Profiles of Sustainable Entrepreneurship: Pearl Automation

A recent article in The New York Times discussed Pearl Automation, which was founded in 2014 by three former senior managers from Apple’s iPod and iPhone groups.  While Pearl has maintained what its founders believe to be the best parts of Apple culture, particularly the focus on innovative design and creating products that provide the highest quality user experience, they have also made a conscious decision to reject certain elements of that culture that they found to be counterproductive for engaging employees and creating and maintaining a healthy work environment that allows employees to fill as if they are seen as valued contributors.

The first thing to understand about Pearl is its focus on using technology to improve the safety of the tens of millions of older cars that are being driven without the high tech safety features that are now commonly installed on newer models.  Pearl seeks to develop products that will make the roads safer, a socially responsible goal that proved to be quite appealing to the dozens of former Apple employees who joined Pearl after growing weary of spending their professional lives worrying about incremental improvements to the iPhone and the Mac.  One of the co-founders explained: “Adding safety features to the cars on the road today is a way to make them more useful. We want to help people to modernize their cars without having to buy a new one.”  Indeed this a laudable social objective; however, the number of older cards being used by consumers who are not interested in, or able to, invest in new models makes Pearl’s target market quite large and the opportunity for economic success is apparent.

Open and continuous communication with everyone in the company is an important principle for the founders, something that stands in stark contrast to an Apple culture in which access to information was closely guarded and employees were discouraged from talking with one another about their jobs.  At Pearl, the founders and other managers hold weekly meetings with the entire staff to provide briefings on upcoming products, the financial health of the company and technical problems that have been identified and the solutions that the company is pursuing.  Employees are even given a chance to see and hear presentations that senior managers are making to the board of directors.  The guiding principle behind these practices is that everyone at the company is seen as an important contributor to the company’s success and in order to be effective they need to have as much information as possible.

The founders obviously believe that a culture of openness makes the design practices that have been imported from Apple more effective.  For example, Pearl’s products share the same level of complexity as the ones that employees worked on at Apple and Pearl has followed Apple’s lead by breaking big projects down into smaller tasks that are assigned to small teams.  Each of the team members is charged with completing one or more subtasks necessary for the team to be successful, something that was referred to at Apple as assigning people to be the “directly responsible individual”.  This approach maximizes participation and decentralizes decision making, in sharp contrast to the tight control that Steve Jobs, and now his successors, exerted over the smallest details relating to the work the Pearl employees did at Apple.  Contributing at Pearl means having a say in what problems need to be solved, something that only works if employees have access to full product design picture.

Pearl’s cultural and business competencies also include a disciplined approach to engineering, a passion for elegant and efficient design and an appreciation of the need to vigorously oversee the activities of the dozens of companies in the company’s supply chain.  Rigorous deadlines are set and presumably circulated among everyone in the company at the weekly meetings.  Communication regarding technical issues compliments the company’s focus on relentless investigation of design and operating flaws, a practice that also carries over to negative feedback from customers.  The founders emphasized the importance of understanding why a failure occurred as a means for getting a good grasp on the full boundaries of the problems that must be solved.  Pearl also invests a lot of time and effort in testing, something that the founders believe many startups do not pay enough attention to.

All in all, the early steps that Pearl has taken to develop and implement its business model include a number of important elements for all potential sustainable entrepreneurs to consider:

  • Pearl’s founders selected a business model that emphasizes innovation and proactively targets an important social issue: minimize the risks associated with driving by making cars safer.
  • Pearl’s products are closely related to the actual needs and preferences of potential customers and continuous testing of prototypes ensures that customer feedback is collected and integrated into product design.
  • Borrowing from their experiences at Apple, the founders have established functional excellence as a requirement of Pearl’s sourcing arrangements.
  • The founders have created an organizational culture in which everyone is involved in the development and implementation of sustainability practices and has an opportunity to access information about the business model and contribute to the success of the product development and commercialization process.

However, Pearl also faces several challenges in its path toward sustainable entrepreneurship.  For example, while the size of the potential market for its product seems apparent, the company has yet to demonstrate its ability to execute a production and pricing strategy that ensures the product will be accessible at reasonable prices that still allow the company to enjoy margins that will support survival of the business.  Another consideration is whether making it easier for drivers to keep their older vehicles on the road will slow transition to newer, more environmentally-friendly cars or wider use of mass transit solutions.

Click here to download “Sustainable Entrepreneurship”, which is part of the Project’s Library of Resources on Entrepreneurship for Sustainable Entrepreneurs.

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