The Silicon Valley Factor .

ZF shows how to combine the creative spirit of a business start-up with the long-term mindset of a well-established technology company.

The pace of change in the auto industry is accelerating. Face-lifted and brand-new vehicle models roll into car dealers’ showrooms and out to customers at ever shorter intervals. Nowadays, very few manufacturers wait for the usual eight years before bringing a new model to market. But the industry’s shortening development cycles, currently down to around five years, are still eternities compared to the ferociously quick product cycles in the electronics industry. Here, customers expect the latest models to appear after just 12 months – a two-year-old smartphone is positively antique.

Now the automotive and electronics industries are converging. Increasingly, connected cars are the norm; software for vehicles is becoming a major innovation driver. Tesla has already shown the way forward. Owners anxious to use the carmaker’s new Autopilot driver­assist function didn’t have to upgrade to a new model, or even take their cars back to the workshop. The new technology was downloaded from the Cloud and automatically installed in their parked “hardware” overnight, ready for use the very next morning.

Updating cars via the cloud

Torsten Gollewski is CEO of Zukunft Ventures GmbH

Software as a growing proportion of the product mix; shorter innovation cycles; new business models – all these developments are impacting technology suppliers like ZF. The company promises to deliver intelligent mechanical systems that enable vehicles to think, see and act. But to do so, ZF needs innovations and new ways of thinking – from inside and outside the company. One approach is embodied in ZF subsidiary Zukunft Ventures GmbH, set up in 2016 to enable the company to invest in other firms. “We offer start-ups in particular an opportunity to raise extra investment capital. In return, we gain improved access to viable, highly competitive technologies,” is how Torsten Gollewski describes the win-win concept. The fact that Gollewski is ZF’s head of Advanced Development as well as CEO of Zukunft Ventures GmbH shows how closely these functions are intertwined. The company has already made several investments, including a 40-percent interest in Hamburg-based Ibeo Automotive Systems. Together, ZF and Ibeo will develop a new generation of lidar sensors for the auto industry. Lidar (or rather, LiDAR, short for “Light Detection And Ranging”) is essential for autonomous driving. ZF has also taken a 40-percent stake in software specialist Doubleslash in Friedrichshafen. ZF has been working with close neighbor Doubleslash for several years, primarily in the field of vehicle networking.

A helping hand for start-ups

Another strategic step into the future is ZF’s joint venture with Plug and Play, a start-up accelerator based in Sunnyvale in California’s famed Silicon Valley. The collaborative venture with Plug and Play is ZF’s response to the challenge of finding and filtering the many business start-ups that could be relevant to the company’s multifaceted technology-focused activities. The Californian firm has been actively involved in start-up accelerator programs for years, all over the world. Plug and Play has helped more than 2,000 start-ups on their way over the past decade, and is already familiar with the auto industry. Its German arm is working closely with automaker Daimler and the University of Stuttgart on the “Startup Autobahn” project – and now ZF has joined the party.

Once a potential partner has been identified and contacted, it’s often only a short step to an actual project. “ZF can benefit from working with start-ups in various ways,” says Torsten Gollewski. Over many years of working in the auto industry, he has built up extensive experience of collaborating with fledgling technology companies. In Gollewski’s view, key benefits include unconventional thinking, creative new processes and shorter, faster progress from initial idea to series production. This is why it is important that collaboration with startups shouldn’t be restricted to the Advanced Development unit. ZF’s divisions are also embracing this stimulating opportunity; it is they, after all, who are responsible for series production at ZF – and ultimately, for the time it takes to bring finished products to market.

Opening photo credit: istockphoto.com

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