Google, GE & the Smart Home Adam Carolla Uncaged

APRIL 2010

FORD’S BIG REVEAL

Introducing America’s Most Surprising
Consumer-Electronics Company
By Paul Hochman

One
Bank
to love
THE
REAL
SMART PHONE
REVOLUTION
Iraq’s
oil “ It’s cool to connect. But it’s past cool
It’s a reason to buy. We’re going to be the

War
coolest, most useful app you’ve ever had.
—ALAN MULALLY
CEO, Ford Motor Vehicles
”
 Ford’s
By Paul Hochman
Photographs by Stephen Wilkes

BIG REVEAL
The next generation of Ford’s Sync technology will turn its cars into
rolling, talking, socially networked, cloud-connected supermachines.
Introducing America’s most surprising consumer-electronics company.

90 FASTCOMPANY.COM April 2010 April 2010 FASTCOMPANY.COM 91

A TALL WOMAN IN A
TAUT SKIRT ENTERS. “It’s cool to connect.
She takes my drink order, But it’s past cool. It’s a
and then I watch her disap- reason to buy.

M
pear down a burnished- We’re going to be the
mahogany-paneled hall. coolest, most useful app
¶ It’s library quiet. Through you’ve ever had.”
the glass walls of the wait- ulally has steered
—CEO Alan Mulally
ing area, past three Marcel Ford away from the brink in the four years since he arrived from
Boeing. He cut labor costs by almost 22%; rallied his company

Breuer chairs, I can see around a printed four-point mantra that 200,000 Ford employees
can carry around on a card in their wallet; and with his former chief

another woman seated at a financial officer, Don Leclair, even managed to raise cash the old-
fashioned way—by borrowing from a bank, securing $23.5 billion in

huge desk, in an enormous loans without asking the government for a penny. The moves paid
off. In 2009, while his competition stalled, Ford made a $2.7 billion

mahogany office, talking profit; by early 2010, the company had earned “car of the year” and
“truck of the year” awards from the auto press and its stock price rose

on the phone. Suddenly, 700% from its 52-week low.

Mulally also culled his brand’s herd of nameplates, to fewer

she stands up, reflexively than 20, from 97. This achievement especially thrills the CEO, who
still becomes unhinged thinking about how unfocused, how uncool,

straightens her flannel the Ford brand had become. “I mean, we had 97 of these, for God’s
sake!” he says, pointing at a list of old models. “How you gonna make

skirt, and smiles at some- ’em all cool? You gonna come in at 8 a.m. and say, ‘From 8 until noon,
I’m gonna make No. 64 cool? And then I’ll make No. 17 cool after

body I can’t see. ¶ Then lunch?’ It was ridiculous!”

Mulally has certainly benefited from his rivals’ recent tendency to

she looks over at me. Beck- slash their own tires—as when GM was repo’d by American taxpayers,
or when Toyota inadvertently installed its accelerators in the

ons. Time speeds up. I’m “always on” position. But his most recent move is his boldest: He’s get-
ting out of the car business. Or rather, he’s joining forces with a most

ushered across the hall.
The episode of Mad Men ends and reality begins. And there he is,
Alan Mulally, the chief executive of Ford Motor Co., his red hair
combed in the old-timey coif of a former Boeing engineer. He leaps
to his feet.
“C’mere!” he says, and puts his arm around my shoulder. “You’ve
got to see this.”
Mulally drags me into his giant inner office and points out the
20-foot-long window. “Look!”
There is a broad, sweeping view of the Rouge River; a hundred
factory buildings; smokestacks.
“That’s GM,” he says, “right there. Bankrupt!”
He turns to his left, still with his arm around my shoulder, spin-
ning me with him. I’m off balance.
“See that over there? Chrysler. All gone. Unbelievable, right?”
He’s silent for a moment. He’s not gloating, just amazed at the
cataclysm right outside his window. “Unbelievable.”
un-automotive cabal, the consumer-electronics industry. In his quest
to change Ford’s culture, redefine its image, thrill young customers,
and even revolutionize the car itself, Mulally wants to connect his
autos to the Internet and to the souls of the people who surf it.
“Look, it’s cool to connect. But it’s past cool,” he says, standing
up in the middle of his sentence. (He’s getting worked up again.)
“It’s a reason to buy. Tech is why people are going to buy Ford! We’re
going to be the coolest, most useful app you’ve ever had, seamlessly
keeping you connected.”
Ford is transforming the car into a powerful smartphone, one
that lets you carry your digital world along with you and then cus-
tomize it. And by the way, says Mulally, it “makes you a better driver.”
How? By freeing you from the tyrannies (and dangers) of messing
with that little phone while you drive and letting you command your
technology, through the car, using only your voice; by establishing
the car itself as your connection to the cloud; and by giving mobile
developers a way to create an ever-expanding portfolio of services
designed for—and around—your vehicle.
And if the thought of a slightly stooped, graying multinational
hooking up with a hot young industry leaves you a little queasy, here’s
the surprise: Ford is not just basking in the borrowed glow of the
likes of Pandora and Twitter; the car company is generating heat as
well. To the surprise of technologists and CE wonks, Ford has dis-
covered a way to make the world’s most popular high-tech device—

