13 ms·

This sounds the “why Tesla will never work argument.” Selling rich people what they want as a starting place to pioneer new technology is a good strategy even i

This sounds the “why Tesla will never work argument.” Selling rich people what they want as a starting place to pioneer new technology is a good strategy even if it doesn’t feel good to you.

hbrundage 6y ago
Nothing wrong with starting there as long as there is a path to profitability with a mass market product! Do you think there is one for vertically grown potatoes? Or corn? Both are 10-100x less valuable per pound and both take 10-100x longer to grow, 10-100x more water, and 10-100x more energy. I am not sure Tesla was battling the same order of magnitude of order of magnitudes.
ed25519FUUU 6y ago
The market doesn’t really absorb boutique veggies well. How many people at a farmer’s market can sell micro greens before it becomes uneconomical? Meanwhile Tesla has a waiting list for virtually every one of their vehicles and is the only one selling them.
akiselev 6y ago
It's not a question of pioneering, it's a question of base resource inputs. Tesla can promise an electric car but they can't promise one that costs less than the lithium and metals required to manufacture it, let alone the cost of labor. Just like Tesla, a farmer can't promise to produce vegetables for less than the cost of fertilizer. Based on the foods that the world prefers to eat, it's just not feasible. Take a look at the scale of fertilizer manufacturing and use in agriculture. The amount of power required to make that fertilizer is likely an order of magnitude or two less than the amount of power that the sun feeds into photosynthetic systems. Classical agriculture gets that massive power input for free by trading off land use, which also has important follow on effects for fertilizer use, compounding the advantage in fertile areas like California. It's not like it's impossible if climate change gets really bad and we have to move underground with plentiful nuclear power, but it's so far from economically viable at scale as to be a pipe dream.
- deleted 6y ago
  [deleted]
- endominus 6y ago
  Speaking of base resource inputs, I would be concerned with the soil erosion inherent in intensive farming methods. By every estimate I've seen of the rate of topsoil depletion[0], we'll reach a crisis point in agriculture within half a century. Could vertical farming, perhaps paired with a less pollutative energy source like nuclear power, stave off that eventuality? I know a lot of people push organic farming as the solution, but it doesn't appear to be productive enough to feed a growing global population. [0] https://news.un.org/en/story/2019/12/1052831 https://news.un.org/en/story/2019/12/1052831
  - jonathankoren 6y ago
    You still have the problem that you need to be able to grow plants beyond lettuce and strawberries. No one is growing cereal grains or root crops vertically. It’s not economical viable.
    - swiftcoder 6y ago
      Why is that, exactly? Potatoes, Carrots, Corn, Mushrooms... All grow fine in buckets. All grow fine hydroponically. I'm not sure I see an obviously barrier preventing all of these from being vertically farmed.
      - jonathankoren 6y ago
        Quite simply, the energy and capital costs of growing bushel of wheat are more than the bushel price of wheat. This difference isn’t just a little, but a lot. If I’m reading the table right in page 19 of the appendix linked, it’s as bad as 37x in 2019, and only projected to fall to 4.6x by 2050. Paper https://www.pnas.org/content/117/32/19131 https://www.pnas.org/content/117/32/19131 Appendix https://www.pnas.org/content/pnas/suppl/2020/07/22/2002655117.DCSupplemental/pnas.2002655117.sapp.pdf https://www.pnas.org/content/pnas/suppl/2020/07/22/200265511...
thereisnospork 6y ago
Thermodynamics is a harsh mistress, new technology or not.
- craftinator 6y ago
  Wow, I wrote a three paragraph argument in response to the parent comment that is not nearly as explanatory or elegant as yours, but essentially says the same thing. I think the parent commenter is looking at this problem from the MBA perspective, not an engineering one.
MrRiddle 6y ago
I'm having a hard time finding a point in your comment? The point is to replace regular farming, and OP is debunking that.
- swalsh 6y ago
  I think the point is that yes, this technology as it exists today is only commercially viable for some products which are only appetizing to a wealthy elite market. But that's an advantage, it provides a stepping stone. The profits from that can be pumped into R&D to further commercialize the technology, and build a commercial ecosystem. Perhaps at some point in the future the technology will be applicable beyond the simple crops planted today. In Tesla, the roadster not only proved that electric cars can be good, but that they can be better. Though not everyone can afford a roadster, enough people could and that car was a launch pad for R&D of electric car technology, manufacturing (which it turns out is truely the hard problem in building a car company) and consumer desire.
  - hef19898 6y ago
    I absolutley agree regarding the development of EV tech. The main reason I have my doubts about tesla fulfilling all the visions people seem to have about them is manufacturing. This is a well solved problem for existing car makers, so tesla's real value would be as a brand. I dont see batteries being the USP, same as I don't see engines right now, no matter what certain engine fanboys say. Also, Panasonic is usually not getting the credit it deserves when people talk about Tesla's battery tech. As long as Elon is at the helm and manages to sell the vision peopl what to hear, tesla should be fine so. the last two years taught me as much.
wpietri 6y ago
It's a good strategy only if you can take the same technology downmarket eventually. It's not yet clear how downmarket Tesla can be even in the car market, and the car market is very different than food, in that only 18% of people globally, mostly the richest, have cars, but 100% of them need to eat. Another important difference is that cars don't grow out of the ground. Right now there's a flood of capital available, so it's very hard to tell a priori which ideas have legs and which are just mirages that look good in a slide deck. This could be amazing. But it could be another Juicero or WeWork, where the unit economics just don't make any sense.
