It used to be common to point out that 1/3rd of all of the self-made multimillionaires in the USA eventually go bankrupt. I don't know what the current statistic is, but 20 years ago I studied the issue in some detail, and the pattern was:
1. entrepreneur sees an opportunity that no one else sees
2. entrepreneur takes some big risks to take advantage of the opportunity
3. entrepreneur becomes wealthy because they took risks to take advantage of the opportunity
4. other entrepreneurs (or businesses) become interested now that the new opportunity has been proven
5. after 10 or 20 years of hard work, the original entrepreneur wants to shift their attention elsewhere, maybe relax, at the very moment that outside money is pouring into this opportunity
6. original entrepreneur goes bankrupt, as their attention was shifting away from their business just as competition was intensifying.
On a much larger scale, it seems Elon Musk is at risk of exactly this pattern. His attention shifted away from Tesla just as Tesla is facing increasing competition.
I am paraphrasing a quote I have heard before, "Pioneers get the bullets and settlers get the land." Might not be actual bullets but pioneers today have to deal with legislators, put up charging stations, develop most components from scratch and so on. These are the modern day bullets. If they don't get bought by a larger company the larger company launches a competing product with the benefit of the experiences of the pioneer.
Can't argue that Tesla's smaller than Mercedes when Tesla's market cap is so much larger. In 2021, at it's peak Tesla's market cap crossed $1.2 Trillion. Daimler at it's peak this year only reached $81 Billion (although climbing). Why couldn't Tesla just buy out Daimler? Even now Tesla sitting at a valuation of $372 Billion. It could happen tomorrow.
Tell me Elon's the savvy businessman you claim him to be. If Gates were running the company, he would have acquired half the auto industry by now.
As an owner who experiences the “joy” of dealing with a tesla on a daily basis it’s simple: Tesla is over-valued. There’s so many little gotchas and shortcuts taken that I find it impossible to believe this company is worth what people claim it is on paper. The theoretical wealth of this company stems from consumer/investor ignorance in my opinion. That’s why he hasn’t acquired more of his competitors, the value can’t be realized, it needs to stay bottled up as “potential” for lack of better words.
Umm that's not how mergers and takeovers work. He bought Twitter on a bully offer, half of which was paid with Tesla stock. If anything, this is the best way to convert overhyped stock into real value.
> If Gates were running the company, he would have acquired half the auto industry by now.
I love this. I haven’t heard it put this way before. I’m tempted to agree with you. Gates was one of the most aggressive, cutthroat, successful empire builders of this century.
Market cap has little to do with actual size of a company (employees, manufacturing capacity, ...), nor can a company with a larger market cap automatically buy a smaller one. Especially the latter completely ignores how markets work.
These mistakes are particularly egregious when you bring meme stocks like Tesla into it.
Market cap does not equate to cash on hand. Let's say I give you a banana for $1. You bring that banana to a marathon where someone will pay you $5 for it. That does not mean I now have $5.
Tesla could dilute their stock and sell more, but that is quite the dilution. Further, the sell price might not be just the market cap value, particularly for a profitable company. Though, exactly those kind of take overs do happen (and with tesla's numbers, not too hard to imagine)
Buying a major car company is buying a whole heap of liabilities and depreciating assets. The major value drivers (contributors to market cap) are brand, patent portfolio, and future revenues from existing capex.
Tesla doesn't want to support the supply chain of new and used parts for a legacy car company, they can barely keep up with their own (and they only make 4 models!).
“Legacy” is not a pejorative term, it’s descriptive. They have a dealer network. They have a parts counter. Their operations are the result of a 120 year legacy. Their valuation is based on longstanding economics of the automobile industry.
I’m saying all this to draw a comparison against Tesla. Tesla doesn’t want a dealer network, or a parts counter, or a typical car company valuation. Buying a legacy car company is not in Tesla’s interest, because they don’t want to play by the rules (unwritten or written) that every other auto manufacturer plays by.
Well, you know, you also get an established luxury brand, a cadre of brand-loyal customers, a significant increase in the manufacturing base and tons of proprietary tech. Are you telling me Mr. Musk would have bothered to create his own brand if he had enough capital to buy an existing brand to start with? The latter is a much safer strategy in bringing a car to market. He took big risks creating his own brand because he lacked the initial capital to buy one outright.
you inherit all the politics that comes with an existing company as well.
owners and CEOs are powerful but not infallible; Carlos Ghosn got thrown in jail when he got too big for his britches as CEO of Nissan (in Japan Inc.'s view, at least).
Why did my comment get downvoted? I'm sharing something that I learned back when I was doing serious research about entrepreneurship, and I'm pointing out that it applies to Elon Musk, an observation which should be relevant to the conversation.
I suspect because you did not relate your comment back to the article, it seems off topic to an article about Mercedes getting level3 self driving approved for nevada highways.
It is somewhat predictable that eventually responses would in particular start to focus on the elephant in the room.. fundamentally a parent comment should be about the article
Perhaps Tesla will suffer, very possible, but where are the Mercedes Satellite Constellations and re-usable Rockets? Mercedes Brain-Computer Interfaces?
Musk's businesses seems so financially diversified that one bombing overnight could just take some cash from the others. He's already leveraged Tesla stock to buy a massive Social Media platform, right? But the profitability of Twitter is certainly another point to be decided.
physiologically, the devices have a limited lifespan due to fact that the tissue will start scarring over and render the electrodes worthless, it's an invasive procedure that can only be done once or twice. Neuronal actions are chemical interactions, not digital computer signals as well.
I agree the work they've done is kind of exciting, but they didn't solve one of the crucial issues that's been blocking the field and technology from flourishing, implantable electrodes have been around for a long time.
Searching 'neuralink "scar"' ('' removed) got me information about the ethical issues of Neuralink@UC Davis, and a 2020 article about potential polymers to use in the wires.
I will continue to wait and see how the tech develops - I certainly was never planning on being one of the first early adopters anyways, but I still see a lot of potential for Paraplegics, and then obviously Consumer usage eventually.
I'm not expert but was involved in adjacent field, so I do not have a singular explanation and one pager. Neuroscience/biology research is complex, but a good indicator is that there are hundreds of papers on trying to modulate responses to implants. They have not gotten very far on a resilient solution to it, and like I said, it's been decades since they've discovered this problem and the fact that neural link doesn't even bring it up leads me to believe they are just BS ing everyone in the same way elon ignored major questions about FSD for tesla, they are nowhere near solving the actual crux of the issue.
The longevity and viability of their work being anything more than terminal experiments is the main thing, those obviously do not make it to normal human usage. Implantable electrodes have been around for a while and are not new technology.
That has existed in academia for 10-20 years. The only thing different is the marketing + the move fast break things ethos both of which are typically frowned upon in academia.
Do research yourself don't listen to randos on internet. Just look up on google scholar results for "implantable electrodes scarring" you can get hundreds of papers on it.
1. entrepreneur sees an opportunity that no one else sees
2. entrepreneur takes some big risks to take advantage of the opportunity
3. entrepreneur becomes wealthy because they took risks to take advantage of the opportunity
4. other entrepreneurs (or businesses) become interested now that the new opportunity has been proven
5. after 10 or 20 years of hard work, the original entrepreneur wants to shift their attention elsewhere, maybe relax, at the very moment that outside money is pouring into this opportunity
6. original entrepreneur goes bankrupt, as their attention was shifting away from their business just as competition was intensifying.
On a much larger scale, it seems Elon Musk is at risk of exactly this pattern. His attention shifted away from Tesla just as Tesla is facing increasing competition.