LØRN case C1221 -
LØRN. ENTERPRISE

Lars Huemer

og Ketil Hoigaard

Professor

BI

Daglig leder og co-founder

Parqio

Sustainability driven strategies: cooperative parking

How can we challenge traditional business-models to find new sustainable solutions for city planning? In this episode you will lørn about Parqio and how they have created a solution for better usage of parking spaces for several different uses. Silvija hosts Lars Huemer from BI and Ketil Høigaard from Parqio and discusses among other things new ecosystems, resource combinations and challenging new business models.
LØRN case C1221 -
LØRN. ENTERPRISE

Lars Huemer

og Ketil Hoigaard

Professor

BI

Daglig leder og co-founder

Parqio

Sustainability driven strategies: cooperative parking

How can we challenge traditional business-models to find new sustainable solutions for city planning? In this episode you will lørn about Parqio and how they have created a solution for better usage of parking spaces for several different uses. Silvija hosts Lars Huemer from BI and Ketil Høigaard from Parqio and discusses among other things new ecosystems, resource combinations and challenging new business models.
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33 min

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Velkommen til Lørn.Tech - en læringsdugnad om teknologi og samfunn med Silvija Seres og venner. 

 

Silvija Seres: Hello and welcome to this Learn series with BI about sustainability and cooperative strategy. My name is Silvija Seres and today I host Lars Huemer from BI and Ketil Høigaard from Parqio. The theme for this case is sustainability driven strategies through cooperative parking. And we will discuss, among other things, new data driven and sustainability driven strategies and how they create more space for dynamic and flexible ecosystems. And why is this a good strategy and a good sustainability? First of all, I would like to welcome my two guests, my two experts, and ask them very briefly to introduce themselves. And we will start with Lars and then we will go to Ketil.

 

Lars Huemer: Thank you, Sylvia. So my name is Lars Huemer, and I work as a professor at BI Norwegian Business School, the Department of Strategy and Entrepreneurship. And I've had the pleasure of following Parqio for quite some time and I am really looking forward to hear the latest news from Ketil.

 

Ketil Høigaard: Thank you, Silvija. My name is Ketil Høigaard, and I am the CEO and one of the founders of Parqio. We have been working together with Lars for a while and also had some of his students following us. So that's been very interesting. We sit in forskningsparken here in Oslo.

 

Silvija: And just another sentence on Parqio before we go more deeply into it. But if I've understood you correctly, It's kind of an Airbnb for garages?

 

Ketil: Yes. I think I  actually would rather describe us as a transformative company who tries to take the space in shared garages and transform it into mobility and service hubs. So it's not so much about parking, it's about mobility and services instead of owned cars in the garage in the future.

 

Silvija: I love this idea. Can I just try to kind of paint my picture based on what I've heard you say now? I'm thinking, you know, mobility is in huge change and our city planners haven't really caught up with that speed of change. And we are going from a space where we have privately owned very large garages or privately owned shared garages in houses to garages that need to be used more efficiently when we have more shared cars and eventually autonomous cars. Because the time in the garage will perhaps be smaller when a shared car is used more efficiently.

 

Ketil: Exactly. So if you look at the garages, they're being built based on the fact that people own their own cars, which are only used 5% of the time. And there's a huge change going on in urban areas. There is less space for cars, there's less sustainability for cars. And city planners all over the world are trying to change the cities to make room for people and not cars. So I think what we're trying to do is to prepare the urban areas for this. It's already happening in Nordic and European cities. But the other change is that digitization of access is coming to buildings. There are digital keys. The end users or residents are changing their behaviors like they can do anything with their phone now, and suddenly they don't really feel the need to have a physical key or a remote control to open the garage. So people are changing their digital behavior and the cities are changing to new sustainability and opening up. And those two are colliding with this old use of garages, where you park your car and let it stay there for 95% of the time. So we are focusing on making more efficient use of that for shared garages, having bicycles in there, that shared mobility on bicycles, and then let it become a service center. Because the main problem here is that, as you take away the on street parking in cities to give room for bicycle lanes etc, as we especially see in the Nordic cities and Oslo. Where are the service providers going to park? Where is the home care going to park? Where is the shared mobility, the carpenter or the home delivery going to park? They have nowhere to park anymore. So we are opening up the garages also to become a service center for the service providers, for short term parking, delivery of goods, logistics, mobility, etc. And then that resource can again be shared in the neighborhood. So even if it's not your garage, maybe you can go across the street and pick up your goods in a refrigerated store box or the shared mobility from Otto or Move about. And then we start to look differently at the existing and future infrastructure of urban areas. That's what Parqio is about. It's not about Airbnb, it's about better use of existing and future space underneath our cities. The Hidden Gold.