- stjohnswarts 6y ago
  You're kidding, right? The model 3 rivals competitors in price and will only drop in price and it's a perfectly serviceable car for most people. Well as long as you don't get it "loaded"
  - ajuc 6y ago
    Tesla Model 3 is 195 490 zł here. For comparison the best selling new car was Toyota Corolla for 80 000 zł. But the real bestselling cars are for over a decade the same - 5-10 year old VW Passat Combi from western Europe for 10-50 000 zł. For 200 000 zł you can have a single-room flat in a big city and rent it out for considerable passive income. 2 such flats and you can live out of that (not very luxuriously but still). That's why Tesla is considered a luxury car here. Most people drive cars worth less than 10% of a new Model 3.
  - Barrin92 6y ago
    The model 3 is way too large for any market that isn't the US. (which is most people). Over last year alone in Europe the M3 market share fell from 33% to 13% IIRC. In China I think the loss of market share was even larger.
    - perl4ever 6y ago
      In some markets, or overall, it's my impression the model 3 and the BMW 3 series compete head to head and the BMW is losing dramatically. I don't want a Tesla, but I drove a new 3-series loaner and definitely came away thinking this is why people are getting Teslas. But I decided for me, a Honda hybrid at half the price would be better.
the__alchemist 6y ago
At first glance. I challenge you to find a technique (Being executed commercially, demonstrated in a paper, or clearly described) where high-calorie foods are grown indoors. I'm not trying to be snarky; I'd love to see something like this, but the comment you reply to is my conclusion as well. I used to be very excited about this stuff, but the only viable crops are leafy greens sold at a high price. I own a business selling sensors for use in hydroponics. I started because I wanted to make an impact in food availability. I've abandoned that, and continue because hobbyists, and companies like this have a use.
- thisisnico 6y ago
  Idk, where I live there are massive greenhouse operations that produce insane amounts of high quality food.
  - nandhinianand 6y ago
    The question is "Is the (total) cost of those high quality food from greenhouse ops cheaper than same quality food from traditional land agriculture?"
    - thisisnico 6y ago
      I think a lot of it is based on locale. Many of the foods may not be easy or possible to grow local, imports are expensive, food grows faster in greenhouses, additionally you can have many grow cycles over the entire year including winter, where that may not be possible with just typical land. They are growing greenhouse operations exponentially, it is a multi-billion dollar business in our locale.
    - arcticbull 6y ago
      Certainly in any remote or isolated community. Definitely in Hawaii - and in Northern Canada (where fresh produce is flown in by air every day, and a head of lettuce goes for over $7 and a thing of orange juice for $26 [1]). [1] https://www.huffingtonpost.ca/margaret-whitley/food-prices-canada-north_a_23552084/ https://www.huffingtonpost.ca/margaret-whitley/food-prices-c...
craftinator 6y ago
You're convoluting a quantitative argument with a qualitative one. The parent comment pointed out some hard facts about nutrient density and farming logistics, and how the current model for vertical farming won't solve world hunger, on a nutritional level. You respond with a qualitative argument that you can grow a business and/or industry and maje better technologies if you have profit. The issue isn't that the technology isn't good enough, it's that there isn't as many nutrients (as in soil) in a city or apartment to grow highly nutritional food. You'd have to truck in bags of soil to do this, which isn't nearly as efficient as leaving the soil where it is and growing it there.
- Fireflite 6y ago
  The problem isn't at all soil or nutrients: those are cheap and make up a very small fraction of the final mass of food. Instead, it's energy required to power photosynthesis, turning them into delicious calories.
JackPoach 6y ago
Not Tesla, but aquaculture. Aquaculture works and reasonably well for a few decades. Here's what we know now. 1. Aquaculture works 2. It's successful with only a handful of species 3. It can't replace marine caught wildlife 4. Flavor-wise it is frequently inferior. It doesn't mean we shouldn't grow salmon, tipalia, shripm or oysters, we just shouldn't make a claim or claims that aren't reasonable (i.e. aquaculture can feed the world or aquaculture will revolutionize modern food production). Vertical farming is great for greens, microgreens, strawberries, herbs and that's about it.
HeadsUpHigh 6y ago
Tesla had a direct path to drop the price by using economies of scale. If you just can't grow a crop, it just won't work. This is more akin to saying that battery density is low enough that it only works up to scooters.
spurdoman77 6y ago
Tesla obviously works today as well as do these vertical farms, but only in the niche they are operating in. The point being made is that they both could remain as a very niche product for looooong time.
hef19898 6y ago
But isnt that the contrary of what Christensen postulates, starting at non-competitive down-market nieche and work upwards? I'm rather bearish on Tesla for various reasons. I also believe current stock prices for Tesla and Amazon are mainly driven by general uncertainty and too much liquid cash with nowhere to go. That being said, vertical farming doesn't realy solve any problems, food nd water are distribution and not availability problems. None of which are solved by vertical farming. Obviously that doesn't prevent people from raising a shit load of VC money. If anything, the wetern world is producing too much food, incl. meat, in hyper industrialized farms already.
- calvinmorrison 6y ago
  Telsa sorta did down-market by jamming an engine into another car in the beginning. The lotus was the first platform they built for
okprod 6y ago
Or as a starting place to make money and then get out. Not everything/everyone has to have an altruistic motive.

