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Elon is willing to go wildly unprofitable, which allows him to be a few years ahead of everyone else on the natural tech. curve. That’s literally all there is t

Elon is willing to go wildly unprofitable, which allows him to be a few years ahead of everyone else on the natural tech. curve. That’s literally all there is to it.

eloff 5y ago
I strongly disagree, if you look at either SpaceX or Tesla, what they've accomplished is far more than a simple willingness to lose money for a number of years while developing the business. Also, that's not how you use the word literally.
- new_realist 5y ago
  Second definition from MW: literally: used to emphasize the truth and accuracy of a statement or description
nickik 5y ago
This so incredibly wrong and un-informed its mind blowing. SpaceX has been profitable from pretty early on in its history and were until they need massive cash for the Starlink project. Tesla is a attempting to get into a very, very capital intensive industry and during the early growth and again in 2017 they had to be less un-profitable. But the companies consistently showed that if it stopped growing it could be profitable. The idea that it literally all there is to it is insane. Pretty much every startup is willing to make loses for growth, it happens literally all the time. This is simply empirically wrong.
- new_realist 5y ago
  Musk’s companies continuously raise funds, even SpaceX. Spending money in order to grow is easy, and not necessary given sufficient profitability. Look at Apple, Amazon etc. for examples of successful transitions to profitable hypergrowth. Startups who spend money to grow eventually make it, or die. Musk’s self-promotion, combined with a low interest rate environment, has allowed him to continuously raise enough money to stay in a zombie state, neither dead, nor profitable: only spending.
  - 7e 5y ago
    SpaceX: 39 total funding rounds (missed a few): 2002, 2005, 2007, 2008, 2009, 2010, 2015, 2017, 2018, 2019 (4x), 2020 (x2), 2021 Tesla: 35 total funding rounds (missed a few): 2004, 2005, 2006, 2008, 2010, 2012, 2013 (3x), 2014, 2015, 2016 (2x), 2017 (4x), 2019, 2020 (2x)
  - eloff 5y ago
    Both companies are profitable. This is simply a lack of understanding of business and accounting. Both companies are re-investing all of their profit in massive capital expenditures to support business growth - that's not a money losing endeavour, that's the same strategy that made Amazon into the behemoth it is today. It's also the logical strategy if you have a long time horizon for investment - which is arguably much better than companies which have short-time horizons.
    - ObserverNeutral 5y ago
      You are crazy if you think Tesla margins are different than other automakers. They do the exact same thing, and building cars is the worst business there is. Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap.
      - eloff 5y ago
        > You are crazy if you think Tesla margins are different than other automakers. Tesla's margin's are about triple Ford's margins over the last decade. That can't last, but it's far from the worst business there is. [1] https://www.macrotrends.net/stocks/charts/F/ford-motor/profit-margins https://www.macrotrends.net/stocks/charts/F/ford-motor/profi... > Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap. Tesla stock is wildly over-valued in my opinion. Even if everything goes fantastically for the company it may not grow into its own stock price. I would like like to short the stock, among others, to hedge my long positions. I still believe the company will be a success though - just not as quickly as the market seems to think.

Elon is willing to go wildly unprofitable, which allows him to be a few years ahead of everyone else on the natural tech. curve. That’s literally all there is to it.

eloff 5y ago

I strongly disagree, if you look at either SpaceX or Tesla, what they've accomplished is far more than a simple willingness to lose money for a number of years while developing the business. Also, that's not how you use the word literally.

new_realist 5y ago
Second definition from MW: literally: used to emphasize the truth and accuracy of a statement or description

nickik 5y ago

This so incredibly wrong and un-informed its mind blowing. SpaceX has been profitable from pretty early on in its history and were until they need massive cash for the Starlink project. Tesla is a attempting to get into a very, very capital intensive industry and during the early growth and again in 2017 they had to be less un-profitable. But the companies consistently showed that if it stopped growing it could be profitable. The idea that it literally all there is to it is insane. Pretty much every startup is willing to make loses for growth, it happens literally all the time. This is simply empirically wrong.

new_realist 5y ago
Musk’s companies continuously raise funds, even SpaceX. Spending money in order to grow is easy, and not necessary given sufficient profitability. Look at Apple, Amazon etc. for examples of successful transitions to profitable hypergrowth. Startups who spend money to grow eventually make it, or die. Musk’s self-promotion, combined with a low interest rate environment, has allowed him to continuously raise enough money to stay in a zombie state, neither dead, nor profitable: only spending.
- 7e 5y ago
  SpaceX: 39 total funding rounds (missed a few): 2002, 2005, 2007, 2008, 2009, 2010, 2015, 2017, 2018, 2019 (4x), 2020 (x2), 2021 Tesla: 35 total funding rounds (missed a few): 2004, 2005, 2006, 2008, 2010, 2012, 2013 (3x), 2014, 2015, 2016 (2x), 2017 (4x), 2019, 2020 (2x)
- eloff 5y ago
  Both companies are profitable. This is simply a lack of understanding of business and accounting. Both companies are re-investing all of their profit in massive capital expenditures to support business growth - that's not a money losing endeavour, that's the same strategy that made Amazon into the behemoth it is today. It's also the logical strategy if you have a long time horizon for investment - which is arguably much better than companies which have short-time horizons.
  - ObserverNeutral 5y ago
    You are crazy if you think Tesla margins are different than other automakers. They do the exact same thing, and building cars is the worst business there is. Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap.
    - eloff 5y ago
      > You are crazy if you think Tesla margins are different than other automakers. Tesla's margin's are about triple Ford's margins over the last decade. That can't last, but it's far from the worst business there is. [1] https://www.macrotrends.net/stocks/charts/F/ford-motor/profit-margins https://www.macrotrends.net/stocks/charts/F/ford-motor/profi... > Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap. Tesla stock is wildly over-valued in my opinion. Even if everything goes fantastically for the company it may not grow into its own stock price. I would like like to short the stock, among others, to hedge my long positions. I still believe the company will be a success though - just not as quickly as the market seems to think.