Why has F1 transformed into the Spring Festival Gala in the technology world with Lei Jun, Google, Lenovo, Oracle?

Author | Cao Siqi

Editor | Zheng Xuan

After five years, the World Formula One Grand Prix (hereinafter referred to as “F1”) has finally returned to China.

From the perspective of sports competition, the home debut of Zhou Guanyu, the first F1 driver in Chinese history, made the atmosphere hot and tickets were hard to get. The various advertising spaces on the field, car body and racing uniforms unabashedly showed The huge commercial influence of this event: the brands of various multinational giants are all available, including Saudi Aramco, Google, VISA, Oracle, Qualcomm, Lenovo, SenseTime…

Almost the most influential stars in the sports and entertainment fields are here, including Deng Yaping, Yao Ming, Gu Ailing, Daniel Wu, JJ Lin, and Lin Zhiying. A few days ago, Lei Jun, the founder of Xiaomi Group, also revealed in a live broadcast that he “has obtained a racing driver's license” and said that he “is going to watch F1 live on the weekend.” In addition, according to Geek Park, many entrepreneurs and investors in the technology field will also come to watch the competition.

You know, in 2020, Lei Jun once disclosed his “terrifying and self-disciplined” personal schedule in his annual speech-at his busiest time, he had to hold 23 meetings a day. Now that Xiaomi Motors has just been launched, production capacity ramp-up and delivery tasks are heavy. With such a tight schedule, why would Lei Jun and the entrepreneurs go to the scene to watch a racing match?

You might say that F1 is one of the three major commercial sports events in the world along with the Olympic Games and the Football World Cup. It is not surprising that it has such commercial appeal. This is naturally one of the reasons. But by 2024, motorsport has developed into more than just a sport and a simple marketing scenario.

In the 1930s and 1940s, there was a famous saying in the traditional European car business: If you can win a car race on Sunday, you can sell more cars in the new week. Today, every car company should be able to have more marketing methods with higher ROI than investing in racing competitions. Moreover, the pursuit of extreme lightweight in the design of racing cars is not completely consistent with the design ideas of “orderliness, process, and scale” of mass-produced cars.

So why is F1 still so attractive today? What does motorsport mean to the contemporary automobile industry? How is it related to contemporary technology and people's lives?

01.The best stage to show off your muscles,Not just car companies

A classic saying is: When the second car in the world was produced, racing began. Around the 1950s, when F1 first emerged, motorsport carried important brand communication and marketing responsibilities. With its continued investment, Ferrari has successfully tied its brand to motorsport. In the Concorde Agreement that determines F1's share, Ferrari can receive a considerable “senior dividend” every year (each team will then calculate the dividend based on actual results). Determine the bonus sharing ratio).

Red Bull's great success in F1 and outdoor extreme sports in recent years is regarded as a classic case in the field of cross-border camps. It has not only greatly enhanced its brand reputation and influence, but also actually increased product sales. Data shows that Red Bull’s global sales share exceeded US$13 billion in 2019.

If we talk about automobiles and mass consumer brands, participation in motorsports can also be understood from a marketing perspective. However, how to understand the motivations of the toB industry giants on the list of cooperative companies of each team?

One of the simplest dimensions of understanding is: first, they must provide real data and calculation services to F1 teams; second, they must be a name on the “sponsor” list.

Different from the track and field or football and basketball sports that we are familiar with every day, racing competitions generate a large amount of driving data every moment. Processing data and predicting the consumption and degradation of tires and components is an important factor in races where every second counts. In fact, before the emergence of a large number of various cloud services and SaaS software, the F1 team's ability and methods to process data have been reversely empowered in fields such as supply chain management, finance and even air control.

Another “invisible boss” in F1 racing is the logistics giants. This global event travels to 23 different countries and regions almost every two weeks from March to November every year. For the team, the transportation of racing cars and accessories is the focus; for the event side, quickly setting up and packaging numerous basic equipment (such as the vast majority of equipment in the team's work area) is the key to ensuring the normal operation of the event. Among them, controlling costs, ensuring transportation capacity, and balancing the commercial interests of each host city are also important management lessons.