This sounds the “why Tesla will never work argument.” Selling rich people what they want as a starting place to pioneer new technology is a good strategy even if it doesn’t feel good to you.

hbrundage 6y ago

Nothing wrong with starting there as long as there is a path to profitability with a mass market product! Do you think there is one for vertically grown potatoes? Or corn? Both are 10-100x less valuable per pound and both take 10-100x longer to grow, 10-100x more water, and 10-100x more energy. I am not sure Tesla was battling the same order of magnitude of order of magnitudes.

ed25519FUUU 6y ago

The market doesn’t really absorb boutique veggies well. How many people at a farmer’s market can sell micro greens before it becomes uneconomical? Meanwhile Tesla has a waiting list for virtually every one of their vehicles and is the only one selling them.

akiselev 6y ago

It's not a question of pioneering, it's a question of base resource inputs. Tesla can promise an electric car but they can't promise one that costs less than the lithium and metals required to manufacture it, let alone the cost of labor. Just like Tesla, a farmer can't promise to produce vegetables for less than the cost of fertilizer. Based on the foods that the world prefers to eat, it's just not feasible. Take a look at the scale of fertilizer manufacturing and use in agriculture. The amount of power required to make that fertilizer is likely an order of magnitude or two less than the amount of power that the sun feeds into photosynthetic systems. Classical agriculture gets that massive power input for free by trading off land use, which also has important follow on effects for fertilizer use, compounding the advantage in fertile areas like California. It's not like it's impossible if climate change gets really bad and we have to move underground with plentiful nuclear power, but it's so far from economically viable at scale as to be a pipe dream.

