Winning by Milliseconds: Formula One • Aston Martin / Shergul Arshad
Winning by Milliseconds
Formula One is one of the most technologically advanced and hyper-competitive industries on Earth. In Episode 53, Nic speaks with Shergul Arshad, Head of North America for Aston Martin Formula One, about what it takes to compete in a world where races — and championships — can be decided by hundredths of a second.
Shergul takes us behind the scenes of modern Formula One: AI-driven engineering, real-time analytics, wind tunnel testing, logistics operations resembling NASA mission control, and the relentless pursuit of microscopic advantages across thousands of moving parts.
The conversation explores how regulation shapes innovation, how elite organizations sustain competitive advantage, why Formula One exploded in popularity in the United States, and what every industry can learn from a sport obsessed with precision, iteration, and performance under pressure.
From sponsorship strategy and global brand building to telemetry, aerodynamics, and the future of Formula One, this episode is a masterclass in modern competition at 200 miles per hour.
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Nic (02:14)
Shergul thank you for being on Natural Selection.
Shergul (02:17)
It's great to be here. Thanks, Nick.
Nic (02:19)
I'm really interested to find out more about Formula One because of just, you know, the little that I know, there's so much of it that is hyper competitive and yet so hyper regulated in every little thing that you do. And so it's interesting to figure out like what that means into everyday practice. But before we really dive into that, I like to give the guests the opportunity to tell us from their point of view, what drives the work that they do. And so could you please let us know, Shergul, what need or impact drives your work?
Shergul (02:49)
My work is simple. And at the end of the day, I worked for a sports organization, which is the Aston Martin Formula One team. The mission is to win world championships. It's a journey, obviously. We are climbing in the standings. We've hired the best aerodynamic specialists in the history of the sport with Adrian Newey. A lot of expectations for
this year and the coming couple of years to get to those world championship goals. And every single person in our thousand person factory, including myself, is contributing towards that goal. My personal way of doing so is by bringing in large scale sponsors. In some cases, there are tech sponsors that are directly impacting the work that we're doing. So it's quite rewarding, I would say, in the journey to the top to help contribute with revenue goals, as well as technology partners.
Nic (03:49)
That's interesting. so ⁓ for most of us that see Formula One, what we see is like what happens on race day. Can you give us a little bit of behind the scenes of what happens during the rest of the week that builds into this world elite team that wins races?
Shergul (04:06)
Sure, I mean, it goes beyond just the off days. There's really no off season. It's almost like a 365 day work schedule for the team. And what I mean by that is that we have thousand people of which all but two drivers are really contributing in different ways to make two cars go faster. The engineering team is probably five or 600 people.
The process in our campus, we have the newest campus in all of Formula One, know, Cadillacs new this year. I guess technically they just came up with something, in our, ⁓ the spend that went behind our campus, we've created three extremely advanced ⁓ technology centers and buildings and the processes of
everything from the design elements that are happening on someone's computer screen to creating 3D printing potential parts of a model of a replica scale of a car that then gets tested in our third building, which is a wind tunnel. Now, I mean, can explain some of the dynamics there, but there's an extreme ⁓ focus on precision every year.
Formula One cars that might've had 12 or 13,000 parts, 75 % of them are redone. This year it's 100 % because they've changed the car configuration for all the teams. So we're talking about literally that many types of parts and pieces that are being tested, built in 3D printers. You can walk into a room that's the size of a small airport full of 3D printers printing out ⁓ pieces of
⁓ of the body of the car for the chassis to test the different aerodynamics parts of it. So yeah, ⁓ it's a process where ⁓ one of the regulations, which is quite unique, is that you can't just go out and test the car and drive it around and see what works. So everything has to be tested on a 60 % replica scale model inside of a wind tunnel ⁓ before then potentially applying it
but you can't even test it until it's the practice date out at a track right before a Grand Prix. So there's an incredible risk and volatility that all the teams have to go through.
Nic (06:40)
So if I, there are a few things you said that I don't quite understand just being kind of like a novice into this. you said a 60 % replica. Does that mean 60 % in size of the overall? like 60 % of the total size of the car that you test in a wind tunnel, but then you can't actually test in real life until practice right before a race.
