Upgradeable Vehicles

  • Vehicles whose functionality evolves after purchase through software or hardware upgrades
  • Upgrades may be difficult for core vehicle functions based for hardware or legal issues; comparatively easy for infotainment
  • Usually requires OTA (over-the-air) upgrade functionality, upgrade marketplace and strong data ethics foundation


  • Tesla
  • BMW ConnectedDrive (limited)
  • Automatic (brand) plug-in connected car tool

Software-Defined Products

  • Responsive design
  • Products where value is defined in part (or fully) by software, so that value evolves over time
  • Requires the ability to upgrade hardware devices over the air (OTA), usually via the internet and/or mobile networks


  • Smartphones
  • Tesla upgradeable vehicle features
  • BMW ConnectedDrive
  • Nest Thermostat
  • Software-defined networks (eg, upgradeable firewalls and routers)

Social Products

  • Products whose core value involves social functions
  • Smart, connected software layer for physical products
  • Usually requires access to existing social networks; may also require a ‘social network of things’ for hardware integration
  • Done well, creates pull for users to interact with the brand, minimizes ‘pushes’ of brand content
  • “If you want to build loyalty, spend less time using data to tell customers about you, and spend more time telling them something about themselves.”—Mark Bonchek


  • Instagram
  • Nike+/Nike Fuel

Autonomous Driving

  • Varying degrees of machine augmentation or automation of human driving capacity
  • Five levels of autonomous driving by US NHTSA (National Highway Traffic Safety Administration)
  • (Level 0): No assistance or automation
  • Function-specific Automation (Level 1): i.e. ABS, ESC
  • Combined Function Automation (Level 2): i.e. Adaptive Cruise Control with Lane Centering
  • Limited Self-Driving Automation (Level 3): i.e. Tesla Autopilot or early Google Car test vehicles
  • Full Self-Driving Automation (Level 4): i.e. Google Car


  • Google Car
  • Tesla Autopilot
  • Traditional Automaker Prototypes (Mercedes, Audi, Etc)