I was challenged by Grant Cardone via Facebook about a few things to do with my stance on TrueCar, one of the challenges being whether I had reached out  to TrueCar about my concerns. I had not—but I thought about it, and so I did!  I emailed TrueCar's CEO Scott Painter via LinkedIn “InMail”, though I’m not sure he’ll get it or respond if he does.

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I reproduce the email, then, below as an open letter on this forum from me to Scott Painter, CEO of TrueCar (I did make a few  VERY  minor changes in this letter from the email for clarity and grammar).   I was limited in the number of characters I could type, so I tried to focus on connecting for further dialog, though I did manage to bring up my real concerns.  However, considering the volatility of this topic, I have concluded that he and his company are building a wall between dealers and vendors, between dealers and vendors, between dealers and consumers, and really between a future with dealers making a profit and a future with only TrueCar making a profit. 

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Mr. Painter, you talk in a video about truth and transparency.  Well, President Ronald Reagan, during a speech he gave while standing in Berlin at the Brandenburg gate near the Berlin Wall in June of 1987, famously challenged Soviet leader Gorbachev to open up East Germany.   Paraphrasing what Reagan said that day:

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“Mr. Painter, Tear Down This Wall!”

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Mr. Painter, 

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I'm one of your vocal critics in the automotive vertical, mostly because of your stance against the dealer distribution channel, but also because it is unclear whether you are mining sales data directly from dealers' DMS or perhaps through transactional sales data from several of the parties involved in the dealers' data. By definition, it seems what the dealers report is being used by TrueCar, and that also seems a repurposing of dealers' sales data against them in the marketplace. 

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I have watched all the videos I can find, including the one from TechCrunch50 in 2008 where you were very clear about what appears a very anti-dealer agenda. I realize you have passionate beliefs, but I have both a tech background as well as dealership experience. If you regard www.dealerelite.net, a social media site membered by thousands of automotive vertical professionals and lurked by thousands more, you will see a thread by Jim Ziegler that has nearly 18,000 page views--a record for auto professional social media. Your employees, Charles Kim and Devin LaCrosse, have only recently been posting on another large thread on the site www.automotivedigitalmarketing.com, and in my opinion it hasn't gone well for TrueCar. I realize better than most what $200million in funding, heading towards IPO, effort can mean. 

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After all that intro, which I thought was necessary, my question is simple: Can you instead participate in the marketplace with dealers and find a way to work with dealers so that they evolve into the new markets rather than get threatened with what amounts to sounding like a coming extinction event? 

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I realize we may never speak in person, and that you may never even read this. However, I was asked by a prominent person that I know if I had reached out to you--and, after thinking about it, I know that **I** want to modernize the experience. If I could get some time to speak to you, I would only want to try and convince you that there's money to be made by modernizing those dealers that WILL modernize. 

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Hope to hear from you soon.

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Keith

Scott Painter agreed to the recording of the call.  Interesting at 12min or so and also at the wrap 48min0sec.  Scott Painter said he does not now, and has never, dipped into the DMS to support his pricing curve.  I said the dealer sold the car, so the dealer is the source of his "sales data" to drive his portal, regardless--and that he was repurposing that data plus all the other date he gets his hands on against the dealer.  He said he was giving dealers a great closing tool; I said his $1.5BILLION consumer "savings" included LOST dealer profit.  He said his bell curve pricing was fair; I said, since he forces dealers to price a certain way and NOT set their own price (they have to choose a spot called "Good" or "Great") that he is inevitably on a race to the bottom just like Jackson of AutoNation said.  He said he doesn't hate dealers; I reminded him of what he said differently at TechCrunch50 in 2008 (and he said he regrets saying that).  He said he also regrets saying that cars a commodities.  He said TrueCar is just business and good for dealers; I used the hypothetical example ofwww.TrueCEOSalary.com to tell him it was bad for dealers and personal (48min0sec).  And that is the overall mistake he has made, in my opinion.

And the future is, despite his dancing a bit (in my opinion), www.TrueFinance.com, www.TrueGAP.com,www.TrueServiceContract.com.  It's ALREADY www.TrueUsedCarPrice.com, oops I mean www.ClearBook.com.

So, if you don't want to see your industry go the way of travel booking sales and travel agents, KILL THE BEAST!

My opinion.  You listen, and you judge.

Thanks!

Keith

keithshetterly@gmail.com, www.keithshetterly.com