Saturday, January 17, 2015

Elon Musk: Backward Entrepreneurship

By Chris Rossini

BusinessInsider reported on the Detroit Auto Show, and provided some quotes from Tesla Motors CEO Elon Musk. Tesla Motors makes electric-powered cars.

Here are a few of Musk's comments:
“The main reason I'm here is to talk about electric vehicles and to do what I can to encourage other automakers to accelerate their electric-vehicle programs. The need for sustainable transport is incredibly high."
I find this statement rather interesting. If it were true that the "need" for electric cars was "incredibly high," why would automakers have to be "encouraged" to make them. Are they averse to making money? Who walks around encouraging their competitors anyway? There's something very odd about that.
“If we can make it go electric sooner, then that will be much better for the world… The potential harm to the climate is really much, much greater than it was before. The potential harm to the environment is much much less [if you buy electric cars].
Now the "encouraging" on Musks part makes more sense. Musk apparently hasn't read the great Austrian economists. If he did, he'd know that consumers are the captains of the economic ship. It's the job of entrepreneurs to follow the captain's orders....not to give the orders. Musk wants to give the orders, using a scare tactic called "climate change".
The first time Tesla got money from the government was in March 2010.
Oh boy, this is going downhill fast.

If the "need for sustainable transport is incredibly high," why take money from the government? If you were supplying consumers with what they wanted, their money would be coming at you hand-over-fist.
Musk says Tesla would be profitable if it scaled back its aggressive growth strategy.
That sounds very familiar. Didn't the dotcoms say the same thing back in 1999?
Musk's advice for other Detroit automakers: Get loans much bigger than what he got for Tesla. "I think I'm quite terrible at getting government money."

Entrepreneurs take note. This is not the way to do business.


  1. I emailed Musk back when he first started Tesla, wishing him the best, and we had a pleasant exchange. I wish I could take it back now with hindsight.

    Interestingly, he didn't know what a "tool & die" shop was back then-I had mixed feelings over that revelation at the time but figured he'd by the knowledge he needed with his Paypal money.(not taxpayer money)

    1. Apparently neither he nor his engineering staff knew how to make a proper BMS at first either given that early cars could brick their battery packs if not driven for weeks from self discharge and parasitical loads. A proper BMS would cut off the battery from the loads well before the level where damage would occur and since Li-Ion has a very low self discharge then the car could sit for years.

      Given the quotes I see why he is so well accepted in the halls of power. That's the sort of social darwinism thinking the so-called elite use, that they should manage and guide society.

  2. Tesla wouldn't have been impressed with electric cars that required charging stations, given his attempts to commercialize a power system more akin to John Galt's premise, Ayn Rand being a contemporary of Tesla's.

  3. Consumers arent the captains of the economic ship, entrepreneurs are. Consumers just vote with their money on what the captains (entrepreneurs) invent. I never saw a petition from consumers demanding a personal computer be invented, or an MRI machine, or Twitter. Entrepreneurs invent what they think consumers might want or should want. They dont take a poll.