Therefore, if we separate F1 from the perspective of sports competition and regard it as a global commercial company, then there is no doubt that the participation of a large number of business partners can ensure the efficient and stable operation of this large-scale commercial entity.

02.The crown jewel of manufacturing

The impact of F1 and motorsport on the modern automobile industry can be understood in different dimensions.

For racing competitions, the ultimate lightweight design goal means getting almost all “comfort configurations” and using a large number of expensive non-regular kits; this is consistent with the Volkswagen consumer field, which pursues product comfort, standardization and scale. The design starting point and goals are obviously contradictory.

Limited by battery density (material issues), the battery life of new energy vehicles has always been a major pain point for its products. In order to improve battery life, various manufacturers have actually borrowed a lot of experience from the racing field in terms of appearance and aerodynamic design. The “new energy vehicles have similar appearance” that consumers complain about is, to some extent, intended to achieve the same product goal by different means.

The Sauber team that Zhou Guanyu works for is mainly Sauber Racing, a subsidiary of the Sauber Group that manages motorsports. Although the Sauber Group does not directly produce cars, it is a well-known aerodynamics service provider in Europe. Its “wind tunnel” at its Swiss headquarters also provides a large number of services to Alfa Romeo. 3D printing and AI technologies are also widely used in the research and development process.

Even racing cars that pursue extreme driving operations are also pioneers in the field of intelligence. F1 teams need to abide by strict speed limits when entering the pit area. If the driver only relies on the “foot feel” to control the mechanical pedal, it is easy to lose speed or violate speeding rules. The technology of cruise control appeared in this form. Today, it has been widely used in a large number of mass-produced models and has become the basis for realizing high-end assisted driving and autonomous driving technologies.

Of course, there is also the empowerment of F1 racing in the field of research and development of car chassis, suspension, steering and other aspects. When Lei Jun announced that he was building a car, the first car-related book he published was “How to Build a Car” by Red Bull Racing chief designer Newey.

03.Don’t forget, it’s still aA huge entertainment IP

Finally, back to a question closer to the F1 event: In 2024, when the marginal effect of racing as a marketing tool for car companies is declining, what is the logic of continuing to invest in and operate F1 teams?

The answer is simple: This is a professional sport that makes money and is growing its assets.

The core change came from Liberty Media Group's acquisition of a controlling stake in F1's parent company in early 2017. After Americans who are good at managing sports IP entered, they introduced a “budget cap” mechanism to this money-burning sport, which reduced the gap between teams and made competition more intense.

At the same time, cross-border partner Netflix entered the scene and launched the documentary “Drive to Survive”, telling the story of F1 drivers off the field. After the release of the documentary, the influence of F1 in the US market has rapidly increased. In 2023, F1 will also enter the “Casino City” Las Vegas for the first time, facing consumers directly in the “direct sales format” of independently hosting races. Previously, F1's hosting was mostly similar to the “franchise” model, and the F1 parent company usually only needed to charge a high fee (tens of millions of dollars) for running the race.

According to the latest annual report at the end of February 2024, F1's total revenue last year reached US$3.222 billion (approximately RMB 23.323 billion), a year-on-year increase of 25%, and operating profit reached US$392 million, a year-on-year increase of 64%. The total dividends of the 10 teams increased to US$1.215 billion from US$1.157 billion in the previous year, a year-on-year increase of 5%.

Therefore, even if you are unable to go to the scene of the racing competition, you can choose to get closer to this highly cooperative sport between humans and machines through “Speed ​​​​Survival” at home. From the perspective of a reality show, there is no more exciting workplace “court battle drama” than “Speed ​​4”. In an F1 team, teammates must cooperate with each other to score higher points for the team and obtain higher bonuses; they are also the most direct competitors – because they drive cars with the same specifications, in this cruel competition We are each other's best mirror.

Competition is as fast and brutal as the business world.