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Business Unusual

Elon Musk - overstretched or just getting started

20 April 2022 7:15 PM
Digital technology

Has the world’s richest man risen to a point of incompetence?

How could the person that has managed to amass more personal wealth through business that anyone in history be considered out of his depth or incompetent? It relates to the Peter Principle which holds that competent people get promoted or in this case get involved in new projects until they tackle a project they are not able to manage.

Fans of Elon Musk would argue that he can do anything, critics will be looking for any misstep as a sign of his coming ultimate failure, but in the middle is the truth. Elon Musk is a very committed and impressive person, but he remains a person. He has significant investment and obligations to provide results for Tesla owners and shareholders while being the chief engineer of a space company that is sending thousands of its own satellites into orbit, dozens of crew missions and then the small matter of getting the largest rocket ship ever built to space.

Self driving cars and worker robots

That would be more than enough for most mortals to fill their plate if not overload it, but Musk is also overseeing the bid to make the Tesla fully autonomous. To do that he is developing an AI solution partially via the lessons learnt from his support of Open AI to have engineers complete it this year, despite having believed that the solution would be ready a few years ago. That is not to say they don’t sell what they call a Full Self Driving package and given that the basic Model 3 is about $50 000 then having the driving package come with an additional $12 000 price tag while not actually being fully self driving. This is the first of the amazing things that Musk fits into his reality distortion field to quote the ability Steve Jobs was said to have in describing technology that existed theoretically just not economically or at scale.

Not only are the engineers tasked with achieving something no-one has succeeded in doing, they also have to fit that AI into a human sized robot called Optimus, a device that Musk believes will be more of an achievement than the Tesla. He would be right, but not many share his optimism that solving robot movement is just a sensor and actuator problem and certainly not making it for under $30 000.

These projections are from his most recent conversation with TED founder Chris Anderson who while challenging some of Musk’s predictions does not press him on them.

Musk achieved the impressive goal of scaling Model 3 production to produce over a million vehicles per year and is positioned to expand on that as new factories in the US and Germany even as the plant in China faced closure during the Covid wave in early 2022 and when it reopened in April required workers to live on site to comply with health regulations.

The 2022 Q2 results will be announced just after this edition is aired.

Space and managing more satellites than anyone else

Not only is Musk the Chief Engineer of SpaceX as CEO he is also the head of Starlink. SpaceX flies more rockets than anyone else and has over 100 successful launches and recoveries, they are preparing the first flight the massive Starship all the while launching hundreds of new satellites.

There are over 2 000 of the planned 4 000 in orbit which probably also makes them the operator of the most satellites with plans to increase that number substantially and if Delta Airlines agrees Starlink will have a very big customer and some very happy passengers, but there are some clouds on the horizon too, France might block it altogether.

Despite that commitment, Musk also acquired SolarCity in 2016 , he is being sued by Tesla shareholders for bailing the company out of likely liquidation. It has become Tesla Energy and uses the Tesla battery packs to create solar packages which are being installed all round the world as Tesla Walls.

So a quick recap. Space (rockets, satellites to supply internet from space, moon lander, mars lander, crew and supply missions to the ISS), Cars ( four models with a 5th promised in the next year, trucks although not much since the big launch), AI to make cars autonomous and then build robots on the same tech.

Other projects

He is also the owner of the Boring Company with the ambition to build tunnels to offset traffic congestion. Since its launch there have not been many completed and the one in Las Vegas is itself subject to congestion. The economies of scale that were predicted do not seem to add up given the cost to build the tunnels and then manage the vehicles that will use them. Critics have noted that he tried to claim that his plan was better than the centuries old idea of building underground metros.

Even more speculative is the hyperloop, an idea that is not new but was not practical almost a century ago and by all accounts is still not practical. He has not spent too much time recently promoting it for effective long distance travel given that he would rather see his Starship used to get anyone between two points on Earth in about 30 mins. On paper a rocket can do that, but it will be quite some time before the infrastructure is ready and even longer before anyone would switch a plane ticket for a rocket one.


If there was any doubt that Elon Musk has his hands full already, shall I add that he has seven children, nevertheless the effect of him interacting with his now 82 million followers on Twitter saw him acquire just under 10% of the company and then made an offer to buy it for $54.20.

He views that Twitter should be protected as a global town square for free speech from the ownership by shareholders but would be better if owned even jointly by one very wealthy person suggests the ideals of democracy are also affected by Musk's reality distortion field. It is likely that those that work at Twitter and agree with their methods to try find fair free speech model would leave if Musk took over. He has said that he would get rid of the many bots on Twitter while not acknowledging how much of the platform relies on those same bots (that is not to say it could still improve greatly) But the current advertiser model requires sustained growth and bots are a way to attract real users and increase interactions when most users only read.

It remains to be seen if shareholders will accept the offer or if Twitter's plan to discount shares to current shareholders will have him reconsider given the increased cost. For the very many excellent investments that have seen him become the wealthiest person on the planet, will his attempt to buy Twitter mark the moment he overreached and finally reached his point of incompetence.

Then again might his own composition which warns you should not doubt your vibe, because its true.

20 April 2022 7:15 PM
Digital technology

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