 

Silvija: I think this is brilliant. I haven't thought about the fact that our garages are this unused, super valuable equity in our cities and wherever we live. And that it should become a more actively used space and perhaps a service center for this new kind of logistics where the last mile is the problem we haven't solved, right?

 

Lars: The possibilities there are enormous. Ketils colleagues Emily and Henrik sometimes come and have guest lectures at BI. And I think the last time we had a class, we had an alliance with Food on School and management in Shanghai. So we ask these MBA students to come up with ideas of how you could utilize this garage space? And of course, Shanghai is very different from Oslo. So the ideas that Parqio received the last time was that the garages could be used for karaoke and for meditation space. I mean, it's endless.

 

Silvija: The point here we are making is that Airbnb is thinking mainly about a place where you work or sleep, actually mainly sleep, right? While there are all these other spaces that are now an integrated part of our everyday lives that could be used much more efficiently than they are today. And they are off the radar in many ways. So we have co-working spaces, we have co-living spaces with Airbnb and such, but we don't have co-service places. Each man  has his own garage and I'm also toying with the idea. Well, so we are charging our cars in our garages. Our garages have also become energy markets. So maybe this whole idea of enabling them with energy distribution capacity, maybe they can make money for the building, maybe battery capacity. So a huge new way of enabling smart buildings and smart cities in a dimension I haven't thought about.

 

Ketil: Exactly. So this whole electrification of mobility is fantastic, but it doesn't really solve some of the biggest problems, which is space in the future. If everybody has a new car but it's electric, we will still have queues. We will still use enormous space for storing the cars when they're not in use. We think that slowly but surely you will see garages in the future being more and more a service mobility and service center and less a storing of owned mobility like cars. So we are already testing this out and piloting a lot of the services and we see some of the garages now using the parking spaces for different shared cars, for lockers, for expensive bikes, charging for expensive bikes, micromobility, first and last mile lockers in the garage. So the logistics go in and out in the garage and not outside where people are using the outside area. So all of these are coming together as people get digital and the society changes and home care will explode in Norway and in Europe. So most of us will need to be getting old at home. So that will also need to be taken care of. So who is coming? Where should they park? And they are in a hurry to service as many as possible. And the natural place is in the same building of course, and not on a street which doesn't have any parking anymore.

 

Silvija: One of the reasons I ended up buying a Tesla is that I wanted to have this network of chargers, but if I could, in addition have a network of parking spaces, where it can easily find a place for me nearby that I can leave my car, run and do what I need to do and get on with my next thing. I mean, this would be a huge contribution to my new hybrid life.

 

Ketil: Yes. And when it comes to electrification, we are looking into that together with a lot of partners because it's a huge investment in electrification in urban areas in Europe and especially in Norway, of course. But the strange thing is that only 10 to 15% of the time the electric cars are charging and the rest of the time those charges are not in use. So ideally, you could say you don't need that many chargers in a garage. You just need enough chargers for what you need to charge. And also, it should be more flexible that you should just park somewhere, charge somewhere and leave again and not only your space. So it's this owned thing to a more shared thing that we are working on.

 

Lars: Both in terms of chargers and the Tesla. You don't have to own a Tesla or the  parking space.

 

Ketil: No, and there are two things happening here. So we will see autonomous cars in the next 5 to 10 years. We have said that for a long time. But okay, so we also work with Applied Autonomy and other partners to map the inside space of the garages so the cars can actually navigate there. Because this is an unmapped space.

 

Silvija: I'm the first one in the queue to use this because I'm one of these drivers that are really hoping for autonomy and especially in places like tight garages. Listen now Ketil, if you could please, please work with people planning these garages, there is a really funny picture you have to take under the in the parking space of the Institute for Informatics at the University of Oslo in Blindern. They have left this wonderful space for electric cars, except they assume that they will be small cars. So you can barely park your bicycle there and now we have the Teslas and they are just going the wrong direction in size. So how do you make these humongous cars navigate those super tight spaces more efficiently? That'd be so useful.

