The head of BMW's impact ventures explains how the auto giant is moving beyond the car - and how building apartments will help it get there
- BMW and Mini have announced their 5th class of startups in their URBAN-X lab in Brooklyn, New York.
- Esther Bahne, BMW Group's head of impact ventures, said the selection process is incredibly competitive.
- It's all about taking risks on emerging companies, she said, rather than just buying startups to eliminate competition or bolster their offerings.
- Mini is also building an apartment building in Shanghai as it transitions into more lifestyle offerings.
When BMW's sub-brand Mini arrived in Brooklyn to establish a technology incubator and accelerator in 2017, it took a different approach to the Silicon Valley norm.
Today, its A/D/O (an acronym derived from Mini's original Amalgamated Drawing Office) space in Brooklyn's hip Williamsburg neighborhood isn't full of the company's branding, nor does it look much like the countless WeWork buildings and similar spaces that dot the area.
Speaking to a group of journalists in the sun-drenched building - most of which is made up by a public space, a coffee shop, art gallery, and high-end restaurant - Ester Bahne, BMW's head of impact ventures and brand strategy for Mini, explained the company's approach to innovation.
"Obviously we knew about the disruptions that were coming for the car industry, and we were in the middle of it," Bahne told a group of journalists. And while some of her team's recommendations, like making more electric Mini models and changing sales strategies, are similar to moves other old-guard automakers are making in order to stay relevant, the other arm of her team's mission involves zero cars whatsoever: making mini into a lifestyle brand.
A brand beyond cars
Through its now five classes of startups, Mini is clearly thinking beyond a traditional notion of an automobile and its function in our lives. Executives are quick to boast that the selection process for the incubator is more competitive than the famous YCombinator, which accepts about 1.5% of applicants.
Seven companies have joined the A/D/O accelerator for its newest cohort, it announced Wednesday. The group spans a wide range of products and services from Free Ride, a free service offering rides in electric golf-carts to and from events, to GreenQ, which uses digital analytics to improve trash collection, and Borrow, a peer-to-peer vehicle rental app.
"Our teams are with them in the trenches every day," Bahne said. "They have business support, they have financial advisors. I mean, we have to get them onto a stage on demo day in front of millions of dollars in a room, so they have to have their shit down."
This is a key distinction for Mini, according to Bahne. Other automakers are snapping up small companies to make headlines, add to their product line, take competition off the market, or do all three.
Ford, for example, recently did this with its buyout of scooter startup Spin. Other automakers have purchased self-driving startups, mapping companies, and more for high prices in recent years.
Mini in contrast is making small, early stage investments in companies that could very well fail when their products finally go to market.
"For what we want to do, it is not a smart idea to take them off the market," Bahne said. "It's a really smart idea to have them on the market and make exactly those connections so we can understand where it's going, and be there for the ride."
Mini wants to be a lifestyle brand - starting with apartments
Mini's plans for its diversification don't end with mobility either - it wants to be in every part of your life, even your home.
Armed with an array of sampling data, the company saw three major trends that customers valued more than mobility. At the top of the list was living, followed by style and experiences.
So the team set out to create Mini Living - a high-flying luxury apartment building in Shanghai, which aims to take the design-thinking process used by Mini to create its first car in as little space as possible, beyond the commute.
"The idea is that you live on a small personal footprint, but have shared amenities like a great kitchen and community lounge," explained Bahne. "It's like a luxury flat-share, but you can still close your door and still have your bathroom."
Mini hopes to set up coworking and design spaces similar to A/D/O in Shanghai and other future Mini Living sites. Similar to Brooklyn, these will also be a fusion of office space with public areas.
"The mobility space is just damn exciting right now," Bahne said. "Yes, there are a lot of players out there, but I think we have a very good shot at coming up with quite a few that will work."
Here's the full list of URBAN-X's 2018 cohort:
- The Free Ride - The Free Ride is an all-electric, short-range, ridesharing company providing city-goers with free, sustainable transportation.
- Borrow - Borrow is bridging the gap between leasing, ownership and on-demand ridesharing by providing short term electric vehicle leasing.
- Thrilling - Thrilling is reducing carbon, waste and water footprints by encouraging the reuse of clothing through vintage and second-hand store online marketplaces.
- Treau - Treau is building advanced climate control systems to bring sustainable, comfortable, and efficient cooling and heating to buildings everywhere.
- GreenQ - GreenQ is creating truck-based waste analytics systems to improve logistics, diversion and recycling.
- Toggle - Toggle is building an automated process that utilizes software and industrial robotics to reduce costs and increase productivity of rebar cages used in reinforced steel projects.
- Gearbuddy - GearBuddy uses IoT and machine learning to digitize every aspect of construction, including equipment, to make construction more efficient, effective and safer.