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The tiny Fiat Topolinoabout the length of a cargo bike and half as long as an American SUV or pickupis the kind of car tourists stop to photograph as a cute curiosity in Rome or Milan. The electric car only travels 28 miles an hour, and its designed for dense European cities. But it also only costs around $10,000, and Fiat is now betting that Americans are ready for something this tiny. The company recently announced plans to bring the car to the U.S., shortly after Trump said that he wanted to help bring similarly tiny kei cars to the U.S. from Japan. Theres a strong argument that smaller cars are better for society: Theyre more affordable, more efficient, take up less space, and theyre safer for pedestrians and other vehicles in a crash. (Uncharacteristically, Trump noted that “really cute” kei cars can be electric and are fuel efficient, shortly after his administration started the process to roll back fuel efficiency requirements.) But for the smallest microcars to be more than a niche category, a lot would have to change. Growing interest in smaller rides For years, the conventional wisdom has been that Americans love giant vehicles. Ford F-Series trucks have long been the bestselling vehicles; SUVs are more popular than cars. But size preferences are slowly starting to shrink. Compact SUVs now outsell larger SUVs. Sales of midsized trucks are growing faster than full-sized trucks. Compact car sales are also growing. Automakers push bigger vehicles because they make more money on them, partly because of loophole in fuel efficiency regulations. But as consumer cost concerns grow, buyers are moving in the other direction. I think that its certainly not baked into our DNA to like big cars, says Ben Crowther, policy director at America Walks, an organization that advocates for smaller vehicles to make streets safer for pedestrians and others on the road. Its the result of several decades worth of marketing. But where I think I see the tipping point being is that small cars are more affordable. Right now, the average cost for new cars is around $50,000. Thats easily someones salary. That cost is inflated because vehicles are oversized. [Photo: Telo] Telo, a startup making a small electric pickup thats roughly as long as a Mini Cooper and cheaper than a typical gas truck, says that its seen strong interest in its first model, which will hit the market next year. Jason Marks, Telos CEO, says that its also noteworthy how much demand there is for kei cars and trucks. Right now, the U.S. only allows the Japanese vehicles to be imported when theyre at least 25 years old, under regulations aimed at classic cars. But despite the restrictions, kei trucks are the largest class of vehicles being individually imported to the U.S., with around 7,500 arriving last year. These are vehicles the size of golf carts, with well over 100,000 miles on them, that cant go 60 miles an hour, and only about 17 states legally allow you to drive them on the highway, says Marks. And theyre still this desirable. Telos offering is very different than a kei truckthe Telo MT1 can haul as much as a regular passenger truck, it can be driven anywhere, and its designed with modern safety features including sensors, unlike 25-year-old kei cars, which typically dont even have airbags. Still, the interest in kei cars illustrates the appetite for smaller cars in general. And though kei cars and microcars like the Topolino face challenges in adoption, theres also room for them to become more widespread with more support. Kei cars versus microcars In Japan, kei carsshort for keijidosha, meaning “light automobile”originated in 1949 as part of Japanese industrial policies to rebuild the country’s auto industry when most people couldnt afford larger vehicles. The cars have to stay under 11 feet long and have small engines. They’re allowed on Japanese highways, but have reduced safety features. [Photo: Paul Esch-Laurent/Unsplash] They’re still very popular in Japan, and also popular in countries like India, where Suzuki’s tiny cars have dominated the auto market for decades. But even current models likely wouldn’t meet safety requirements in the U.S., and adding those features would jack up costs. Take the example of the Honda N-Box, a bestselling car that costs around $12,000 to $15,000 and has a fuel efficiency of around 50 miles per gallon. “The Honda N-Box does not have airbags, it does not have ABS, and it does not have some of the features that you would typically require under the current regulations in the United States,” says Aditya Ramji, an economist at UC Davis who focuses on energy, transportation, and electric mobility. “That means that the moment I add those requirements and made this vehicle compliant, the price of the $12,000 N-Box now will become $22,000 straight away.” That’s similar to the cost of the Toyota Corollamaking it unlikely that an N-Box could compete under current regulations. [Photo: Honda] In theory, the DOT could create new standards and certification requirements benchmarked to those that have been in place in Japan for decades, and make it more feasible to import new kei cars. That process would take time. (Trump’s post on Truth Social saying “I have just approved TINY CARS to be built in America” did not actually constitute approval.) Microcars like the Fiat Topolino fit into a different category under U.S. regulationssomething the DOT calls a “neighborhood electric vehicle” or NEV. The cars are restricted to speeds of 25 miles an hour. In most states, they’re only allowed on roads with speed limits up