 

Ketil: That is ahead of us. But what we're doing now is to map it and get that data from OBOS and other property developers. And then we can give that data to companies like Tesla and others so they can navigate better in the garages. But the most important thing is to tell some kind of online system where the free spaces are. Where can I park? What is available right now as I need to deliver my service or be a guest parking. So all of this needs to be connected and we're working on that. But one of the most interesting things we have done is to automate the opening. So you just approach the gate and if you're supposed to be there, it will open for you automatically. And it seems like a small thing, but we think that in the future you will not be in your own car, you will maybe be on a bike, on a long bike, a long tail, and have the kids and the groceries on that bike. The last thing you want to do is to stop, find your mobile phone or something to open that gate. You just want this to be seamless. So we are working to achieve that and do it now with automatic number plate recognition with a camera, but we're now launching this with the proximity as long as you have your phone with you. And that means that also smaller mobility will automatically seamlessly get openings as they approach the gates. And we think that kind of seamlessness makes sense when it's more of a more shared space, right? So if we actually have a red and green lamp outside that lets you know if there is free space or there's free shared mobility, and then as you hire that mobility from Otto or Move about, you will be able to open that gate even if you normally do not have access. So we kind of open this square kilometers of space for everybody over time, which has been locked off with remote controls for decades.

 

Lars: Ketil I think this is a great illustration of what Parqio is and what it is doing and what it can do. But you've put in a few hours to make this happen and making the different actors see what you're trying to do, is something that has been challenging. And I know there's an interesting story about, for instance, about access and the gate, the garage producers and so forth. Could you tell us a little bit about how this worked out?

 

Ketil: We as founders in Parqio have been very interested in ecosystems and especially me who has an ecosystem background from large companies, to create them and nurture them in a way. And we had the same approach with Parqio. But the interesting thing is that people don't think a garage is advanced. It's just a place and it's a gate and that's it. But as you open up this ecosystem as everything else, the complexity increases. So why are gates in garages not digitized today? All over the world there's a remote control or keys while you have a lot of other things that are digitized. So why is it lagging behind and has been lagging behind? And the main reason is that the gate providers who are making the gate have provided the keys, and the keys have been remote controls that were invented in the 1960's. And their main revenue has been the remote controls. So again, we see successful business models stopping or slowing down innovation because what they really want is to sell a remote control from China that costs 50 NOK and sell it for 600 NOK. So they don't want to digitize the gate because it doesn't really make sense for them. But now things are changing. People can open their bank, their door, everything with their phone. So they're thinking like; I'm not having this one physical thing in my life to open that one gate. Things are really changing now. And as we dived into this ecosystem, we had to learn a lot because if we were to change things, we could not compete with the whole value chain. We had to make them support us and push us into the customers. What we did was to create value for everybody in the value chain so they could change and they wanted to change, instead of stopping change. Instead of just opening the gate, we made a device that extracts data from the gate itself. What position is it in, are there any error messages? And mind blowingly enough, this has not been done by the gate providers. There's still somebody who has to be sent out and read that little display, but now it's digitized. So we actually export data to them and then they can create new business models instead of the remote controls. They can give service agreements and actually fix the gate, count the number of times it's been opened and so on. And they can create new value with new tools that we provide to them. So that's a good example of how we work with partners. It's even more complex whether we want to invite all the service partners into a space they're not usually in. Like car sharing companies don't really want the car inside a garage, because it's not visible for everybody and it's locked off. So what we did was to work with the car sharing companies so that people who don't usually have access to the car can see the car in Ottos, Move about or Hyre own map. Then when they rent it, they get access. So you can actually open up the garage that way and that solves a problem for them because they have less and less space on street parking, which is disappearing to store their cars. It's about finding value and getting insight for each of the partners in the value chain and also for the end customer. So that's a huge job, but now it's really working in a way. We don't sell anything. Our partners push us because they get value from our product in some way.

 

Silvija: If I can just underline the idea of the ecosystem creator here. I think the most powerful, most successful, most beautiful digital companies that I know of being created are the ones that create a new ecosystem. And to me it sounds like you're quite well on your way. Of course there is a huge friction bringing on new people in your ecosystem. Everybody wants to do it alone and everybody wants to own their data and so on. But you have a very, very good reason to do this. And I think just this idea of removing the cars from the street parking. I see Hyre when I'm on the street and driving, but I really don't want to see them in a parking space. I really don't want to see parked cars in my city. And I know that the city planners don't want it either. So the idea of Fornebu, where I live, is that all the garages are underground. And we have this eternal problem of not being able to go and visit each other by cars because you never figure out how to get into the guest parking in that garage. And your system can solve things like this. There could be shared QR codes, you could get a day pass for parking by sending a QR code to somebody like a ticket almost.

