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What kind of analysis are you looking for? How much these features are worth is subjective and the general aviation market is super small and not exactly growin

What kind of analysis are you looking for? How much these features are worth is subjective and the general aviation market is super small and not exactly growing. Don’t get me wrong: everybody I know loves his SR20/22. My comment was not dismissive of the innovation by Cirrus (which I think is great). It’s about the costs getting it into the market and having it certified. Imagine you buy a car for 50k USD. Now, you want an airbag and a better infotainment system. Not a problem. Price is now 250k. Is an airbag and a better Infotainment system worth that premium to you? I can’t answer that for you. But this is what we are dealing with in general aviation. And it is not 1MM USD in Capex... It is 1 MM USD premium per PLANE. And again: there is a reason why you have the B747 and 737 for like 40 years... Because exactly of that certification nightmare of new airplanes. Now talk autonomous electric vehicles with passengers. How should the math ever add up?

theptip 6y ago
> How much these features are worth is subjective Perhaps we're talking at cross purposes here; when talking about ROI, the numerator and denominator are usually both in dollars. If I'm pitching Lilium to some VCs, I'd model out the cost of researching, developing, and building the fleet ("I"), and the revenue I hope to generate in a given timeframe ("R"). After adjusting for the risk of failure, if that ROI is higher than what you can get with other investments, the ROI is, in the relative sense "good". If it's worse than putting your dollars into treasury bonds, it's "bad". Paraphrasing, your arguments earlier in this thread were that investing in aviation is brave, because the ROI on those investments is bad, because it's expensive to certify new inventions. I certainly agree that it's expensive to build a plane, or even add features to a plane, and even more expensive to build and certify a new plane. But that doesn't mean it's bad ROI. The return generated by building expensive things can be astronomical; see military and aerospace contractors taking in multi-billion dollar contracts with very healthy profits, for example. There should be clear numbers behind this; how many aviation startups succeeded in the last N years? How many folded? That would be the objective analysis I'm looking for when talking about ROI on investments in aviation companies. Maybe that's not the point you were intending to make; perhaps you're just talking about the ROI for an individual buying a plane, rather than a business operating a fleet (like Lilium in the OP)? But if that's what you mean by ROI, then I don't think that is particularly relevant to investors; they are interested in ROI in the sense I outlined above.
- looping__lui 6y ago
  If you are in the aviation industry and building planes - you compete with other means of transportation; e.g., cars, trains, Ubers etc. It is a competitive market with relatively clear revenue expectations per person-miles (e.g., private helicopters potentially being an upper boundary). So, the R side of the equation is pretty known... Helicopter taxi services didn’t quite take off and I guess it is because they were kind a above the per person-mile price people were willing to pay... You will also be in one of the most heavily regulated industries and push for a product that doesn’t even yet know its regulations... You can’t compare it to the military because - well, they don’t have to certify the same way civil aviation has to. They can essentially say “it’s good enough”. And they aren’t bearing the “R” side risk of the investment for being expose a free market. Military contractors aren’t “paid by the price of a bomb dropped” in a competitive market. The R is limited and known. We know helicopter taxi services don’t work. The I is a complete unknown and potentially magnitudes higher than expected. Why would I invest in this market that has historically had a bad track record for innovation? E.g., you want an airbag in your car and better infotainment? Price for the car goes up from 50k to 250k. In the aviation industry, a Tesla would probably be closer to 500k-750k given all the innovation it has (and would need aviation certification) compared to a 50k “regular car”. If you think this would not “make you think twice” - ok.

theptip 6y ago

> How much these features are worth is subjective Perhaps we're talking at cross purposes here; when talking about ROI, the numerator and denominator are usually both in dollars. If I'm pitching Lilium to some VCs, I'd model out the cost of researching, developing, and building the fleet ("I"), and the revenue I hope to generate in a given timeframe ("R"). After adjusting for the risk of failure, if that ROI is higher than what you can get with other investments, the ROI is, in the relative sense "good". If it's worse than putting your dollars into treasury bonds, it's "bad". Paraphrasing, your arguments earlier in this thread were that investing in aviation is brave, because the ROI on those investments is bad, because it's expensive to certify new inventions. I certainly agree that it's expensive to build a plane, or even add features to a plane, and even more expensive to build and certify a new plane. But that doesn't mean it's bad ROI. The return generated by building expensive things can be astronomical; see military and aerospace contractors taking in multi-billion dollar contracts with very healthy profits, for example. There should be clear numbers behind this; how many aviation startups succeeded in the last N years? How many folded? That would be the objective analysis I'm looking for when talking about ROI on investments in aviation companies. Maybe that's not the point you were intending to make; perhaps you're just talking about the ROI for an individual buying a plane, rather than a business operating a fleet (like Lilium in the OP)? But if that's what you mean by ROI, then I don't think that is particularly relevant to investors; they are interested in ROI in the sense I outlined above.

looping__lui 6y ago
If you are in the aviation industry and building planes - you compete with other means of transportation; e.g., cars, trains, Ubers etc. It is a competitive market with relatively clear revenue expectations per person-miles (e.g., private helicopters potentially being an upper boundary). So, the R side of the equation is pretty known... Helicopter taxi services didn’t quite take off and I guess it is because they were kind a above the per person-mile price people were willing to pay... You will also be in one of the most heavily regulated industries and push for a product that doesn’t even yet know its regulations... You can’t compare it to the military because - well, they don’t have to certify the same way civil aviation has to. They can essentially say “it’s good enough”. And they aren’t bearing the “R” side risk of the investment for being expose a free market. Military contractors aren’t “paid by the price of a bomb dropped” in a competitive market. The R is limited and known. We know helicopter taxi services don’t work. The I is a complete unknown and potentially magnitudes higher than expected. Why would I invest in this market that has historically had a bad track record for innovation? E.g., you want an airbag in your car and better infotainment? Price for the car goes up from 50k to 250k. In the aviation industry, a Tesla would probably be closer to 500k-750k given all the innovation it has (and would need aviation certification) compared to a 50k “regular car”. If you think this would not “make you think twice” - ok.