to 35 miles an hour. Some states require extra safety equipment, like windshield wipers. But airbags aren’t required. Because of the limitations, it’s a niche market. Some experts are skeptical that demand of either kei cars or neighborhood electric vehicles could significantly grow. “Generally speaking, it is difficult to imagine a scenario that could significantly shift the personal vehicle market in a direction that would result in widespread adoption of very small cars in the United States,” says David Bunch, a management professor emeritus at UC Davis who has studied consumer choice in vehicles. The main exception, he says, could be highly urbanized areas like New York or San Francisco. [Photo: Fiat] The safety challenge Both kei cars and neighborhood electric vehicles struggle with consumer concerns about safety. Still, Ramji argues that tiny vehicles could be relatively safe in urban commutes even without the current suite of required safety features, as they travel at relatively low speeds. The growing suite of safety features on other modern cars, including sensors and automatic braking, also helps. “I think the trend that well be seeing as the fleet turns over and more of these vehicles have safety features, it means that you dont need the full armor of an SUV or a pickup truck because your car, and everyone elses car on the road is actively working beyond just the driver to avoid that collision,” says Crowther. If more of the tiny cars were in use, it would also mean fewer pedestrian deaths: If a person is hit by a small vehicle, they’re much more likely to survive. That’s both because there’s less force in a collision and because low cars hit the body lower than a large truck or SUV that can fatally strike someone in the head or chest. And small cars are also less likely to damage other vehicles in a crash. The paradox, of course, is that people are more likely to choose cars that protect themselves, not others on the road. “The notion of ‘safety benefits’ of smaller cars has long been problematic, because they must share the road with larger vehicles, and in a ‘contest’ the larger vehicles win,” says Bunch. “That is, smaller cars are by definition less safe in an environment with mixed vehicle sizes.” Can microcars grow? Even with the challenges that exist, there could be room for more tiny cars in the U.S., especially in dense cities. Demand isn’t guaranteedthe tiny Smart Fortwo was taken off the American market in 2019 due to low sales. But some policy changes could support growth. For example, a city could offer cheaper parking permits based on vehicle size, since tiny cars don’t take up as much valuable curb space. States could choose to allow neighborhood electric vehicles on more roadsor, to boost safety, could lower speed limits on more routes. Better urban design would also help. “To have neighborhood electric vehicles, you really do need to have a better mix of land uses, which we don’t see in most suburban settings,” says Kara Kockelman, a professor of transportation engineering at the University of Texas at Austin. “In these planned developments, a grocery store is off of a much higher speed street.” If it was possible to drive at a low speed to run errands or commute to work or school, tiny cars could become a more viable option for more people. (Of course, it would also be easier to bike in that scenario.) [Photo: Nissan] Both microcars and kei cars could be useful as a second car for short commutes, says Ramji, and that could potentially help unlock a new urban market for EVs. It’s not likely that the current administration will intentionally do anything to promote electric cars. But creating new regulations that allow kei cars could also theoretically boost EV sales. One popular current kei car, the Nissan Sakura EV, has around 110 miles of range and costs $16,000 or $17,000far less than most EVs on the U.S. market. “Maybe this is an opportunity in the U.S. to think about how the small car segment can fundamentally serve the electrification narrative and really come in strategically leapfrogging that ecosystem and looking at urban EVs as opposed to gas cars in the mini car segment,” Ramji says.
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Here we go again! For the third time within a quarter century, the Warner Bros. studio assets have been acquired for more than $70 billion. Since I commented very sharply on the first two, lots of people are asking me my thoughts on the just-announced purchase of Warner Bros. by Netflix. I provide my response in this Playing to Win/Practitioner Insights (PTW/PI) piece. And as always, you can find all the previous PTW/PI here. Third Time Lucky? The first of these mega deals was in 2001 when AOL bought Time Warner in a deal that valued Time Warner equity at $166 billion. (While it was more of a merger than a takeover, it was technically structured as an acquisition). The next one was in 2018 when AT&T bought Time Warner for $85 billion. Both deals routinely make lists (like this one) of the worst takeover deals in business history. The AOL Time Warner deal cratered almost immediately as the market realized that AOL was largely worthless, which was confirmed when AOL was spun off for a mere $3 billion in 2009. The selling shareholders initially thought they got an awesome deal because Time Warner shares were valued at a massive 70% premium over the preannouncement price. However, the payment was in what turned out to be wildly overvalued AOL stock. In the end, Time Warner shareholders gave up 55% of their companyworth about $55 billion based on preannouncement value of Time Warnerin exchange for an asset worth $3 billion. As a combination, AOL Time Warner was a disaster, but the shareholders of AOL made off like bandits. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/martin.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/Untitled-design-1.png","eyebrow":"","headline":"Subscribe to Roger Martin\u0027s newsletter","dek":"Want to read more from Roger Martin? See his Substack at rogerlmartin.substack.com.","subhed":"","description":"","ctaText":"Sign Up","ctaUrl":"https:\/\/rogerlmartin.substack.com","theme":{"bg":"#00b3f0","text":"#000000","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#000000","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91412496,"imageMobileId":91412493,"shareable":false,"slug":""}} In the AT&T Time Warner deal, AT&T learned not long after the dust had settled that this was a disastrous acquisition and, a mere three years later, sold the Time Warner assets to Discovery for $43 billiona massive discount. As I have pointed out before, that is the equivalent of the AT&T executives holding a bonfire of $38 million of shareholder cash every day for three consecutive years. On December 5, 2025, Netflix reached an agreement to acquire the Warner Bros. assets for $72 billion. Of course, we dont know yet how it will turn out. The first two deals destroyed over $50 billion of value for Time Warner shareholders and over $40 billion for AT&T shareholders, respectively. The hope is that this will be third time luckybut the track record around the transfer of Warner Bros. assets hasnt been good thus far. Deeply Flawed Strategic Rationales I knew the first two deals were doomed from the outset because the (so-called) strategic rationale for both was deeply flawed. The stated strategic logic of the AOL Time Warner combination was that AOL would benefit competitively in the internet access business, in which it was then the market leader, by having proprietary access to Time Warner content. Sounds great! But the logic just doesnt track. Time Warners value was based on its ability to broadly distribute its content. Content creation is a fixed cost business. Creators invest an enormous amount in creating the content and then to amortize that fixed cost, they strive to sell their content to as many users as possible. AOL led in the internet access business with 30% market share at the time. One of two things could have happened after the combination. First, Time Warner content could have given AOL a meaningful advantage over its competitors. That would have validated a key tenet of the rationale. But had that happened, the other 70% of the market would have boycotted Time Warner content because it was helping their competitor, which would have sabotaged the business model of Time Warner. Alternatively, Time Warner content may not have been able to move the needle on AOL advantage over its competitors, invalidating the entire premise of the combination. That is, there was zero probability of the strategic success of the combination, which I described in this Harvard Business Review piece. On AT&T Time Warner, the rationale was owner economics, a concept I hate in the general case, as I discuss in this piece, and my antipathy applies in spades to this case. The idea was that by buying Time Warner, AT&T gained the advantage of owner economics. Rather than buying content from outside providers and having to pay a profit-margin premium for it, AT&T would get it from Time Warner at costimproving the (owner) economics of AT&T. Yup, that would be true. But then all the business Time Warner would have with its giant customer, AT&T, would be at zero profit, thus tanking the profitability of Time Warner, ensuring that its value would never be close to the $85 billion for which it was purchased. Days after the merger, I pointed out this logical flaw to Fortune reporter Jeff Colvin, who had called me for my opinion, and I predicted that: a) the acquisition would be an unmitigated disaster; b) would be divested within five years; c) at a price half of the acquisition price; and d) would cost AT&T CEO Randall Stephenson his jobpredictions that Colvin confirmed in an article at time of divestiture. The only thing on which I was (slightly) wrong is that I predicted AT&T would salvage 50% of the purchase priceit was 50.6%. Both illustrate what I call the Impossibility Theorem, which describes a situation in which for the logic to hold, two things must be true, but if one is true, the other cant possibly be. For example, if AT&T does benefit from owner economics, Time Warner cant maintain its value. If Time Warner can maintain its value, AT&T cant benefit from owner economics. Not understanding the Impossibility Theorem cost shareholders roughly $100 billion across these two acquisitions. Netflix-Warner Bros. This all begs the question, is this just another Warner deal based on a fundamental strategic fallacy? No, it is not. There is no insane argument about owner economics or vertical integration. This is a plain, old-fashioned bulk-up move. With the acquisitionof Warner Bros., Netflix bulks up in its two core businesses: content creation and content streaming. Netflix started in media content distribution and led by pioneering internet streaming, becoming the dominant player in that arena. It distributed the content created by the traditional major players in that space, such as Universal, Paramount, Warner Bros., etc. However, during the 2011-2015 period, all the new streaming players, including Netflix, started spending aggressively in content creation of their own. As a result, Netflix is now a major