92 fastcompany.com April 2010

 “The ‘not invented
Not Invented Here— Climate Change Color Coordinated A Big, Bright Touch
the phone—stronger, just by bringing it into a car. Ford’s system for Good Reason MyFord Touch lets you Quick visual cues are better Tired of a display that “looked
takes the power, features, and much of the content on your smart- The five-way “smart” button modify the instrument (and safer) than text-based like it came from 1960,” VP
phone and gives it a human-scale outlet that’s easy and safe to oper-
ate at 65 miles per hour. here’ syndrome design did not originate with
Ford. It mimics the iPod, bring-
ing the gold-standard consumer-
cluster, swapping out
the navigation display,
ones, so Ford color-coded
the basic functions on your
Derrick Kuzak and his team
made the touch-screen

kills all kinds of

It’s a new foundation for the ultimate mobile device. The automo- say, for climate control dashboard—orange for larger—and pretty. You can
electronics interface into the car. or even Pandora. phone, for example, and even watch video—when the

B
bile will never be the same.
green for navigation. car’s in park.

great ideas,” Pre-Amp Your iPhone

says Mulally. “The

Phones and MP3
players are trans-
Speak to Me formed by Ford’s

y almost any measure,

minute you make it Sync features voice-
recognition technology
390-watt, Sony-built,
Dolby-certified,
12-speaker 5.1 sur-

proprietary, you’re
from Burlington,
Ford’s in-car Sync communications platform, introduced in part- Massachusetts–based round system.
nership with Microsoft in January 2007, has been a huge success, Nuance Communica-

dead meat.”
largely because Sync enabled Fords to do something dramatic. tions. The next upgrade
comes with a big one
Where once driving entailed a kind of social disappearance, Sync from Nuance too, doing
was a breakthrough because it allowed you to move seamlessly away with layered
from the connected world contained in your phone to an equally menus and responding
connected one inside your car—without touching a single button. quickly and accurately
Calls are automatically transferred to the car’s speaker system, for to 10,000 normal-
example, when you get in. To make a phone call without taking In fact, according to Vladimir Sejnoha, vice president and chief speech commands. Adaptive Intelligence
your hands off the wheel, all you have to do is press the media but- scientist of Nuance, the next version of Sync actually approaches Stores two sets of
personalized settings
ton on the steering wheel and say out loud, “Make a call.” The sys- artificial intelligence. It predicts what word you’ll say next based on
for two different driv-
tem speaks back to you and guides you through the process, all the the string of words you’ve already spoken. It also “learns,” tuning its ers. Or a driver can
while accessing the address book and call information you have on predictions based on its past interactions with each speaker. carry his preferences
your cell phone. If that feels a little old hat, consider this: Ford’s ­Nuance’s software breaks down every sound you make into its most between two MyFord
so-called Service Delivery Network can also connect your car wire- basic components and compares them against a giant database it has Touch–enabled vehicles
lessly to the cloud. SyncMyRide, for example, a Web-based service, collected over the past decade. “It’s a what-if proposition, millions of on a USB thumb drive.