deleted 6y ago
[deleted]
endominus 6y ago
Speaking of base resource inputs, I would be concerned with the soil erosion inherent in intensive farming methods. By every estimate I've seen of the rate of topsoil depletion[0], we'll reach a crisis point in agriculture within half a century. Could vertical farming, perhaps paired with a less pollutative energy source like nuclear power, stave off that eventuality? I know a lot of people push organic farming as the solution, but it doesn't appear to be productive enough to feed a growing global population. [0] https://news.un.org/en/story/2019/12/1052831 https://news.un.org/en/story/2019/12/1052831
- jonathankoren 6y ago
  You still have the problem that you need to be able to grow plants beyond lettuce and strawberries. No one is growing cereal grains or root crops vertically. It’s not economical viable.
  - swiftcoder 6y ago
    Why is that, exactly? Potatoes, Carrots, Corn, Mushrooms... All grow fine in buckets. All grow fine hydroponically. I'm not sure I see an obviously barrier preventing all of these from being vertically farmed.
    - jonathankoren 6y ago
      Quite simply, the energy and capital costs of growing bushel of wheat are more than the bushel price of wheat. This difference isn’t just a little, but a lot. If I’m reading the table right in page 19 of the appendix linked, it’s as bad as 37x in 2019, and only projected to fall to 4.6x by 2050. Paper https://www.pnas.org/content/117/32/19131 https://www.pnas.org/content/117/32/19131 Appendix https://www.pnas.org/content/pnas/suppl/2020/07/22/2002655117.DCSupplemental/pnas.2002655117.sapp.pdf https://www.pnas.org/content/pnas/suppl/2020/07/22/200265511...

thereisnospork 6y ago

Thermodynamics is a harsh mistress, new technology or not.

craftinator 6y ago
Wow, I wrote a three paragraph argument in response to the parent comment that is not nearly as explanatory or elegant as yours, but essentially says the same thing. I think the parent commenter is looking at this problem from the MBA perspective, not an engineering one.

MrRiddle 6y ago

I'm having a hard time finding a point in your comment? The point is to replace regular farming, and OP is debunking that.

swalsh 6y ago
I think the point is that yes, this technology as it exists today is only commercially viable for some products which are only appetizing to a wealthy elite market. But that's an advantage, it provides a stepping stone. The profits from that can be pumped into R&D to further commercialize the technology, and build a commercial ecosystem. Perhaps at some point in the future the technology will be applicable beyond the simple crops planted today. In Tesla, the roadster not only proved that electric cars can be good, but that they can be better. Though not everyone can afford a roadster, enough people could and that car was a launch pad for R&D of electric car technology, manufacturing (which it turns out is truely the hard problem in building a car company) and consumer desire.
- hef19898 6y ago
  I absolutley agree regarding the development of EV tech. The main reason I have my doubts about tesla fulfilling all the visions people seem to have about them is manufacturing. This is a well solved problem for existing car makers, so tesla's real value would be as a brand. I dont see batteries being the USP, same as I don't see engines right now, no matter what certain engine fanboys say. Also, Panasonic is usually not getting the credit it deserves when people talk about Tesla's battery tech. As long as Elon is at the helm and manages to sell the vision peopl what to hear, tesla should be fine so. the last two years taught me as much.

wpietri 6y ago

It's a good strategy only if you can take the same technology downmarket eventually. It's not yet clear how downmarket Tesla can be even in the car market, and the car market is very different than food, in that only 18% of people globally, mostly the richest, have cars, but 100% of them need to eat. Another important difference is that cars don't grow out of the ground. Right now there's a flood of capital available, so it's very hard to tell a priori which ideas have legs and which are just mirages that look good in a slide deck. This could be amazing. But it could be another Juicero or WeWork, where the unit economics just don't make any sense.

stjohnswarts 6y ago
You're kidding, right? The model 3 rivals competitors in price and will only drop in price and it's a perfectly serviceable car for most people. Well as long as you don't get it "loaded"
- ajuc 6y ago
  Tesla Model 3 is 195 490 zł here. For comparison the best selling new car was Toyota Corolla for 80 000 zł. But the real bestselling cars are for over a decade the same - 5-10 year old VW Passat Combi from western Europe for 10-50 000 zł. For 200 000 zł you can have a single-room flat in a big city and rent it out for considerable passive income. 2 such flats and you can live out of that (not very luxuriously but still). That's why Tesla is considered a luxury car here. Most people drive cars worth less than 10% of a new Model 3.
- Barrin92 6y ago
  The model 3 is way too large for any market that isn't the US. (which is most people). Over last year alone in Europe the M3 market share fell from 33% to 13% IIRC. In China I think the loss of market share was even larger.
  - perl4ever 6y ago
    In some markets, or overall, it's my impression the model 3 and the BMW 3 series compete head to head and the BMW is losing dramatically. I don't want a Tesla, but I drove a new 3-series loaner and definitely came away thinking this is why people are getting Teslas. But I decided for me, a Honda hybrid at half the price would be better.

