It was a difficult thing that was made more difficult
by one of our investors who was just an absolute
bastard, nobody should ever take money from them.
From Crunchbase here are my likely sources of bad investor groups (I've excluded individuals and Google):
> Compass Technology Partners 4 investments - from the start (probably not).
Valor Equity Partners 3 investments - from the start (probably not).
> JP Morgan 2 - maybe (unlikely)
Technology Venture Partners US 1 - (unlikely)
> Capricorn Management 2 - maybe (probably not)
VantagePoint Capital Partners 2 - maybe
Draper Fisher Jurvetson 2 - maybe
Now it seems that Musk didn't expect the investor to act like a douche. So I doubt it's JPMorgan (who are have been historically known to be douches).
It was probably one of the VC funds trying to squeeze Musk on TSLA during the GFC - a firm with whom he has dealt with before. I doubt that it was US tech ventures - since they don't have much weight.
It was probably one of the VC firms. I doubt it was the Europeans (once again not much weight).
So it's either DFJ or Vantage. I remember Sameer Bhatia (of hotmail fame) stating that DFJ loves a good squeeze (they tried to screw him by telling other VCs to back off) - so I wouldn't put it past them.
Vantage point has been known to manipulate deals and are probably the most likely along with DFJ.
This is all speculation - someone else help me narrow it down?
Who am I to criticize Elon Musk, but several things in this interview seemed puzzling to me, and concerning if I were an investor in Tesla. And I'm not even talking about the explicit discussions of their corporate finances.
> ... deliver cars to customers who have been waiting for a long time
If the demand for Tesla cars at a given price point exceeds their supply, shouldn't they be charging more?
> Q: Have you had cars come back from customers, where you noticed a mistake ... A: No.
If the CEO is inspecting every single car, sending lots of them back for (what in some cases sound like) extremely minor tweaks, despite the fact that they haven't had any real complaints about quality, while potential customers are on long waiting lists -- might the CEO's well-intentioned perfectionism be hurting them?
I mean, it's great to see someone obsessed about quality, but I want to see Tesla turn a profit and become an established force in the market, and this article makes me continue to wonder if they'll make it.
He is doing the right thing. They start out low volume and are ramping up. Little issues that are ignored can end up being really big issues (and expensive) once combined with all the other little issues at higher volumes. Additionally every single one of them can be learned from. Maybe you need to tweak the design to improve things, maybe a new machine will help, perhaps a supplier is having issues which will blow up as volume ramps.
When you are doing manufacturing there is something they call the learning curve which is roughly the rate at which efficiency improves. The more attention and learning you can do earlier on, the steeper that curve can be which will also affect your profitability. http://en.wikipedia.org/wiki/Experience_curve_effects
For example current estimates are that Boeing are losing $100m on each 787 manufactured. They expect that their learning curve will bring them into profitability down the road, which much debate as to how steep the curve is, whether it will be better than prior planes (eg 777), and if Boeing was the capital to keep this up.
Minor imperfections are very often indicative of bigger underlying problems. We're talking about a physical product here. Variations in the output demonstrate a need to tighten up the process. You can't just redeploy, like with software. I think it makes all kinds of sense to get it right before you ship on a massive scale. Recalls and warranty work erode margins.
How perfect a product is might have an impact on brand perception.
Example: I recently bought a MacBook Pro Retina. From time to time (rarely) it makes creaking sounds. The bottom plate doesn’t sit quite perfectly on the chassis. Do I send it back because of that? No. Does that impact my perception of Apple as a brand negatively? Absolutely.
He creates culture of perfectionism. A car doesn't have to perfect to drive from point A to B. But it has to perfect if they want to build valuable brand.
This is a great article, full of interesting details you wouldn't get from an interview with the CEO of Ford or Toyota. The 'bastard investor'; the knight-in-shining-armour who rescued the company; the big-name suppliers who 'can't get their shit together'; Musk's personal attention to detail and quality of every single car. If he writes an autobiography I'll be the first to buy it.
> But if you work for Tesla, the minimum is really a 50-hour week and there are times when it'll be 60- to 80-hour weeks.
