CEOs, Break Free: The Urgent Call to Abandon Short-Term Thinking for Infinite Success
Alex Pesjak
Enable commitment and acceleration towards Frontier Futures. Brand | Innovation | Change | Platform | Ecosystem | Newsletter #EcosystemEspresso | Video-Podcast #PlatformDisco | VP EMEA McFadyen Digital |ex-Coke|ex-MDLZ
Analysts in Crisis: Tesla's Business Model Shatters Outdated Valuation Methods and why CEOs Must Embrace the Platform Ecosystem Model Now.
From this week´s #WEROBOT event
Un Espresso per favore!
It is Friday and I am glad you take a sip of Ecosystem inspiration. After a good unannounced summer break the #EcosystemEspresso is back...
This is #EcosystemEspresso #58
1| Thank you for 1067 Subscribers! THANK YOU!!!!!
I value you all are coming back and that you engage after the silent period. I will repeat this at X-mas...
It is so nice to hear from people that they read, are surprised and still I do not see their thoughts and interaction.
--> so, more people will have a chance to dive into the world of brand-led platform and ecosystem play...
2| Platform Disco Pause
Unfortunately due to sick leaves we could not keep the schedule. But we will be back soon.
Enjoy: Stefan Wolk from Episode #16 in the meantime.
3| CEOs, Break Free: The Urgent Call to Abandon Short-Term Thinking for Infinite Success
It is funny. Did we see the same presentation and event on 10/10/24?
I was blown away and I can see something unique unfolding. Whether this in Q4 2025 or Q2 2027 is irrelevant to me, as I am sure the Tesla cash reserves are huge and once in scaling mode, this has an "infinite" multi-TAM.
The Tesla business will also tomorrow be based on pipeline and platform business model elements and scale layer by layer.
Video of highlights of #WEROBOT
Here a highlight video of the event some days ago. I cannot remember such a rich demo of a future that is better (potentially)... Click on the image with the #Robovan to start it...
Media, analyst and stock price reactions
Analyst and media reactions mostly were: "disappointing". I knew this was going to be the reaction not matter what. This was already the case when Model 3 and Model Y were announced. The latter is the number 1 vehicle of all sorts of propulsion globally.
But one day after the event - all down! The rest is history. I think we were witnesses of a historic day and the pattern above was visible one more time. Not the last time.
Rivian - co-invested in by #Amazon went up. Car valuation! while #Tesla again was close to - double digits ;-)
Quote of the week:
It always seems impossible until it’s done. Nelson Mandela
The core message:
Stop believing messages you hear about Tesla from the street or media! Their interests are not always the best for you and a profitable future. If you are in mobility, energy, automation or AI, you will be disrupted, unless you stop building your sense of urgency or strategies on those messages. Rather learn and move to action - fast!
So, tank short-termism!
5 conceptional ideas that were triggered by this presentation at 10/10:
1| The Birth of a New Mobility Ecosystem
Starting from us. The customers.
The event was not about what analysts and media were so keen to hear about. It was not about propulsion, capacity, entry level vehicle, pricing assumptions, time plans etc.
It was about the main pain points that made it impossible so far to have mass individualised transport as a service in premium quality, far beyond being lifted from A to B.
Tesla team was talking customer benefits and a brighter future!
Globally, surveys suggest that over 70% of people in fast-paced economies feel they lack enough time, while only 30% feel they have sufficient time for their personal and work commitments. Washington Edu
Green cities faster than we think
Tesla is driven by their purpose: to accelerate the world's transition to sustainable energy. Consequently, they are doing all to scale - fast.
Hi hear quite often when talking to friends, family and people in general that EVs and autonomous fleets are for cities. It will not work in the countryside. See Waymo only having 5 cities after such a huge investment.
Yes, the charging experience is painful in a big city. And providing the fundamental charging infrastructure behind and in front to the charger is not easy, expensive and time consuming.
Given Tesla´s "#embodied #AI" is capable of picking up the environment as it is based on a visual system like our eyes with a brain, it can be rolled out easily.
Tesla as TaaS operator and PaaS provider to max scale!
Therefore, Tesla will become an operator to retain direct customer contact, data access, strengthen the #Tesla brand ahead of others, while in parallel facilitating ecosystem partners and complementaries to innovate and deliver on the platform.
