Shai Agassi is an amazing guy. In this TED Talk from 2009 he outlined a vision for an electric car with swappable batteries -- a startup called Better Place, which raised $200MM but then filed for bankruptcy this year after ousting Agassi. Same for Henrik Fisker, designer of the timeless Aston Martin DB9 and founder of Fisker Automotive, another electric car company that recently burned out.
Then there's Elon Musk, founder of Tesla. It's no secret that I'm a huge fan -- I've written many posts over the past few years about Tesla. Where Better Place and Fisker have seen failure, Tesla has seen massive levels of success.
So what separates Musk from Agassi and Fisker? The ability to execute flawlessly.
Here's Tesla's stock price since it went public:
Musk is achieving a vastly different outcome in the electric car business than two other incredible entrepreneurs were able to achieve. And therein lies the lesson for all of us: All three of them had solid ideas. But what actually creates value is not the idea. It's the execution. In fact, in this post I argue that a good idea is actually a contrary indicator to huge exits. Executing on things well means optimizing relentlessly. It means executing with an iterative approach -- something Jason Polites calls The Big Shift.
Where Agassi and Fisker tried to jump into creating an electric sedan straight away, Musk instead took a vastly more iterative approach from the very beginning. Here's Elon's Master Plan for Tesla as outlined in a blog post from 2006:
His first car, the Roadster, was built from a modified Lotus chassis in small volumes. Even doing it that way almost bankrupt the company. So with Tesla, the incredible Model S sedan is just at the beginning of Act II of a III act play (at least initially -- I'm sure there's more to come).
Outcomes are obvious in hindsight but impossible to predict in the present. The only way to even have the chance of success -- even for an entrepreneur like Musk -- was to take an iterative approach to the business with fast cycles (at least, for the auto industry) and a relentless measurement of both success and failure points.
Tesla's future is not guaranteed nor is it obvious to everyone that the company will succeed. It still faces many challenges in an industry where no new car companies have been able to succeed in the US in the past 100ish years.
But because of the way Musk executes, I'll continue to invest in Tesla and continue to believe that Musk can pull it off.
And for the rest of us entrepreneurs, we owe a debt of gratitude to Agassi, Fisker and Musk for taking risks that we can learn from. Let's all go forth and really focus on executing flawlessly with iterative approaches and fast cycles where we measure both success and failure in whatever businesses we're in.
Can you talk more about that iterative process and what it consists of?
I highly recommend you read Jason Polites' blog on the topic, called The Big Shift: http://polites.com/2013/04/09/the-big-shift/
all while breaking the NASA monopoly on space flight. on the side.
Yeah so here's the thing: That shouldn't really be possible. That Musk is co-CEO of two companies (let alone two very different companies). Jack Dorsey does this with Square and Twitter as well.
What spurred me to write this post was this article about how Tesla is now testing swappable batteries -- something that Agassi set out to do originally with Better Place. Except that the iterative approach worked for Tesla, and Agassi's direct approach didn't.
Sue and I took a tour of the Tesla Model S factory in Fremont, CA today. This is the old NUMMI plant. If you haven't heard the NUMMI story between GM & Toyota, and you're a car buff, there's a This American Life episode about it that's just mind blowing. The net of it is that GM tried to learn Just In Time assembly practices from Toyota, they built a factory together for Toyota to transfer this know-how to GM, and GM completely blew it. The factory shut down and was sitting idle after that fiasco.
When Elon Musk was looking for a place to build his new Model S sedan, he approached Toyota with a $50MM bid for it, which Toyota accepted. Why would Toyota sell a car production plant arguably worth $1 billion or more for $50MM? For the answer to that, you really have to understand the relationship between Musk and Toyota, which is well portrayed in this 2010 WIRED magazine article.
As a reservation holder for the Model S, I'm proud to support one of the most amazing entrepreneurs of our generation. What makes Elon even more amazing is that he's not only revolutionizing the automobile industry, but the space industry as well, with SpaceX... at the same time. Elon, my hat is off to you.
Below are a number of pictures and vidoes of the factory and the event, which was very well done.
Getaround is a car sharing service like Zipcar, except that it uses people's private vehicles instead of a fleet. It's a bit like AirBnB for cars. Getaround is part of the "collaborative consumption" movement, which believes that if we could share things we don't use most of the time it would be better for us in a lot of ways. Sharing cars means less cars on the road, which means less pollution, and generally less "stuff."
I'd never used Getaround and a few weeks ago I was trying to figure out why. I pinged Jessica, one of the founders, and told her that what I'd realized was that I didn't want to have to go to someone's house and "borrow" their car. The thought of actually interacting with the owner of a car was awkward enough that it had kept me from trying the service.
Jessica told me about a new type of rental they now have called "Instant," where I can use the Getaround mobile app to rent a car instantly and unlock it with my phone, meaning I wouldn't have to meet the owner or wait for approval. (This dovetails really well into my recent blogs about the power of mobile and apps to transform businesses, and how Fortune 1000 CEOs are going to get fired for missing it.) Getaround Instant was exactly what I was looking for, so my brother-in-law Dal and I decided to give it a try.
I had a few hiccups that Getaround is still working through (for example, Getaround verifies a driver's driving history with the DMV in real-time, and since my last name has a hyphen in it, but the DMV doesn't account for hyphens, my rental request initially broke Getaround's booking system. But both Jessica and Matt were very proactive at resolving these speed bumps). Overall the process was incredibly smooth: