The 2024 Formula One season opens in March, with the Bahrain Grand Prix, and concludes in December. TV viewership over the course of the racing season can surpass 1.5 billion people. And each team can spend $135 million trying to design and build the fastest car possible.
In that context, each team works hard to turn sponsorship dollars into a carbon fiber vehicle that will have a competitive edge.
“These teams have from the end of the season in November till the start of season in March to launch a whole new car,” says Shergul Arshad, Head of North America for the Aston Martin Formula One team. “The car is a completely custom device. Think about it this way: there are 13,000 parts in these cars, and 75 percent of them are redone every year.” The Aston Martin team finished fifth in the team standings last season, but it was the team’s best performance thus far.
Arshad was previously Director of Corporate Development for DraftKings, the online sports betting site, and Head of Digital for the AS Roma soccer team in Italy. We spoke with him in January about the power of celebrities, analytics, AI, and innovation.
• • •
The ‘Drive to Survive’ Effect
Formula One has caught fire in the last four or five years…in the US because of the Netflix series “Drive to Survive,” which is #1 on Netflix in thirty-three countries, including the US. During the pandemic, people just flocked to watching it – and the whole country became crazy about it. As soon as the pandemic kind of started to lift, people wanted to watch the races and then go to the races. …It was already the number one racing series globally, with the fastest cars and the highest technology and the most amount of innovation.
And probably almost half the sponsors of the AstonMartin Formula One Team were American led companies. …Aston Martin is a relatively new team — it has only been around for four years [and as] the partnerships team that was based in Silverstone, England was expanding, the Managing Director there, Jeff Slack, brought me in to run what is going on in the US.
…When Liberty Media took over Formula One [buying a controlling stake in 2016], the mission statement was “Let’s Make America care, and let’s make this a truly global sport.” And, like I said, the “Drive to Survive” innovation was basically the new owners saying the cameras will be on at all times. Take it or leave it; you have no choice.
So the entire sport became behind-the-scenes, and all the stuff that people love from “Drive to Survive.” It is pretty unscripted, but it is fantastic. And that appetite led to folks wanting to have more races in the US. …The Miami and Vegas [races] have become, If not the most popular, they are right up there with Monaco, Singapore, and Silverstone, UK annually. You can almost call it like a “Big Five” of races now.
Races Connect CEOs with Celebs
What makes Miami and Vegas in particular different is they are celebrity “seen and be seen” type events at this point. CEOs and CMOs want to go with it because they’re brushing shoulders with Tom Brady and LeBron James. …If Formula One has invited 15 to 20 A-list celebrities, what they will do is they will send them out to the different team garages to spend some time there, because the TV looks great with David Beckham in our Aston Martin garage — which is what we had. So then, of course, I bring down some top prospects: if I am trying to close a partnership with a large tech company and I bring a CMO down and they get to interact with David Beckham, that doesn’t hurt.
…The reality is that it’s becoming more and more obvious that Formula One has an audience story like no one else. There are a billion-and-a-half TV viewers worldwide., and each race gets seventy million TV viewers. So seventy million global TV viewers. The Super Bowl had 120 million last year, and our Abu Dhabi race a couple of years ago had 120 million viewers. So our biggest race is the size of the Super Bowl, but we also have twenty-three other races that are near Super Bowl level audiences. …And we also pack up the circus tent and bring it to people around the world.
My KPIs Don’t Include Boosting Car Sales, But…
…When you think of [Aston Martin], it evokes James Bond. Classic English cars come to mind. The owner of the F1 team, Lawrence Stroll, is also the majority shareholder of Aston Martin. There’s nothing in my KPIs that says I need to tether directly to selling more cars. [But] ironically, the single biggest driver of sales these days to Aston Martin dealers, and car dealerships that sell Aston Martins, is the awareness and association with this cool, fast, sexy Formula One world. In the last couple of years, that’s been the number one brand awareness driver for car sales.
I personally have a great relationship with the marketing folks at Aston Martin. I ran an event in New York a few months ago at the new headquarters showroom…. We had the F1 car there. …And we just did another event in Miami where people got to drive Aston Martins on a racetrack.
The [important KPI for us] is really winning. You just have to be faster than the other cars.
…The innovation is very proprietary… We keep everything behind closed doors, and it’s very proprietary during the off-season until we unveil a new car.
Eight Hundred People Trying to Make Two Cars Go Faster
I can talk about innovation at the team level first. [For] the teams within Formula One, the innovation is really staggering. There are eight hundred people [on our team.] There are two drivers, and everyone — all eight hundred people — in some capacity are trying to make two cars go faster. There are ten teams, two cars per team, and a cost cap. The cost cap is several hundred million that the teams can spend right up to the last penny… [Teams could spend $135 million per season in 2023.]
So the innovation is very proprietary… We keep everything behind closed doors, and it’s very proprietary during the off-season until we unveil a new car. And no one can actually take the car out for any test drives or anything until the week before the season starts.
The car is a completely custom device. Think about it this way: there are 13,000 parts in these cars, and 75 percent of them are redone every year. I’d say something like at least half of those eight hundred people are in the engineering department, and we’re talking about mechanical engineering, but also 3D design and folks shaving some small particle of weight from different components, because if you make something lighter, then it goes faster. So the aerodynamics folks and the types of people we have – it is almost rocket science-level intelligence working on the aerodynamics for the chassis.
Again, you make one minor improvement that you test in a wind tunnel or in a simulator that you can then bring out and make a game-changing difference year over year when you unveil that car. So I think when people talk about the speed of F1 innovation, it’s like these teams have from the end of season in November till the start of season in March to launch a whole new car. And obviously, you’re spending most of the year after you’ve launched it learning, or maybe making some in-season improvements, but also tracking improvements for next year’s car.
…If the team realizes, “We really don’t have good brakes,” then you’re [focusing on] that for next year as a conscious problem…
Everything is about making things faster and safer, but also to cost less if possible…
Data, Analytics, and AI
During a race, there are something like three thousand live data points back into mission control, which is in Silverstone, England. We are feeding back information constantly: everything from tire degradation to the engines and the brakes — all the analytics you would assume we are capturing about the car.
There have been seismic improvements that F1 teams had to make, as far as shifting things from big boxes into cloud computing. But I think, going forward, the role AI is going to play in everything and how quickly can teams adapt will be another seismic shift. The challenge is, when you are constantly chasing speed and innovation at speed, it is extremely hard to attach a long-term strategy.
How is AI going to make things better, faster, and safer — and how quickly can we harness it versus the competition?
…There’s probably a lot to be learned through AI strategically, everything from designing components to race strategy questions that can be altered. So the buzzword — not just in Formula One or in the luxury automobile subsector, but pretty much everywhere — should be: How is AI going to make things better, faster, and safer — and how quickly can we harness it versus the competition?
…Right now, I don’t think there has been a good deployment of AI in F1 other than some marketing projects. But I think from a team perspective, if it has been done, it’s so proprietary even within our own team you would not know about it yet. …But I do not think there has been widespread implementation of it so far.
[We’re] trying to transform more and more from being a new entrant that inherited a bankrupt team to being top of the charts. And the way you transform often is through innovation. Money actually helps up until a certain point, but there’s a cost cap. So if all ten teams have the same cost cap, how can you use your tools — your innovation — essentially better than others?
You don’t have to be fast, per se, you just have to be faster than the other nine teams at the end of the day. So what is the risk-reward versus [in] making a change that could affect you negatively versus a marginal improvement? Because there are lots of different strategies in place. There are eight hundred people all employed to try to make the cars faster. Like my employment: by bringing in sponsors, there is more money to pay for higher quality engineers and drivers and everything in between to make the cars go faster.
The Emotional Bond Matters
[In the age of AI, virtual worlds, and autonomous vehicles], the whole point here is like the emotional bond you have with an athlete. The fact that there’s life and death, and a guy in a car, and flames, and potential crashes.
That’s what makes it cool, right?