Shergul (07:02)
Yeah, so let's say we're in the middle of the season and typically the worst case scenarios for all the teams are what we call triple headers where you have three straight races on three straight race weekends. Because a large part of the team is just going from one race into the other. By the time you've set up, you're right back into a race. But then oftentimes there might be a two week break.
During that two week break, a lot of the teams will take that time to take all the data from what's happened in the last few races, essentially go back to the factory, realize where potentially some of the design improvements could come from. ⁓ That's where you're going through a lot of this rhythm of building out pieces, trying them in a wind tunnel, then doing a full scale carbon fiber version of that piece, then building out
different parts for different scenarios, for different weather types. And then you literally pack it up in a trailer, it gets to the next race. then the Fridays, typically it's a Friday, Saturday, Sunday race weekend where the race is on Sunday and Saturday is qualifiers. Friday, you have these two practice sessions where you can simulate and try a few of these different parts. And, you know, it is actually probably one of the most important days for the teams.
For fans, it's probably less exciting, but for true fans that are understanding that there's upgrades being introduced and new car parts, it's actually pretty fascinating as well.
Nic (08:37)
No kidding. So I'm assuming that this is not for lack of resources. These are constraints that are imposed in the teams. How much you can practice and what's the, what's the, what's the meaning? What's the reason for this? These, I can understand like some rules, which is like your engine can only be so big, or maybe you can only invest so much money because this way you kind of keep an even field across the various teams. then like constraining, for example, practice time, like what's the point of that?
Shergul (09:07)
⁓ Nick, think there's probably ⁓ some of this question is outside of my pay grade and you'd have to go to the actually FIA and to Formula One management to get the actual answers. the short answer is number one, it's a sport in car racing that is more top secret than anything else. So if you think of NASCAR, everyone runs these same stock cars. They're pretty much the same car. ⁓
And off you go. ⁓ With Formula One, as of recently, they've imposed a cost cap, which is kind of a good thing because otherwise some of the biggest teams would just keep spending until there's no limits on technology. So now there's a cost cap where ⁓ roughly 150, 160 million per year goes up each year, but is being allocated towards the engineering of the car. ⁓
⁓ In part of parallel to, guess, that parity is ⁓ the regulations around being able to test outside. you're really kind of confining your testing to the factory and what's happening inside of a factory. There's also secrecy in the form of if you take it out outside in a visible area, everything from espionage and drones and stuff that could get introduced from other teams. ⁓
So think that probably plays some small percentage role to it, but I think it's really just, we're in a sport where it's almost like, let's take horses. You breed the horse and then your first race is the Kentucky Derby and out you go. ⁓ We haven't raced you. It was a pretty interesting ⁓ dynamic.
Nic (10:56)
Yeah, and you know, I would imagine you said you guys have like 500 engineers. So does it does the virtual world like the simulation world? Does it come so close or identical to the real world that by the time you hit the track, you've roughly kind of felt out what that car already is going to how it's going to operate? Or are there a lot of surprises on that practice day?
Shergul (11:20)
As technology improves, obviously there's an introduction of new AI tools. I think having a proprietary wind tunnel, ⁓ there's improvements that are happening in technology at such rapid pace that that delta keeps getting smaller ⁓ versus the old days of Formula One. If you think back even ⁓ the nineties, let's say ⁓ pre internet and
Some of the clips you might see of some of older Formula One, know, the Delta was massive. I mean, things like a tire change now, by and large, most teams can get done, you know, between 2.5 and four seconds. So let's call it an average of three to three and a half seconds. In the old days, you're talking like a minute, but you could shave 15 seconds off by being slightly faster than
you know, the jacks, would take a tire off and now this is all happening in such a quick intermittent intervals. So you've really seen a sport where it used to, it went from full on seconds of differential ⁓ to tens of, you know, to now to tens of seconds to milliseconds. ⁓ know, we, two, three years ago, Fernando Alonso, our star driver, you know, world champion driver,
in Monaco Grand Prix, which is known for, obviously it's sort of the granddaddy of them all. It's the most famous Grand Prix in the circuit, but it's also narrow roads, which makes it almost impossible to pass. What they found is that it's ⁓ really more critical to finish top of qualifying than any other race, because if you start out in front in Monaco,
and you execute your tire strategy, you pretty much win. ⁓ We wound up second in qualifying by one one hundredth of a second.
Nic (13:25)
Wow.
