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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (10459)	10/16/2020 12:29:23 AM
From: Sun Tzu	1 Recommendation Recommended By Kirk © Respond to of 26422

Aside from the not-invented-here, there are two big problems that large established organizations struggle to overcome. Firstly, the senior management has to be willing to disrupt themselves. This is an extremely hard feat to pull off. Why would a company kill their own cash cow? How would they get the approval from the board of directors? Why would they risk their reputation, pension, and livelihood to go on a risky venture that may not work out? And of course, can they possibly do it? Assume that you are the senior execs for Nissan. Would you go risking it all on EV, given that even if you succeed you are likely to be in a worse position than you are today? Or would you just collect your bonuses and launch a pilot project so you can claim that you too are a forward looking leader? The other problem has to do with capabilities. Pivoting out to a new risky technology requires a very different type of talent and leadership than running an established enterprise. They are not the same thing at all. Which is why most large companies prefer to buy established new players than to develop their own leading products. I can't even remember anymore how many companies Cisco bought. It was in the hundreds. They just bought them and integrated their products into their switches rather than do their own R&D. Outside of China, VW is the company that has most actively invested in EV. And it's not as if the Germans are dumb when it comes to engineering. But they have a very different approach than Tesla. Musk tries to make a vertical company that integrates all the pieces together perfectly. From the batteries to the car to the material science to even the lithium mines, Musk is taking charge of it all. And when they hit roadblocks, he sleeps on the factory floor and forgoes shower for days to make sure everything is on track. VW is outsourcing as much as they can is focusing on design and manufacturing of the EV. None of the execs sleep in the factory. This is not necessarily a bad thing. But it speaks volumes on the differences in culture and the management attitude. To Musk, this is life, his passion, and his do or die. To VW, it is a project to be run just like any other important project. They will go about it "professionally." Again, I am not here to sing Tesla's or Musk's praises. I have no shares in Tesla and I think that Musk is a bit to unstable and eccentric for my liking. But just because the other side has money and engineers it doesn't mean that they can match Tesla. BTW, I once saw a program on SpaceX (60 Minutes, I think). They interviewed a number of their engineers who had quit their jobs at JPL and NASA to work there. When they asked them why, they answered because this makes them feel like they are the Right Brothers and are doing something exciting and innovating, whereas the NASA felt comfortable and academic. I imagine a similar thing is true for Tesla engineers vs GM, Ford, or Toyota engineers who end up working on their respective EV projects.