9 ms·

The 5% stake in Tesla Tencent took a few months ago was extremely strategic. Not only did Tesla get some much needed capital for Model 3 production, I'm sure El

The 5% stake in Tesla Tencent took a few months ago was extremely strategic. Not only did Tesla get some much needed capital for Model 3 production, I'm sure Elon's friends at Tencent were happy to introduce Tesla to the right people in the Chinese government to make this deal happen and boost their Tesla stake. A crucial step as China will likely soon represent the biggest market for EVs (if it isn't already?). Just goes to show every entrepreneur how valuable equity in your company can be not just for access to capital, but also access to people.

sidcool 9y ago
It's a bit sad that some Governments exercise so much control on businesses and knowing the right people means so much. There should be a Goldilocks zone between Laissez-faire economy and extreme regulation.
- fsloth 9y ago
  "...knowing the right people means so much." Doesn't it everywhere in life? Unless one prospects gold in the wilderness, I suppose.
  - TheSpiceIsLife 9y ago
    Even still, knowing the right people to sell to might come in handy.
  - hobofan 9y ago
    I think the point was that even at that level of business, where some people might think that money can get you access to everything, knowing the right people is __still__ important.
  - xapata 9y ago
    Interesting thing about the Klondike gold rush: It was considered polite to collaborate with neighbors and inform them about good prospects. Robert Henderson snubbed George Carmack, because of Carmack's native/indigenous wife. Thus Carmack didn't tell Henderson about a major find and Henderson missed out on a great fortune.
  - kamaal 9y ago
    Almost all promotions in the everyday company happen because the reportee has leverage with the manager. Work barely if ever gets you anything in life.
  - owens99 9y ago
    Not nearly to the same degree as in this situation.
  - watwut 9y ago
    Interesting that HN tend to swing between two extremes in this: "it is meritocracy, all is just about work" and "everything is corrupt and based on who you are friend with" (plus some who attempt to frame latter as former through it is not).
    - fsloth 9y ago
      I was not implying cronyism (alone). Human lives are deeply affected by relationships - personal, business, or lack of. For example, what if Jobs had not known Woz? What if Bill Gate's family wasn't super established in the way it was? What if Softdisk had not employed the crew that became Id software? Etc. This does not mean an individual contributor can't come up with something groundbreaking locked away in some closet. But generally, that is million to one even in a population of over achiever engineers.
    - DanHulton 9y ago
      Keep in mind, HN isn't just one person.
      - watwut 9y ago
        Yes, but it as if the two groups never met, I don't recall discussion between the two. Also it is as if there would not be people in the middle (where I am) .
    - jcadam 9y ago
      When I was young, I believed in the meritocracy. Now I know better.
- TheSpiceIsLife 9y ago
  In case anyone gets concerned that Lassie the dog isn't free, the parent comment probably meant Laissez-faire.[1] 1. https://en.m.wikipedia.org/wiki/Laissez-faire https://en.m.wikipedia.org/wiki/Laissez-faire
  - sidcool 9y ago
    Yes, corrected. Thanks.
  - barrystaes 9y ago
    pfffiew thanks!
- vacri 9y ago
  There is - just don't do your business in China or the US if you want that. Most developed countries fall in-between those two extremes. Of course, the disadvantage is that it'll be harder for you to crack the lucrative American market...
- bildung 9y ago
  > It's a bit sad that [...] and knowing the right people means so much Isn't that called networking around here?
  - humanrebar 9y ago
    When the right people work for the government, it's called lobbying.
- dalbasal 9y ago
  Idk, I think this characterization is a little on the naive-idealist side. Access to people in positions of power has always been an important part of the game. Those gatekeeping peddlers of access and influence can be financiers, politicians or corporate bosses. Often, it's all mixed together. In the west, it's sometimes been considered faux pax to emphasize the political component publicly. That generally doesn't apply to certain endevours, where the idea of doing anything big without such support is absurd. Banking, large scale construction and military industry comes to mind. If you can't get in a room with the big boys, you're not a big part of those. I'm not against idealisation. Like power in the hands of the people, building your fortune by the sweat of thy brow is admirable and attractive morally. As ideals, they can and do shape society and history. But societies and economies are not really built like that, never have been. Power matters.
