Elon Musk's Other Company

[thriftyandboringinohio]

Say what you will about Elon Musk, but he is certainly willing to make a big show of taking on big competitors in mature markets.
We talk mostly about Tesla vs Toyota, Ford, et al, but he also has SpaceX.

SpaceX is a company that designs, builds and launches large heavy-lift rockets to carry payloads for NASA and DoD.
The only competitor is United Launch Alliance (ULA), a joint venture between Boeing Defense Space & Security, and Lockheed Martin Space Systems.
ULA is essentially the monopoly supplier of launch services to the U.S. government with the Atlas and Delta rocket families.

Musk is working hard to get the government to certify SpaceX as acceptable, like Boeing/Lockheed.

Some news about that courtesy of Aviation Week and Space Technology.

Revised SpaceX, USAF Certification Plan To Focus on ‘Trust’


Aerospace Daily & Defense Report
Amy Butler
Wed, 2015-03-25 17:30


The U.S. Air Force and SpaceX are modifying the Cooperative Research and Development Agreement (CRDA) signed two years ago to outline what has become the contentious process to certify the Falcon 9 v1.1 rocket for use in launching national security payloads.


The changes are needed to refocus the certification process on establishing top-level trust and confidence that the company can deliver a launch as planned. The current CRDA was “probably too focused on the government side on conducting detailed design reviews and instructing design changes … rather than focusing on the high-level question of do we trust this new entrant,” Air Force Secretary Deborah Lee James told Aviation Week during a March 25 interview.


SpaceX chose its path to certification and the CRDA was signed by both parties in June 2013. “Even though the certification process is governed by a CRDA – it is all written down – and you would think that would help people mutually understand what is expected, that, in fact, was not always the case,” James said. SpaceX’s culture of innovation and the Air Force’s culture — focused on “history and a lot of experience” — clashed.


The CRDA has not been publicly released, but both parties have said it required SpaceX to conduct three successful Falcon 9 launches, two of which were to be consecutive. These missions were completed by January 2014.


Additionally, they say the company was required to provide data for review on its designs and processes as well as engineering analysis, though detail on this element has been scant. This is the portion that has taken the most time for SpaceX...To date, SpaceX has conducted 12 Falcon 9 v1.1 flights...

Full article here http://aviationweek.com/defense/revi...an-focus-trust

I'm not surprised that technical data and design reviews are the sticking point.
Launching jillion-dollar spy satellites that are one-of-a-kind, critical to national security, and which might take a decade to replace makes the satellite owner/investor nervous.

Due diligence gets pretty big.

It's hard to accept a vendor who says "Just trust me". The investor prefers to hire a few hundred of their own engineers to review thousands and thousands of pages of technical documents provided by the rocket vendor, looking for that one little flaw that might make things go boom.

SpaceX stock is private, but Google and Fidelity have both invested so you can get some indirect exposure through them, if you think it's smart.


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[don]

Re: Elon Musk's Other Company

The only competitor is ... Boeing Defense Space & Security, and Lockheed Martin Space Systems.

Only?

[thriftyandboringinohio]

Re: Elon Musk's Other Company

Only?

LOL. He's already taking on Honda, Toyota, BMW, GM, Ford...

Maybe he has a Bruce Lee complex.
He's convinced he's that guy in the old kung fu movies who can beat up every hombre in the room, all at the same time.

[BK]

Re: Elon Musk's Other Company

Fidelity and other institutional investors owned 70% of ENRON shares.... http://money.cnn.com/2001/11/29/funds/enron_funds/

GOOG - look at Googles acquisition of NEST for $3 Billion - does that mean that internet thermostats are a business worth $3 Billion - or just that Google has Billions of dollars to blow and own a huge chunk of NEST through Google Ventures investment.

[thriftyandboringinohio]

Re: Elon Musk's Other Company

Fidelity and other institutional investors owned 70% of ENRON shares.... http://money.cnn.com/2001/11/29/funds/enron_funds/

GOOG - look at Googles acquisition of NEST for $3 Billion - does that mean that internet thermostats are a business worth $3 Billion - or just that Google has Billions of dollars to blow and own a huge chunk of NEST through Google Ventures investment.

Good observations, BK.
I think Google's purchase of NEST can be viewed in a different way.

Google and Apple seem to be using the same generic business plan, and it seems to work
Create a proprietary marketplace that attracts huge numbers of customers, then take small fees from millions of customers and larger fees from thousands of businesses that want to have a store in your proprietary space. Do it first and do it well, and the competition will be slim and will arrive late. Worst case scenario is a good market share and the best brand identity after competitors finally arrive and get established. That's the iPod/iPhone/iTunes/App store for Apple, and the the equivalents for Android/Google.

Google intends to draw fees from the whole household automation market (internet of things) through NEST.

Google is promoting the proprietary NEST interface, which it's branding "Works with NEST".
So for home automation of systems and appliances, Google can get fees on one end from the Google apps that run on our Android phones to control our homes and machines and also get fees on the other end from appliance makers for building in the connection interfaces that work inside the NEST ecosystem.

The thermostat company isn't worth 3 billion, but proprietary fees on the entire home automation marketplace probably is.

[BK]

Re: Elon Musk's Other Company

While people are drunk with gains from their stock portfolio they will sign up for lots of recurring monthly fees.

One day the gains will begin to vanish, inflation flares, and people will start paying very close attention to recurring fees.

Look at the momentum that cord cutting is getting these days.

At the moment it looks and feels like Google can do anything. That's what happens in the midst of a market trading on mania. Just yesterday the I heard Google just filed a patent on inflatable automobile bumpers (to protect pedestrians). At the moment nothing is outside the GOOG business plan.

Anyone remember when Wang was on top of the world and promising to make the office paperless. That marvelous technology and patent portfolio ended up in the hands of the unstoppable Kodak (heck, Kodak even took over office space in Wang Tower in Lowell-MA).

Markets tops create hopium and that makes it impossible for anyone to see clearly that the future will unfold in unexpected ways.

[seobook]

Re: Elon Musk's Other Company

Do it first and do it well, and the competition will be slim and will arrive late.

Or come later to the market, and violate intellectual property (like AdWords & Android did) then later paper over it by buying (Motorola) or licensing other IP assets (PPC patent from Yahoo!/Overture).

Or buy out the leading copyright violation platform (YouTube).

The other angle is to take something which is paid & make it free (maps, analytics software, office software, email, mobile OS, etc.), then give it preferential placement & buy distribution with bundling (like how Adobe Flash updates drive-by install Google Chrome as your default web browser) while aggressively advertising it to gain share and commoditize the compliment. Then when dominant share is obtained, features can be removed or friction added to re-add monetization (Gmail priority inbox, AdWords exact match broadening out over time, Android terms updates which lower partner revenue share and require them to place more services as category defaults, etc.).

And with vertical search, the recently leaked FTC documents about Google's behaviors made it clear that Google felt they could come to the party late, give themselves preferential placement, and do so on the back of scraping unlicensed third party content. Sites like Yelp and TripAdvisor were offered ultimatums that they either allowed themselves to be scraped-n-displaced into Google Local or remove their sites from showing up in Google at all. That's a big part of the reason regulators got involved in all.

Google is absolutely fantastic at public relations. They seemingly never lose.

Here is an example of a hit piece Google had done on Bing "copying" Google results. Around the same time Google engineers were accusing Bing of "cheating" Google was scraping Amazon sales data and leveraging it to try to create a competing shopping search service. And in the background Google had YouTube, was doing their book scanning project, etc. etc. etc.

I think many of Google's side projects are done primarily for the public relations narrative.

Sell the story of innovation and the bright happy utopian future while distracting away from the monopolistic stuff.

Almost every category they lead in other than search and email wasn't driven by internal innovation, but by purchasing it.

- Google Analytics was Urchin
- AdSense was Applied Semantics
- Google Maps was acquired. Keyhole was acquired.
- Android was acquired.
- DoubleClick was acquired.
- Youtube was acquired.
- even the self driving car & streetview were from a start-up they acquired named 510 Systems.

Granted, even though most their innovation has been from acquisitions, many other companies who have acquired a bunch of companies have failed to scale them and keep them in leadership positions.

It is also worth mentioning that Google monetizes Nest in part by selling data to utilities:

The company has negotiated deals with multiple energy partners in the U.S. Some utility partners are willing to spend $30 to $50 per year and per thermostat to be able to turn the air conditioner up when it’s a hot day. This way, the utility can levels load on the grid. Partners don’t have direct access to the thermostats, they just sign a deal with Nest, and then Nest has access to the thermostats.

[BK]

Re: Elon Musk's Other Company - Innovation - from small cos

Acquisition is the way every company innovates.

I would argue that the NEST thermostat is cool design and not innovation. Honeywell is doing everything that NEST is doing (and probably more) .

Google is just like Microsoft. When people speak of Microsoft they seem to think that Bill Gates wrote MS-Dos. Bill and Paul Allen struggled coming up with a hot product to sell. One day Bill Gates sees an advertisement for a new operating system and he ends up buying the company.

Currently Microsoft is giving VMWare a run for its money with a product called Hyper-V. Where did Hyper-V come from.....

Microsoft acquired a small Utah company in the midst of financial chaos for $3-5 million (I think). The company has a product that allowed you to run PC software on OSX.

Most real innovations is done by engineer working in their basement or garage. Very often these crazy engineers who innovate happen to be men (as it is a rare women who likes to spend 15-20 hrs a day working on a piece of software or technical product with no pay in the hopes that one day they will get paid).

[GRG55]

Re: Elon Musk's Other Company

While people are drunk with gains from their stock portfolio they will sign up for lots of recurring monthly fees.

One day the gains will begin to vanish, inflation flares, and people will start paying very close attention to recurring fees.

Look at the momentum that cord cutting is getting these days.

At the moment it looks and feels like Google can do anything. That's what happens in the midst of a market trading on mania. Just yesterday the I heard Google just filed a patent on inflatable automobile bumpers (to protect pedestrians). At the moment nothing is outside the GOOG business plan.

Anyone remember when Wang was on top of the world and promising to make the office paperless. That marvelous technology and patent portfolio ended up in the hands of the unstoppable Kodak (heck, Kodak even took over office space in Wang Tower in Lowell-MA).

Markets tops create hopium and that makes it impossible for anyone to see clearly that the future will unfold in unexpected ways.

+1.

I am fascinated with this new craze of technology billionaires driving their companies (Tesla, Google, Apple, etc.) to invent the next automobile (electric, driverless, whatever).

I think you are correct...too much "free money" intersects with an invincible ego, and voila, la nouvelle voiture.

Google is well on its way to becoming a completely unmanageable company, trying to do far too many diverse things all at once.

Cheap money can hide a LOT of mistakes, but the consequences of long periods of mis-allocated capital are difficult to avoid as individuals, families, corporations, industry sectors, or even entire nations.

[jk]

Re: Elon Musk's Other Company - Innovation - from small cos

Google is just like Microsoft.

i have long been of this opinion.

the heart of google is search. the heart of microsoft was the desktop os - first dos and then windows. microsoft had a near monopoly on the desktop os; google has a near monopoly on search. microsoft incorporated internet explorer into its os in order to drive netscape from the marketplace. microsoft incorporated numerous utilities into the os, utilities which formerly were sold separately by other companies. [i remember buying utility suites when i was using dos on my machine. of course the utility suite suppliers themselves were trying to squeeze out companies producing single purpose utilities.] google incorporated maps and navigation, which formerly were sold separately by companies like garmin and tom tom, which have now been marginalized. google provided email, formerly the sphere of other companies, and then scraped data from the email to sell ads. microsoft created msn, linked to internet explorer, to try to compete with and squeeze out yahoo and aol. of course that whole "portal" business was evaporating even as microsoft was trying to establish msn, but there's another example of microsoft coming late to a market and trying to muscle its way in. google + is google's latest weak attempt to displace facebook; google chat has displaced aol's im but now facebook is incorporating messaging.

