/// TrueCar CEO: Disrupting the Car-Buying Process Nearly Drove It Out of Business (Video)

October 21, 2012  |  All Things Digital


Many companies believe they can disrupt an existing offline business by offering consumers lower prices over the Internet. It’s a playbook that Amazon has used for years, and more recently, companies like Warby Parker have been getting recognition for offering prescription glasses online for hundreds of dollars less than brick-and-mortar stores. But Scott Painter, TrueCar’s founder and CEO, says he knows what it’s like to drive prices too low. The company started off providing leads to dealers that were willing to offer the lowest prices on a car. While great for customers, it often meant a loss for the dealer. At first, Painter wasn’t terribly concerned, adding that he’s always been interested in “sticking it to the man.” But after learning the hard lesson that the dealers were his partners — and there’s actually not that many of them in the U.S., he’s altered the business to be more dealership-friendly. Today, it operates more as an intelligent Kelly Blue Book service that provides pricing transparency to customers by tracking all car sales in the U.S. TrueCar collects a flat rate from the dealer when one of its customers buys a car. Up until last year, the Santa Monica, Calif., company was profitable; revenue was doubling every year for seven straight years. But in late 2011 everything changed. A nationwide advertising campaign, highlighting customers who saved thousands of dollars on their car purchases, got car dealerships to wake up to the fact that TrueCar’s service was resulting in cars being sold at a loss. What happened next nearly buried the company

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TrueCar CEO: Disrupting the Car-Buying Process Nearly Drove It Out of Business (Video)



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