  - noway421 9y ago
    When gatekeepers are corporate bosses or financiers it's fine, the most they can do is to say no. In case of state and authority, there's much more power imbalance. If something goes wrong, or entrepreneur falls out of favour of authority, it becomes a no-rules game. Prosecution, seize of assets, state sponsored media witch hunting.
    - dalbasal 9y ago
      Again, I sort of disagree on similar grounds. The clear distinction between private and public is (in my estimation) more of an idealisation of free market economic systems than reality. In practice, money, power and influence at sufficient scale are the governing system. The idealisation is built on (a) very abstract idealised example (like Adam Smiths charming world of bakers and miller's) and (b) real world examples where free market dynamics work well, the way they are supposed to. For example, much of the SV-2.0 world before the money and politics got to the scale it's at now. But even here, connections always featured prominently at certain choke points like fundraising. The world of finance in particular is (I feel like I need to keep emphasizing imo, I do not have absolute proofs and I'm speaking in very general terms) more a part of the "public" governing system than the "private" realm of free individuals. Like I said though, I think these terms are not as clear as many HNers do.
- hkmurakami 9y ago
  Knowing the right people is still extremely powerful in a free market economy.
- Pica_soO 9y ago
  What if this seperation of government and buisness exist only in your head? What if china was not a government, but a cooperation? Would you even notice? Would you complain about a cooperation doing a deal with another cooperation? Or is that thought damaging the reference frame? If a government and cooperation would be the same. The whole artificial antagonistic distinction would break down- and you would just stand there, a ranting peasant in the lower ranks of a pyramid scheme, played to hate the east side of the same pyramid..
- syshum 9y ago
  Even in Laissez-faire economy who you know is often more important than What you know. Does not matter if you are looking for millions in funding, or for a minimum wage job who you know can often be the difference between success and failure.
- vkou 9y ago
  Where government gatekeepers don't exist, the private sector inevitably finds some way to fill the power vacuum.
- ajross 9y ago
  > There should be a Goldilocks zone between Laissez-faire economy and extreme regulation. Arguably the US spent the past five decades in exactly that region. Also, I'm not sure that "corruption" and "extreme regulation" are really synonyms. The latter is used as a tool of the former of course, but it's not the only such tool and not all oppressive regulations are "corrupt".
- eighthnate 9y ago
  Some governments? All governments exercise control on all businesses to some degree and vice versa. Business exert control on government too. Knowing the right people is easily the most important factor in your business succeeding, not just in china, but in the US as well. Elon Musk's contacts in the US government is why he was able to get hundreds of millions of dollars to bailout a bankrupt tesla many years ago. Elon's success, even with paypal, had more to do with knowing the right people and having the right information than anything else. The same with tesla.
powerapple 9y ago
yes, for a company like Tesla to invest in a new factory in any city, you need to know the right people, otherwise, no one is going to take your money and jobs you provided.
PinguTS 9y ago
Until now, Nissan is still the leader in the market. Just to remind you. https://www.bloomberg.com/news/articles/2017-08-29/the-leaf-is-the-world-s-best-selling-electric-car-now-nissan-needs-to-catch-up-with-tesla https://www.bloomberg.com/news/articles/2017-08-29/the-leaf-...
- Feniks 9y ago
  Ah yes but Tesla is an American company and the media darling. In the real world Tesla is small time. They make only 100k cars a year and their research is being outpaced by the big corporations.
RayVR 9y ago
Tesla received no money from tencent. Tencent acquired their shares in the secondary market like nearly every other investor.
- omarforgotpwd 9y ago
  Whether Tencent buys from Tesla or from someone else doesn't matter. The increased demand pushes the share price up either way. Tesla has sold shares this year, and because Tencent's buy pushed the share price higher Tesla saw more proceeds from the same number of shares than they would have had Tencent not acquired a 5% stake.
  - naveen99 9y ago
    Price doesn't always increase after a trade. Depends if the settlement price is above or below the previous trade's price.