And we recently saw statistics here on HN proving that working more than 40 hours/week for long durations is counter-productive. Alas, I'm sorry to see Elon Musk falling for this "tough men work hard" nonsense.
I suspect that people who expect and look forward to working +50 hours/week would perform much better than people who are guilted into it. Also sounds like they're well compensated for it.
I don't think the special forces analogy holds water.
Consider this hypothetical example: If special forces train for 40 hours per week then they have a 70% chance of rescuing the hostages, but if they train 50 hours per week they have an 80% chance of success. Is it worth the extra cost? Absolutely. Having one special forces team with 80% chance of success is better than two teams with a 70% chance.
But now imagine that my job is to install headlights into a car chassis. If I work 40 hours per week then I can install 70 headlights, and if I work 50 hours per week then I can install 80 headlights. Is it worth the extra cost? No - two people installing 70 headlights per week is better than one person installing 80 per week.
Having said all that, it may be that "willingness to work 50 hours per week" is a good indication of passion and energy. If you ask a potential employee, "are you passionate?" the reply will always be "Yes". But if you ask, "Are you willing to work 50 hours per week" then you'll be more likely to get someone who loves the work.
People who want to be pilots love flying. Nonetheless they're not allowed to fly more than a number of hours, because passion, motivation and whatever you want won't prevent you from messing up when you're tired.
Amphetamines were invented for the military and particularly the special ops, mind you. As you know they come with their problems, too.
So please stop bullshitting yourself. As much as I like and respect Elon Musk, when he says this he's full of shit, plain and simple. Asking mechanics to work long hours building cars is terrible management. No wonder he finds defaults on each and every car.
> People who want to be pilots love flying. Nonetheless they're not allowed to fly more than a number of hours, because passion, motivation and whatever you want won't prevent you from messing up when you're tired.
Correct me if I'm wrong but quick googling shows that pilots are restricted to 100 hours of flight time per month by the FAA. That's 25 hours per week. Perhaps flight time is not exactly comparable to building cars time?
> So please stop bullshitting yourself.
I don't appreciate that.
I have friends who can eat twice the calories each meal that I have and don't gain a pound. Some of them sleep 5 hours per night and they're perfectly rested. Some of my friends spend 60 hours a week at work and still always feel behind.
Turns out that not everyone is built the same. I can't have a slice of pizza every day. I need at least 8.5 hours of sleep per night to function. I can accomplish as much work in 30 hours as some of my peers take 60 hours to do.
I can't sustain long work hours unless I'm working for myself, but not everyone is built the same.
> Perhaps flight time is not exactly comparable to building cars time?
It's not comparable in the consequences of you messing up because you're tired (150 deaths vs a misaligned rubber joint that leaks). However the underlying principle remains; when people work too much, they get tired and they makes many more errors. So it Musk wants absolutely perfect cars, he must gives more time off to the workers. Basic common sense supported by experience and scientific studies.
> > So please stop bullshitting yourself.
I don't appreciate that.
Sorry for the formulation, it wasn't targeting you, but this quite US-specific mix of protestant and macho ethos of hard work pushed to the absurd. Many, many people are dead sure _they_ can work so much more than the next guy and stay efficient.
> I have friends who can eat twice the calories each meal that I have and don't gain a pound. Some of them sleep 5 hours per night and they're perfectly rested. Some of my friends spend 60 hours a week at work and still always feel behind.
Yes, and some people can drink a bottle of wine everyday and never get cirrhosis, etc. Of course we're all different, and there probably are people that can work 60 (or maybe 80) hours a week and don't be tired and inefficient.
However you can't count on that, thus it's not reasonable to build a business model betting that you'll only get absolutely exceptional people with nearly super-human abilities in your team. Particularly when the number of employees is in the thousands (from the article Tesla currently has 2800 employees).
You may be right. Maybe working 50+ hours a week is always a net negative. Maybe a sane, family-friendly work environment will, in fact, maximize both the happiness and well-being of individual contributors and the productivity of the organization as a whole.
But you know what? Nobody told the kids in the garage down the street. You know... the ones who are working 60+ hours a week, and who are about to kick your company's ass, because there's no place on Earth they'd rather be than in that garage.
