I lived through the Telecom boom as a founder of 3 companies. I was in a good position to watch and experience how timing and luck are critical. Tesla appears to have a unique position and a good starting solution to a real market and planetary problem. That's a given but what comes next?
I believe there is little doubt there is a real need for an alternative to fossil fuel based transportation. The existing energy suppliers have enormous market and political power with Fossil Fuels (FF) being at the power core. This is not only the "Big Oil" companies but everyone upstream (dependent) and adjacent (coal, NG, etc.). Even the electric utilities have a powerful vested interest in fossil fuels since they have such large power plant investments. The inertia of the fossil fuel genetic market tree is massive. The threat of Global Warming and its climate impact are pressing harder and harder against the FF market inertia. The recent change in the US administration :smile: with Obama and Chu is a powerful signal of change. The idea of Greenland melting and its 26 foot sea level rise is sinking in. That would be very bad! The previous administration :frown: behaved in a manner that helped maintain the inertia but the dam is broken.
The Obama administration is beginning to provide an opposing force that will start real shifts and breaks in the FF market tree. The electric car has been kept on the sidelines while various hybrid technologies and fuels received the attention. Even the DOE seemed to jump over it to the "not yet practical" Hydrogen. The obvious "no brainer" combination of wind, solar and hydroelectric plus electric vehicles was quite threatening. The avoidance of electric cars in the mainstream was not an accident nor was it a conspiracy. Markets can behave in ways that "clear the way" to minimize the risk of future competition. It needed to keep the solar, wind, hydro + electric vehicle recipe from mixing. Tesla was bucking those forces and if not for the election of Obama, would have been relegated to the backwaters. That problem is gone. That is both good timing and luck. The door is open but can Tesla take advantage of it? Maybe! Tesla needs more good timing and luck. Is it too soon or just right? That would be my question?
Can Tesla be what Cisco was to the Telecom Market? The election of Obama reminds me of the Bell System divestiture in 1984 which acted as the catalyst for the Telecom/WAN explosion. Or will Tesla be the Stratcom which gets bought by whoever hits the window? I was lucky enough to hit the window but we were purchased by a middle sized supplier when the 1987 crash and aftermath and the huge capital startup costs were overwhelming. Our product went on to take dominance away from the pre-divestiture AT&T in the local loop. We timed the window just a little early (a few years) and the capital costs were underestimated and were a prerequisite to large scale sales.
Tesla seems positioned similar to my experience but will other factors be the key? My second startup was able to go public in 1999 when the lofty market valuations could generate the capital. Is Tesla going to miss that opportunity or will they survive on the loans and go public just as this recession turns? Will that happen soon enough? Will the valuations be such they can raise the enormous Auto Manufacturer startup costs. Its one thing to break even on Roadsters and quite another to compete with the Japanese and Korean auto companies at volume. Will the Obama administration see Tesla as the perfect example of his new Green economy and then just "make it happen" or will that be Tesla's followers?
In any case it seems Tesla is surely positioned to be the US Cisco of the Auto Industry. Its going to take some luck and timing to see if they come up one generation short or take over the industry? The ride will be fun so long as you are not the Tesla CFO. I am hopeful and believe they have formula right and only timing and luck stand between them and history. I will enjoy building my own PV system and lighting my house, running this laptop, filtering my pool and yes charging my Tesla. 60% of the energy that supplies electricity to my house is wasted in efficiencies in generation and transmission. The percentage wasted by my Corvette burning gasoline is similar. Once I am producing my own electric at $4/watt installed by myself, I will truly enjoy saving that 60% wasted as my Tesla charges and my laptop warms my lap. Tesla fits into that formula alone, for now.
Tesla has the wind (and solar) at their back and the fear of melting Greenland drawing them forward. What a wonderful place to sit even if they come in second and get bought by the industries Cisco equivalent. They will certainly have a good place in history. Lets hope its not under water from Greenland melting and they can say they played a key role. That would be very nice! I wish them luck and so do my kids. Thank God somebody is doing it right.