player in both content streaming and content creation. However, in streaming, Netflix is no longer the sole dominant player. Based on recent numbers, Netflix still has the biggest U.S. subscriber base with 81 million. But Amazon is close behind with an estimated 75 million. Disneys Hulu has 64 million. But if you combine the three Disney streaming platforms (Hulu with 64 million; Disney+ with 55 million; and ESPN+ with 25 million), it is far ahead of Netflix with 134 million streaming subscribers. Globally, Netflix leads with 302 million subscribers to Disneys 221 million (combined) and Amazons estimated 200 million. But with the Warner acquisition, which includes its HBO Max service, Netflix jumps slightly ahead of Disney in the U.S. (139 to 134 million) and dramatically widens its global lead with 430 million to Disneys 221 million and Amazons 200 million. This is simple straightforward bulking up in Netflixs core streaming businessovercoming its scale deficit in the U.S. and extending its scale advantage globally. That is a simple and powerful strategy logic. In content creation, Netflix was a big part of the dramatic transformation by which the players that have entered content creation since 2011 now make up 50% of the estimated content creation spend. But prior to this deal, Netflix was a mid-tier player in that game, spending an estimated $17 million in 2024 compared with Comcast-Universal at $37 million or Disney at $28 million. However, adding in Warners $14 million makes Netflix one of the top tier content creators. To the extent that scale matters in streaming and content creationand I think it doesthe strategic logic of this makes lots of sense, in stark contrast to the previous two trades of Warner Bros. assets. The Rub When the AOL Time Warner and AT&T Time Warner deals were announced, there was huge uproar in the press over antitrust concerns. Would the vertical integration hurt consumers? Would AOL and AT&T become dangerously dominant in their primary markets because of their ownership of Warner content? I didnt worry for a second because regulators dont have to protect consumers from mergers that are going to crater and I knew both deals were destined to fail miserably. Regulators only need to worry about mergers that are likely to succeed! And they should worry about this one. The Netflix press release is quite something. It makes two claims aimed specifically at potential antitrust concerns. Bold-type callouts claim that the combination will: 1) Offer More Choice and Greater Value for Consumers, and 2) Create More Opportunities for the Creative Community. I understand why companies do this kind of thing. Netflix would love to have readers be insipid enough to believe these two things because that would suggest there are no antitrust problems about which regulators should be concerned. The problem is that both claims are flat out false. When you reduce the number of major competitors by one, you do not provide more choice or greater value for consumers. If you buy the competitor and leave it alone, at best, you provide the same choice and the same value. But to leave it alone is not why a company pays a huge takeover premium to buy a competitor. And when you reduce the number of major industry players by one, you do not provide more opportunities for suppliers to that industry. You reduce by one the number of customers who compete for their services. I can totally understand why Netflix wants to reduce competition from other streamers and other content creators. In streaming, it started with a near monopoly but has lost its lead in the U.S. market and is no longer far ahead globally. Getting rid of one major streaming competitor and bulking up makes lots of sense. In content creation, when all the new players entered, including Netflix itself, they created a bonanza for content creation talent. It has never been a better time for talent, as exemplified by Shonda Rhimess $450 million production deal with Netflix. Bulking up to have more buying power over content talent, plus eliminating one major content competitor makes total sense. But dissimulating about it? Not a good look. Practitioner Insights You will be fed all sorts of ridiculous so-called strategy logic on a regular basis. It can be vertical integration, owner economics, or having one less competitor will deliver more choice for consumers. Some are the product of utter cluelessness, others fundamental dishonesty. Sometimes somebody else (like me) will help you expose the logical fallacies. Other times, you will be on your own. For those times, it is important to practice your critical eye for strategy logic. When you read or listen to someone espousing a strategic logic, practice interrogating it. Dont just accept it. Instead, take it under advisement and ask whether there is a better, more profound logic to explain the situatione.g. Time Warner shareholders were about to be taken to the cleaners by AOL shareholders, owner economics is a fraudulent concept that will cost AT&T shareholders dearly, and Netflix isnt motivated by consumer choice or creative community welfare but rather by increasing its scale and reducing competitive intensity in its core businesses. {"blockType":"mv-promo-block","data":{"imageDesktopUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/martin.jpg","imageMobileUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/09\/Untitled-design-1.png","eyebrow":"","headline":"Subscribe to Roger Martin\u0027s newsletter","dek":"Want to read more from Roger Martin? See his Substack at rogerlmartin.substack.com.","subhed":"","description":"","ctaText":"Sign Up","ctaUrl":"https:\/\/rogerlmartin.substack.com","theme":{"bg":"#00b3f0","text":"#000000","eyebrow":"#9aa2aa","subhed":"#ffffff","buttonBg":"#000000","buttonHoverBg":"#3b3f46","buttonText":"#ffffff"},"imageDesktopId":91412496,"imageMobileId":91412493,"shareable":false,"slug":""}}
