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Why TESLA and Space X Could Fail

Updated on November 8, 2018
Ken Burgess profile image

Originally from Cape Cod. Army Vet., Fmr. Director of Energy Conservation programs, RE Agent, current residence the Space Coast, FL

Elon Musk the visionary I love, Musk as a calculating critical Business Executive, I don’t. It’s that simple.

I have had brush-ins with Musk’s various businesses in unexpected ways over the years. Once years ago as Solar City made efforts to expand in the NY market, I met with a couple of Solar City’s regional directors for a position of interest, the interview to say the least was informative, my overall feeling was they were looking for well groomed, well educated, liberal minds that understood the value of looking good and saying the right things. Experience, comprehension of the marketplace they were moving into, the people to network with in that region to make a positive impact, I could tell those things weren’t on the forefront of their concerns.

Fast forward a few years later, when I am interacting with people involved in his Space X efforts, and I hear stories that verify much of what I ran into in that interview being the problems for Space X’s struggles and wasted time, effort, and expense.

Musk noted in one interview how he likes to test if a person really did do something by asking them how they solved the matter, he then expects them to be able to give a full detailed account and not get stuck, and if they get stuck with the retelling, then that tells him they weren’t really the ones who fixed it. Musk said “people that really solved the problem, they know exactly how they solved it they know the little details.” On the other hand, those “pretending” only share so many details before “they get stuck,” he said.

Sadly, not all minds work that way. Often as soon as I am done solving a problem, I move onto the next goal, issue, matter at hand and begin working on that, I redirect my focus. And the more you have done, and the more you have accomplished, the more likely it will work that way, unless you have photographic recollection of everything you have done.

Speaking at the 2018 World Government Summit in Dubai, Musk noted that he wants a potential employee to tell him the “story of your life and the decisions that you made along the way, and why you made them,” in addition, “tell me about some of the most difficult problems you worked on and how you solved them.” This was “very important,” Musk added.

What type of answer was he looking for?

Not all minds are built alike, while my mind works great at solving problems and what many might consider complex projections. I really don't dwell on the past, or what happened ten weeks ago, let alone ten years ago. I wonder if Einstein could recollect his childhood and retell it to others in great detail when he was in his 50s? If he couldn't, was he any less brilliant because of it?

At only 46, Elon Musk has done more than most could hope to accomplish in a lifetime, yet that doesn’t mean he isn’t sometimes his own worst enemy when it comes to selecting the right directors and executors of his vision. Despite having a renown appetite for reading books and gathering wisdom to himself on topics, how to be an executive or manage his time are not fields he has endeavored to expand his knowledge. In fact, he was quoted in Inc.com as saying: "I've actually not read any books on time management."

Musk indicated in an interview with Y Combinator president, Sam Altman, that he focuses most of his efforts on product development: "I think a lot of people think I must spend a lot of time with media or on business-y things...But actually almost all my time, like 80 percent of it, is spent on engineering and design." Perhaps this is reflective of how he treats time management, and his company’s management as a whole, and why his efforts, be they Solar City, Space X, or Tesla are not necessarily headed by people who know how to meet deadlines or keep expanding the market. They are not driven by results (a Lee Iacocca would work wonders for Tesla), they are driven by a visionary that does not have the right people in support positions to make those visions become reality.

How do I know this? Well the old sayings ‘actions speak louder than words’ or the ‘proof is in the pudding’ come to mind, and in the case of TESLA and Space X, the ‘pudding’ is product and production goals and whether you meet them, or you don’t. In the entrepreneurial world, where production and results are what matter most, choosing the Dreamer over the Dictator doesn’t get it done.

"I think it's very important to have a feedback loop," Musk details, "where you're constantly thinking about what you've done and how you could be doing it better." But at some point in time, you have to stop evolving and start producing. Putting emphasis on surrounding yourself with engineers and visionaries that focus on betterment and evolving the product rather than producing the product and getting it to market becomes counterproductive and leads to missed target dates and lost revenues.

Just last week, CEO Elon Musk said his company would stop selling SolarCity products at sales kiosks at around 800 Home Depot Inc. stores, a retail partnership that reportedly generated around half of the sales produced.

Another article out just today criticized Tesla's treatment of costs in its financial statements, saying margins on the cars they sell may have been overstated. Again, lack of having leadership that puts production and cost effectiveness at the top of the priority, because the CEO hasn’t chosen that type of leadership to drive the company.

A former-employee review (below) is one of a great many of its like:

Elon Musk himself has often stated that he is not in these businesses to make a buck, but rather make a difference. I would say this is clear with results seen to date, further, if not for grants, government funding and tax incentives that have favored his companies over the years, its likely these companies wouldn’t be around today. A recent report from the Sunlight Foundation (a nonpartisan group that tracks government spending), found that "SpaceX has spent over $4 million on lobbying Congress since it was established in 2002 and doled out more than $800,000 in political contributions" to Democrats and Republicans.

Musk claimed in an interview in 2015 that SpaceX, Tesla, SolarCity and buyers of their products had or were projected to receive together an estimated $5 billion in government subsidies over twenty years. For example New York state, which spent over $750 million to build a solar panel factory in Buffalo to be leased to SolarCity for $1 a year, a deal that also included no property taxes for a decade. But one can only exist off the generosity of the government for so long.

I would love for all of Musk’s endeavors to succeed, beyond expectations. But one has to look at things with a realistic eye as well, if one is concerned about getting a return on one’s investment. If one is more concerned about investing in the future betterment of humanity, for its own sake, and not for profit alone, then Musk’s efforts might be what you are looking to buy into.

© 2018 Ken Burgess

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