Shergul (13:26)
And so therefore that 1-100th wound up finishing second in the race and Max Verstappen won. And so you think of the difference that technology and process can make improvements of 1-100th that could make the difference between winning the most important race or not. ⁓ So yeah, there's extreme precision and focus on trying to shave every millisecond off.
Nic (13:54)
Yeah, that's intense. So when you, I guess if I think of it again from the outside, when you're constrained on the levers that you can pull to innovate, then part of the game is always looking at the gray space where these regulations don't define maybe the edges of what you can do and constantly pushing on those spaces to see how much you can tweak out of the system. Because like you said, if you get
one one hundredth of a second faster that can make a difference between a race and a loss.
Shergul (14:28)
And also, you know, one of the things that I've learned too, in the three and a half years I've been to, it's not apparent to the naked eye and still to my eye today, which is why I'm not on the race engineering side, but they say that different tracks are as different in surface to a driver and the tire that's going on the track as a tennis surface might be for a clay court player versus a hard court versus grass. So.
And we see, it's pretty apparent to see grass and clay courts and hard courts at the Australian Open or US Open. That's naked eye sees that, you know, I'm one that sees a road and a track and I sort of see similarities, but everything from temperature to the actual asphalt type and the speed at which these cars are going, you know, 200 plus miles an hour and the tires, they're almost, they both have to be
sticky enough so that the car isn't sliding anywhere, but also not too much so that it's melting quickly and you have to change your tires all the time. So therefore the knowledge of surfaces is so important that you have 24 different races, essentially 24 different types of surfaces, and then you throw in weather elements because all of these races are happening outside. So wind plays a huge role.
rain of any kind, precipitation of any kind, humidity, heat, ⁓ all these play a role with how the tires would react on the surface and therefore what components, what design, which type of setup is gonna optimize for all those different variables.
Nic (16:13)
Yeah, that's incredible. I mean, it's such a quick and dynamic moving target. And yeah, it sounds like this is more of like an exercise in physics than anything else. Right. I mean, you guys are managing for all the variables, speed, ⁓ friction and agility, ⁓ all while doing 200 miles an hour or going as fast as humanly possible around these tracks. So, you know, when you and Asin Martin, when you guys think about
innovating like, you know, you go through the off season for the next season. How do you approach ⁓ trying to squeeze out that extra one hundredth of a second? mean, I would imagine you look at all the lovers, right? It's probably like the conditioning of the driver to the aerodynamics of the car to any number of different things. I would imagine you guys are just pushing on all these lovers constantly and just trying to bring this together into a winning team. Right.
Shergul (17:11)
Yeah, this year is a particularly interesting one because we have a new team principal and head of aerodynamics in Adrian Newey. ⁓ He has won at all other teams he's been at. ⁓ He's won 12 world championships as a constructor and 13 with drivers. the expectations are now sky high. So we're actually
not looking for modest improvements, we're looking for seismic and incremental improvements. So I think all phases get re-examined to that point. When you bring in a new manager in any sport, you expect a lot of changes and a lot of revisions. And so that's not unlike what's happening here. We do have the same two drivers as we've had for the last few years now with Lance Stroll.
the son of our owner, Lawrence Stroll, who has been competing at extremely high levels since his teenage years. ⁓ And then Fernando Alonso, ⁓ grizzled veteran in his early 40s, ⁓ who is the oldest driver right now in Formula One, but is also widely regarded and respected as ⁓ the best as far as technical abilities and ⁓ his knowledge of a car. So we kind of have
the inputs of Lance and Fernando coming into this car as well. ⁓ But what I'd say all of this is, I guess the overarching umbrella is these incredible wings of Aston Martin. ⁓ And so what we carry forth with the car, with the brand is the name of Aston Martin and the prestige and power and the sleekness and the coolness of James Bond and everything that we
kind of live to try to deliver that Aston Martin experience for guests of ours that come for sponsors of ours, for people that visit the factory and the car ultimately, you know, there's parts of the race cars that end up in some of the higher end Aston Martin vehicles. It's actually not the other way around. We're not taking any ⁓ engine from ⁓ Aston Martin. For example, we use a Honda engine.
which has been winning world championships in the past with Red Bull and now is exclusively with us. So, ⁓ there's a whole series of changes that have happened this year. That's another really big one. We went from being a client of Mercedes, one of four teams that was getting the Mercedes engine, to now being what we call a works team, where we actually have the proprietary right to the...