 

Ketil: Actually, we are doing that now and Fornebu is a place where we already have  a lot of installations. We will have all of the new installations for Fornebu through OBOS. But how we solve this is that as a resident, you will invite your guests and the minute you invite your guests, they will get information from us and direction and a map. As they approach that gate, it will automatically open if they put in their registration number and they will be directed to the guest parking inside. We do this already today. Guest parking both inside and outside the garage is part of our solution because that flow is very important for us, that seamless flow and still being very secure and keeping  in line with the GDPR and all of these things.

 

Silvija: So Lars, where is the strategy and where is the sustainability? What do you want to focus on?

 

Lars: To me, it's very obvious and clear in this case. From a competitive standpoint in which we would do a competitive analysis, the garage that is sort of the focal resource here, wouldn't come out with flying colors. It's a very boring, unattractive, non sexy resource. End of story. But they have turned gray cement into gold and are on their way of doing it.

 

Silvija: You've just given him a new tagline. We make garages sexy.

 

Lars: There you go, and that's not easy. It is by connecting the garage to other resources, combining and making what we call resource bundles and building this ecosystem that links to co-operative strategy. That is very much sort of to the heart of co-operative strategy. You're trying to help others to create value, you make others create value for you. Which is very different from the idea of having a competitive advantage. We're all seeking competitive advantages, but the idea of a competitive advantage is very much based on the notion that I'm better than you. I could sort of beat you. It's not so much focusing on how I can become better together with you, how can we co-create value, make something together? And so I think that's really key and central to me. And I think many of the listeners would love to learn more about how Parqio, and you Ketill, how you went about it. Because helping to change someone's business model. You can say that in a sentence, but it takes more than a weekend. That's my guess. 

 

Ketil: We've been learning and we're still learning. And I think insight and being very humble, even though we are very proud of what we have done. Every time we get customer interaction, we listen. Every time we talk to a partner, we listen, we take notes. We are always moving. We will never be finished. So I think that is what we've been very good at, to listen and understand and see the complexity and not tell people what the answer is. And we are starting to tick off some property developers, entrepreneurs, city builders. Everybody is now seeing the value of Parqio. But we are still listening, It's part of it. So I think it's very much about insight and understanding. And as a startup, of course, insight is key always to the end customer. But for us, insight to the ecosystem is just as important. So I don't know if that answered the question, but that's how we work.

 

Lars: It definitely does. And I think often we say we will, but do we really implement it? We often listen to replies, but do we actually listen to understand? And I think that's part of your message here.

 

Silvija: Lars, I'd like you to unpack the concept of data driven strategy. That's what we are talking about now. That's also one of those nicely sounding phrases, that I think people just know and think; of course, they are data driven. So how is this a data driven strategy?

 

Lars: I think the best practical illustration here is about how they are starting to provide hardcore concrete data to the to the garage producers. So data driven strategy to me in this case implies that Parqio are helping a set of companies that before produced a physical product, a gate, and a not so modern type of key to make money. They were essentially product oriented. The data can now help them to transform to become service companies so they can, instead of being the producer of a physical product, which I sell and then I'm basically done, there may be some service. The main thing becomes an access service, but to make that transition, they will need data. I don't know if you would agree.

 

Ketil: I would agree very much, but I think I have an even better example. So we are data driven, we do create a lot of value for everybody in the value chain and users and so on. But the real goal is actually that we can now measure what happens if you implement a car sharing platform or shared mobility or a bike locker or anything in a garage. You can actually measure how that changes behavior, mobility behavior, logistic behavior for that building, the residents, the neighborhood. We can see that people are selling their cars and making the parking spot inside the building free for other use, so we can actually track in real time what works for getting people to change mobility and logistic behavior. And that data is, of course, extremely valuable for car sharing companies. What kind of car should be in the garage? Should be a small car, big car, how many, which season? Summer, winter, rain. There's a million data points that we are gathering which gives them, again, an advantage and give the end users a much better service.

 

Lars: It's beautiful. This is something you've started to develop quite, quite recently. And to me my previous example was I think it's valid, but it's more on a micro level. This is really an illustration of data driven, a strategy on the ecosystem level. Because you're using data to aggregate it for the entire ecosystem. And that's important because then you see all these interdependencies.

