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Friday, June 10, 2011

Missing Deadlines is Good for Business

"Missing Deadlines is Good for Business"

by Smyth Performance on Friday, June 10, 2011 at 1:09pm
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2 years ago around this time in June I went public with the Smyth car project that I had been working on for about a year.  The Smyth car was nothing more than an idea with a  hint of testing on a diesel wagon and a big diesel speedboat.  I was stuck with the jetta since it was the only reasonable diesel sold in the U.S. in any volume for 20 years.  I went to all of you with the plan and decided to share my work.  Now we are on the eve of launching the car and I must say it has been an amazing product development ride.

I bring this up not because of the two year anniversary ...but because I was looking back on what I thought at the time would be a 6 to 12 month project.  Two years is not a year and I started looking inward and reviewing my notes as I prepare to write the story of the Smyth car in a book.  I had a great boss in my early management career at Avery Dennison up in framingham, Ma named Lee Carlson.  A veteran of managing a big R&D budget he always was helpful with me as a young upstart in a big company.  His rule of thumb like many others in R&D is to just double what the director of the project says.  You will still be off by a bit, but at least you won't cost the company tons of money with false expectations.  As I moved into more of a new product manger role  at Avery after getting my MBA, my mentor Craig Donaldson who was director of the office products group maintained my learning curve by putting me in front of the higher ups and allowing the young hot shot a bit of exposure.  After showing him the first Cobra replica in 1993 (I rented the back of a transmission shop to build the first prototype after work)he said to me "I will hold your office for you in Pasadena for a while".  The delays hold true  even when the head of the company is in charge of the just get so excited that it feels like you can hit your ambitious targets.

I am not counting scope or major project configuration changes in these dates...just the time for the idea to flow into something that can be shipped.

Delays and new products go hand in hand.  Creativity has a schedule and it really can't be written by guys in starched white shirts that have never built can only be guided.  No mater the budget R&D guys will always run a little late and your company is the better for it.  Ideas are never perfect, it takes time to refine even a great idea.  Timelines set by management(even in the car business most higher ups have very clean hands and have never actually built what they make) don't fly.  Time lines set by the R&D staff don't fly either.  One party is too disconnected to what it actually takes to get the job done, and the other is too close and emotional to avoid the inevitable excitement driven optimism.

So back to the G3F and the Smyth performance timeline.  Six months would have been doable in a perfect world and a simple design without all the extras for five of my friends.  As the project scope changed into a daily driver to avoid any potential overlap with the FFR line, it also made for a reboot of the body/frame design.  If FFR was to do a "mini me" I did not want to compete against a company that I still own...I am in this for the real synergy and income from three completely complementary companies that can move along with customers as their tastes and budgets change. LM, Smyth and Factory Five do this perfectly in my mind.  I wanted fertile ground where the NEXT car my customers built was an FFR or a Local motors project.

This change of scope and FFR entry into the small displacement market was a challenge but ended up working out really well.  I was able to informally contribute to the marketing study that showed a real need for an affordable open track car and FFR was able to use the real time feedback thru the "time to talk" thread and justify the smaller "non V8" entry.  FFR was also able to informally learn from Local Motors's new business model and run a competition for the new car's body(I still would have used the LM web site for this contest...but Grassroots motorsports is a solid FFR supporting bunch too).  Jay saw early on the power of the FFR community,  so you can see the very real cross pollination here working below the radar that most companies can only dream of.  In the end all three companies are in high gear.  FFR applies their vast knowledge of complete frame design on an ultra light subaru sport racer, I have the sporty commuter nailed with the G3F and the jetta based truck concept, and LM continues to be the ultimate worldwide car designer destination.

Meanwhile the customers that came in with the smyth concept were speaking loudly about the diesel commuter as a true daily driver.  Sure it could be sporty...but I have to be able to drive it ...a lot.  Many still wanted an ultra light track car and said so on the forums.  I went full on daily driver and comfort while directing these "track guys" over to FFR.  It works well still....true synergy.  The pure sport open track car is FFR territory and the daily driver was my target.  Can you imagine an FFR which is titled on the road as a VW offense to the VW guys but FFR is a bit on the super special side with the whole 200 mph thing going on.  By keeping to the VW weighted crowd I keep a loyal Audi/VW fan base and bring new people into the Smyth/FFR/Local Motors mix or great car projects.

I started looking around at other start ups since my only experience has been taking Factory Five from zero to ten million and helping Jay with the growth of Local motors as I sit on the small borad of directors.  Jay is the man in charge at LM...this is his show and he is the majority holder...FFR and I are helping as we can but in a relatively passive role.  It took me six years to get to 10 million in sales as the head of FFR...Jay took LM to multi millions in valuation within a year of starting and continues to multiply LM value every year.

In the world of product development as opposed to business development we are all in the same boat though.  The Factory Five transaxle project for the GTM is a classic example of a great idea that has had huge delays but is just simply really worth it for the customers.  Look, the ffr guys designed a performnce leading car around a donor transmission from a porsche long before FFR shipping 100 GTM's a year blanked every porsche box in the U.S.... ,yep about 2 years....we were a victim of our own success.  The trannys are out there but FFR was spot on in developing their own box with mendeola...great decision since many porsche units are over 8 grand now..  Since guys that own 911's tend to take care of them, it follows that we ran out of cheap trannys...and the mendeola looks like a winner.  Late, like all R&D projects, but a real winner and a better product for it.  LM was late with the rally fighter,  I was late with the Smyth car...I bring it up to showcase that as long as you finish with real customer wants addressed, you win the new product prize.

What if you are too late and delay too many times?

Ask Tesla.  Ask Fisker.

Tesla and  Fisker are in the middle of discovering the down side of too many delays.  Sometimes no matter how much money is thrown at the new project it....just....never....happens....or thats how it feels.  How many hundreds of millions will Tesla and Fisker spend before the companies are simply purchased by a big name to incorporate an electric vehicle in their lineup.  We will see.  But after over 8 years the crowd that expressed interest in these cars gets restless.  Just a guess but I will bet the talks are underway now.  The cars look amazing, should drive great, and we will all see if they can make a financial story that makes sense.  A little late is OK..a lot late is maddening.  Even more so with a product like a sports car that is a product of passion.

So as the FFR open house is tomorrow,  let's watch LM, FFR and Smyth together as  they launch these terrific new products.  We may always be bit tardy on the launch pad but we always will aim high by delivering dreams that work.

Mark Smith

Full disclosure so you know where everybody sits in the three companies that make the best component cars in the world.

                         Smyth Performance, Inc. is
                         100% owned by Mark and Kim Smith

                         Factory Five Racing, Inc. is
                         owned 50/50 by brothers Mark and Dave Smith

                         Local Motors, inc. is
                         owned by many..Factory Five Holdings, Inc. is one,
                         Mark Smith serves on the board of directors

                         Factory Five Licensing, Inc. is
                         owned 50/50 by brothers Mark and Dave Smith

                        Factory Five Holdings, Inc. is
                        owned 50/50 by brothers Mark and Dave Smith

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