Have You Talked to a Ford—Lately?

lets you load a destination into your kitchen computer and pull it
up on your car’s navigation system, so you don’t have to print out
directions and then hold a f luttering piece of paper in front of you
while you drive.
Fords with Sync already sell twice as fast as identical Fords
without the system. A million and a half Sync-enabled cars are
now on the road. But this spring, Sync, now firmly established as
Ford’s big strategic focus, will get a killer user-interface upgrade
called MyFord Touch. Coming first in the 2010 Edge and the Lin-
coln MKX, then the 2011 Focus, the new UI is a voice- and touch-
activated system, layered on top of the Sync operating system in
the same way new software is updated onto your PC’s OS. And it
will dramatically simplify the Sync experience. (More important,
it will also satisfy Mulally’s first commandment: “We won’t do it
unless it lets you keep your eyes on the road and your hands on the
times,” Sejnoha says. “We don’t understand the speech, per se. We’re
just saying the input signal looks like this sequence of this model, so
we’re going to guess.”
The instrument panel for the 2010 Ford Edge, featuring the next iteration of Sync.
All of which makes sitting in the cockpit of a 2011 MyFord
Touch–enabled car a little disconcerting—sort of like talking to a
cat and having it understand you. Or like talking to a cat and hav-
ing it listen to you and then go get you a beer. Stored in Nuance’s
system are more than 10,000 commands associated with driving, to enter the space and compete. Ultimately, what Ford is doing is tentativity more bluntly. “We used to have a saying in the company
allowing you to speak normally to the car. Instead of talking to the moving the automobile into the next century.” that we were a fast follower,” he says. “Which meant we were slow.”
dashboard in a stilted series of menu commands, you just say, “I’m Other car companies are chasing the same space, including Kia, Starting a decade before Mulally arrived in the spring of 2006,
hungry,” and out comes spoken restaurant advice, matched up with which now uses Microsoft’s open platform to create some rudimen- Ford had been spending millions of dollars trying to catch up with
the nav system. If you’re in the mood for Oscar Peterson, you don’t tary Sync-like features. (Ford had only 18 months of exclusivity with GM’s in-car phone and modem system, OnStar. Ford had good rea-
have to say “music,” then “playlists,” then “artists”; you just utter the Microsoft, which has expired.) But Ford’s hope is that in the same son: OnStar, rolled out in 1996, was highly successful. Hundreds
phrase “I’d like to hear some jazz.” Up comes every piece of jazz way the iPhone’s hardware became the platform for an international of thousands of car owners bought the system so they could make
music attached to the car, whether it’s in your phone or on your app explosion—who thought a phone would one day be a carpenter’s basic cell-phone calls and connect with emergency services if

wheel. Otherwise, you’re not adding value to the customer—you’re
just adding buttons.”)
For example, the MyFord Touch interface is customizable. Two
LCD panels sit on either side of the speedometer, and drivers can
change the layout of the instrument cluster above the steering wheel
to suit their needs. Don’t need to know about your car’s climate right
now, but you’re lost? Get rid of the climate-control graphic and re-
place it with the navigation display. On a long stretch of highway and
don’t care about the nav? Replace it with the radio-station informa-
tion or phone controls—whatever is most important to you at that
moment. (You can even watch video on the center console, but only
when the car’s in park.)
Being able to choose which digital information sits in front of you
is a nice way to reduce what Ideo, Ford’s partner in researching the
system’s design, calls “cognitive overload.” But the most dramatic
changes in MyFord Touch will be profoundly human. The new voice-
recognition system, created by Burlington, Massachusetts–based
Nuance Communications, will let you speak to the car as if it were
another human being.
iPod. If you have Sirius Satellite Radio in the car, you can say, “Find
talk radio” to pull up your preferences.
But perhaps the best thing about voice recognition is what it does
for the devices you bring into the car. It lets you control them with
your voice too. For starters, making a phone call takes one verbal
command—“Call Paul at home”—instead of five or more. But even
more impressively, you can control your smartphone (and run mobile
applications) through the dashboard controls. No more fumbling
around with your Droid as you swerve into that semi-trailer’s lane.
No more thumbing through tweets (the car even reads them aloud
to you). The mobile applications from Pandora and OpenBeak (a
Twitter client), as well as Stitcher, an audio news aggregator, are now
available to you by simply saying the word. And those are just the
first three services Ford has partnered with; more will follow.
The new combination of skills has all the earmarks of being a
game changer. “I’d go one step further,” says Thilo Koslowski, a VP
and lead automotive analyst for Stamford, Connecticut–based Gart-
ner. “MyFord Touch could be a category killer. Right now, Ford has
redefined this market, and it has made it very difficult for anybody
D
level, a remote control, a compass?—Sync will transform Ford.
earborn was not always
this app-happy. In fact, by 2001, things were looking dire. To under-
stand how far Ford has come, digitally speaking, it’s important to
recognize how dark the technological night was before the dawn.
“Everybody has been through this,” says Mulally, “where they
think they can manage everything. Where they make proprietary
systems that don’t work with anybody else’s. The ‘not invented here’
syndrome kills all kinds of great ideas. It’s the same thing in air-
planes. The minute you make it proprietary, you’re dead meat.”
Mulally’s EVP and Americas president, Mark Fields, who looks like
he could bench-press a Camry, characterizes the old days of techno-
needed. And owners paid for OnStar three times—for the bolted-in
phone/modem box, for the $199 annual subscription fee, and for
the marked-up phone minutes. By 2001, GM was pulling down
hundreds of millions in revenue from that feature alone.
Ford couldn’t figure out a way to counter. The company launched
and killed not one but two competing “telematics” products and
was $160 million into a third, Wingcast, when Doug Van Daegens,
director of Ford Connected Services, realized there was a funda-
mental f law in the GM model: OnStar’s phone was built into the
vehicles. That meant GM wouldn’t be able to adapt to the rapidly
evolving technology outside the car. Each generation of OnStar
would be obsolete almost as soon as it was installed.
Weeks before Wingcast was slated to go on the market, Van Dae-
gans had a vision. And that vision was Bluetooth. “Bluetooth was a
much more affordable method of hands-free connection [than our
telematics system],” he says, “and way, way, way more flexible.” Blue-
tooth, now ubiquitous, was then just getting started—a basic radio
language that allows all brands of consumer-electronics products
continued on page 105