sidcool 9y ago

It's a bit sad that some Governments exercise so much control on businesses and knowing the right people means so much. There should be a Goldilocks zone between Laissez-faire economy and extreme regulation.

fsloth 9y ago
"...knowing the right people means so much." Doesn't it everywhere in life? Unless one prospects gold in the wilderness, I suppose.
- TheSpiceIsLife 9y ago
  Even still, knowing the right people to sell to might come in handy.
- hobofan 9y ago
  I think the point was that even at that level of business, where some people might think that money can get you access to everything, knowing the right people is __still__ important.
- xapata 9y ago
  Interesting thing about the Klondike gold rush: It was considered polite to collaborate with neighbors and inform them about good prospects. Robert Henderson snubbed George Carmack, because of Carmack's native/indigenous wife. Thus Carmack didn't tell Henderson about a major find and Henderson missed out on a great fortune.
- kamaal 9y ago
  Almost all promotions in the everyday company happen because the reportee has leverage with the manager. Work barely if ever gets you anything in life.
- owens99 9y ago
  Not nearly to the same degree as in this situation.
- watwut 9y ago
  Interesting that HN tend to swing between two extremes in this: "it is meritocracy, all is just about work" and "everything is corrupt and based on who you are friend with" (plus some who attempt to frame latter as former through it is not).
  - fsloth 9y ago
    I was not implying cronyism (alone). Human lives are deeply affected by relationships - personal, business, or lack of. For example, what if Jobs had not known Woz? What if Bill Gate's family wasn't super established in the way it was? What if Softdisk had not employed the crew that became Id software? Etc. This does not mean an individual contributor can't come up with something groundbreaking locked away in some closet. But generally, that is million to one even in a population of over achiever engineers.
  - DanHulton 9y ago
    Keep in mind, HN isn't just one person.
    - watwut 9y ago
      Yes, but it as if the two groups never met, I don't recall discussion between the two. Also it is as if there would not be people in the middle (where I am) .
  - jcadam 9y ago
    When I was young, I believed in the meritocracy. Now I know better.
TheSpiceIsLife 9y ago
In case anyone gets concerned that Lassie the dog isn't free, the parent comment probably meant Laissez-faire.[1] 1. https://en.m.wikipedia.org/wiki/Laissez-faire https://en.m.wikipedia.org/wiki/Laissez-faire
- sidcool 9y ago
  Yes, corrected. Thanks.
- barrystaes 9y ago
  pfffiew thanks!
vacri 9y ago
There is - just don't do your business in China or the US if you want that. Most developed countries fall in-between those two extremes. Of course, the disadvantage is that it'll be harder for you to crack the lucrative American market...
bildung 9y ago
> It's a bit sad that [...] and knowing the right people means so much Isn't that called networking around here?
- humanrebar 9y ago
  When the right people work for the government, it's called lobbying.
dalbasal 9y ago
Idk, I think this characterization is a little on the naive-idealist side. Access to people in positions of power has always been an important part of the game. Those gatekeeping peddlers of access and influence can be financiers, politicians or corporate bosses. Often, it's all mixed together. In the west, it's sometimes been considered faux pax to emphasize the political component publicly. That generally doesn't apply to certain endevours, where the idea of doing anything big without such support is absurd. Banking, large scale construction and military industry comes to mind. If you can't get in a room with the big boys, you're not a big part of those. I'm not against idealisation. Like power in the hands of the people, building your fortune by the sweat of thy brow is admirable and attractive morally. As ideals, they can and do shape society and history. But societies and economies are not really built like that, never have been. Power matters.
- noway421 9y ago
  When gatekeepers are corporate bosses or financiers it's fine, the most they can do is to say no. In case of state and authority, there's much more power imbalance. If something goes wrong, or entrepreneur falls out of favour of authority, it becomes a no-rules game. Prosecution, seize of assets, state sponsored media witch hunting.