google's core, search business, rides on others' hardware. google bought android to compete with the iphone, but gives away the android os so it can have its core, advertising enhanced by scraping, business ride on other people's hardware. similarly microsoft was never a hardware company but had its core business ride on others' hardware.

someone pointed out that google has purchased much of its "innovation," coming a little late to already established markets and then using its size and other services to squeeze out or simply acquire the original players. wasn't this always the criticism leveled at microsoft?

i think that at least part of what drives google's wide-ranging acquisitions is that they don't want to repeat microsoft's history of relying too much on its core business, and "satellite" products and services which connect directly to and amplify its core product. we know how well that worked in the long run for microsoft, and the somewhat shorter run for blackberry. ibm used to own the desktop hardware market along with the mainframe market. "nobody ever got fired for buying ibm pc's" was the mantra of corporate purchasing agents. until it wasn't.

google doesn't want to be bypassed by other developments. thus google uses its huge cash flow to stick its nose into any other innovative tech it can think of, trying to broaden itself.

apple, otoh, has established an almost entirely separate universe by controlling and integrating both hardware and software. this is what let the mac line survive on low volumes during the period when it was favored only by people interested in graphics, while windows dominated both the personal and business desktop. the introduction of the ipod, and then the iphone, with features that integrated with the mac, enhanced the attractiveness of the mac line, expanding its market. but apple, too, has some of the same strategies aimed at other companies' businesses. how is apple maps doing, i wonder? is there any public data? and circling back to microsoft, how many people here are using bing as their search engine of choice?

[vt]

Re: Elon Musk's Other Company





Operating systems:





China:






Apple and Google Maps are in here:






This is an image link to dozens of charts:


https://www.google.com/search?q=sear...0CB0QsAQ&dpr=1

[dcarrigg]

Re: Elon Musk's Other Company

+1.

I am fascinated with this new craze of technology billionaires driving their companies (Tesla, Google, Apple, etc.) to invent the next automobile (electric, driverless, whatever).

I think you are correct...too much "free money" intersects with an invincible ego, and voila, la nouvelle voiture.

Google is well on its way to becoming a completely unmanageable company, trying to do far too many diverse things all at once.

Cheap money can hide a LOT of mistakes, but the consequences of long periods of mis-allocated capital are difficult to avoid as individuals, families, corporations, industry sectors, or even entire nations.

I fully agree with you and BK. You can see it in the new HQs they're building and in the employee numbers:



Of course, not to be outdone, Facebook's building a fancy new HQ too. And Apple's re-inventing the damn Pentagon as a circle.

[lektrode]

Re: Elon Musk's Other Company

I fully agree with you and BK. You can see it in the new HQs they're building and in the employee numbers:....,
...
Of course, not to be outdone, Facebook's building a fancy new HQ too. And Apple's re-inventing the damn Pentagon as a circle.

nears eye can tell the only one of em who actually got the forecast right?

was the coiner of the phrase:

'... the giant sucking sound...'

the rest of em.. er... most of the rest of em = present company accepted, of course...

not so much.

[BK]

Re: Elon Musk's Other Company

I'm fascinated by how human psychology is affected by money.

People are most dangerous when there is to little or too much money. But, it strikes me that too much money gives a man or woman the feeling that they are a god.

Today I see twenty-thirty somethings repeating the same mistakes of the twenty-thirty somethings of the late 1990s. Only the distance of time makes me realize that I have been infected with the same disease in an earlier part of my life.

How many will be hurt when Elon Musk is finally revealed as the latest Emperor with no clothes?

[thriftyandboringinohio]

Re: Elon Musk's Other Company

...How many will be hurt when Elon Musk is finally revealed as the latest Emperor with no clothes?

Some amount of common human tragedy appears unavoidable.
Failed business ventures that operate on a grand scale do hurt people.
Most of the rank and file workers get different jobs, and most of the investors recover their losses, but some are ruined.

The Dutch Tulip mania for which this site is named is an early example. The British South Sea Company; the Sadlier affair; Credit Mobilier; US railway stocks; Mr. Ponzi himself; right up through Enron.
It just seems part of the human condition.