Many years ago, I had the rare privilege of hearing a young hedge fund manager named Jeff Bezos describe his new company called Amazon. He was asked, “why books?” Bezos responded that he wanted to create something in the virtual world that had millions of SKUs and that could not be replicated in the physical world. In his mind that meant music, drugs or books. He said, music was already being disintermediated, drugs had too many liability issues, so books it was for launching Amazon. With twenty-twenty hindsight I regret having bought his vision but not the stock.
I say this because we seem to have moved from the era where companies like Amazon really did “disrupt” massive markets by using technology to overthrow traditional business practices and models to an era where anything that involves going online is now called “disruptive” with the goal being to generate funding and hopefully exit strategies. We have cheapened the term disruptive in the process and in a strange way have rewarded incremental improvement to an unwarranted degree.
Interestingly, even with that said, there remain really, really big markets that for a host of historic reasons are there to be transformed. They involve the ‘Bezos vision’ of looking at something with millions of SKUs and providing an online user experience that cannot be replicated in the physical world, and that once recognized can be invaluable.
One such market is an interesting sub-set of the automotive industry, and believe it or not the U.S. is a prime target in general; the aftermarket for automotive parts in particular is especially enticing for true disruption. And, that is where an interesting White Plains, New York-based start-up RxSpeed is now seeking to change the game in dramatic fashion.
At a high level, RxSpeed.com is a comparison shopping engine for the so-called automotive aftermarket. For those not familiar with the term—and not to be confused with the used car market—this is the market for people who are looking to further accessorize their favorite mode of transportation. These so-called “gearheads” are individuals of who are totally into cars and are extremely knowledgeable about how to modify and fix them.
The RxSpeed site is designed to serve what is a very large (25 million enthusiasts in the U.S. alone that span every type of demographic) and extremely intense group of buyers who spend vast amounts of time and money during their research and purchase process. The proprietary RxSpeed software platform catalogs millions of parts from hundreds of brands to help match customers with retailers easier and faster than ever before.
Let me explain the disruption at work here.
Gearheads take notice
I had an opportunity to speak with Michael Chapin, CEO and co-founder of RxSpeed about the company’s platform and he laid out several important facts that are more than a big noteworthy:
From the above the reasons why this market is an inviting target for Chapin, a gearhead and IT guy himself, are more than understandable. “We saw the need to create a very user-friendly experience to match a very passionate audience in a rapid way to not only the part they want but the best place to order it.”
Chapin then explained some of the details. RxSpeed is built on big data, taking in millions of records every week from a variety of brand sources, then organizing that data by linking the correct vehicle-fitment databases and part-category databases. This is how a process that used to take hours or even days now take minutes as search engine results on the site link shoppers to parts for their year, make and model vehicles, and provide a list of retailers selling those products. RxSpeed currently features 470 different brands representing more than 1 million parts with 27 million vehicle applications to search in its database.
As Chapin noted, “Think of this as a car person’s enhanced version of Kayak or Expedia (News - Alert) in the travel and hospitality industries. They know what they want but what they don’t know is where to get it and at the best price. Our secret sauce is using our proprietary software platform to clear up a lot of dirty data so that it can be easily searched and instantly useable.”
In addition, RxSpeed since its launch in February, is creating unique editorial content via an area on the site called “The Lab.” It features enthusiasts’ projects with clickable photographs, allowing consumers to discover new products with one-click access to a parts company’sentire product catalog. It is in the capable hands of Michael Crenshaw, former editor of 0-60 & RIDES magazine.
Chapin says RxSpeed will continue to add to its database and release new features throughout the year. He also sees several key revenue streams available to the company aside from the typical advertising ones. “We are in a unique position to be gathering all types of data about people and their transactions, which as you can imagine is very valuable to numerous stakeholders who are already interested in our data and its extensibility throughout the aftermarket supply chain,” Chapin noted.
To recap, this is a $34 billion market in the U.S. alone with relatively minimal online market penetration held back by the lack of data standards. It has millions of SKUs. There is a huge audience that wants to find what they want and get the best price and suppliers that would like nothing more than making a match, including driving traffic to their physical sites. In short, it fits the profile Bezos described years ago as ideal for disruption almost perfectly.
RxSpeed, by using its expertise about the market and how today’s big data solutions and analytics can turn dirty and complex data into real business intelligence that is highly useable, seems to have the Rx for what has been ailing the auto sales aftermarket. And, if you are a gearhead, it is certainly worth taking out for a test drive.