The auto tech whisperer: The next $300M exit

Welcome to another episode of the Car Dealership Guy Podcast.

Today’s guest is Mark Boyd, a visionary leader and serial entrepreneur with over 20 years of experience transforming the automotive industry through digital innovation. From his pioneering days as the founder of Chrome Data, Dealix, and Cargigi, to his early investments in game-changing companies like CarGurus, TrueCar, and LotLinx, Mark has a proven track record of disruption and success.

Stream the full episode now: YouTube | Spotify | Apple

Private Auto - The safest way to buy vehicles privately. Use code ‘CDG’ to list your car for free. Learn more at privateauto.com.

CDG Job Board - Connecting world-class talent with top-notch companies in Automotive. Find your next role—or start hiring today—at CDGJobs.com.

Interested in advertising with Car Dealership Guy? Drop us a line here.

Want to be considered as a guest on the podcast? Add your name here.

(00:00) - Intro

(00:31) - Introducing Mark

(02:51) - Mark’s career in auto

(12:50) - Where will value be created over the next 5 years in the industry?

(15:10) - Customer Data platforms

(18:45) - What’s exciting to you in Auto tech right now?

(22:53) - What are some key themes you’re focused on as an Auto tech investor?

(27:29) - Is it smart for dealerships to incubate technology in-house?

(35:45) - Do you see OEMs moving to an agency model?

(41:35) - Thoughts on AI

(46:23) - What traits do you see in the best founders/CEOs?

1. From salesman to startup founder.

Mark is behind some of the biggest names in car software. But, he started his career selling calculators for Hewlett-Packard (HP). After selling millions of calculators at HP, his friend, a microcomputer specialist, approached him. He had software that took speccing out cars from manual to digital. Instead of taking hours, the process took minutes or even seconds. As PC Carbook grew over 16 years, 8,000 dealers signed on (remember this is before the internet). “And then Chrome [Data] was born back in 1986 in my garage, literally on a foldout table with one PC. And just started making phone calls and selling dealers. It was awesome,” says Mark. Chrome Data was bought by Dealertrack in 2005 and later sold to J.D. Power where it is now worth $1.4 billion. 

2. Breaking through the automotive retailing industry.

Many startups, founders, and ventures aim to disrupt the car industry. Yet, automotive retailing is nuanced and operates differently than the broader tech industry. So, what gave Mark the conviction to roll out this kind of software to dealers? “It was really just by trial and error. And I mean, we made every mistake in business you could possibly make at Chrome. And in spite of my stupidity, I still survived. So it's really about learning, pivoting, changing, growing. I had no idea what I was doing. I just knew we had a really cool tech,” explains Mark. More importantly, Chrome Data was a springboard to build lasting relationships with automotive leaders. It’s because of those relationships and trust, that Mark can get things done fast.

3. The next $300 million venture.

In the next 5 to 6 years, Mark believes that data and AI-focused tech companies will be some of the industry's most highly valued. “If you can tap into that in an organized way that's meaningful for the dealer, that's the home run multi-billion dollar deal,” says Mark. “I can't predict the future. I certainly don't have a crystal ball. But my gut tells me, if you have data, good quality, deep data with history, the AI can do amazing things with that information and deliver value for a dealer and to consumer,” he adds. Mark also acknowledges that there can be disconnects between the amount data and what’s actually usable insights for dealers to sell cars faster. But many platforms out there today are bridging these gaps in innovative ways.

4. An interesting company filling a niche.

Traditionally, dealerships rely on a variety of software vendors for various tasks, from sales to marketing. These vendors often work in silos. They force dealerships to log in to different platforms and manage data individually. Mark finds Unison's Dealer Mesh interesting because it acts as a central hub, consolidating data from many different vendors. This allows dealerships to maintain control over their information, which is crucial because valuable customer data is often unknowingly given up to vendor partners. 

5. What Mark looks for when investing.

Mark invests in companies that give dealerships a leg up, either by increasing sales or bringing customers to the dealership efficiently. Mark acknowledges that online car buying platforms like Roadster (now part of CDK Global) were doubted at first. But, he sees the benefits. They save time by reducing negotiation at dealerships and speed up the buying process for customers. Mark is inspired by Tesla's online buying experience. He envisions a future where dealerships use a similar, Amazon-style checkout model. He thinks dealerships that embrace this digital shift will win in the long run.

6. Dealerships and tech companies collide.

Mark sees the advantages of dealerships starting their own tech companies. But, he warns against the pitfalls. The biggest perk is having the dealership as a built-in testing ground. It lets the tech company solve real dealership problems with live feedback. However, running a tech company like a dealership, doesn’t work.. He's seen this fail miserably because running a tech company requires a different skill set. His advice? Dealerships should invest a small stake and advise on the board. But, they should let the tech company operate on its own. He emphasizes that dealerships shouldn't try to control the business. Instead, dealerships should leverage their resources and offer up their platforms for experimentation. “Give input, but do not try to control that business because you're going to screw it up and you're going to take it down,” he says.

7. Navigating the dealership landscape.

Mark takes inspiration from Bruce Thompson's success story – building and selling multiple companies by partnering with dealerships and focusing on organic growth. However, for Mark, the key qualities lie deeper. He values the integrity of the founders and a clear understanding of the problem they're solving. Fancy product ideas come second. He points to Cargigi, a company he built with Tony Hall, as a prime example. They bootstrapped their business, focusing on a specific niche and leveraging resellers to attract thousands of dealerships. This ultimately led to an acquisition by eBay Motors.

8. The dealer’s role.

Mark isn't convinced that dealerships will eventually be replaced by manufacturer-controlled fulfillment centers also known as agency models. He points to past attempts by Ford (and others) to bypass dealerships as evidence that it’s not very effective. In his view, dealerships offer a valuable service beyond just selling cars. They provide customer support, repairs, and educate car buyers who might not be sure what they're looking for. Even Tesla, with its streamlined online buying process, seems to struggle with service delays and repairs. Some dealerships may consolidate. But, Mark believes dealerships will stay crucial to car buying for at least the next 5-10 years. “Dealers are resilient. They're brilliant. And they will change if they have to modify their model, but they'll always have a place,” he asserts. 

9. Burgeoning artificial intelligence.

Mark isn't worried about AI robots replacing salespeople or receptionists at dealerships any time soon. In his experience, people still prefer the human touch. He points to car selling platforms where AI helps attract potential customers, but real people handle the nitty-gritty negotiations and paperwork. “I don't think it's ever going to replace the salesperson. It will get close, but people want to talk to people,” he says. Mark sees AI more as a super-powered assistant. It can automate repetitive tasks, like answering FAQs or sending reminders. This frees up dealership staff to focus on what they do best: building relationships and closing deals.

10. The valuable qualities of successful CEOs.

When it comes to successful startup CEOs, Mark holds integrity in the highest regard. He dives deep to understand the person behind the business, their values, and their vision. Jerks need not apply. Mark prioritizes building relationships with people he enjoys working with. His advice for aspiring CEOs is a mix of practical wisdom and hard-earned experience. First, be cautious of investors. Don't take on money that could strangle your company; consider organic growth to stay in control. Trust your gut – don't overanalyze decisions, learn from mistakes, and pivot when necessary. Authenticity is also key. Ditch the facade and embrace transparency. But remember, ideas are a dime a dozen, and execution is everything.