16 Questions About Self Driving Cars + links

Every day I need to drive my car around 30 minutes. I do not have a good public transport commute to go to work, so, drive my own car is the best way. But it is quite boring and unproductive. Maybe in 2023 or before I will have the opportunity to read or watch Youtube videos during my commute.

In this fantastic video, Frank Chen, partner, at Andreessen Horowitz explain us the main questions about self-driving cars. It is not a 101 guide, but I provide a few more links to really understand the current situation of this amazing industry.

16 Questions about Self Driving Cars from Andreessen Horowitz on Vimeo.

Everything that moves, says a16z partner Frank Chen, will go autonomous. But what does that really mean? In this presentation from our a16z Summit, Chen goes over the 16 most commonly asked questions about autonomous cars, and what their answers might be: Will we progress level by level, or go straight to Level 5, i.e. full automation? Will they use LIDAR or not? What blend of software techniques will be used? What rules of the road (traffic lights!) will become a thing of the past, and how will insurance be affected? You can’t understand autonomous vehicles without understanding these 16 basic and essential questions — and the issues at stake tied to them — in this concise overview that covers everything you’re wondering about autonomous vehicles in a nutshell.

Slide 1. Frank Chen.

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Talking about cars only, this is Goldman Sachs‘s opinion:

In the next ten years, the auto industry will undergo a profound transformation: the cars it builds, the companies that build them and the consumers who buy them will look significantly different. Technology will be leading this change, but it will be shaped by four key themes.

Slide 4. Cars market is a huge one, as we can see in the following graph. Big industry around the globe.

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Questions about technology, business and social implications in the self-driving industry.

1.-Technnology

Question 1: automated driving. There are 6 levels, from zero to five,

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Level one: assisted.

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Level two: complex drive assistance.

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Level three: semi-autonomous driving.

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Level four: fully autonomous car.

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Nowadays different companies are doing opposite things. More of them are going level by level. Mercedes, VW, BMW or GM are learning the curve step by step. On the opposite side is Google, with fully autonomous driving car prototype. So, the key question here is: level by level or straight to level five? I am sure car manufactured companies will go level by level. Google, instead, will reach level five as soon as possible and when achieve enough test hours and all the Government paperwork done will try to monetize all this.

Question 2: LIDAR or not? First of all, what is LIDAR? Below you can find good examples of what is LIDAR (in general) and a great car visualization of LIDAR technology.

LIDAR – a surveying technology that measures distance by illuminating a target with a laser light. LIDAR is an acronym of Light Detection And Ranging, (sometimes Light Imaging, Detection, And Ranging) and was originally created as a portmanteau of “light” and “radar.”

Not all car companies are using/investing in LIDAR technology. Tesla, instead is equiping cars with 8 cameras, 360 ultrasonics, GPS and radar.

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Question 3: pre-computed “HD Maps”, or built on the fly?

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Beyond GPS and Google Maps is for people. So, we need a different type of maps for cars or we need a car with the technology to calculate everything on the fly, just by driving by. This a good post by NVIDIA, “Beyond GPS: How HD Maps Will Show Self-Driving Cars the Way”.

Question 4: What blend of software techniques? Deep learning, path planning, cloud or data. Deep learning is winning all surveys. More about this topic.

A few good introductions to deep learning/machine learning.

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Question 5: how much real world vs machine world?

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Question 6: Will V2X radios play an important role? V2X, X is a variable, vehicle-to-vehicle conversation. Mercedes will use it in 2019. How does it work?slide11

Question 7: Can we get rid of traffic lights and four-way stops? Will autonomous cars need traffic lights? MIT visualization, who wanna be the first driver?

Question 8: How will automakers “localize” their cars?

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2.- Business:

slide14Question 12: Who will win? Silicon Valley vs China vs Incumbents?

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Traditional car makers, service providers, technology companies…a lot of competition.

Question 13: will we buy cars or transportation as a service? Service (UBER, Hailo or Lyft) or Buy ( Toyota, VW). Fly industry, Airbus vs Boing. Loyalty to the carrier, not the manufacturer.

IMHO I believe big cities like London, NYC, Ciudad de Mexico or Paris, service providers will win the battle. Fewer people will buy a car and they will use public and private transport more often. slide16

Question 11: How will insurance change? All new questions will come up. Repair costs up or down?

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The motor insurance market may shrink by 60% by 2040, according to KPMG. The insurance aspects of this gradual transformation are at present unclear. More about this topic, “Self-driving and insurance”.

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Question 9: How will accident rates trend? Rapid decline in the number of fatalities over time. Self-driving cars? What will happen? Human error related, driver error. Learning curve: better in a 16 boy or a machine? That the question! I truly believe more in machines than in myself ith 18 years driving my first car. Follow before chart:

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Question 14: How will commute change?