94 fastcompany.com April 2010 April 2010 fastcompany.com 95

Ford’s Big Reveal
continued from page 95
and smartphones to talk to one another; a
cheap, wide-open, universal protocol for
voice and data that, to users, is invisible, ag-
nostic, everywhere.
Wingcast’s CEO initially kiboshed Van
Daegens’s idea of integrating Bluetooth. Van
Daegens went to Ford’s leadership. “Ford
took steps to insert me as the CEO and
chairman of the board of the division,” he
says, in a diplomatic retelling. “They said,
‘Here’s what we’d like you to do. We want you
to walk into the board meeting and politely
tell everybody that their services are no lon-
ger required.’ That was the point at which we
said, ‘We’re not going the way OnStar went.’ ”
Still, almost three years passed between
the death of Wingcast and the birth of Sync.
Only in 2005, after a Dearborn meeting be-
tween “the Two Bills,” Gates and Ford, was
the Sync concept hatched.
When Mulally arrived as CEO in 2006,
a Sync prototype was among the develop-
ment projects he was presented. That’s
when he surprised everyone by pointing to
Sync as the future of the company. Mulally
seized on a strategy already being developed
to use the low end of the Ford lineup as the
tech’s showcase, seeing it as a way to do
what Henry Ford had done back at the
­beginning: “democratize a brand new tech-
nology. Make it available to the masses.”
­I nstead of making Sync a feature for its
high-end Lincolns, it would roll out in the
2008 Focus. “People said, ‘Aren’t you mak-
ing a big bet on small cars?’ ” recalls Mu-
lally. “And I said, ‘Wait a minute, there’s not
a market for small cars in the U.S.? Have
you heard of the Japanese?’ ”
To hear Ford executives tell it, the
­implosion of Wingcast and rise of Sync pre-
sented an opportunity to redefine the com-
pany. At its core, that meant meshing the
slower, bigger teeth of the car business with
the smaller, faster-spinning gears of the
high-tech world. “These [high-tech] com-
panies work at a very different clock speed
than Ford,” says Fields, “a much faster clock
speed. We had to jump in. We had to learn.”
So in that new embrace of an open system,
what had changed at Ford? “Simple,” he
says. “We started thinking like a software
company.”
As a piece of software, Sy nc wa s
­designed to be a basic general-purpose plat-
form that sits in a car and allows other com-
panies’ products to connect to it—a simple,
sturdy foundation. Outside tech experts,
such as smartphone manufacturers and
software designers, could connect their
products to a Ford (and let their customers
connect to the world) by writing code that
works on top of Sync’s operating system.
“It’s Windows CE,” says Walter Sullivan,
a senior product manager in Microsoft’s
autos division, “with a standard Win 32
API [programming interface]. Eight million
developers and 400,000 partner companies
around the world know how to speak it. It’s
a massive community.”
Mulally sees huge advantages in this
open platform, and in the community that
already understands it; he knows he doesn’t
have to be responsible for developing all of
the improvements. He just has to make sure
they meet his standards. In fact, with so
many outside experts familiar with Sync’s
basic OS, and with an easy-to-mate plat-
form, upgrades come faster and cheaper.
Updated services—traffic, directions, busi-
ness searches, even news, sports, and
weather—can just be “beamed in” from one
of six data centers around the country. Pan-
dora and OpenBeak created Sync-specific
software in just 10 days.
“People said, ‘Aren’t you mak-
ing a big bet on small cars?’ ”
recalls Mulally. “And I said,
‘Wait a minute, there’s not
a market for small cars in
the U.S.? Have you heard
of the Japanese?’ ”