Honda engine, we get all the inputs ourselves directly to the top. They're custom-making engines just for us. We reap all the positives. Whereas before, if you're receiving an engine from another manufacturer and you're one of four, you actually don't have the same level of access and input.
Nic (20:20)
OK, and yeah, I mean, it sounds like 500 engineers. have the best aerodynamic systems engineers. You have best drivers. This is this is an entire it's not just a small team, it's an entire organization that's behind this. Is that part of what makes winning repeatable, sustainable in this field? know, when you winning one race is one thing and an enormous amount goes into that.
How do you make winning sustainable? So it's like race after race or year after year. Is it just really accumulation of all of these people that you put yourself in the room with?
Shergul (20:59)
Yeah, so I'll sort of answer that two ways. Historically, if we just look at the last 15 years or so, you went through a cycle where Mercedes won a lot with Lewis Hamilton and then Red Bull won a lot with Max Verstappen. The last two years, McLaren has figured something out that, again, may or may not be sustainable. The good news for all our other teams is the regulations have changed so much that you're almost at a
fresh restart for all 11 teams this year. ⁓ The sustainability often comes in advantages that in the past were more, they were harder to catch mainly because of there was not as much focus on the cost cap. So those that were ahead could keep spending and keep winning and keep being ahead. But also there was less technology and insights.
to figure out what the other folks are doing. you now, you know, obviously with AI, but also with the amount of volume of engineers that some of these top teams like ourselves have is we've got this, you know, ability to go in and view what all the ⁓ other teams have been doing. So, you know, let's say the first couple of races or first race goes by and you're not at the top. Let's say you're in the middle of the pack.
we'll have been able to get the data on all the other top teams, as well as the visual data on their car setups and match those two things together to sort of figure out where they've optimized. And it is a bit of a me too world in that, okay, well that worked for them, so we're gonna copy that part. It may so be that the teams at the top though have innovated beyond, so they're always ahead of you. So there's a little bit of a...
see what's working for others and try it yourself, while at the same time needing to be innovative. ⁓ And then there's the most top secret part of the, I'd say the most top secret part for most ⁓ cars is the floor of the cars. ⁓ The only part that you can't see that's part of the ⁓ chassis design. And so,
Oftentimes because the velocity of these cars are going, there's a give and get between wanting to be ⁓ tethered to the ground so that you're not sliding everywhere, while at the same time not too low such that you're bouncing and you're scraping and you're losing speed from hitting the floor. ⁓ so that floor design and the type of aerodynamics that are down there,
can oftentimes be one of the differentiators and make a difference in those hundreds of seconds we're talking about towards winning championships.
Nic (24:01)
That's interesting. ⁓ But the motors aren't exposed in these cars, right? So there's still a lot of other components that you can't quite...
Shergul (24:11)
But to my point, so like Ferrari is supplying three of the 11 cars and Mercedes is four of the 11. So, you know, all the Mercedes teams certainly know what the other Mercedes engine is like. So there is less ⁓ secrecy around those types of engines. We'll have an advantage in that we'll be the only ones with this new Honda engine. So you're correct in saying that that is another
big differentiators is having that engine manufacturer.
Nic (24:45)
Interesting. So when you get an engine from Honda or Ferrari, you don't tweak it further with proprietary things that you do. You take it as it comes to you and that's what goes into the car.
Shergul (24:57)
Yeah, by and large, mean, there's always some permutations that one can make, but you're getting, ⁓ was really well explained by our colleague who comes from Mercedes and they basically allocate an engineer inside of each of the teams, but they produce a series of engines for the teams. And then they're essentially randomized and sent out to teams so that there isn't the
Hey, the best one went to Mercedes or McLaren and the one that wasn't as good went to Aston Martin. So there's parity and it's highly regulated. So it's a ⁓ highly regulated process. You can imagine that you are getting ⁓ at least ⁓ the chance of having had the best of that lot as equal as anybody else.
Nic (25:50)
Yeah. You know, it's interesting when you talk about like race day, when you see the competition and you start reverse engineering almost their competitive advantage by virtue of the data that you get and what you see in the cameras. ⁓ If we could use that maybe as a way of unpacking a little bit of the teamwork that goes into this, what does that process look like? know, this is I'm assuming it starts in practice day. So like Friday, Saturday and.
