Sorry, let me start again. This is Elon Musk. But the comparison with Steve Jobs is obvious, right? A technological visionary, a polished[a] product, a difficult character - and above all a personality cult worthy of an Egyptian pharaoh. But whereas Steve Jobs was a magician on stage - Elon talks like a robot and sometimes comes on stage like this: Tesla, like its founder, inspires a crazy amount of devotion in some people. They organize themselves into local owner clubs on Facebook.
They are crazy about TSLA stock... to the point that they think it makes perfect sense to invest all their money in it. Completely disregarding normal investing protocol, that tells you to diversify your portfolio. They swear that Tesla is the new iPhone, and Musk the new Steve Jobs.
And those who are famous enough,[b] or lucky enough to meet their guru, talk about it this way : In the opposite camp, there are the skeptics. The most radical ones attack Tesla drivers every time Elon Musk's antics put him in the news. The Wham Baam Teslacam YouTube channel has gained over 600k subscribers by uploading videos of Teslas being destroyed. Their most popular video has over 6 million views: an insane road rage where a guy inflicts $45,000 worth of damage on a Tesla. The greediest are betting big on Tesla's fall - and earned 11.5 billion in 2022.
And the more rational critics write technical reports to prove that Tesla cars… are bad, with poor design and disastrous customer service. They tell you that buying a Tesla is buying the hassle of a luxury product at the price of a luxury product… without luxury quality. They swear[c] that Tesla is the new Nokia: an innovative product when it first arrived on the market… but on the verge of being crushed by the competition. But by the end of this video, you'll understand why the question of whether the Tesla is a bad product… is completely irrelevant to its actual success.
The question is, how did a mediocre[d] product manage to become the worldwide symbol for the “electric car”? And how did a company that produces such bad cars manage to exceed the valuation of all its century-old competitors in just a few years? It's all the more outrageous… when Musk keeps telling anyone who will listen that Tesla doesn't advertise[e]. But here's the thing: just because you don't spend millions on TV ads or billboards… doesn't mean you don’t do marketing. There is a type of Tesla-skeptic that I call the “enlightened consumer”.
This is the amateur analyst who puts an insane amount of energy into convincing you that Teslas are bad cars. They even created a subreddit to hang out on, "r/RealTesla," which has 54,000 members, and defines itself as: “An ongoing discussion about the harsh realities of Tesla driven by facts, data, and healthy skepticism.” On there, I found a post that checks off all the bingo boxes of the enlightened skeptic consumer. The title: “Teslas are bad cars.
Here are a few reasons why.” The author is a moderator of the subreddit in question - and his argument is summed up in this punchline: “The primary reason they’re bad is they’re made by a shitty manufacturer that sells a garbage product at luxury prices, so you get all the ownership inconveniences of a luxury vehicle without actually owning one.”[f] And of course, in his post and in the comments, we can find quantified comparisons with the competition.
Personally, I don't own a Tesla and I don't know much about cars. So it might surprise you, but I think it's quite possible that the competition has better features. But what the enlightened consumers don't understand… is that this in no way means Tesla is an inferior product. And I'll go even further: if your only way to evaluate a product is to compare its features to the competition… there's a blind spot of the size of Tesla's market valuation in your rearview mirror. What's crazy is that even Musk presents himself as being obsessed with the product experience: To the typical enlightened consumer, this excerpt seems contradictory - but that's because they confuse the product experience with the sum of its features. But here's the thing: A Tesla is not a feature factory.
Tesla is an experience, a story, a movement. Of course, creating a movement is easy to say and *very* hard to do - but Musk has clearly succeeded with Tesla. And it starts with a deep understanding of why his clients buy a Tesla.
The Level 1 answer is that the Tesla represents a status symbol for a certain group of people. Bankers, shareholders, and real estate investors buy Porsches[h]. Crypto millionaires, consultants and tech YouTubers buy Teslas. The Porsche is the symbol of slowly accumulating wealth and tennis afternoons with the family. The Tesla is the car for the disciples of meritocracy and meteoric success. This partly explains the road rage incidents we talked about earlier: destroying a Tesla is a middle finger to the tech bros who made a fortune in a few years because they bought the right NFTs.
