Not Your Average Car Company
Local Motors, Chandler, Arizona
Local Motors may be the most joyful durables manufacturer in history. Lots of companies make fun products. But Jay Rogers has designed a business process that's a hoot from ideation and design through sourcing, fabrication, and marketing. If Saturn had delivered as much entertainment as this little car company, it might still be around.
Rogers, who experiences more "aha" moments in a week than most people do in a lifetime, uses the word magic to describe many elements of Local Motors's business model. This is not the kind of concept that folds neatly into an elevator pitch, but here goes: Thousands of designers worldwide compete in online contests to create the most visible elements of each car model (shape of the frame, interior setup, lights, etc.). Members of the public then vote for their favorites. Each model will be created for a specific region or terrain. So the sleek, petite Boston Bullet will navigate narrow streets and potholes. The Phoenix Rally Fighter -- the first model in production; the first three cars were delivered last month -- is a big, bad desert racer. Rogers buys commodity parts from traditional manufacturers. But because he wants to build cars from lightweight composites rather than steel (to make them more fuel efficient), he sources the custom bits from companies that make, for example, the blades for wind turbines. He then opens microfactories ("like Willy Wonka's!"), in which customers build their cars themselves, with the help of engineers and fabricators. "We make niche vehicles targeted to niche areas using niche tools in niche microfactories, and we will do it again and again and again," says Rogers.
Rogers's cars aren't cheap: The Rally Fighter sells for $59,000. But each is a limited edition. Local Motors will build 2,000 or so and then swap in new regional contest winners.
Rogers, 37, is himself an unusual composite: a veteran of both the Marines and McKinsey & Company, a Princeton and Harvard Business School graduate who can rattle off every car he has owned with the facility of someone naming his kids. Is it any wonder he often sounds like a hybrid of Click, Clack, and Clay (Christensen)? "In terms of strategy, this is a differentiated product offering," Rogers says. "When I drive one on the highway, guys in a Chevy pickup truck will yell at me, 'Where's that car from?' and I'll hand them a brochure while we're both doing 75 miles an hour."