In my opinion, the gap between renters and owners will decrease heavily in the next 5 years.

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Question 15: How will cities change?

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Question 16: When ill this start, and then ho quickly will we switch to autonomous cars?

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The future will be better for customers, still, a lot of questions to solve and asked.

Source | a16z

Three ways to invest in the Internet trend.

This morning I have published a tweet about a talk at the Francisco Marroquín University, “Investment according to the Austrian School of Economics” by the Fund Manager Francisco García Paramés. Author of the book called Invirtiendo a largo plazo.

For him, investments like Google or Facebook are still Venture Capital, 15 years are not enough for Francisco to invest or try to understand the business. But technology (Internet in this case) does not mean that you cannot take advantage of this technology to increase the valuations in other company, you can find other ways to do it. For example:

  • Look for non-Internet companies that indirectly benefit from Internet traffic. For example, DHL benefits from Amazon. Or other package delivery company does the same.
  • An Internet business is embedded in a non-Internet company  with real earnings and a reasonable stock price.
  • Old-fashioned business uses Internet to cut costs, improve operations and become more efficient.

Alphabet and Risk Factors

At the beginning of this week, Alphabet passed Apple as the most market valuable company, see chart. All media  and newspapers wrote about it.

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So, what risks have Alphabet to invest in? I went to the S-1 statement that Google published in 2014 for the Google´s IPO. In that statement the company wrote about “Risks Related to Our Business and Industry”, all risk factors in 2004:

We face significant competition from Microsoft and Yahoo.

We face competition from other Internet companies, including web search providers, Internet advertising companies and destination web sites that may also bundle their services with Internet access.

We face competition from traditional media companies, and we may not be included in the advertising budgets of large advertisers, which could harm our operating results.

We expect our growth rates to decline and anticipate downward pressure on our operating margin in the future.

Our operating results may fluctuate.

If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenues and operating results could suffer.

We generate our revenue almost entirely from advertising, and the reduction in spending by or loss of advertisers could seriously harm our business.

We rely on our Google Network members for a significant portion of our net revenues, and otherwise benefit from our association with them, and the loss of these members could adversely affect our business.

Our business and operations are experiencing rapid growth. If we fail to manage our growth, our business and operating results could be harmed.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

We are migrating critical financial functions to a third-party provider. If this transition is not successful, our business and operations could be disrupted and our operating results would be harmed.

Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our business and operating results would be harmed.

Proprietary document formats may limit the effectiveness of our search technology by excluding the content of documents in such formats.

New technologies could block our ads, which would harm our business.

Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, our business may be harmed.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand.

We are, and may in the future be, subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and could limit our ability to use certain technologies in the future.

Expansion into international markets is important to our long-term success, and our inexperience in the operation of our business outside the U.S. increases the risk that our international expansion efforts will not be successful.

We compete internationally with local information providers and with U.S. competitors who are currently more successful than we are in various markets.

Our business may be adversely affected by malicious third-party applications that interfere with the Google experience.

If we fail to detect click-through fraud, we could lose the confidence of our advertisers, thereby causing our business to suffer.

We are susceptible to index spammers who could harm the integrity of our web search results.

Our ability to offer our products and services may be affected by a variety of U.S. and foreign laws.

If we were to lose the services of Eric, Larry, Sergey or our senior management team, we may not be able to execute our business strategy.

The initial option grants to many of our senior management and key employees are fully vested. Therefore, these employees may not have sufficient financial incentive to stay with us.

If we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.

Our CEO and our two founders run the business and affairs of the company collectively, which may harm their ability to manage effectively.

We have a short operating history and a relatively new business model in an emerging and rapidly evolving market. This makes it difficult to evaluate our future prospects and may increase the risk of your investment.

We may have difficulty scaling and adapting our existing architecture to accommodate increased traffic and technology advances or changing business requirements.

Problems with bandwidth providers, data centers or other third parties could harm us.

System failures could harm our business.

More individuals are using non-PC devices to access the Internet, and versions of our web search technology developed for these devices may not be widely adopted by users of these devices.

If we account for employee stock options using the fair value method, it could significantly reduce our net income.

We have recognized cost of revenue, and may continue to recognize cost of revenue, in connection with minimum fee guarantee commitments with our Google Network members.

We face risks associated with currency exchange rates fluctuations.

It has been and may continue to be expensive to obtain and maintain insurance.

Acquisitions could result in operating difficulties, dilution and other harmful consequences.

We occasionally become subject to commercial disputes that could harm our business.

We have to keep up with rapid technological change to remain competitive.

Our business depends on the growth and maintenance of the Internet infrastructure.

Shares issued, and option grants made, under our stock plans exceeded limitations in the federal and state securities laws.

As you can see, more or less, all of these statements are still risks factor to Alphabet. After more than 10 years risks did not change a lot.