“I'm just curious, and I like to be part of disruption.”

Some people are drawn to the automotive industry by the cars themselves, but for Tal Cohen, founding partner of both Drive TLV and Next Gear Ventures, the fascinating part is being involved in the current changes and disruption. He says he enjoys being part of such a dynamic field, and it combines his passions for mechanical things and AI as well. Cohen shares that there are many forces directing the mobility industry today, including Covid and supply chain issues, moving away from fossil fuels as energy sources, and all the unknowns about the future. Sustainable mobility will be at the forefront of the field moving forward, he believes. Cohen explains that there is lots of room for innovation in the automotive industry today, especially as vehicles become more complicated platforms. He is excited about the potential of Israeli startups in the area of mobility.

 

 

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Tell me about yourself. What got you hooked on the automotive industry?

The mobility and automotive industry is having this fundamental change, and that's driving a lot of innovation, startups, and talent. I'm just curious, and I like to be part of this disruption. It's fun to be part of something so dynamic. There are so many startups here in Israel touching innovation mobility. I said, "Wow, this is a big challenge that we should address."

I was always passionate about mechanical things, about moving things, but not necessarily cars. Putting these around digital, around AI, that really made it for me.

How do you see the automotive industry today?

You have so many colliding forces. The dominant one is coming out of the COVID reality and the supply chain reality. And a recognition by the industry that the main energy source for mobility has to change from fossil fuel to electrification mostly. I think that has huge ramifications on how things are moving forward.

But also, on the level of risk and uncertainty that everybody's taking, the unknowns of what could unfold in the next 10, 20 years. Those compound to major question marks about the industry in the future.

Take me back to the founding of DRIVE TLV and Next Gear. Where were you at in your career? Where was the automotive industry?

For 20, 25 years before that, as an entrepreneur and in the academy, I enjoyed bringing value to big corporations from a startup perspective. I realized that one of the most fundamental issues that startups have to face is to quickly get some orientation on the value proposition. It's good to come up with your ideas and concepts that can bring value. But it's a necessity for the startup to get, as quickly as possible, an understanding of where they are standing.

From the corporate perspective, when the atmosphere is getting more competitive, there's more disruption, you have more appetite for innovation. I know that from both sides.

Six, seven years ago, I came back to Israel, and I saw the talent. I realized that there's tremendous potential in Israel in terms of startups in mobility, but there's also tremendous unknowns. I saw the unknowns spread to the corporates as well. I realized the gap and that's why I proceeded.

If you look at traditional B2B or SaaS companies, it's pretty cheap to see how people engage with your product. But there's an added layer of complexity when it comes to the automotive industry. Why is it so hard to get that validation?

It's obviously hard, but there's a positive side to that. The automotive industry is an industry that works. You go into a platform, you stick the key in, you press on a button, you drive, it works. Things are working for days, weeks, months, years. In software type development, you have bugs. So you run a program, you find the bugs, you fix it. You run it, fix it again.

To go 10, 20 years back, you cannot have bugs on mission-critical systems like that. It's a cultural thing. If you want to introduce innovation and experiment on different versions, it's much more difficult to do it quickly in a classical environment that is manufacturing reliability-based and valued in the organization’s DNA.

How do these two organizations work hand in hand when it comes to automotive startups?

Creating a unique organizational structure in corporations to help adopt innovation coupled with executive support- It's the basic thing that you have to assume: it's really difficult for this to work. Once you understand this is the challenge, you actually can find a way for this to work. The organizations are struggling to change. It's not an easy task. So you have joint ventures, you have silos. You have separate entities that are living in conservative organizations. So you create some structural facilities for incumbents to battle in the new innovation field against the newcomers.

Was this something that was relatively trivial for them to do, being open to these types of partnerships and experiments?

It is trivial on the message level; it's very difficult on the execution level. When you have things that work for decades, it's very difficult to redirect them. You have to have strong commitment, strong leadership, and pull from the top. But it has to be consistent. We're fortunate to have that in of our partners in DRIVE and Next Gear.

How do you see the future of mobility?

I really think that the concept of smart mobility is moving into more sustainable mobility. I think that we are facing a reality that is more and more vivid about how we need to behave in society in a sustainable and responsible way all the way through. Entities are going to be more successful by combining those trends, and society will be more successful.

I think that digitization is going to actually play into sustainability. It's going to play into the understanding of how we're going make the next generation of platforms and fleets more user-friendly to us and to the ecosystem.

Number two, concepts like the autonomous, for example, we've seen the maturation. We will have some more capabilities. It's going to be gradual. You will see that we will need to be communicating better between us humans and the autonomous agent. We're going to have a period in the next 10 years or so, I would say, in which we have to develop and treat it like a decision support system. We're going to figure out how to play along with our smart digital assistant in the car and who is going to take responsibility for what.

The ecosystem, regulator and the market will play a major role in driving sustainable mobility forward.

How do you think my 7-year-old niece’s relationship with a vehicle will be different than my relationship with my car?

I believe that 10 years from now, we will have to have very strong fundamental capabilities of how to behave socially and according to the rules in the roads. I don't think it's going to be a matter of a decade that you have a fundamental cultural change by which people will not really need to know how to pass the car or how to park. We're going to have some of that.

There are going to be some tasks she will not need to know. It might be that driving on the highway in certain places in the world will be something that people have less experience with. That will be more easily turned into the autonomous agent part.

In your perspective, what are some of the most pressing and most interesting problems that we have yet to uncover?

Progress in battery technology, storage technologies, alternative energy technologies, all this will have fundamental changes. If you think about how you manage fleets and cars, when to charge, how much to charge: any singular solution can have a difference and can change the behavior of the whole industry. There's a big potential in finding innovation in this field.

On the digital side, the path is still very long. The concepts that are going to help us build a better decision support system are definitely huge there. But we don't want to stop there. Vehicles are becoming extremely complex and sophisticated platforms. I think that has to be improved as well.

Infrastructure is in play. I think you can actually have a trade-off. You have less sophisticated platforms, but more sophisticated infrastructure. I think it's undervalued today. I think the future holds a lot of promise for infrastructure.

 

Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, is a Venture Partner at J-Ventures and was an engineer at Hippo Insurance. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.

 

Contributing editors: Michael Matias, Megan Ryan