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It’s a matter of phase of company. MBAs are better at measuring and capturing value. Weaker at creating it. Therefore the non-MBA expert outperforms in the g
by mathattack 6y ago
It’s a matter of phase of company. MBAs are better at measuring and capturing value. Weaker at creating it. Therefore the non-MBA expert outperforms in the growth phase, though it takes a different mindset for mature companies.
- ProAm 6y agoThis is an underrated comment.
- orky56 6y agoSpot on. MBA's aren't meant for 0 to 1. They're meant to optimize and sustain business models with the foundation of innovation and revolutionary ideas. Companies that only stick to one or the other are doomed, or require their industry to be that much more technical or business focused.
- lazyjones 6y agoHow is this working for other car makers, who are full of MBAs? Elon comes along and takes their market share.
- nine_k 6y agoIs e.g. Toyota MBA-driven? (I have no idea.)
- mathattack 6y agoJapanese companies generally aren’t.
- conductr 6y agoI feel like Toyota is where MBA concepts originate, it's a good blend of where management is a science or as close as possible
- bluedevil2k 6y agoElectric cars are 2.6% of cars sold, and Tesla is 18% of that EV market. That's not really any proof that the MBA's are "ruining" other car markers, is it? 1 - https://www.iea.org/reports/global-ev-outlook-2020 https://www.iea.org/reports/global-ev-outlook-2020 2 - https://electrek.co/2020/10/30/tesla-tsla-market-share-global-ev-sales-change/ https://electrek.co/2020/10/30/tesla-tsla-market-share-globa...
- typon 6y agoIt is if you consider the stock market to be reality
- bluedevil2k 6y agoThe stock market is not reality. Especially TSLA.
- kjksf 6y agoEV cars will be 95% of all cars sold within 20 years. Most likely much faster. Lack of early, large and decisive investment in EV shows a stunning lack of foresight from all ICE car CEOs. Suicide by inaction. 18% is more market share than the biggest ICE car companies (VW and Toyota have ~10% market share). This shows that Musk handily outperforms all ICE car makers in his sub-market (EV cars). It's not like Tesla lacks competition in EV market (NIO, BYD, XPeng, Nissan, GM, Hunday, Renault, Rivian, Lucid...)
- findthewords 6y agoOh so that's where the market cap comes from. It's valued forward at 2030-2040 valuation where it owns +18% of the vehicle market.
- bluedevil2k 6y agoIn theory....the share price is the discounted cash flow of Tesla in all future years. Using a discount rate of 8-10% means the annual cash flows for the next 20 years or so are important (any further than that has very negligible effect on the share price). So the share price is counting on explosive growth. Now, considering Tesla doesn't pay dividends ... what's really the "cash flow" for investors? This is why it's mostly a theory...human beings don't behave like Excel spreadsheets.
- orky56 6y agoElon isn't taking their market share. He's banking on the future and stealing their market cap. What people are missing is that every car company is a fast follower and Elon's head start and subsequent lead is disappearing as Porsche (VW) and others are stealing the limelight and performance ranks. Similar to Apple, Elon is thinking in terms of profitability and long-term strategy and wants to focus on taking that over all else.
- ericd 6y agoHow is Porsche stealing the limelight? With the Taycan? Which starts at >$100k, with half the range and slower 0-60 numbers than a lumbering $70k base model Model S? (I know they're not direct competitors, I expect the Porsche to have significantly better fit/finish and handling, and the Taycan doesn't really sit 5 comfortably). At the top end, it looks a bit better, but then it's priced in the range of the 2021 Roadster, which seems likely to be a monster. VW's offerings are obviously more affordable, but they don't seem to offer the same range per buck that Tesla does?
- clouddrover 6y ago> How is Porsche stealing the limelight? With consistently better performance. The Taycan is a sports car: https://www.youtube.com/watch?v=vcKz1OGZ7_I https://www.youtube.com/watch?v=vcKz1OGZ7_I > but they don't seem to offer the same range per buck that Tesla does? The VW ID.3 has similar WLTP range figures to the Tesla Model 3 and the ID.3 is cheaper.
- ericd 6y agoYep, the Model S is a large family sedan, that's why it's a bit absurd for it to win. My point was that a sports car from Porsche should be winning, and not by a little. That video is comparing the Turbo S (the $185k version of the Taycan) to the $92k version of the Model S. The $140k version is significantly faster, let alone the 2021 Roadster. The ID.3 seems to have a stated range of ~200 miles?
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- mathattack 6y agoThey are in decline. They need MBAs to manage their pensions and health care liabilities. Elon Musk wouldn’t last a week at any of them. He needs to be in a growth company.
- clouddrover 6y agoPretty well. The large car companies are prioritizing the markets with the strictest emissions standards. Renault and Volkswagen EVs outsell Tesla in Europe. Toyota's already in a good position for fleet emissions because it's been selling hybrids for so long. EVs are still only a small percentage of the overall car market. The world's biggest car companies won't stop being the world's biggest car companies. They'll just start selling more EVs.
- sounds 6y agoWorth looking at it from the viewpoint of the Multi-Armed Bandit problem as well, or in other words, companies sometimes shift their focus from "exploration" to "exploitation," and it can be a challenge for the company to learn to shift back to "exploration." https://en.wikipedia.org/wiki/Multi-armed_bandit https://en.wikipedia.org/wiki/Multi-armed_bandit
- sagarm 6y agoI would say MBAs are excellent at extracting value, rather than sustaining value generation. Actually producing value is clearly not a priority in MBA culture.
- young_unixer 6y agoThere must exist a sweet spot of engineers/MBAs ratio. The question is: is company X higher or lower than that sweet spot?
- mathattack 6y agoIt’s timing related. You need fewer in growth phases, though they’re good running sales ops. Need more with mature companies that are optimizing.
- mrandish 6y ago> MBAs are better at measuring and capturing value. Weaker at creating it. Spot on! I've described the difference as "creating vs scaling value."