 

Silvija: I just want to add one more comment. If I was very flippant and very off the record describing an ecosystem builder, I would say somebody who tries to connect everybody, gathers all the data and then gets control of the whole ecosystem and thereby puts themselves in the best position, gets the money. But I hear you, Ketil, talking about how you're optimizing the value chain and the position of everybody, and basically putting to good use unused or underutilized resources. And to me, this is a really, really nice example of a healthy, new, digitally driven ecosystem.

 

Lars: It's healthy because it's cooperative, it's not too competitive.

 

Ketil: Exactly. So we give value back to the ecosystem because then we become a valid player and then we use less in sales. We are a natural part of their business process. We give value all the time. And so in a way, we exchange the data and our value into creating people who promote us, sells us and give us access to new customers. Our business model is not about the data that we give away back to the ecosystem. Our business model is to end users who like our solution. I want seamless openings and things in the garage, but for all others we give that value back so they become our promoters and our sales force in a way. I want to just say, since you live in Fornebu Silvija. We are a part of OBOS partners. All of Fornebu has a huge problem, you already know that today, and it will be even bigger in the future as a huge development will be established with 20,000 apartments in 2030. So we are now installing Parqio to get that data on how Fornebu's garages will be in the future to reduce the number of cars, lessen the logistics, give more access to sustainable mobility like bikes for everybody. So actually you are one of our key customers in the future on the data you are giving now. And that will probably end up with OBOS building very different garages in just a few years, smaller garages, more flexible garages and so on.

 

Silvija: And perhaps also taking some responsibility for the service of Micro-mobility on Fornebu. I think it's the perfect place, because there are old people's homes, and there are kindergartens. There are all these places where people need help with mobility. And it's very well suited for thinking about new models like connected autonomous types of vehicles.

 

Ketil: And they're very focused on creating a kind of a lighthouse for future urban development at Fornebu. So they're actually using a lot of time with us on how to help Fornebu become a great place to live. For old, for young, with little traffic and without micro mobility littered everywhere, but actually in the garage. Everybody should go down and take their mobility tool that they need for their job. Are you going to the kindergarten 300 meters away? A car is a bad tool. A bike for the kids is a good tool.

 

Silvija: Excellent. Lars, towards the end,  do you want to highlight a couple of challenges? Or what would you like students to remember?

 

Lars: Maybe I could give the listeners an assignment after listening to this. What we've been talking about now in the presentation we heard about Parqio, if they take us to the point of departure goal number 17. Which is essentially about cooperation, partnerships, alliances, building an ecosystem, if you wish. If they take that as a point of departure and then they listen to what they have said and can see what other goals from one to sixteen is Parqio actually addressing, and they will find quite a few of these goals embedded in the departure of goal 17. And again, that's sort of the message of this series that if we fail with goal 17, we will fail with goal one to sixteen. That is both a small assignment and a summary.

 

Ketil: I don't know if the master thesis for the students that followed us last year is public, but if people are interested, I think that's a very good place to start and have a look at that thesis. Because it details a lot of our early work on creating this ecosystem that is actually now up and running even earlier, but it's now actually working.

 

Lars: I think it was confidential for one year, so it's available now. And the external grader was quick and solid on concluding that this was a solid A. So it's a good master thesis and that's good advice.

 

Silvija: We'll attach a PDF to that from our platform as well then. Thank you both so much. It was a very inspiring and a very educational talk about how to think new, both about sustainability goals, especially goal number 17 and how to build very healthy ecosystems for the future.

 

Lars: Thank you.

 

Ketil: Thank you.

 

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YOU WILL LØRN ABOUT:
  1. New data-driven and sustainability-driven strategies downplay competition, focus on collaboration. Our example of Parqio, and Airbnb for garages, shows how inhabitants are thinking differently, city planners, building developers are thinking differently
  2. Resource combinationions and re-combinations. Better resource usage across the whole ecosystem, with example of garage gate providers who have become acces service providers, with ecosystem integration and software keys; resource bundles and interdependencies existing across bundles; a garage in isolation does not have that much value, but connected to the other resources in creative ways its value grows
  3. How to build new ecosystems: micro to macro level. Think differently and dynamically about data-driven ecosystems, and find sustainability in these new combinations. Value proposals change!
LITERATURE

See in TMP case folder (PDF)

TEMA: SUSTAINABILITY AND CIRCULARITY
DURATION : 33 min
DATE : 220818
CASE ID: C1221
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