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The market is so huge that it's worth it even if it takes decades of R&D costing billions a year. Some numbers: ~100M cars are made a year If 10% of those are

The market is so huge that it's worth it even if it takes decades of R&D costing billions a year. Some numbers: ~100M cars are made a year If 10% of those are self driving, and if they have $1,000 in gross margin due to self driving features, that's $10B a year to cover past R&D. Over 20 years this adds up to $200B. Optimistically, if the tech eventually reaches 80% of new cars and $3,000 margin, then we're talking $4,800 BILLION in profit over 20 years to cover R&D. Waymo is probably spending like $1-$2B/yr right now. Their engineering headcount is not huge, it's like under 1,000 based on a LinkedIn search I did last year. Really the potential market is so huge that it can justify many many billions spent on R&D. I am relatively bearish on the technology, and doubt it will be commercialized in 10 years, but I still think the investment is justified. Apologies for the poor writing - typed from my phone. I have more thoughts here: http://www.tedsanders.com/on-self-driving-cars/ http://www.tedsanders.com/on-self-driving-cars/

Judgmentality 8y ago
> The market is so huge that it's worth it even if it takes decades of R&D costing billions a year. This is a common trap novice founders fall into. They see that a market is huge, and simply say "well if we can just get a piece of the pie we'll be great!" It's like saying you only need to take 1% of search from Google. Yes, that is a huge opportunity, but how are you going to do it besides hopes and dreams? If ~$10 billion invested turned into an actual self-driving technology that could be generalized, it would almost certainly (if competition also develops it you essentially have a commodity and are now in the airline industry where there's a huge moat but the margins are still awful) be worth it. But people are becoming more cognizant that maybe that technology just isn't ready yet and nobody knows when the next breakthrough will occur. Is it possible one of the competing companies already has it and just hasn't shared it? Technically...but I am very confident that right now the state of the art just isn't good enough and the people in charge are naively throwing money at the problem hoping it bears fruit. I realize the person I am responding to largely shares my opinions on self-driving cars not being ready for prime time yet (I'm familiar with his website), I just wanted to point out a common fallacy that leads people to work on fruitless endeavors. In my opinion an AI winter is coming before self-driving cars are "real" - by which I mean a profitable solution that can be scaled.
semi-extrinsic 8y ago
I think the main point, as this article alludes to, is that we may end up with safe and actually fully autonomous vehicles, but they're bloody annoying to ride in. At that point nobody will be willing to pay that $1000 premium, and you'll never recoup costs. Personally I think given the prior that we can achieve self-driving tech, there's a ~75% probability people won't want that tech. We've seen it so many times before, companies spending $$$ on R&D of some cool new thing and people just go "meh." I don't see a compelling argument for why this won't just join the ranks of 3D-TVs, Google Glass and flying cars.
- jimrandomh 8y ago
  The first generations of autonomous vehicles will almost certainly still have steering wheels, so if it's too timid at a turn/merge, you could override it like the safety driver in this anecdote did. There is immense value in being able to watch a movie or sleep, and trust that the worst thing that will happen is that the car will wait too long for an opening.
- lsc 8y ago
  > I think the main point, as this article alludes to, is that we may end up with safe and actually fully autonomous vehicles, but they're bloody annoying to ride in. At that point nobody will be willing to pay that $1000 premium, and you'll never recoup costs. I think you underestimate what a difference riding in back makes. Yes, yes, when you drive, you get angry and aggressive. I do too; my observation from taking ride share (I gave away my car and now almost exclusively use the rideshare) is that almost everyone rages out from time to time when they drive. Sitting in back with a book is such a different experience. "Wow, I used to be like that?" I mean, it seems so weird to see someone get mad about traffic when you haven't taken the wheel for a month yourself. Edit: To be sure, if we don't get full level-4; if you still need to be the 'safety driver' and actually pay attention, that's a different thing, and yeah, that's a whole lot less useful. And to be clear, I am not saying that I think we are close to full level-4. I'm just saying that if we get there? it will be wonderful in ways that weren't obvious to me until I switched from driving to being driven for quite some time.

Judgmentality 8y ago

> The market is so huge that it's worth it even if it takes decades of R&D costing billions a year. This is a common trap novice founders fall into. They see that a market is huge, and simply say "well if we can just get a piece of the pie we'll be great!" It's like saying you only need to take 1% of search from Google. Yes, that is a huge opportunity, but how are you going to do it besides hopes and dreams? If ~$10 billion invested turned into an actual self-driving technology that could be generalized, it would almost certainly (if competition also develops it you essentially have a commodity and are now in the airline industry where there's a huge moat but the margins are still awful) be worth it. But people are becoming more cognizant that maybe that technology just isn't ready yet and nobody knows when the next breakthrough will occur. Is it possible one of the competing companies already has it and just hasn't shared it? Technically...but I am very confident that right now the state of the art just isn't good enough and the people in charge are naively throwing money at the problem hoping it bears fruit. I realize the person I am responding to largely shares my opinions on self-driving cars not being ready for prime time yet (I'm familiar with his website), I just wanted to point out a common fallacy that leads people to work on fruitless endeavors. In my opinion an AI winter is coming before self-driving cars are "real" - by which I mean a profitable solution that can be scaled.

semi-extrinsic 8y ago

I think the main point, as this article alludes to, is that we may end up with safe and actually fully autonomous vehicles, but they're bloody annoying to ride in. At that point nobody will be willing to pay that $1000 premium, and you'll never recoup costs. Personally I think given the prior that we can achieve self-driving tech, there's a ~75% probability people won't want that tech. We've seen it so many times before, companies spending $$$ on R&D of some cool new thing and people just go "meh." I don't see a compelling argument for why this won't just join the ranks of 3D-TVs, Google Glass and flying cars.

jimrandomh 8y ago
The first generations of autonomous vehicles will almost certainly still have steering wheels, so if it's too timid at a turn/merge, you could override it like the safety driver in this anecdote did. There is immense value in being able to watch a movie or sleep, and trust that the worst thing that will happen is that the car will wait too long for an opening.
lsc 8y ago
> I think the main point, as this article alludes to, is that we may end up with safe and actually fully autonomous vehicles, but they're bloody annoying to ride in. At that point nobody will be willing to pay that $1000 premium, and you'll never recoup costs. I think you underestimate what a difference riding in back makes. Yes, yes, when you drive, you get angry and aggressive. I do too; my observation from taking ride share (I gave away my car and now almost exclusively use the rideshare) is that almost everyone rages out from time to time when they drive. Sitting in back with a book is such a different experience. "Wow, I used to be like that?" I mean, it seems so weird to see someone get mad about traffic when you haven't taken the wheel for a month yourself. Edit: To be sure, if we don't get full level-4; if you still need to be the 'safety driver' and actually pay attention, that's a different thing, and yeah, that's a whole lot less useful. And to be clear, I am not saying that I think we are close to full level-4. I'm just saying that if we get there? it will be wonderful in ways that weren't obvious to me until I switched from driving to being driven for quite some time.