But this explanation has one major issue: Musk needs to make the product mainstream, and thus lower his prices. It's not easy to make a product mainstream while maintaining its symbolic status. Musk himself told his employees before 2015 that he was doing everything he could to make sure the company understood that its mission “was not to make toys for rich people.”[i] What Tesla is selling to its clients is the future. But not just any future. If I tell you to close your eyes[j] and imagine the world in 50 years, you probably have two scenarios in mind.
Either you see your civilization collapsing before your eyes[k] and your children having to ration their water supply. Or, you think we've reached the end of history, and that the future will look like the present but with a few more solar panels. What Elon Musk is doing with Tesla is taking you by the hand, and opening up a third way, that of a future that is both different and BETTER than the current situation.
Whereas most politicians promise to maintain the status quo and make sure that no one is too badly affected by technological change… → Musk builds Cybertrucks and has ambitions to colonize Mars. And whereas eco-anxious individuals make you feel guilty every time you go shopping in your Toyota… → Musk tells you that we can solve global warming without beating ourselves up. In a world where collapsologists predict apocalyptic extinction against a backdrop of civilizational chaos, Musk is the techno solutionist who reassures you that you’re not naive just because you believe that our problems have solutions. At this point, if you scroll through the comments of this video, you will probably find comments like: “But Stan, it's all marketing! Elon Musk's futurism is propaganda, he's not going to solve global warming with €40,000 cars! Techno-solutionism is a scam!” Well, at the risk of surprising you… these comments are not exactly wrong. Will Tesla solve the auto industry's carbon emissions problem? Probably not. But much to the dismay of the moderators of r/RealTesla, Tesla fans just don't buy “facts” and “data”: they describe the cars as “quasi spacecraft” and by getting on board, they are buying a seat on the highway of History.
Musk gave an interview during the TED2022 conference which is a gold mine to witness his storytelling in action. For starters, look at the way Chris Anderson, the head of TED, introduces him: about madness, About the future of humanity. If your only answer is to measure the gaps between the panels of the Tesla model 3, you come across as a nitpicky hater… or as a loser with no imagination. That doesn't mean you're wrong - it just means that by moving the goalposts, Elon makes your arguments seem boring and inaudible.
In 2007, Nokia’s cell phone market share was more than 50%: 1 phone out of 2 sold in the world was a Nokia. So when they saw the iPhone come on the scene, Nokia thought, “It's cute, but there's nothing earth-shattering about it. We'll just keep releasing our products at our own pace and crush them.”
A perfectly reasonable attitude at the time, right? Well, later on, Nokia's market share graph looked… like this. In 2017, after only 10 years, Nokia went from 50% of the smartphone market share… to 1%. Flashback [m]to 2004: an eccentric entrepreneur has just sold PayPal and decides to embark on not one, but two economically unfeasible projects: * building rockets, * and creating a start-up for… electric cars. Ford and General Motors look on with a smile. The last time someone succeeded in creating a car startup was Chrysler… in 1925.
“Tesla’s cute, but there's nothing earth-shattering about it…” But by 2020, Tesla's market cap outweighs General Motors and Ford… combined. However, there's a problem with this type of comparison, because you can interpret it any way you want. Remember that Nokia were considered innovators only a few years before their downfall. So is Tesla like Apple - a revolutionary product that toppled the giants of its industry… … or is Tesla like Nokia, the first entrant that had a head start, but couldn’t keep up? What's weird is that when Musk was talking about Tesla's goals in 2015, he said this: “The impact that Tesla will have is fairly small in and of itself.
It will change people’s perception perhaps, but it will not in and of itself change the world. But if large numbers of people are choosing to buy [a Tesla]…then that’s what will prompt car companies to invest real money into electric vehicle programs of their own, and indirectly, by spurring competition, Tesla can be the catalyst for a multi-order of magnitude shift of the entire industry towards electric.”[n] Musk didn't believe he could dominate the auto industry. He knew the established car manufacturers would steal his ideas long before that happened. He just wanted to light a fire under them.[o] But today, things seem to have changed. Tesla's stratospheric market valuation implies that it's not just there to be a catalyst for Ford and General Motors to - Tesla is meant to dominate them.
And to do that, storytelling isn't enough. Tesla is going to need a decisive edge that can't be copied by its bigger competitors. Tesla's most obvious advantage is its network of 40,000 [p]“superchargers”.
And yet, in 2022, Musk announced that he would open Tesla superchargers to other electric cars. At first glance, this is a completely absurd business decision: Tesla is agreeing to share its main competitive advantage with its competitors… while its No. 1 status will be determined in the coming years by its ability to develop this exact type of advantage. It would be like Netflix giving Disney+ the right to broadcast Squid Game… But the decision was not made randomly.
