The head of BMW’s impact ventures explains how the auto giant is moving beyond the car — and how building apartments will help it get there

When BMW’s subbrand Mini arrived in Brooklyn, New York, to establish a technology incubator and accelerator in 2017, it took a different approach to the Silicon Valley norm.

Today, its A/D/O (an acronym derived from Mini’s original Amalgamated Drawing Office) space in Brooklyn’s hip Greenpoint neighborhood isn’t full of the company’s branding, nor does it look much like the countless WeWork buildings or similar spaces that dot the area.

Speaking to a group of journalists in the sun-drenched building — which comprises a public space, a coffee shop, an art gallery, and a high-end restaurant — Esther Bahne, BMW Group’s head of impact ventures and Mini’s head of brand strategy, explained the company’s approach to innovation.

“Obviously, we knew about the disruptions that were coming for the car industry, and we were in the middle of it,” Bahne said. And while some of her team’s recommendations, like making more electric Mini models and changing sales strategies, are similar to moves other old-guard automakers are making in order to stay relevant, the other arm of her team’s mission involves zero cars whatsoever: making Mini into a lifestyle brand.

Graham Rapier/Business Insider

A brand beyond cars

Through its now five classes of startups, Mini is clearly thinking beyond the traditional notion of an automobile and its function in our lives. Executives are quick to boast that the selection process for the incubator is more competitive than the famous YCombinator, which accepts about 1.5% of applicants.

Seven companies have joined Urban-X, the accelerator located at A/D/O, for its newest cohort, the company announced Wednesday. The group spans a wide range of products and services, from The Free Ride, which offers rides in electric golf carts to and from events, to GreenQ, which uses digital analytics to improve trash collection, and Borrow, a peer-to-peer-vehicle-rental app.

“Our teams are with them in the trenches every day,” Bahne said. “They have business support, they have financial advisers. I mean, we have to get them onto a stage on demo day in front of millions of dollars in a room, so they have to have their s— down.”

This is a key distinction for Mini, according to Bahne. Other automakers are snapping up small companies to make headlines, add to their product line, take competition off the market, or do all three.

Ford, for example, recently did this with its buyout of scooter startup Spin. Other automakers have purchased self-driving startups, mapping companies, and more for high prices in recent years.

Mini, in contrast, is making small, early-stage investments in companies that could very well fail when their products finally go to market.

“For what we want to do, it is not a smart idea to take them off the market,” Bahne said. “It’s a really smart idea to have them on the market and make exactly those connections, so we can understand where it’s going and be there for the ride.”

Mini wants to be a lifestyle brand — starting with apartments

Mini’s plans for its diversification don’t end with mobility — it wants to be in every part of your life, even your home.

Armed with an array of sampling data, the company saw three major trends that customers valued more than mobility. At the top of the list was living, followed by style and experiences.

So the team set out to create Mini Living — a high-flying, luxury apartment building in Shanghai that aims to take the design process Mini used to create its first car in as little space as possible beyond the commute.

“The idea is that you live on a small, personal footprint but have shared amenities, like a great kitchen and community lounge,” Bahne said. “It’s like a luxury flat share, but you can still close your door and still have your bathroom.”

Mini hopes to set up coworking and design spaces similar to A/D/O in Shanghai and other, future Mini Living sites. Similar to the one in Brooklyn, these will also be a fusion of office space and public areas.

“The mobility space is just d— exciting right now,” Bahne said. “Yes, there are a lot of players out there, but I think we have a very good shot at coming up with quite a few that will work.”

Here’s the full list of Urban-X’s 2018 cohort:

  • The Free Ride is an all-electric, short-range ride-sharing company providing city-goers with free, sustainable transportation.
  • Borrow is bridging the gap between leasing, ownership, and on-demand ride-sharing by providing short-term electric-vehicle leasing.
  • Thrilling is reducing carbon, waste, and water footprints by encouraging the reuse of clothing through vintage- and secondhand-store online marketplaces.
  • Treau is building advanced climate-control systems to bring sustainable, comfortable, and efficient cooling and heating to buildings everywhere.
  • GreenQ is creating truck-based waste-analytics systems to improve logistics, diversion, and recycling.
  • Toggle is building an automated process that utilizes software and industrial robotics to reduce costs and increase productivity of rebar cages used in reinforced-steel projects.
  • Gearbuddy uses the internet of things and machine learning to digitize every aspect of construction, including equipment-making, to make construction more efficient, more effective, and safer.
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