the__alchemist 6y ago

At first glance. I challenge you to find a technique (Being executed commercially, demonstrated in a paper, or clearly described) where high-calorie foods are grown indoors. I'm not trying to be snarky; I'd love to see something like this, but the comment you reply to is my conclusion as well. I used to be very excited about this stuff, but the only viable crops are leafy greens sold at a high price. I own a business selling sensors for use in hydroponics. I started because I wanted to make an impact in food availability. I've abandoned that, and continue because hobbyists, and companies like this have a use.

thisisnico 6y ago
Idk, where I live there are massive greenhouse operations that produce insane amounts of high quality food.
- nandhinianand 6y ago
  The question is "Is the (total) cost of those high quality food from greenhouse ops cheaper than same quality food from traditional land agriculture?"
  - thisisnico 6y ago
    I think a lot of it is based on locale. Many of the foods may not be easy or possible to grow local, imports are expensive, food grows faster in greenhouses, additionally you can have many grow cycles over the entire year including winter, where that may not be possible with just typical land. They are growing greenhouse operations exponentially, it is a multi-billion dollar business in our locale.
  - arcticbull 6y ago
    Certainly in any remote or isolated community. Definitely in Hawaii - and in Northern Canada (where fresh produce is flown in by air every day, and a head of lettuce goes for over $7 and a thing of orange juice for $26 [1]). [1] https://www.huffingtonpost.ca/margaret-whitley/food-prices-canada-north_a_23552084/ https://www.huffingtonpost.ca/margaret-whitley/food-prices-c...

craftinator 6y ago

You're convoluting a quantitative argument with a qualitative one. The parent comment pointed out some hard facts about nutrient density and farming logistics, and how the current model for vertical farming won't solve world hunger, on a nutritional level. You respond with a qualitative argument that you can grow a business and/or industry and maje better technologies if you have profit. The issue isn't that the technology isn't good enough, it's that there isn't as many nutrients (as in soil) in a city or apartment to grow highly nutritional food. You'd have to truck in bags of soil to do this, which isn't nearly as efficient as leaving the soil where it is and growing it there.

Fireflite 6y ago
The problem isn't at all soil or nutrients: those are cheap and make up a very small fraction of the final mass of food. Instead, it's energy required to power photosynthesis, turning them into delicious calories.

JackPoach 6y ago

Not Tesla, but aquaculture. Aquaculture works and reasonably well for a few decades. Here's what we know now. 1. Aquaculture works 2. It's successful with only a handful of species 3. It can't replace marine caught wildlife 4. Flavor-wise it is frequently inferior. It doesn't mean we shouldn't grow salmon, tipalia, shripm or oysters, we just shouldn't make a claim or claims that aren't reasonable (i.e. aquaculture can feed the world or aquaculture will revolutionize modern food production). Vertical farming is great for greens, microgreens, strawberries, herbs and that's about it.

HeadsUpHigh 6y ago

Tesla had a direct path to drop the price by using economies of scale. If you just can't grow a crop, it just won't work. This is more akin to saying that battery density is low enough that it only works up to scooters.

spurdoman77 6y ago

Tesla obviously works today as well as do these vertical farms, but only in the niche they are operating in. The point being made is that they both could remain as a very niche product for looooong time.

hef19898 6y ago

But isnt that the contrary of what Christensen postulates, starting at non-competitive down-market nieche and work upwards? I'm rather bearish on Tesla for various reasons. I also believe current stock prices for Tesla and Amazon are mainly driven by general uncertainty and too much liquid cash with nowhere to go. That being said, vertical farming doesn't realy solve any problems, food nd water are distribution and not availability problems. None of which are solved by vertical farming. Obviously that doesn't prevent people from raising a shit load of VC money. If anything, the wetern world is producing too much food, incl. meat, in hyper industrialized farms already.

calvinmorrison 6y ago
Telsa sorta did down-market by jamming an engine into another car in the beginning. The lotus was the first platform they built for

okprod 6y ago

Or as a starting place to make money and then get out. Not everything/everyone has to have an altruistic motive.