⁓ even before the race, you're looking at some of this data, you're looking at the aerodynamics, how the car's performing, maybe even their tactics on the course itself. Then you gather that back and I'm assuming like a team just kind of like descends in this information and just has like ⁓ some analytical session to try to figure out what the competition is doing. Is that how it works?
Shergul (26:37)
Yeah, mean, and many more. mean, there's a series of the most interesting analogies towards NASA here would be during a race itself, we actually have a mission control at Silverstone, which is the headquarters for our team. It's also across the street from where the British Grand Prix is, but the race could be happening in Australia or China or Miami, wherever it is. there's a
team of race engineers, usually about 10 per driver, so column 20 that are on track, plus some leadership positions that are on the track. And then almost like a 2X factor of those folks back at this mission control room who are analyzing data points in real time, not just for their specific area, but also looking at all the other teams and what they're doing in real time.
So there's a real time debriefing happening ⁓ as a race is going on. Obviously there's post race debriefs. There's kind of the Monday after type debriefs and meetings there on. if it's a right on the heels of another race week, know, typically the team I'll give you the three, three weeks stretch that happens ⁓ from Austin, Mexico city in Sao Paulo, Brazil. Those are back to back to back and you're,
you're packing up equipment and typically going straight from one location to the other. logistics, we signed Atlas Air as our logistic partner, a deal I worked on. ⁓ It's a fun ⁓ case study if you think about it. The ultimate packing down of a circus. You're talking about ⁓ a garage and ⁓ equipment that's highly confidential and sensitive and fragile and ...
multifaceted everything from replacement car pieces of the car itself to the garage walls and everything else you can imagine being sent from one location to the other. And typically it takes two days to set up for the next race. So you're going in on a Monday, getting there Monday night, Tuesday, Wednesday are set up. Then you're off to tinker and use the garage on Thursday practice on Friday.
qualifying Saturday, race on Sunday, and then packing it all back up. It usually takes about six hours to pack up afterwards and send it all to the next location.
Nic (29:11)
No kidding. Wow. ⁓ So I guess from ⁓ a similar question from a different angle, when something goes wrong on the course during qualifiers, whatever, when there is failure in any way, how does the team react to that? Is there like a systematic process by which the teams go into to figure out what causes and how to prevent it in future races?
Shergul (29:38)
No, absolutely. mean, data is king. There's 30,000 real time data points being fed back to Silverstone during any kind of race interaction. It could even be a qualifying lap or a practice lap. So these are data points. So if there's any single point of failure or there's a, you know, if it's a mechanical issue, it's almost immediately known.
If there's a crash of any kind or a sliding of any kind, we have the data to almost realize immediately what to be done. What's incredible is versus again, the old days where it would take a minute to change tires. The old days, you'd crash a car, you'd retire the car. Now, so many things are ⁓ built almost compartmentalized into different areas of the car and
There's no stacks and ⁓ rear wings and side pods that, again, if you damage your side pod, you just pop a new one on. We have all these replacement parts. It's like the ultimate for Lego enthusiasts. It's like watching them pop a piece off and put a new piece on. ⁓ It's obviously not that simple. I would say that we have incredible technology partners.
And we have Aramco, which is also the fuel sponsor for the whole league, ⁓ working us on clean tech fuel solutions and giving us incredible data on the fuel side. ⁓ All the teams work with Pirelli from a tires perspective. So that's less proprietary. ⁓ we have CoreWeave, which is an AI cloud computing ⁓ company that has really done
amazing things both for the public markets on the stock side, ⁓ work with NVIDIA and doing quite a bit in the AI space in general. But with our team, they kind of made our team their showcase of a lot of the work that they're doing. working, for example, on computational fuel dynamics for the wind tunnel and how can their data help us improve the CFD in the wind tunnel. So again,
As you add technology partners and their expertise into the mix, we can do more and more. We have ⁓ Arm as a tech partner. We have Cognizant as a tech partner. We've got ServiceNow and Xerox. And so these are all ⁓ major brands and contributing engineers into the process. So that's another ⁓ race that we're seeing is being able to find the best technology partners to help you out too.