I believe there is little doubt there is a real need for an alternative to fossil fuel based transportation. The existing energy suppliers have enormous market and political power with Fossil Fuels (FF) being at the power core. This is not only the "Big Oil" companies but everyone upstream (dependent) and adjacent (coal, NG, etc.). Even the electric utilities have a powerful vested interest in fossil fuels since they have such large power plant investments. The inertia of the fossil fuel genetic market tree is massive. The threat of Global Warming and its climate impact are pressing harder and harder against the FF market inertia. The recent change in the US administration :smile: with Obama and Chu is a powerful signal of change. The idea of Greenland melting and its 26 foot sea level rise is sinking in. That would be very bad! The previous administration :frown: behaved in a manner that helped maintain the inertia but the dam is broken.
The Obama administration is beginning to provide an opposing force that will start real shifts and breaks in the FF market tree. The electric car has been kept on the sidelines while various hybrid technologies and fuels received the attention. Even the DOE seemed to jump over it to the "not yet practical" Hydrogen. The obvious "no brainer" combination of wind, solar and hydroelectric plus electric vehicles was quite threatening. The avoidance of electric cars in the mainstream was not an accident nor was it a conspiracy. Markets can behave in ways that "clear the way" to minimize the risk of future competition. It needed to keep the solar, wind, hydro + electric vehicle recipe from mixing. Tesla was bucking those forces and if not for the election of Obama, would have been relegated to the backwaters. That problem is gone. That is both good timing and luck. The door is open but can Tesla take advantage of it? Maybe! Tesla needs more good timing and luck. Is it too soon or just right? That would be my question?
Can Tesla be what Cisco was to the Telecom Market? The election of Obama reminds me of the Bell System divestiture in 1984 which acted as the catalyst for the Telecom/WAN explosion. Or will Tesla be the Stratcom which gets bought by whoever hits the window? I was lucky enough to hit the window but we were purchased by a middle sized supplier when the 1987 crash and aftermath and the huge capital startup costs were overwhelming. Our product went on to take dominance away from the pre-divestiture AT&T in the local loop. We timed the window just a little early (a few years) and the capital costs were underestimated and were a prerequisite to large scale sales.
Tesla seems positioned similar to my experience but will other factors be the key? My second startup was able to go public in 1999 when the lofty market valuations could generate the capital. Is Tesla going to miss that opportunity or will they survive on the loans and go public just as this recession turns? Will that happen soon enough? Will the valuations be such they can raise the enormous Auto Manufacturer startup costs. Its one thing to break even on Roadsters and quite another to compete with the Japanese and Korean auto companies at volume. Will the Obama administration see Tesla as the perfect example of his new Green economy and then just "make it happen" or will that be Tesla's followers?
In any case it seems Tesla is surely positioned to be the US Cisco of the Auto Industry. Its going to take some luck and timing to see if they come up one generation short or take over the industry? The ride will be fun so long as you are not the Tesla CFO. I am hopeful and believe they have formula right and only timing and luck stand between them and history. I will enjoy building my own PV system and lighting my house, running this laptop, filtering my pool and yes charging my Tesla. 60% of the energy that supplies electricity to my house is wasted in efficiencies in generation and transmission. The percentage wasted by my Corvette burning gasoline is similar. Once I am producing my own electric at $4/watt installed by myself, I will truly enjoy saving that 60% wasted as my Tesla charges and my laptop warms my lap. Tesla fits into that formula alone, for now.
Tesla has the wind (and solar) at their back and the fear of melting Greenland drawing them forward. What a wonderful place to sit even if they come in second and get bought by the industries Cisco equivalent. They will certainly have a good place in history. Lets hope its not under water from Greenland melting and they can say they played a key role. That would be very nice! I wish them luck and so do my kids. Thank God somebody is doing it right.