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Ive tried them all. A fancy planner, perfect workout routines, ambitious ways to read more, and writing rituals to get more done. I did the research. But what ultimately worked is something called the kaizen incremental method. An idea is from Japanese manufacturing, of all places. It means continuous improvement. The practice of tiny actions. A step so small your brains resistance (a built-in fight-or-flight response to big, scary changes) doesnt even bother to fight it. I use the kaizen approach as a backdoor to building new neural pathways. Im not forcing change; Im gently guiding my brain into new habits, one step at a time. Thats how I started writing almost every day. I opened my laptop and started putting thoughts down at the same time daily. I didnt aim to write a whole page. Just ideas down. After a few weeks of the same practice, writing things down became easy. Not effortless. But the resistance was not the same. Thats the kaizen advantage. You work with your psychology, not against it. Big goals Youve probably tried the new year, new me approach to life. You start the year with big goals. And big motivation. But most people dont even make it through to March. Whats helped me is tiny but consistent routines, rituals, and behaviours. It doesnt matter what time of year. I focus on stacking good actions. The kaizen approach feels like nothing. Until suddenly it feels like everything. The easier a behavior is to do, the more likely the behavior will become habit, writes B.J. Fogg in his book, Tiny Habits. Kaizen matches how you live. Say you want to read more. The old way: Ill read 50 books this year! You buy a stack, stare at it, and feel behind by February. The Kaizen way: Ill read one page before bed. One page. Youll often read more. But on the worst day of your life, one page is still a victory. Youve kept the habit alive. One tiny bit of progress at a time. You read one or two pages of your favorite book daily. A year later, youve finished more books than ever. You save $50 a month. One day, youve built an emergency fund. You start by tidying one drawer. Eventually, your whole space feels clean. Theres no one massive win. Just small wins stacking up. When you want big results, small steps feel insulting. You want to sprint. You want the outcome that means everything. You want proof that youre serious. Direction is everything But being serious means not stopping. The secret is in the consistency, not the intensity. A 1% improvement, repeated, is compound interest for your life. Do the math: 1% better every day for a year, and youre nearly 38 times better by the end. Life isnt that linear, but the direction is everything. Youre moving forward, not stalling out in a cycle of ambition and guilt. Youll doubt it at first. I did. It feels too small, too insignificant. One page of reading is nothing! But nothing is sustainable. Youre playing the long game. You cant overhaul your entire life every January. You will burn out and feel frustrated. Youll feel like you failed when really, its your system that failed. Small steps are not a compromise. Theyre a sustainable life strategy. Make your system too easy to fail. Pick the smallest version of the thing you want. If the goal is to write, maybe you start with one sentence a day. Yes, one. Whats the point? The goal is not to overwhelm your brain. Convince yourself its too easy not to try. The more you practice, the greater the chance of it becoming a habit. Make it repeatable If you need willpower, its too big. Keep score. Tiny wins feel bigger when you can see them. Can you quantify your results? Show your wins to yourself. And let yourself feel proud. Seriously. Celebrate the tiny stuff. Your brain loves reward signals. Over time, your small steps evolve. You dont have to force it. Momentum does the heavy lifting. Kaizen doesnt just help you change. It changes how you see yourself. When you repeat every day, even in tiny ways, you stop seeing yourself as someone who tries. You start seeing yourself as someone who does. And that transformation is everything. Big change looks impressive, but small, consistent action builds identity. They build trust in yourself. They build a life that doesnt fall apart the minute motivation fades. If you want a change that can last in the next few months, something that sticks, try smaller. Way smaller. The path to significant change isnt broken resolutions. Its tiny, steady progress. Just pick an area of change. A tiny habit you can sustain. And start small. Pick one thing you are likely to do. Something that wont tell your brain its a big deal. Kaizen is the discipline of consistency. You dont need a new version of yourself to pursue things too overwhelming for your brain to sustain. What you need is just todays version, willing to take one small, almost silly step. Significant change is not an event you schedule. Its a practice. Youre not breaking yourself down to build something new. Youre just guiding yourself, kindly, in a better direction. Take that goal you are pursuing. Now, make it smaller. Smaller still. Until you think, Oh, I could do that right now. Then do it. And trust that tiny start with all your heart. Its the smartest, most human way forward youve got.
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