Nic (32:30)
Yeah, I mean, it sounds like there's a lot of moving parts and it definitely sounds like it's very data intensive. mean, you guys are processing tremendous amounts of data every millisecond during the race, but even off race time. ⁓ mentioned AI, so I would imagine that you guys use very advanced analytics and practically everything that you do from design to race time analytics, right?
Shergul (32:54)
Yeah, absolutely. And then of course everyone has to pardon the expression, but sort of stay in their lane. So I don't sit here and pretend to know much at all about the engineering side, nor should I. That wasn't either an area I was brought in for. I've been speaking at lot of conferences and events that are in and around the US with more nascent F1 fans learning about the marketing side of the sport.
So, you know, the F1 movie with Brad Pitt and what's been happening with Drive to Survive on Netflix and the pop culture impact and the growth of the sport. So some of the staggering numbers are on the sports growth. And part of that is to entice and ultimately bring on sponsorships in the form of, you know, deals that are now climbing up on an average of probably over 10 million for most of the teams. I mean, these are...
big, big investments for a lot of companies. For most companies, it's like the major sports sponsorship or sponsorship that they do, I'd say almost in every single instance. And because of that, my focus is that piece of the business versus kind of the, I don't know, what's happening, which No Stack is the best for
⁓ the first race in Australia.
Nic (34:26)
With so many moving parts and so many expertise required for this and obviously a lot of investment, it must be a sport that you don't have a lot of new entrants coming into it regularly. For example, if you had ⁓ some Silicon Valley tech company that wanted to disrupt Formula One with technology and data analytics and so on, what would stop them first? Would it be regulation, capital?
culture or accumulated advantage of like the institutional knowledge that comes with it. And Aston Martin has been doing this for a long time.
Shergul (35:03)
I'll answer that in two ways. think first and foremost, Cadillac became the first team that Formula One led in to the sport in decades. It's been a 10 team format for a really long time. And part of that is each team has two cars at the same time. And therefore, from a sheer space and crowding,
⁓ on the track. Everything from the narrowness of a road in let's say Monaco to the space that has been existing for garages and for all the different build outs, which seemed to be optimized right around 10 teams. often rumored like getting it 11 theme has now happened. Let's see how it impacts the sport.
⁓ But what does happen to give you kind of a different perspective is there are times where teams sell, either all or parts. ⁓ Lawrence Stroll acquired the team that used to be called Force India ⁓ and Racing Point before that. And so this was a team that hit some financial difficulties. The previous ownership ⁓ was forced to sell.
in a favorable situation for the buying party, because you kind of get a distressed asset and in a typical private equity scheme, you kind of start with something that needs to be rebuilt. So we took over a campus that was ⁓ very small and looked like a ⁓ kind of a shack by comparison to the building that we've built now.
But then the capital started to come. You went from 350 employees to almost 1,000. We've gone from a shack to a ⁓ $350 million ⁓ campus, ⁓ including our own proprietary wind tunnel. You've gone from a pink car called Racing Point to the luxury green of S Martin and all the assets that come with that. So that's an example of ⁓ an occlusion
that has come into the sport and put his own mark into it and put his own people and his own partners and has hired a whole team to go out and get new partners and new sponsorships. I think that can happen again. It could be done through Silicon Valley to your point or not, but again, there's always a buyer or a seller in certain instances and some teams are probably more likely than others.
Nic (37:58)
Interesting. And you know, you've mentioned other industries and, know, as you compare like to NASA and how they do things in your tenure so far at Formula One, ⁓ are there any innovation mindsets or capabilities that have been developed at Formula One that you think other industries, whether it be health care or tech or manufacturing, could realistically learn from Formula One and how they do things or how they approach things?
Shergul (38:28)
I mean, absolutely. And I think that there's been a little bit of Formula One actually taking people from other industries like NASA as a great example to sort of glean from their expertise. And I think that you're right, that the opposite probably happens, although arguably the jobs in Formula One are both more attractive and more... ⁓
economically viable for the engineering talent versus some of the other places you've mentioned, know, healthcare or NASA. Actually, there's a guy, R.B. Karapetian, who Formula One has hired, was 25 years at NASA. And he's now looking at innovation and new projects for Formula One itself. Basically, yes.
Nic (39:14)
How was it?
like a rocket scientist.