For starters, from a storytelling point of view, it's an obvious call. If Tesla's mission is to democratize the electric car, they should share their network of chargers, even if it instantly makes their competitors' products more attractive. Another way to analyze this decision is that Tesla sees the supercharger network as a new business unit. Musk is used to launching side projects within his companies - which sometimes become huge. For example, Starlink, SpaceX's satellite internet project, is already generating $1 billion in annual revenue - and is predicted to be a bigger revenue driver than the actual rockets by 2025. Finally, there's control over the client’s experience.
The owner of a competing electric car will be able to use the superchargers - but it will be at a station with a big Tesla logo, using the Tesla app. That’s pretty great advertising for Tesla, which would permanently drive home the fact that the default choice for electric cars is Tesla. We can even imagine that Teslas will have some advantages in terms of user experience. For example, you can use any Bluetooth headphones on an iPhone, but AirPods have features that can't be copied by other manufacturers, like automatic switching between all your Apple devices. In a broader sense, the main debate in the analyst community is whether Tesla is a tech company - or a car company. I know it seems like a niche question, but it changes everything.
Because if Tesla is a car company, then it's all going to come down to the economies of scale that it can create. For example, by reducing the cost of batteries by scaling up production. The problem is that to benefit from economies of scale, you need volume. And volume, for the moment, is the strong point of the General Motors and Fords of this world: not Tesla’s.
But if Tesla is a tech company, then the software is the core of its competitive advantage. Pro-Tesla people prefer this explanation because it justifies a much higher valuation. But analyst Ben Evans points out a problem: if it's all going to be about having the best software, what's to stop Google or Uber from creating a car operating system and selling it to the major manufacturers? “Tesla is not just competing with car companies - it’s competing with other software companies. It doesn’t have to beat Detroit at software - it has to beat all the rest of Silicon Valley at software.”- Ben Evans[q] According to Evans[r], Tesla's big advantage is the data it collects from its vehicles. If it can use this data to get to self-driving technology before its’s competition, Tesla will have hit the jackpot: More sales mean more data, and so a better product, which leads to more sales.
This is exactly how Google or Facebook came to dominate their respective markets. But it's not at all clear that this model will work for Tesla. With Netflix, for example, this theory didn't work. Initially, there was the idea that Netflix, as the first entrant in the streaming market, would build an insane advantage with its recommendation algorithm.
More customers meant more data, so a better product, thus leading to more customers. But in the end, it turned out that Netflix wasn't really a tech company: it's a media company. Any competitor can build a streaming site and a successful recommendation algorithm. So Netflix has to fight on its competitors' home turf: the real challenge is to produce content that people want to watch. Tesla is run by “the world's raddest man”.
No, no, the expression is not mine: it's the title of an article by Tim Urban, a guy who draws stick figures on his blog to explain very complicated subjects. In 2015, Musk contacted the blogger to write an article about him: it shows how early he was aware of the need to create his own myth. Tim Urban was a great pick because he was instantly in awe before Musk. At the beginning of the article, he compares him… to Zeus, no less. “The problem with Elon Fucking Musk, though, is that he happens to be involved in all of the following industries: * Automotive * Aerospace * Solar Energy * Energy Storage * Satellite * High-Speed Ground Transportation * And, um, Multi-Planetary Expansion [Interviewing] Zeus would have been less stressful.”
The most important sentence in the article comes in the first few paragraphs: “Whatever skeptics have said can’t be done, Elon has gone out and made real.” You watched him invest all the money he made with PayPal in the 2 most absurd businesses in the 2000s, building rockets and creating an electric car startup, and you thought he was a millionaire on a crazy ego[s] trip? He proved you wrong. Journalists from the Valleywag blog named the Tesla Roadster the “N°1 tech failure of 2007”? He proved them wrong. Tesla's stock dropped dramatically after Musk's Twitter antics, and he got booed by Dave Chappelle's audience when he went on stage in the middle of this mess? He'll prove them wrong.
And that's the very core of the Elon Musk legend. He has beaten the odds against him again and again. Some describe him as a pathological liar who constantly announces unrealistic deadlines. Others see him as a megalomaniac with a savior complex, or as a peddler of false solutions to the climate crisis.
