What is TomTom Maps
Tomtom co-founder: "Google Maps is not designed for drivers"
Tomtom co-founder Peter-Frans Pauwels speaks in an interview with the Swiss “Handelszeitung” about the competition with Google, measuring the roads for autonomous cars and the frustration of traffic jams.
Handelszeitung: What was more stressful for you: the founding of Tomtom in 1999 - or in 2007, when you realized that the iPhone and the dominance of Google would bring your company into heavy seas?
Peter-Frans Pauwels: I would choose another time. It was from around 2003 to 2004 when we grew strongly. From 40 to 4,000 employees in 30 countries in just a few years. A hypergrowth. We looked out of the office window in Amsterdam and said: Anyone who can talk and walk will be hired (laughs).
Handelszeitung: Tomtom sat navs were a revolution.
Pauwels: We democratized navigation, created a device that combines maps and route planning. Everything very user-friendly. It didn't exist before. We sold the sat navs faster than we could manufacture them. At that time we were producing in Asia, and shipping by sea took six weeks. At some point we rented jumbo jets to fly the sat navs to Europe. It was the fastest growing division in the consumer electronics world.
Handelszeitung: The Tomtom share price climbed rapidly, then crashed sharply in 2007. Since then, the title has been bobbing around. Why?
Pauwels: It was already clear to us then that the product category of navigation systems would change. However, we are working on a long-term business model. We knew at the time that every car would have its own built-in sat nav. A few years ago this was a daring statement.
Handelszeitung: Did you know that the competition from Silicon Valley would eat up your profits?
Pauwels: We couldn't know where exactly the competition was coming from, but we knew that there would be a lot of new entrants in our market in the long term. The business offered a lot of turnover and innovation. But after the iPhone was launched and GPS followed in Apple devices, this was the moment when navigation became free.
Handelszeitung: Bad news for Tomtom.
Pauwels: Naturally. We knew: at some point our products will be replaced. That is why we needed good maps, ideally worldwide. There were only two companies that had digital road maps, Tele Atlas was one of them. We decided to get into a takeover battle. If we hadn't done that, we would certainly be in a very bad starting position today; the company is a diamond in our crown today. But because of the purchase, we were financially in a difficult position as far as our balance sheet was concerned. Then there was the credit crisis in 2009.
Handelszeitung: And where are you now? The Tomtom course has recently come under heavy pressure again.
Pauwels: There was a difficult time until 2013, but then we saw light at the end of the tunnel. We are well on our way now.
Handelszeitung: The extreme ups and downs in the company - what does it do with company founders like you who are still on board? What is it that holds you together?
Pauwels: We complement each other well in terms of skills and characters. And we respect each other.
Handelszeitung: What exactly is your role?
Pauwels: I am a co-founder and act between marketing and product manager. I wake up in the night and then I remember what we need.
Handelszeitung: And then you go to the CEO?
Pauwels: Exactly. Or I tell him: Here, look what we did.
Handelszeitung: The Tomtom founders have long since paid off financially after the IPO. What is it that drives you? It cannot be money alone.
Pauwels: It's not about the money, but about an intellectual challenge and about taking responsibility for the company and its employees. We're in tech: there's something new every year. It's super exciting.
Handelszeitung: You have to constantly reinvent your company.
Handelszeitung: What is your advice to startup founders who don't have that much money behind them, but still have to motivate themselves every day?
Pauwels: Ultimately, it's a pleasure to be able to be innovative. And to advance a company and specific goals. You always have to try to be better than the others.
Handelszeitung: What should Tomtom's future look like? Fixed navigation devices are no longer there.
Pauwels: It's about autonomous driving and the transformation of mobility. It is a future in which we can travel safely with autonomous vehicles powered by cleanly produced electricity. That is what we are working towards and that requires detailed road maps and software to make it work.
Handelszeitung: So far, the navigation system, which we glued to the windscreen with a suction cup, told us where the journey was going. Will the computer be built into the car soon?
Pauwels: Exactly. And that takes a lot of data. We have been collecting this data anonymously since 2007. They help us to improve our services, such as traffic information.
Handelszeitung: Do your customers know that?
Pauwels: Yes, you know that.
Handelszeitung: A few years ago, Tomtom came under pressure for providing data to the police in the Netherlands to catch speeders.
Pauwels: We are not interested in the data about the users, i.e. the individuals, but in data about the road network. Right from the start, we built in guarantees that it would work. In this way, the data is anonymized because we want to know where the traffic jam is. Not who is stuck in a traffic jam.
