Choose your location to get a site experience tailored for you.

Remember my region and language settings

Putting the Data Pedal to the Metal: An Interview with Otonomo’s Ben Volkow

February 24, 2020 By Alex Koster

Otonomo’s car data services platform has an ecosystem of 100 service providers and connected-vehicle data from more than 18 million cars worldwide. The platform—which receives, secures, cleanses, aggregates, normalizes, and enriches data—supports the development of a wide variety of apps and services for drivers, passengers, transportation companies, and municipalities. Current and pending use cases include remote diagnostics and predictive maintenance, fleet management, traffic and safety solutions, smart-city applications, and concierge services.

CEO and founder Ben Volkow recently spoke with BCG managing director and partner Alex Koster, coleader of the firm’s Center for Digital in Automotive, about Otonomo’s rapid growth and some of its challenges and opportunities. An edited version of the discussion follows.

Ben, thank you so much for joining us. It’s terrific to have you share your perspectives on getting value from car data.

Thank you for having me, Alex.

Cars have become a highly sophisticated, mass-market technology “gadget,” one that generates millions of lines of software code and vast amounts of data. But the industry has struggled to unlock the potential value of that data. Your company recently crossed the milestone of having more than 18 million cars globally connected to your platform. What is your strategy? And what would you say is the reason for your success?

That’s true—we are growing rapidly. In 2019, we added about 12 or 13 million vehicles, and our growth is accelerating. The reason we are growing quickly, I think, is the value we generate. Most of the car manufacturers don’t want to build all the technology needed. And if you talk to the data consumers on the other side, they will tell you that they don’t want to have to deal with an API for every car manufacturer and a different data dictionary and also deal with all the related privacy concerns and different rules. Everybody prefers to have someone in the middle.

Now that you are moving into having more and more partnerships, I would suspect that the number of conflicts is also going up. How do you manage the tradeoffs?

There are complexities on both sides of the platform, both with the providers and with the consumers of the data. To tackle it, we allow, for example, data providers to give us “blacklists” of services they don’t want us to connect to. I think the decision we made to stay on the platform level also helped—we had many requests to help with things like scoring, accident reconstruction, etcetera. We are very careful not to compete with companies within our ecosystem. So, really, part of it is knowing what we do best and staying there.

We’ve been focusing on your direct customers, the OEMs, as well as the potential data consumers. Now there’s a third party, of course—the end user who is providing the data. Do you expect that, at some point, the user will be compensated for the use of his or her data?

We took a stand from day one that the driver or car owner, depending on the country or use case, is the owner of the data. And the OEM is the custodian—the one who controls it. But the data really belongs to the driver or owner. The way to get the approval or support of drivers for the use of their data is by creating value. If I offer you services that are beneficial to you, you’ll likely be happy to share your data. Having said that, we are also seeing a lot of initiatives by OEMs to create additional value. For example, an OEM might say to an end user, “If you share your data, I’ll give you two services for free for three months or reduce your monthly leasing cost by five euros.” So OEMs are trying to make it more enticing.

It sounds like this will evolve into a pretty complicated web of interactions among the different players. How do you determine the right prices?

That’s a highly complex challenge. Data has many unique qualities. For one, it can be sold over and over. When providing GPS-related data from the vehicle, we might provide it first to your insurance company for usage-based insurance. We might provide it again to a parking service to help you find parking and perhaps again to a city for smart-city applications. And the data will have a different value each time. A lot of what we have tried to do in the last four years is build the knowledge and algorithms necessary for us to understand precisely what segments want the data, what the use case is in each segment, what data is needed for each of those use cases, the required refresh rates—is the data coming every ten seconds or every ten minutes—and so forth. That’s helped us determine the data’s market value.

No one knows the ultimate size of this market, but what do you think will prove to be the most valuable places to be?

Everybody likes to talk about usage-based insurance. But today, penetration is less than 2% in the market, so it’s been slow to evolve. Ultimately, I think about a dozen horses will make it to the finish line. We see some interesting use cases related to the residual value of vehicles—imagine the utility of being able to access all the data of a used car that you were contemplating buying, to understand its true value. We also see a lot of promise in what we call the concierge economy: someone coming to fuel or clean the car, for example, or deliver something that you bought on the web to your vehicle, etcetera. So there are a number of potentially valuable opportunities—basically anywhere data can be used to improve people’s lives.

What is your long-term aspiration for the industry and Otonomo?

I believe that a big part of the vehicle of the future will be the services connected to it. And I hope we play a key part in making this happen. I hope to see Otonomo building genuine value from car data, using the data to enable services that make people’s lives better, safer, and more convenient.

Thanks, Ben.

protected by reCaptcha

Subscribe to our Automotive & Mobility eAlert.

Putting the Data Pedal to the Metal: An Interview with Otonomo’s Ben Volkow

SUBSCRIBE