Go figure, feature creep is bad, even outside of video games

Bloomberg ran a less then nice article about electric car maker Tesla. The short version: they have terrible losses every year, they are swimming in debt and their productivity (income per worker) is a joke. Unless they get new investors by the end of the year, they are bankrupt.

I’m sure the analysts will write essays for the reason, but it’s obvious to me: feature creep. All gamers know the situation when a game is added more and more features while the core game is not working properly and unbalanced and the whole thing is a mess. Only noob devs and Star Citizen level scammers do that nowadays. Anyone better than that makes the game working.

Elon Musk is a visionary. Having visions is called delusion. The guy clearly doesn’t belong to where he is any more than Elizabeth Holmes does. He drives Tesla into feature creep that cannot end any other way than the obvious.

Tesla is an electric car. Period. That’s the product. A car that runs on batteries. That’s it. Everything else is not Tesla, it’s ingredient that he should buy on the market. It’s obvious that Tesla doesn’t make toilet paper used in the company bathroom. But it’s equally obvious that Tesla shouldn’t work on self-driving cars or fully automated car factories or touchscreen drive console or any other crazy nonsense Musk introduces.

Not because these are bad ideas, but because they are not the product any more than the toilet paper in the offices. Someone else who specializes in that should make a self-driving system and if it proved itself, Tesla should license it and include it to their cars, just like any other car manufacturer. Self-driving has nothing to do with the power system of the car, it can be added to a petrol car just as well as an electric. Hell, you could add it to the feet-powered cars of the Flintstones. Same for the touchscreen or the manufacturing automation. If they work, they should buy them from the market. If they don’t work, he shouldn’t bother with them, because it’s not his damn job. His job is to make electric cars. Something he fails to do, producing 7%!!! of the cars he planned, due to the “synergy” of unfinished technologies. Making a good electric car is hard enough, no point making it harder by adding an infant self-driving computer and a bunch of robots that haven’t been used even in much simpler petrol cars.

I hope he won’t get investor money (good luck with that with B3 risk class papers), or only gets it on the condition of him stepping down from management. All the feature creep should be thrown out and all focus should be on making electric cars.

By the way he collected $1B from future buyers as pre-payment for cars he didn’t built and with the current rate won’t build over a decade. Maybe we should check if he is really a guy and not just Chris Roberts with a good mask.

Author: Gevlon

My blog: https://greedygoblinblog.wordpress.com/

12 thoughts on “Go figure, feature creep is bad, even outside of video games”

  1. I am in two minds about Musk. On one hand, i appreciate his outstanding ability as a salesman. He is great to the point of actually lending credence to the idea that sales ability is more important than substance.
    On another hand, sales ability does not trump substance in any sort of long-term endeavour.


  2. If you really feel that strong, it might be an idea to invest a small part of your savings (< 2%, but that is personal) in a short position on Tesla. Foreign short positions has always been a bit tricky to find a proper broker for, but since the start of 2018 it finally has become more mainstream to do so. To me that seems like a sure bet with a nice payout ratio (and I can deal with the loss if I'm wrong).


  3. Tesla’s main issue is around their overambitious production plans. Their features are relatively standard with the rest of the luxury car industry.
    Tesla’s plans to be profitable required them to jump directly to being a volume manufacturer (no time to organically grow the business) with a very high degree of automation. They are in trouble because their robots were only as good as the rest of the industry. At the moment they are neither a volume manufacturer nor highly automated.


  4. @Anon: I have no idea WHEN to short it. I’m sure it’ll fall, but I don’t know if it happens in 2018 or in 2020. Theranos operated for a decade despite being an outright scam, while Tesla is not. The product is fine, they just have to cut the feature creep.

    @Dobablo: I don’t understand why they couldn’t partner with a car manufacturer who provides chassis, suspension, interior while Tesla only provides batteries, engine and drivetrain. Oh wait: “I want it all”.

    Go figure, 10% of 100K cars is bigger profit than 100% of 3K.


  5. The problem with “Tesla” as an “electric car company” is the problem with electric cars: They only make sense to manufacture if gas is expensive enough. As long as gas (Petrol for you across the pond, I have no idea what they call it in Hungary.) is essentially subsidized, electric cars make no sense.

    If electric cars made sense… you’d see a proliferation of small electric cars. I mean everywhere… not just as a tax subsidy. They’d be sprouting up like weeds, and that organic movement would change the zeitgeist of the “must have” car from the SUV to the electric.

    Enter Elon Musk: He’s not making “electric cars”, he’s making high tech tax subsidies. Completely different business model.


  6. I think Tesla would not have a sales point if there would be no feature creep. Almost every car manufacturers have electronic cars now. They are not as good as Tesla but not really far behind (neither in power or price). Tesla’s main marketing point is exactly the feature creep: “we do things noone else do”. It would be invalid without all of these features.


  7. @Smokeman: people buy electric cars because either genuinely care about climate change, or they want to paint themselves as one who cares. It’s an emotional buy like donating to charity.

    @Cathfaern: but now they aren’t selling much, because they cannot. Sure that you have more buyers if you promise them the Moon, but if you can’t deliver, your business won’t last.


  8. Tesla is currrently in the position that they can’t sell the main product electric car on the mass market cause it can’t compete in performance or price . It currently can only sell as a luxury item and that naturally has to come with gimmicks to entice people who want it just for prestige. Automatic driving is also coming with or without them. If they get overtaken by regular car manufacturers they will be even in a worse position to get sales.


  9. This is the iPhone of cars: it is marketed towards rich people who can spend a lot of money on status seeking. They don’t care if the features work, they care if they can tell their friends about them.
    If they really wanted a working, smart electric car, they’d get a Nissan Leaf – for a third of the price.


  10. Tesla is partnered with multiple manufacturers for parts. In fact, they used to be partnered with MB until about 2016 or so.. they are not building a new car. They are selling a concept and a luxury product.


  11. The point of Tesla is to function as a virtue-signal shield so Musk can work on rockets without too much hassle. Telsa produces a vehicle for graft, kickbacks, and Veblenian consumption, not a vehicle for getting a person from A to B.


  12. @Alrenous: that would make sense if they would actually produce the luxury cars. But they don’t, because they can’t. Whatever is their plan, it’s not working.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s