Handelszeitung: Your global traffic index shows where most of the traffic jams are. Who is most stuck in a traffic jam where and for how long?
Pauwels: Mumbai leads the world. (...) This information is not only important for car companies and their customers. Companies like Apple and Uber also need them. To do this, we are constantly analyzing billions of data.
Handelszeitung: You can also measure the world with a camera car. What do you photograph exactly? Traffic lights? Traffic lines?
Pauwels: So far, we have measured the world so that you can get from A to B easily. Now it's about helping the self-driving cars make their decisions. This requires other, much more precise maps, which we call high definition (HD) maps. That is why we re-measure the world with our own vehicles that record everything with cameras and laser radar. Everything in HD. This gives us an HD map of the world that a self-driving car can use and that we always know what position the car is in. Accurate to the centimeter.
Handelszeitung: But you have to drive around a lot.
Pauwels: Sure, we're initially concentrating on regions where we believe that autonomous vehicles will initially be on the road a lot. This is primarily the case in Western Europe and North America. Tomtom uses innovative technologies and artificial intelligence - so much more than just mobile cartography vehicles - for the map creation process.
Handelszeitung: How far are you?
Pauwels: We started with the highways. The HD maps cover over 400,000 kilometers worldwide.
Handelszeitung: Google and other providers have long been sending camera cars onto the street.
Pauwels: Of course, that's competition. However, we want an HD card, but others are also interested in photos of shops, we don't care.
Handelszeitung: Here Technologies, in which BMW, Daimler and Audi, among others, are significantly involved, also supplies maps.
Pauwels: The automakers that aren't part of it also need cards. We can say: we are independent. And with regard to Google Maps: This is not exactly developed from the point of view of the motorist, but rather from the point of view of the map business, which targets the individual in order to better place advertising. They are aimed at the end user. We don't do that. Our customers are primarily car manufacturers or Apple.
Handelszeitung: Street signs change, so do streets. You have to keep delivering new maps to stay current.
Pauwels: There are currently not that many autonomous cars on the road. But they are all equipped with cameras and sensors. In the beginning, everyone needs a basic version of the cards. The more vehicles are on the road, the more data they will provide and then automatically communicate these changes.
Handelszeitung: Why should Tesla have an interest in sharing the recorded data with Tomtom?
Pauwels: The industry understands that it needs efficient and good feedback and that it is necessary to share such information.
Handelszeitung: Is it very frustrating for you that Google, with its deep pockets, so often sets the standards in many areas?
Pauwels: Absolutely. You are always the big elephant in the room. But that also helps us to stay nimble and smart and make decisions quickly.
Handelszeitung: Last year Renault, Nissan and Mitsubishi decided to use Google infotainment systems in their vehicles. A major setback for Tomtom.
Pauwels: Yes, that was a crucial moment. We have to see what happens to it. It was the first time a major automaker said Google is getting into the wagons. As many hardware manufacturers have already shown with Android, the Google operating system. This proves: You lose direct contact with the customer if you let another manufacturer deliver the operating system. Seen in this way, it was a groundbreaking decision.
Handelszeitung: Why should anyone still buy a Tomtom sat nav? There are even models that cost almost 400 euros.
Pauwels: These are high-quality devices that reach the customer. High quality in that they have accurate data on navigation and traffic jams. “There will be a traffic jam in 200 meters”, is reported, for example, and then there actually is a traffic jam. Many users find this very helpful, especially if they are often on the road for work.
Handelszeitung: Tomtom used to sell fitness trackers and action cameras. Back soon?
Pauwels: No, it's all over for two years. Perhaps there are still residual devices on the Internet that are being offered. But we are better in other areas and are focusing on autonomous driving.
Handelszeitung: It will take a long time for everyone to drive autonomously.
Pauwels: The trend towards autonomous driving is definitely there. So far, there are still different levels, i.e. technologies that support the driver, for example with the lane assistant. It will certainly take a lot longer until the so-called level 5 driving, in which the computer controls everything completely by itself. But driving will become more and more autonomous over time. In the meantime, we are testing our own autonomous vehicle to gain additional experience. We are very well positioned for the future.
Handelszeitung: Why does nobody seem to notice this on the stock market?
Pauwels: It's always difficult to understand how the stock market works, but we certainly need to explain a little better what we're working on.
The original article is available on the Handelszeitung. Copyright 2019. And you can follow Handelszeitung on Twitter.
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