> the ones who are working 60+ hours a week, and who are about to kick your company's ass, because there's no place on Earth they'd rather be than in that garage.
Because they're 20 years old, and they'll do that only for a limited time anyway because even the energy from youth won't protect them from burnout. This is nice, heart-warming story we like to believe, but this is anecdote. In general, people work efficiently about 40 hours a week for long periods (months or years).
By the way, old asses like me have had their fair share of being in the office from 9AM to 22PM and you know what? While you're congratulating with your co-workers on what a bunch of hard-working supermen you are, you aren't actually getting anything done. It's incredibly hard to get things done 7 to 8 hours a day, it demands incredible energy and commitment; I don't pretend being even capable of this more than once or twice a week. Yes, I think that programming efficiently 40 hours a week is already nearly super-human, unless you're incredibly passionate and it's incredibly rewarding.
I don't think this has been established. But regardless, wazoox is saying that even eight hours a day (of real, focused work that doesn't involve checking Hacker News or Facebook all the time) is too much for most people over a long period of time.
It's all anecdotal evidence - I guess you could pull off a bit more if your job is your life. I've never met anyone who meets this criterion, but maybe someone else has.
I would be willing to work ~50/60 hours a week if the company accommodated me by helping me with my other goals, such as maid & laundry service, the kind of physical training I would like that I could do during work hours, a cook who would cook my weight loss diet to my specifications and somebody who would buy things on a list for me from target or wherever. That saves me more than the 10/20 hours extra they ask from me. Big clincher is to my specifications, which a lot of places cannot/wont do.
I think his "special forces" analogy is quite good.
Sure, most people won't join the military.
Sure, out of those that do, most won't be joining the special forces.
Sure, those that do join the special forces know it's "above and beyond", an added level of stress and quite difficult to do for 40+ years, but they do it anyways. Why? Probably because they're compelled by the greater mission and they're willing to do it in spite of the tradeoffs. Oh, and they're the best of the best, so they're probably okay with trading some rest for the work they're putting in.
Yes, most people won't hold up under those conditions, but special forces recruiters aren't looking for "most people". I suspect Musk isn't either.
Also, while you may think 40 hour work weeks are the optimal time, you'll have to admit it's a completely arbitrary number.
Elon himself, first and foremost, is proving your assertion wrong by easily working more, while simultaneously running 2 (I would suggest) of the most important emerging companies around. Sure, other aspects of his life may suffer, but he's willing to make that tradeoff.
Don't try to project your personal limitations onto someone else or create a population generality from a personal anecdote.
> Elon himself, first and foremost, is proving your assertion wrong by easily working more, while simultaneously running 2 (I would suggest) of the most important emerging companies around.
See my other comments. As a CEO, spending an afternoon chit-chatting with journalists, then having a filmed interview with Kevin Rose, then more chit-chatting qualifies as several hours of work. It's not remotely as strenuous as carefully aligning car doors for the same duration, though. Or writing down the specification of an important program without any interruption for facebook or HN.
It's much, much easier to work 60 to 100 hours a week as a CEO (because your work includes things like golfing with customers or dining with investors).
> Don't try to project your personal limitations onto someone else or create a population generality from a personal anecdote.
I don't deny Musk the ability to sleep 3 hours each night and work like a slave 16 hours a day, I really have no idea. However when as the CEO of a ~3000 people company he says he's expecting everyone to work 50-60 hours week, particularly auto workers, I pretend he's making a huge, grave management mistake.
Actually fatigue means that people doing repetitive work are extremely prone to error and worse, wounding themselves past a number of hours (depending upon the job). There's a reason there are laws forbidding truck drivers and plane pilots piling in hours.
Bullshit. When you're piling long hours, you make many mistakes, and that's totally independent from your passion, interest of whatever. This is just being tired.
BTW in 1998 I've worked 100+ hours/week for a few months; it ended in the hospital. So I think I've seen that from the inside, too.
As a high level knowledge worker (CEO or CTO), I may "work" for long hours getting informed on the latest trends reading HN. I can be in the office, or in the shower, ir running in the woods thinking about my next product. Heck, I can even be working, golfing with an important customer. By this metric of course I work 120 hours a week (though I spend at most 40 hours a week in the office).
