Ten years ago when Elon Musk announced his plan to lead a revolution from gas powered to electric cars it seemed like a classic case of overreach. Musk was one of the founders of PayPal that cashed out when the company was purchased by eBay (EBAY) for $1.5 billion. From there he started Space Exploration Technologies (SpaceX) which he claimed would effectively privatize space exploration.
Musk's silly electric car company was dubbed Tesla (TSLA) after the famously brilliant and crazy inventor Nikola Tesla. Tesla, the man, created the alternating current electricity infrastructure we use today, yet died penniless and alone in a cheap hotel room in 1943.
Steve Jurvetson, managing director at venture capital juggernaut Draper Fisher Jurvetson, was one of the few early believers in Elon Musk. In the attached video he explains what convinced him to be one of the first investors in Tesla.
"What got us excited about Tesla in the early days was Elon Musk as a person, the company and its bold idea that all vehicles will become electric cars, and the fact that they thought they could build a car that people would actually want, not only make a good electric car but make the best car, bar none."
So far this is fairly boiler plate VC ambition. The key wasn't the business model. It was Elon Musk. Without a plausible leader, revolutionary ideas go nowhere. During last night's post-earnings conference call Musk demonstrated the qualities that show why he has a very real chance to succeed at his wildest dreams.
He's not "the next Steve Jobs." He's the first Elon Musk. Here are three quotes from last night's conference call that show why:
1. He's merciless with his supply chain
"We don't have a demand problem, we have a supply problem," Musk said, sending a chill up the spine of any company with which Tesla does business.
"Previously we had some trouble attracting A-team suppliers because they felt we wouldn't be around for the long term and we have that issue where IHS predicted Tesla would only ever sell 3,000 cars in its lifetime... we sold that in the first quarter of production."
Translation: Non-believers will be forced to kneel before Tesla before securing their business. Those contributing to the "supply problem" will be left for dead.
2. He's contemptuous of the competition
Musk on BMW's i3:
"Well, I am glad to see BMW is bringing an electric car to market. That's cool. I think there is room to improve on the i3 and I hope they do... I really do encourage other manufacturers to bringing electric cars in the market because this is a good thing... I wish it was going faster than it is."
The effect was chilling. It was like listening to Ivan Drago discussing Apollo Creed. Not only is he unafraid of the old guard auto makers' deep pockets, he freely mocks them. Musk has the car of the year; everyone else has glorified prototypes.
3. Power players believe he can do it
Municipalities desperately want to believe in Zero Emission Vehicles. The government spent billions helping General Motors (GM) create the Volt without any evidence of demand. The problem has been the infrastructure. Much as they wanted to lead green initiatives politicians couldn't throw their resources into building the much needed outlets and preferred parking spots to support vehicles that didn't exist.
Musk says he's 18 months away from delivering a $35,000 Gen 3 electric car and there's absolutely nothing in his history to suggest he won't be able to pull it off. The political math has changed. For all the lobbying dollars from Detroit no pol can be seen as standing between customers and a mass market electric car.
Speaking to the problem of Gen 3 drivers who don't have garages or need to park in the street Musk said following:
"A lot of cities and municipalities are putting charging infrastructure on the street... for apartment and condos we actually have a loosely formed group within our sales and operation team that is able to tell them what they need to do to install sockets."
Note the verb. Elon Musk is done asking people to do anything. He's telling suppliers, municipalities and even competitors what to do. There's a very good chance they're going to listen.
[At the time of publication Jeff Macke owned shares of Tesla (TSLA)]
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