Menu

Digital Report (2): Tech Entrepreneurs Must Be Pragmatic

None Designed by Freepik

Recognized as one of the most inventive mapping company, TomTom had to face a giant competitor, Google! Corinne Vigreux (C87), co-founder of TomTom, explains how the company faced this new stake.

ESSEC Alumni: TomTom, one of the world leader in the personal navigation systems, has seen its leadership ending, when Google developed, around 2004, its free mapping tools. How did you and your company face this new market and new competitor? 

Corinne Vigreux: It is true that the arrival of free navigation was a challenge for us, but it was not the only one. We’d also just acquired the mapping company TeleAtlas, the 2008 global financial crisis had kicked in and we had sold 10s of millions of Navigation devices so penetration levels were high… a perfect storm. However, we were very focused on the big picture and our ultimate goal of improving the navigation experience by further developing real time traffic and real time maps. We kept investing in R&D to that effect, whilst reorganizing the business and diversifying. It is paying off, as 2015 was a year where TomTom achieved growth again.

EA: Was diversification the only way to go in order to develop new markets?

C. Vigreux: Innovating and diversifying are key when you start your life as entrepreneur with one very successful product.
The acquisition of TeleAtlas was bold but meant that we could vertically integrate and deliver on our promise to create the best navigation experience in the world. Our ability to update map, traffic and thus guidance real time is a key technology asset for what is about to disrupt the automotive industry for ever with the arrival of driverless cars.
We provide that technology directly to automotive manufacturers as well as licensing partners like Apple and Uber.
Early on we also invested in Telematics for fleet managers and today TomTom telematics is now the largest and fastest growing company in Europe in its field. More recently in the consumer division we’ve launched our own range of sports watches as well as the Bandit action cam capitalizing on our knowledge of GPS as well as strong hardware and software competencies. We are able to keep innovating and solving problems that customers are encountering with products currently on the market.

EA: Why did you decide to focus on the Freemium business model?

C. Vigreux: We find that our customers have a wide range of usage habits. Whilst we still sell more than 4 million of PNDs per year (this is the 4th biggest consumer electronics category in Europe) we also know that some more occasional drivers prefer to use an app on their phone. For them the app is a great entry product from a trusted brand. And we provide the excellent routing and traffic information that we are famous for. This is also a demand we have from our customers.

EA: How important were the investment dedicated to the launch of the sportive camera Bandit?

C. Vigreux: Entering any new category requires some investment. We were ourselves very frustrated by the experience provided by the products currently on the market, so we decide to give it a go at solving them and we are very happy with the results. Customer satisfaction is very high. The challenge is to communicate that TomTom is also making great quality, easy to use action cams. We need to be patient but the product is great and it is getting noticed that we have solved a problem that our biggest competitor is struggling to solve.

EA: According to you, is disruptive innovation an irreversible process?

C. Vigreux: If you think about innovation, it is pretty much by definition disruptive as it does something that was not done before, but some are more disruptive than others. It is true that developments are getting faster and faster and innovation in a given industry doesn’t only come from the usual competitors anymore. Access to processing power, technological tools and markets are easier than ever before and small agile companies that solve real problems can disrupt traditional industries very fast. It is all down to customer acceptance and this can be quick. So indeed I think this process is only likely to accelerate, as there are still some big problems to solve!

EA: Is disruptive innovation becoming the new way of doing business?

C. Vigreux: Well, those disruptive innovations will by definition destabilize and disrupt existing models. In some case, the old and new will co-exist with the shared economy model, the more traditional one. I believe the next segment to be disrupted will be the financial sector. There are some very exciting Fintech companies around and I hope that Europe can play a leading role there. Transport and mobility will be the next one. I firmly believe that the way we move around in cities will have been transformed beyond recognition in the next 20 years and I am looking forward to playing a key role there, eliminating traffic congestion, optimizing transport, reducing commuting and pollution and making our cities a nice place to work and live.

EA: How do you see growth for TomTom?

C. Vigreux: Where shall I start? We are a team of pragmatic tech entrepreneurs, and we have big dreams.
Ten years ago, we created personal satnav and made this technology accessible to everyone, and empowered our users to explore the world, never worried about getting lost.
We will keep working on products and technologies that will impact the way we live and move around. We will play a major role in smart cities mobility, we will help people get more data about themselves to motivate them to keep moving, be fitter, live longer and make sure that our adventures are all shared with our loved ones!
We will keep looking at the next problem we can solve and make products that bring a smile to people’s faces.

 

Read the full report:

 

First published in Reflets ESSEC Magazine113. Click here to suscribe. 

 

This website uses cookies. By continuing to browse this site, we will assume that you consent to the use of cookies. Find out more about cookies

x