Ford’s group VP of global product devel-
opment, Derrick Kuzak, gets a wee bit emo-
tional talking about the power of Ford’s
strategic change. “That openness,” he says of
the universal platform, “you don’t know how
profound that impact was on some of us. We
took that fundamental learning and took it
all the way to the electrical architecture of
our vehicles.” It’s late on a bitter cold Michi-
gan evening, in Kuzak’s big, low-slung
office on the Dearborn campus; he leans in
and extends a disapproving, Dickensian fin-
ger at my BlackBerry, sitting on his desk.
“You talk about gears spinning at different
speeds,” he says softly. “That phone in 10
years will be lucky to be a doorstop. Every-
thing we’re doing, we’re trying to do faster.
We’re even designing new cars 50% faster
than we did three years ago, because it’s all
about speed. . . . We got that in part from
consumer electronics.”
In turn, Kuzak gave something back to
the CE world: the dashboard. As anyone who
has fumbled with a 2-inch-wide BlackBerry
knows, the miniaturization of electronics
has brought devices nearly to the vanishing
point, where the keys are actually too small
for the meaty fingers dancing across them.
Wouldn’t it be nice if you could turn up the
volume on your palm-size handheld by
twisting a big knob? Wouldn’t it be nice if
your phone was as easy to use as a steering
wheel? Wouldn’t it be nice if you could just
talk to it? Why yes, yes it would.
And when Kuzak and his team connected
the two—smartphone and dashboard—they
realized that the dashboard actually made
the newest technology both more powerful
and easier to use. Play Pandora through your
Sync system and the result is better than
your car radio ever was. But it’s also better
than Pandora ever was. “Voice is far more
elegant than typing or touch,” says Pandora
founder Tim Westergren. “It’s like being in
the audience at a concert and yelling out
the song and having the band play it.” Or as
­Kuzak says, “When you bring your mobile
device into our vehicle, you’re actually build-
ing a better one.”
The great thing for Ford, of course, is that
the more Ford improves a customer’s favor-
ite handheld device, the more likely it is that
people will want to carry their handheld
devices into a Ford. And if you think this is
all a niche play, think about this: Pandora
was the most popular Internet-radio appli-
cation in 2009, with more than 40 million
users, of whom 18 million listened on their
mobile devices and 9 million listened in
their cars. As Julius Marchwicki, Ford’s
director of mobile applications, said at this
year’s Consumer Electronics Show, that’s
9 million people “fumbling with their phone,
voting, bookmarking, changing stations—
all while driving.”
None of which means Ford’s lead in this
new space is secure. Competition is looming.
In addition to Kia, Audi, Mercedes, and other
manufacturers are working on their own sys-
tems. “They obviously have a big lead,” says
Koslowski, the Gartner auto analyst, about
Ford, “but sometimes being a first mover
doesn’t pay off. Think of Apple. There were
plenty of MP3 players in the market before it
introduced the iPod. For Ford, the burden it
has put on itself is to keep innovating. I think
the company is capable, but it takes a com-
mitment all the way from the top.”
Up in his office on the 12th floor of Ford’s
Dearborn world headquarters, Mulally
looks out the window for a moment. Then he
looks me in the eye. “I’m not worried,” he
says. “We’re committed to this thing. Look,
this is part of Henry’s [Ford] vision, ‘Open-
ing the highways to all mankind.’ I think this
is the way to do it.”
Paul Hochman is the gear and tech editor
for Today on NBC and host of msn.com’s
GearDaddy.
hochman@fastcompany.com
April 2010 fastcompany.com 105