However when you're typing in code, or carefully assembling a car engine, if you work too much you'll simply make more errors. This has been verified many times. It's absolutely not debatable. If you want to believe it's not this way, you're deluding yourself, and that's not good, don't do that.
BTW in 1998 I've worked 100+ hours/week for a few months; it ended in the hospital.
Hell of a difference between spending 50 hours a week on the job and spending 100. Everything you've said in this thread is undeniably true at 100 hours/week. Almost nothing you've said in this thread is generally true at 50.
Having been through several cycles of burnout over the years I tend to agree with you. These days I take nearly as much time to play as work, and my work is better for it.
That said, I wonder how much the type of work has an impact on diminishing productivity over a duration. Also wonder if EM takes this into account in other ways, like vacation time, etc.
Well at least he's upfront about it. Better than an org that says you should work 40 hr weeks then presses deadlines so hard you have no choice than to go over.
That's a good point. It sucks to work overtime constantly when you had other plans, commitments, etc, especially when the bosses are ungrateful.
On the other hand, when working on something that you know upfront is going to be an enormous challenge, and you really love what you're doing, the hours don't seem to matter. The problem for me becomes more of a physical thing. I can work a 70+ hour week or two, but then it takes a week to get back to the same level of output.
That is looking at it from the perspective of the individual. But the company can choose to not care about its individuals and just try to get the most out of them until they burn out. While not optimal this is pretty common in some startups in my experience.
Here's what I think everyone can agree with: we don't want conversations on HN that amount to pissing contests between fans of different celebrity figures. There is little insight to be had here.
I must say, I've been on the wall about the Model S, being a hard-core auto enthusiast and really loving my gears (e.g. I only drive stick shift). But this interview, the revelation that Elon Musk is out there personally inspecting each and every car (well, more or less), that the guy designing my cars is even more of an anal-retentive OC-freak than I am who won't laugh and scoff at me like the guy at the Audi dealership did when I pointed out the flaws in the cockpit of the RS5 (which I consider to have one of the best-engineered cockpits of consumer cars, being both practical and well-designed) has really changed my mind.
I just had a chance this week to see the Model S up close at the Washington Square showroom in Portland. Have to say I wasn't all that hyped about it from the pictures (and I'm more of a truck/jeep guy), but in person it is just awesome. Reeks of quality. When Tesla makes a 4x4 I will be first in line!
It's amazing just how real Elon Musk is -- he doesn't sugar coat answers and isn't furtive when describing Tesla's many weaknesses, unlike most other automaker CEOs.
The most important thing is that the stock doesn't fall even when he says these things that shouldn't be said. Indicating approval of his style. Or how insignificance it is compared to missing delivery target.
I really enjoy this article and hope tesla succeeds, but I am always turned off by plug-in EVs. Say for example, he does achieve 30 minutes charging for 3 hours driving. And say I drive from SF to LA. after about 3 hours, there is this one in n out station, that everyone stops at, are we going to have 20 superchargers at that station? in off hours of the day, those will not all be utilized, thus lose money. It seems like a terribly inefficient way to power cars. Even gas stations get lines on 5 and 101, and it only takes like 3 minutes there. EVs will always be niche until you can 'refuel' in 3 minutes or less, and you can't do that with 'chargers' because people will die. Swappable packs is the only way to go, and I hope that Tesla is at least thinking of that.
> ... say I drive from SF to LA. after about 3 hours, there is this one in n out station, that everyone stops at, are we going to have 20 superchargers at that station?
That's a legitimate issue. There's talk of eventually having battery-swap stations -- you drive in and your battery is swapped out for a freshly charged one. There are obviously practical difficulties, not least of which is the size and weight of EV batteries and the fact that there's no standardization right now. But it's expected that these issues will eventually be addressed as the system's advantages become obvious.
You'll probably be able to reserve the SuperCharger from your phone while you're driving, or even from your Tesla dash. That way, when you arrive, you're all ready to charge. If when you try to reserve a charging space from your phone, there aren't any spots... I guess you'll have to reserve the next available time then... unless they do something creative.