And there is some truth in all of that. But don’t forget, the goddamn rocket took off without exploding, and then it came back to Earth to land safely on its platform. You can't bullshit with the laws of physics.
So Elon bullshits[t] with the human mind to raise money and sell the products that finance his fight against the limits of physics. At least, that's what he wants you to believe. Were electric cars inevitable[u]? Or did we need a "Henry Ford of electric cars"? Tim Urban, in awe of Musk, has a clear-cut answer: “Our intuition tells us that technology, social norms, movements and ideas just move forward through time, as if forward progress is a river and those things are on a raft gliding through. We so associate the passage of time with progress that we use the term "the future" to refer to a better, more advanced version of our present world. In reality, if a more advanced future does happen, it's because that future was willed into our lives by a few brave people.”[v] This is similar to the “great man theory” in History.
Did Napoleon change the world, or is he just a product of his time and someone else would have played the same role if Bonaparte had never been born? Elon, of course, is a believer in the Great Man theory. He has to sleep on the floor of the Tesla factory because if he doesn't, no one else in the world can take his place. And here again, it's hard to argue with him.
With Tesla or SpaceX, he has clearly sparked innovations that would not have existed without him - or at least not for many years. But on top of that, there is the marketing aspect - where he makes a conscious effort to establish himself as a disruptive and eccentric innovator. The more Musk deviates from the norm - dancing on stage, smoking a joint during Joe Rogan's podcast, giving his daughter[w] an unbelievable name, or disrupting the market with a tweet - the more he reinforces this idea that he is a very extraordinary human. This is also what Nikola Tesla, the real-life inventor that inspired the company’s name, embodies: a misunderstood iconoclast who defended alternating current. Tesla was an engineer.
But during his lifetime he was overshadowed by his rival Thomas Edison, who was an industrialist. Contrary to popular belief, Thomas Edison did not invent the lightbulb. The achievement that put him in the history books is that he created "affordable and accessible electric light[x]” for all.
So where Edison’s story is embroiled in commercial issues and personal gain, Nikola Tesla embodies pure, uncompromising innovation. That's what makes Tesla the perfect geek hero. When Nikola Tesla arrived in New York in 1884, Edison greeted him by proclaiming, "So this is our[y] Parisian engineer who works all night!" Now, replace Parisian with Californian, and you have an accurate description of how Musk insists on portraying himself: He never misses an opportunity to remind us that before being CEO, he is an engineer... Or that he hates being a manager. Or that he doesn't want to be CEO... of any company. Which is obviously completely inconsistent when you look at his track record.
But it really does fit his constructed image of the misunderstood genius. So, did you notice the problem? Tesla was a brilliant innovator, but his business failed and he died poor. This is called the innovator paradox: to share his invention with as many people as possible, the misunderstood genius must become a rational manager, and make compromises. Steve Jobs made way for Tim Cook, Larry Page for Sundar Pichai, and Bill Gates for Satya Nadella. Back in 2018, Musk agreed to step down as chairman of Tesla's board of directors after tweeting what U.S. regulators consider a teeny tiny attempt at securities fraud.
In 2022, Musk had to liquidate $36 billion of his Tesla shares to buy Twitter. Historic investors started to see his actions as erratic - and to doubt his commitment to the cause. The stock dropped, the annual results were worse than expected , and the rumor spread: "Tesla’s magic is fading.”
Musk goes from "real-life Iron Man" to an "increasingly unpopular buffoon." Being polarising is a great strategy when you are starting out and need to stake out a strong identity. Entire brands are built on it, and it works very well.
But to fulfil the promise of its stratospheric valuation, Tesla needs to conquer the mainstream market and launch cheaper models. A polarising figure like Musk automatically limits Tesla's reach: beyond the fanboys, there are fewer and fewer neutral consumers to appeal to, and more and more people who have read one - or ten - negative articles about Elon. And fewer consumers mean fewer economies of scale - an essential element for any car brand.
Musk understands all this very well. Rumour has it that he’s grooming Tom Zhu to succeed him as head of Tesla. He’s the polar opposite of Elon Musk, avoids the spotlight like the plague, and rushed to delete his LinkedIn profile when the rumors surfaced. We haven't talked much about the Twitter takeover. And while I have to admit that I've always found Musk impressive - I was very disappointed in the way he handled the Twitter deal.
His announcement of a takeover, only to immediately back down with lame excuses, was ridiculous. From someone who says his mission is to save humanity, you wonder why he’s wasting his time with a site that is used for political flamewars. He would have been better off staying focused on his businesses that are making a real impact. At least that's what I thought before making this video.
But along the way, I have developed a new theory about Elon Musk. Contrary to what he tries to portray, Elon Musk is not a genius engineer. His real strength is being an agent of chaos. To take a mega-geek reference, he is what the game Dungeons[z] and Dragons calls a "chaotic good" character. He wants the best for humanity, but his way of doing things[aa] is to create havoc in industries that have become stuck. Twitter is not only a service for sharing memes - it is also the most stagnant social network on earth.
Twitter has been infamous[ab] for 10 years for its total inability to produce any innovation on its platform - despite successive CEOs. So maybe Elon was the electric shock that Twitter needed to wake up from its paralysis and get back on the road to progress. Most importantly, if we consider Elon to be an agent of chaos, he is - or will [ac]quickly become - harmful to the day-to-day life of Tesla, a company that wants to be dominant in its industry. His role then is to go and start a new crazy company - or to shake up a paralyzed company like Twitter.
In two years, Twitter will be “Muskerized” and able to innovate again... or the patient will be dead on the operating table. That's also possible.
At that point, it will be time for Musk to turn his attention to another stagnant industry, where everyone agrees there are[ad] problems, but no one can break the status quo. One possibility would be the healthcare system in the US, which is known to be incredibly[ae] expensive and not even that effective. If he can drastically lower costs, as he did with NASA, he will become a national hero. Or maybe education.
Everyone knows the education system is outdated, but the same universities have dominated for decades and they have no incentive to evolve. A few years ago, the auto industry needed an agent of chaos - and it worked: things are changing. Now that the mission is accomplished, the best thing Elon can do for mankind[af] is to go make a mess somewhere else.
If you like the video, subscribe - I’m just getting started. And if you want to watch more, check out my video about how minimalism became a religion that makes millions. [a]Sounds like Polish [b]« Who are » you said were [c]These two words aren't clear. [d]Meediocre [e]Quote from his tweet “Tesla does not advertise.”
[f]This is the exact quote. [g]I don't think this quote is in the YouTube video mentioned, but I found the quote in a tweet here: https://twitter.com/ICannot_Enough/status/1624754212893560834 [h]I hear Porschers [i]quote here: https://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html#:~:text=%E2%80%9Cwas%20not%20to%20make%20toys%20for%20rich%20people.%E2%80%9D) [j]Eye(z) not eyes [k]here too [l]There's also an expression “first come, first served”, which might be appropriate here.
[m]Shouldn't it be “flashback” here? [n]This is the shortened quote from: https://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html [o]a more slang expression would be: “give them a kick up the ass.” [p]Are you sure about this number? on the site it says "Tesla has nearly 13,000 “supercharger” stations around the world...while also increasing its total “destination chargers” to more than 21,000...Morgan Stanley estimates
Tesla will expand the supercharger network to 15,000 stations “by 2030." https://www.cnbc.com/2019/02/12/morgan-stanley-tesla-charging-station-network-competitive-moat.html [q]I found the quote here: https://www.ben-evans.com/benedictevans/2018/8/29/tesla-software-and-disruption#:~:text=Tesla%20is%20not%20just%20competing%20with%20car%20companies%20%2D%20it%E2%80%99s%20competing%20with%20other%20software%20companies.%20It%20doesn%E2%80%99t%20have%20to%20beat%20Detroit%20at%20software%20%2D%20it%20has%20to%20beat%20all%20the%20rest%20of%20Silicon%20Valley%20at%20software.%C2%A0 "Detroit" is the place where the "Big Three" produce cars_Ford, GM & Chrysler. [r]Ehvans not Eevans [s]eego [t]You say " Elon's bullshit" in the video [u]in-EVitable [v]Quote here: https://www.goodreads.com/quotes/10447255-our-intuition-tells-us-that-technology-social-norms-movements-and [w]he has a son That i am sure of [x]I just put the exact quote from the site between quotation marks.
: https://www.innosight.com/insight/teslas-new-strategy-is-over-100-years-old/#:~:text=invented%20was%20affordable%20and%20accessible%20electric%20light. [y]you say "or" / 'all' [z]you missed the S [aa]or “M.O. modus operandi” [ab]Infamous [ac]There should be a pause after chaos [ad]There are [ae]Incredibly [af]You said minekind
2023-04-13