  - dalbasal 9y ago
    Again, I sort of disagree on similar grounds. The clear distinction between private and public is (in my estimation) more of an idealisation of free market economic systems than reality. In practice, money, power and influence at sufficient scale are the governing system. The idealisation is built on (a) very abstract idealised example (like Adam Smiths charming world of bakers and miller's) and (b) real world examples where free market dynamics work well, the way they are supposed to. For example, much of the SV-2.0 world before the money and politics got to the scale it's at now. But even here, connections always featured prominently at certain choke points like fundraising. The world of finance in particular is (I feel like I need to keep emphasizing imo, I do not have absolute proofs and I'm speaking in very general terms) more a part of the "public" governing system than the "private" realm of free individuals. Like I said though, I think these terms are not as clear as many HNers do.
hkmurakami 9y ago
Knowing the right people is still extremely powerful in a free market economy.
Pica_soO 9y ago
What if this seperation of government and buisness exist only in your head? What if china was not a government, but a cooperation? Would you even notice? Would you complain about a cooperation doing a deal with another cooperation? Or is that thought damaging the reference frame? If a government and cooperation would be the same. The whole artificial antagonistic distinction would break down- and you would just stand there, a ranting peasant in the lower ranks of a pyramid scheme, played to hate the east side of the same pyramid..
syshum 9y ago
Even in Laissez-faire economy who you know is often more important than What you know. Does not matter if you are looking for millions in funding, or for a minimum wage job who you know can often be the difference between success and failure.
vkou 9y ago
Where government gatekeepers don't exist, the private sector inevitably finds some way to fill the power vacuum.
ajross 9y ago
> There should be a Goldilocks zone between Laissez-faire economy and extreme regulation. Arguably the US spent the past five decades in exactly that region. Also, I'm not sure that "corruption" and "extreme regulation" are really synonyms. The latter is used as a tool of the former of course, but it's not the only such tool and not all oppressive regulations are "corrupt".
eighthnate 9y ago
Some governments? All governments exercise control on all businesses to some degree and vice versa. Business exert control on government too. Knowing the right people is easily the most important factor in your business succeeding, not just in china, but in the US as well. Elon Musk's contacts in the US government is why he was able to get hundreds of millions of dollars to bailout a bankrupt tesla many years ago. Elon's success, even with paypal, had more to do with knowing the right people and having the right information than anything else. The same with tesla.

powerapple 9y ago

yes, for a company like Tesla to invest in a new factory in any city, you need to know the right people, otherwise, no one is going to take your money and jobs you provided.

PinguTS 9y ago

Until now, Nissan is still the leader in the market. Just to remind you. https://www.bloomberg.com/news/articles/2017-08-29/the-leaf-is-the-world-s-best-selling-electric-car-now-nissan-needs-to-catch-up-with-tesla https://www.bloomberg.com/news/articles/2017-08-29/the-leaf-...

Feniks 9y ago
Ah yes but Tesla is an American company and the media darling. In the real world Tesla is small time. They make only 100k cars a year and their research is being outpaced by the big corporations.

RayVR 9y ago

Tesla received no money from tencent. Tencent acquired their shares in the secondary market like nearly every other investor.

omarforgotpwd 9y ago
Whether Tencent buys from Tesla or from someone else doesn't matter. The increased demand pushes the share price up either way. Tesla has sold shares this year, and because Tencent's buy pushed the share price higher Tesla saw more proceeds from the same number of shares than they would have had Tencent not acquired a 5% stake.
- naveen99 9y ago
  Price doesn't always increase after a trade. Depends if the settlement price is above or below the previous trade's price.