Perry had been in the post since the end of , when Painter departed. In , changes to Google's search algorithm caused a steep decline in TrueCar's website traffic. Job Board. From Your Site Articles.
Crew Exit. Tech Lead BasePaws. Senior, Data Platform Engineer Rivian. View More Jobs. Three years later, Zag launched TrueCar, which culled pricing information from a multitude of sources--finance and insurance companies, vehicle registration, dealers, and other data aggregators--to give consumers something they had never seen before: an up-to-date, real-life snapshot of what people actually pay for cars.
In , the two companies merged under the name TrueCar. Painter's pitch resonated with investors partly because they could all relate to how miserable it can be to visit a car dealership. According to a recent survey by Edmunds. One in three said they'd rather do taxes, go to the DMV, or sit in an airplane's middle seat. It became Painter's mission in life to fix that.
After his first two kids were born, he decided that TrueCar was his perfect chance to settle down and finally build a sustainable company. Some dealers loved the leads TrueCar provided, especially when car sales dropped off a cliff during the financial crisis of About 5 to 6 percent of TrueCar leads turn into sales, Harmond says, far better than the 2 to 3 percent from other lead generators, such as Edmunds.
Still, Painter admits that his company was so consumer-centric, and had whipped itself into such a frenzy with what he calls its "Stick it to the man! One TrueCar employee got so carried away that he registered the domain name fuckedbythedealer. Painter says he would never authorize such a thing and was shocked when he found out, and the employee was promptly fired. But by that time, the damage had been done.
And, as for that "complete asshole" thing--well, one moment that stands out came when Painter sat down for a family Thanksgiving dinner in At the table was his brother-in-law, Phil Kerr, a Mazda dealer in Arizona.
With TrueCar at its pre-Swirl peak and its flashy ads saturating TVs nationwide, Painter began gleefully berating Kerr about how dealers like him would get steamrolled by the digital revolution unless they embraced internet-driven price transparency--all while the rest of the family was attempting to enjoy their mashed potatoes and drumsticks.
What Painter didn't know was that the tide had already begun to turn, and within mere weeks, the Swirl would begin to overwhelm TrueCar. TrueCar was also accused of violating state laws by acting as a broker and extracting too much valuable customer data from dealers' computer systems. Painter denies that TrueCar was ever a broker, but the company voluntarily suspended service in Louisiana and Colorado while it overhauled its business model.
Now it charges dealers a monthly subscription fee in some states, rather than on a per-deal basis, and operates legally in all 50 states and Washington, D.
Troy Foster, TrueCar's chief legal and compliance officer, insists that TrueCar is very clear with its dealers about what data it collects and how it is used and that it has never resold customer information to third parties.
Meanwhile, dealers and trade associations confirm they've received queries from the Federal Trade Commission about whether they violated competition laws by conspiring to boycott TrueCar; the FTC declines to comment.
Struggling to reverse the slide, Painter hired Mike Timmons, a former AutoNation executive, to reach out to dealers. But this was as much a culture clash as a business dispute, with the colorful, rough-edged world of car dealers deeply distrustful of Painter's elite team of technocrats from Santa Monica. One day at a dealer convention, Timmons approached Ziegler, who often wears a baseball hat emblazoned with his nickname, Alpha Dawg, and posts goofy videos of his attempts at rapping on YouTube.
Timmons introduced himself and extended his hand in greeting--and Ziegler retorted, "I know who you are," slapped his hand away, and kept walking.
Back in therapy, Painter realized that the solution to this mess was staring back at him in the mirror each morning. And that it's all your fault? Why don't you own that and see how that goes? Painter did, going into couples therapy with his wife and saying almost those exact words.
Next, he decided to try the same approach at work and found miraculous results there, too. So he kept at it. Realizing he had not truly paid attention to the concerns of dealers--the lifeblood of his business--he went on a nationwide listening tour, meeting with dealer groups, car manufacturers, and industry media and influencers. As long as I just took the blame for everything, we could get to a better place," he says. Next, Painter created a council of auto dealers that meets six times a year to tell TrueCar what it's screwing up and what it's doing right.
He spent 10 hours traveling to and from Norcross, Georgia, just to meet with Ziegler for a few hours to explain TrueCar's new business model and show him the latest TV ads. They met at an outpost of the Cajun chain Pappadeaux Seafood Kitchen. Meanwhile, TrueCar. It no longer encourages dealers to beat the lowest price, instead rating dealer prices as good, average, or above average. The site also gives customers reasons to choose a dealer beyond price, including location and such added services as oil changes, car washes, and delivery.
New TV ads talk glowingly about dealers as TrueCar's "trusted partners. Painter also reformed his company's culture. To drive home the point that TrueCar needed to do a better job balancing the needs of customers and dealers, he created a large metal see-saw etched with the word Consumer on one end and Dealer on the other.
At company gatherings, groups of employees stood on both ends of the see-saw and tried to achieve a perfect balance. While the new TrueCar has probably resulted in some consumers paying more for cars than they did using the old site, Painter believes he finally has a sustainable business model that benefits both buyers and sellers. He points to a recent TrueCar survey showing that most consumers believe dealers make a 20 percent profit on a new car--more than five times the average margin of 3.
This shows that car buyers want the dealer to succeed, Painter says--they just don't want to get ripped off. That's where TrueCar comes in. All together these changes produced a stunning turnaround. Since the depths of the Swirl in February , TrueCar has more than doubled the number of participating dealers, to around 9,, website traffic and the volume of cars sold have nearly tripled, and quarterly revenue has more than tripled.
Not all of TrueCar's indicators are positive. And Painter still has many critics. David Ruggles, a former dealer who is now a prominent consultant and writer, says, "I'm not mollified in the least. But his objective is still the same. The whole principle of demonizing dealers is opportunistic and I hate it. He's not out to change world for the better unless Scott Painter makes a buck doing it.
TrueCar also recently annoyed dealers by announcing it will no longer offer financial credit to dealers who can prove a sale involved a third-party site other than TrueCar.
Some dealers are even turning the tables on Painter by showing customers TrueCar's prices to prove how competitive their own offers are, helping them close the deal without paying a fee to TrueCar. As for whether Painter has truly changed, others share Ruggles's skepticism. He walked into a lion's den when he came to speak to us. It took a lot of nerve to do that. Painter is, at least, a wiser man about the forces of technological disruption, insisting that internet entrepreneurs cannot have the same haughty attitude they did during the heady days of the '90s.
That's when his CarsDirect was one of the many internet companies to emerge from Bill Gross's legendary Idealab, along with spectacular flameouts such as eToys. Disruption for disruption's sake is not a good idea in terms of creating long-term sustainable value. It took a lot of personal and professional turmoil for Painter to realize that. But today, he spends more time with his wife and children; he's also lost weight and downsized his lifestyle by selling some of his cars. Now the company that he has bet all his chips on needs only another few thousand franchise dealers to reach the sweet spot of 11, to 12, that Painter believes will allow TrueCar to really take off--giving its certified dealers a competitive edge over the other 19, or so dealers nationwide while ensuring that TrueCar customers can choose from a wide selection of dealerships selling every major brand in all geographical regions of the country.
That would put this restless entrepreneur on the path to creating a company he could someday leave for his children. The industry has a big existential crisis ahead of it--the consumer fundamentally doesn't trust auto retail at all. Today, the consumer knows more about the car than the person selling it, and car dealers have worse reputations than members of Congress The TrueCar story would have had a very different ending had Scott Painter not made an impassioned effort to reach out to his critics.
Here, some tips on crisis management should you ever face a similar situation.
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