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The thing that gets me is that the guys who lead this effort are go-getting ex-finance, ex-trading people who work their butts off and have attention to detail

The thing that gets me is that the guys who lead this effort are go-getting ex-finance, ex-trading people who work their butts off and have attention to detail of a microscope. And the article mentions that they did in fact do detailed studies and make financial models of the venture and things looked good enough to push forward. So... clearly even their experience, hard work, and attention to detail was not enough to predict what would happen. I'm not sure what that means in the end :-). Maybe predicting the future is just hard? Maybe it was a 30-60 bet and they just got unlucky? In that case what they did was not unreasonable and had it worked the same journalists that cackle at them with schadenfreude would be singing their praises.

throwway120385 3y ago
Or maybe a background in finance is not actually enough to know how to launch a totally new product within your company. Maybe you need some people with engineering expertise to ask a different set of questions beyond "will the costs add up?"
jordanb 3y ago
My experience with Finance/PE people is that they don't really care about any details. They want all decks to be like three slides. If you can't represent something on a spreadsheet it doesn't count. And they're extremely good at working backwards from a conclusion. I'm sure they never asked "how fast can they be repaired?" "What will the customer experience be when a car has to be paired with your phone and you need a Tesla account?" "Are the maintenance claims put out by the manufacturer reasonable?" etc. etc.
adamors 3y ago
It seems to me that the finance guys were completely out of their element and when their models didn’t fit the reality on the ground they couldn’t adapt at all.
jiqiren 3y ago
The scenario of Elon aggressively cutting prices was likely not something they modeled as it is pretty unprecedented. Elon should have kept prices high while giving deep discounts and priority on parts to fleet purchases. That is what a sane car manufacturer does. To keep cars moving for retail you can have limited sales for holidays and seasons with "cash back" (not officially changing base price) and buying the loan APR to a lower rate. Instead Elon crashed the price of Tesla's entire lineup.

throwway120385 3y ago

Or maybe a background in finance is not actually enough to know how to launch a totally new product within your company. Maybe you need some people with engineering expertise to ask a different set of questions beyond "will the costs add up?"

jordanb 3y ago

My experience with Finance/PE people is that they don't really care about any details. They want all decks to be like three slides. If you can't represent something on a spreadsheet it doesn't count. And they're extremely good at working backwards from a conclusion. I'm sure they never asked "how fast can they be repaired?" "What will the customer experience be when a car has to be paired with your phone and you need a Tesla account?" "Are the maintenance claims put out by the manufacturer reasonable?" etc. etc.

adamors 3y ago

It seems to me that the finance guys were completely out of their element and when their models didn’t fit the reality on the ground they couldn’t adapt at all.

jiqiren 3y ago

The scenario of Elon aggressively cutting prices was likely not something they modeled as it is pretty unprecedented. Elon should have kept prices high while giving deep discounts and priority on parts to fleet purchases. That is what a sane car manufacturer does. To keep cars moving for retail you can have limited sales for holidays and seasons with "cash back" (not officially changing base price) and buying the loan APR to a lower rate. Instead Elon crashed the price of Tesla's entire lineup.