When there's a much smaller number of electric cars you can get away with a much smaller number of recharging/swapping stations and "pumps". They can incrementally add more stations as more electric cars are operating. Swapping stations would probably take a greater real estate footprint and require more human staffing than a charging station, which can be fairly small and automated (picture a coin-operated tire air machine). I would not be surprised if somebody at Tesla has already put R&D time into the idea of not only setting up a swapping station, but also automating it and designing a car model that works well with it. But it takes time, and devil in the details. As Elon (or any good engineer would say), there are a lot of constraints and trade-offs involved. For now, for launch, they're confident a network of roadside charging stations will suffice for the number of vehicles they expect, at least the first few years, and for the kind of buyer who will be buying early -- folks that have the most wealth and/or most want the shiny and/or most are about having an electric car rather than having everything work exactly like a gas car. As Elon has said too, I think, they'll have to deliver different features and tradeoffs in long run to be able to sell to a broader mix of customer types. But never let the perfect be the enemy of the better than what you have today. Sell to a certain customer segment. Ship product. Then later expand to other segments with different products. They could launch with what they have now, then later create new models or variants designed to allow battery swapping. That is not mutually exclusive with the charging approach, strategy-wise.
Also since they're following a "we only build what people have actually ordered" approach, they also have the opportunity to forecast, much more accurately, where there's going to be increased demand for charging/swapping stations. But regardless, they can do the cow pathing technique. (Or MIT sidewalk laying technique.) Watch where the cows/students go. Add sidewalks there. More students/cows? Widen paths or add more paths. Put one station in each major city. Add more stations and more nodes to match demand. Add stations along journey mid-points (bisections). Rinse, repeat, scale up.
I disagree. I've modeled it. If 500+ of these cars go from SF to LA on a weekend, it's going to be utter chaos. One pump at one service station servicing 500+ cars is barely a win on the SF to LA route for gasoline, so it's beyond incredulous to think that charging stations that take at least 10 times longer are going to change that or make the economics even remotely desirable from a business standpoint.
I am a firm believer in "the medium is the message." For 15 years before the iPhone, Microsoft parroted your comment above almost exactly about smartphones and tablets, needing to hit "critical mass". It didn't happen. They had a shitty UI, and people didn't want to develop for it, and so people didn't buy their hardware.
Simply. Batteries are very expensive. They are not going down in price like transitors, not even linearly with a reasonable slope. We are already at 'economies of scale,' due to the electronics industry. ( you can think of the electric packs, as N MBP batteries strung together ) Batteries will always be the most expensive part of the car ( it's like buying 80% of all the gasoline your car will ever need when you purchase it initially, rather than incrementally over the life-time of the car ). Charging stations are both too dangerous and too expensive to implement for even 1% of vehicles to be electric. It will be like parking spaces, but much more expensive. The only solution for EVs, on technology even on the horizon, is battery exchange systems.
I believe Elon could do it, if anyone can, but not with how Tesla is set up now.
>When there's a much smaller number of electric cars you can get away with a much smaller number of recharging/swapping stations and "pumps".
No they don't, and this is a big catch for them. This is a chicken and egg problem. People will be reluctant to buy electric cars until there are fast recharge stations everywhere around, because home charging takes a lot of time, and needing to travel far away you're essentially stuck. These charging stations are not quickly appearing because there are too few people with electric cars to use them. This will fix, but much, much slower than technically/economically possible.
> Usually, when people say it's the all-new blah-blah-blah, whatever car, that's bullshit. 40 percent of that car, if not 60 percent of that car, if coming from some parts bin. In our case, two percent is coming from the parts bin.
I was definitely not aware of this practice. Recycling material is one thing, but reusing parts is something customerss need to know about, especially if it's about 40-60 % like Musk claims.
Hah. Sorry for the misunderstanding, I thought he meant reusing parts from other cars, when he actually mean reusing designs. That actually makes so much more sense. My bad.
I'm pretty sure he didn't mean recycling previously owned/installed/used/worn parts. I think he meant using previously designed parts --- parts that are components because they have been used in other models before. In other words he's saying most of the parts in this Tesla are debutting with this model, for the first time, anyway. So there's going to be teething issues. R&D rather than pure heads-down production.