I would imagine so. That's incredible. ⁓ Historically, I understand correctly, Formula One wasn't really all that deeply into the US, right? It's been historically more of like a European sport. And you're obviously based actually right here in Boston, probably right down the street from each other. ⁓ So after decades on the periphery in the US, what's changed strategically or culturally, structurally to make this influx into the US happen?
Shergul (39:54)
Yeah. It's actually been a very deliberate move. So ⁓ Formula One for decades was owned by Bernie Ecclestone and was privately held. ⁓ There was a very big focus on the luxury segment of champagne and Rolex watches and ⁓ almost say we don't really care about other parts of the world that doesn't care about us, which was mainly the United States, because we've got our champagne and Rolex watches, right? ⁓
In fact, spoke to one investor who's pride as early as around 2000 or so, and that the total consumer database of all of formal and was like 25,000 people. This is a sport that's watched by a billion and a half people worldwide, but they just weren't focused on data and growth. so Liberty Media, which acquired the rights ⁓ now are going on about eight years now ago. One of the big things was let's
let's make ⁓ the media market that is the United States really care about Formula One, especially because 60 % of corporate sponsors that are in the sport are actually headquartered out of the United States. So you're talking about, at this point, ⁓ the likes of CoreWeave for us or ⁓ Google is in the sport, Microsoft is in the sport. ⁓
Dell, IBM, ⁓ and so on and so forth. They've all ⁓ had a US roots to it and yet there was no viewership. So the strategy that was employed was very much around, let's put cameras everywhere. We'll create a series of content on Netflix. And the small luck component in a ⁓ weird way was people were at home during COVID with starving for a new content.
And the drive to survive series rocketed up to number one in like 53 out of 53 countries, 53 out of 58 countries worldwide during that period. And it was this fascinating series because it's the glitz and glamour of Monaco and coupled with the ruthless competition, not just between teams, but ultimately the two drivers on each team were the only two guys that are driving the exact same car.
And so in some teams, I think there was two young guys that maybe both thought they were the alpha guy and the track and qualifying results and track results pretty much lay out who's the better guy. And oftentimes, by late summer teams are making decisions into the following year and getting rid of a driver that hasn't performed.
there's only 20 of them, now 22, in a world of thousands of other, hundreds of thousands of qualified candidates racing in lesser series. there's this, imagine there's a thirst from tens of thousands, or even if you just say the next hundred guys that are probably as good as you are, but are waiting for that break for you to come in, for you to mess up. So drive to survive, got thrust into people's homes.
Then ⁓ social distancing, think about you're a person in a car alone. ⁓ It's pretty easy to start up Formula One without crowds there. And so it started back up in March. So right in the heart of COVID, ⁓ there was a sport that was happening. You could turn your TV on. And so that hooked people. And then when live events started up again, there was this huge pent up demand to go to Formula One races.
that has only risen, ⁓ adding a Miami and a Las Vegas Grand Prix has really made Americans care. And those have become the see and be seen celebrity events. I've gone the first and only three Las Vegas Grand Prix's as well as the Miami Grand Prix's and you're rubbing shoulders with our boy Tom Brady. ⁓
I've seen Mark Wahlberg there. could go on and on about the Boston folks, yeah, mean, Ed Sheeran and ⁓ Eminem. mean, you're seeing Sting. You're seeing the celebrities that used to go to boxing matches.
Nic (44:30)
Say like a Mike Tyson boxing match, right?
Shergul (44:33)
Yeah, it's basically become the event aside from, know, or in addition to the Super Bowl, which has drawn celebrities. that again fuels the media interest and spurned the movie. You know, now we have the Brad Pitt F1 movie nominated for best picture. And that's helped my job and the sport's growth tremendously.
Nic (44:58)
I can imagine, especially like you mentioned, the shows like, you know, drive to survive in the movies. It brings that human element to the equation, right? From the outside, you just see these amazing cars driving super fast. The shows and the movies kind of they expose a little bit of the drama. And you mentioned a little bit of that what happens behind the scenes, right? ⁓ So if we just projected the last two questions, you number one is.
Shergul (45:16)
Absolutely, yeah.
Nic (45:22)
with the way that the industry is moving and you guys obviously have these regulations that keep the industry from just completely exploding and becoming like, you know, changing wildly from day to day. But if you project forward five, 10 years, given the technology that's coming in and what you see, how do you, how do you envision this field kind of formula one heading over the next, you know, say decade or so? Like, what do you think the future of formula one looks like? What's the trajectory given?
everything that's happening in the field, the investment that's happening in the ownership.
Shergul (45:57)
I think you're going to see constant tweaks on schedules and optimizing for peak television ratings. And I think that it's going to get to the point, especially as there's more parity that's brought in through regulations like a cost cap, that every race becomes exciting. A season comes down to the end. You know, the type of ⁓
excitement that NFL regular season has is there's only 17 regular season games. If you think about it, we only have 24 races. So every race is critical. ⁓ It becoming more and more of appointment viewing. ⁓ therefore, your TV ratings globally, the average race gets 70 million viewers. ⁓ But of which the US is contributing, you know, sub probably, probably
5 % of that. Awesome. So you're talking about, you know, Miami Grand Prix, uh, you know, might be getting three to 4 million viewers, whereas, um, Vegas one happening at night, even though it's a sensational event, um, is probably drawing, you know, a third of that because of the timing. So, you know, what are things that can be done to take those numbers to, yeah, we don't have to reach Superbowl levels, but
Nic (46:54)
There's a lot of room for growth.
Shergul (47:18)
an average AFC conference championship is getting 25 to 30 million TV viewers. Could the US start to become a Formula One market that's getting tens of millions of viewers, at least for sure. And then what does that do to the influx of brands and marketing? I think you're starting to see a proliferation of licensing. So the Lego car deal has been phenomenal. Lego says that the F1
licensing agreement has been the second most successful after Star Wars and is climbing. So you're talking about, yes, this massive impact. There's so many kids that grow up and they want a toy car of sorts and a Lego car. this has been a huge success. And Disney is now ⁓ at the table and a sponsor of Formula One and Pepsi. So what are the implications of getting these big brands and get the ubiquity of
of Formula One is only gonna grow. So I think you're gonna see growth from a fan perspective and technology is just gonna keep getting better and better. again, that ultimately becomes more parity because someone will have a short term advantage because they might have a year or two of having figured out something that ultimately everyone else catches up to. ⁓ So I think you'll continue to see little bursts by different teams for a few years up at the top.
Nic (48:44)
Well, you know, I think I'll answer my own question, but it sounds like you're having a hell of a lot of fun. mean, this sounds like a great job in a great industry to be a part of.
Shergul (48:56)
It's great. Yeah, I love it. Having a time in my life. I think it's been phenomenal to be part of this surge in growth here in the U.S. and continue to be part of that. It's exciting.
Nic (49:06)
Yeah, so just one quick final question. If you were to project forward to a point in your career where you could look back and reflect on the things that you've accomplished, ⁓ what changes to the industry or what impact that you would have driven would give you the maximum fulfillment over the course of your career, specifically in Formula One?
Shergul (49:28)
Yeah, I mean, think the fulfillment comes across, you know, maybe two or three different areas. I think there's the personal fulfillment of the economic gains that can reward my family for years to come. think that's very important. Of course, that could happen in lots of different industries. I think the fact that this is ⁓ at this tipping point of excitement and is growing to
start to rival behemoths in the US like the NFL, that's an exciting part. I love being part of this journey to see Formula One taking more and more center stage in the world sport ranking. And then first and foremost, I guess the answer is the one I gave at the very beginning, being part of winning and winning a world championship and knowing if we win a world championship in the next year two, three, I've contributed personally
through a lot of sponsors and partnerships that I've brought in, that's very rewarding.
Nic (50:32)
Totally. Yeah. I mean, it sounds like, ⁓ you know, one of the areas we didn't talk about innovation is a lot of the work that you're doing around like sales and marketing and sponsorships and partnerships and all that stuff, because all that plays into not only how your team does, but how the field does in the U S which is also fascinating. As you mentioned this, just this kind of growth of formula one into the U S and making it into like one of these big behemoths sports.
rival in the NFL. Well, with all that, Shergul, this has been fascinating. I learned so much about Formula One talking to you over the last hour. ⁓ Thank you so much for your time. I really look forward to hopefully bumping into you here in Boston and then maybe at some point making it with one of your races.
Shergul (51:12)
All right, thanks so much, Nick. Appreciate it.