EV-adoption will skyrocket, as you will not need to buy, own, lease or rent a car. We will adopt pay per use models, ad funded models. Lower prices will boost transport to superabundance levels. I would love to have easy access to such a fleet. Thinking about a night out, a ride to skiing, a trip with friends etc.
The lobbying - especially here in #Europe - will not make it happen overnight but facts will speak form themselves. This is a matter of 1 decade, some say 2 (I believe closer to one decade as we need less vehicles).
A car is the second biggest project people typically invest in after a house or flat. Imagine the leap in disposable income. People will have resources to go out more often, doing and buying sports gear, entertainment, vacations etc. This will drive adoption!
Marketing - not needed
Just think back the last weeks about how the #cybertruck was celebrated by VIPs, kids alike. Free visibility and stories.
Now imagine what will happen in #cybercabs and #robovans, for the good or bad, on platforms like #x or #YouTube we will see fun and wild things alike. Party nights, bachelor parties, fan rides etc. It will be a FOMO moment: "what, you never tried it?!"...
2| Redefining Transportation Economics
Creating $/€ value right out of the gate.
We are moving into an era of superabundance. While most leaders are not aware, this is what we enjoy as users already today in some fields. In the future in many. For example. A "free What's App call" to anybody in the world. .
A cost of a mile in a bus was commented on as 1 USD, while here cost per mile longer term around $ 0,20 is attainable. If cost are lower than operating your own vehicle, actually only refuelling your vehicle, then scale and adoption are not an issue.
Idle asset utilisation
A car would have 168 hours a week to be ridden. But it is only 10 hours per week. This is a bad use of all of our resources. Moving to a fleet this can be optimised by a factor of 5x?!
Add a total cost of ownership lens, and you will forget owning a vehicle. e.g. charging at home or away from home, garage, installation, maintenance, tyre changes, windscreen wipers etc. Non of your problem...
Such a vehicle is no different to what riding an elevator to us is today. In the past there was a "liftboy" - now the "driver". Why should mankind not progress? I have zero doubt drivers will be like lift boys or horses today, pure luxury...or a special experience, maybe not the everyday.
New platforms and income streams
Next to running your own flock of a few cybercabs, people will be able to run their "Optimus" (Tesla humanoid robot) that provides cleaning and maintenance services to the fleet. On top pick up and other services.
This will be a new impetus in creating one person companies or also ecosystem collaboration opportunities.
Here an illustrative calculation by Morgan Stanley. I do not want to go into commenting assumptions, my agreements and disagreements. It is here about order of magnitude this investment house is assigning.
Interesting are the Robotaxi assumptions on revenue per car and year. A net profit of USD 15K per vehicle and a value /unit of USD 252K over a multi-year period show the attractiveness to us users becoming entrepreneurs with our flock. If Tesla produced 1 MM units this is an insane value of 1/4 of a trillion USD!
The Street still only looks for the numbers of vehicles sold
With few exceptions most analysts and media commentators are looking for the small entry level vehicle, sales etc. Yes, this is still important in the transition to a new model. The world going electric! However, #WEROBOT showed a new world on top of that - The world of robots, not cars.
Why Wall Street Doesn't Get It
Outdated valuation models unfit for platform businesses
Short-term focus misses long-term ecosystem potential
Failure to account for network effects and data value
Inability to properly assess transformative technologies
Many influencers have their financial models and they are simulating with a lot of detail and scrutiny the different layers of the Tesla universe which keeps expanding and ultimately will look like painted above.
For a traditional analyst this is too much work, or even not appropriate given they belong to dedicated functional or sector teams. There might not be the permission or simply laziness to go that far. They might lack chip, AI, business model know-how..
The analysts measure the wrong metric. Number of non-autonomous vehicles and compare it with Tesla. They benchmark shares. The chess playing field has moved on!
3| This is a huge circular initiative!
Check the 5 R's
Cars are a big market!
So climate, social and economic impact will be significant replacing so many vehicles.
The biggest impact is REDUCE!
What is not produced and needed, does not create negative externalities.
80% of carbon impact is determined in the design of products and journeys. We do not know what was done on that front but we learned that the #cybercab was highly optimized for transport. Bulky luggage, space for goods, no windows in the rear, securing transport compliance through side mirrors and visual systems most likely without "inviting" for theft breaking glasses.
Reuse: Making vehicles accessible for customers 2-3-4
Flexible vehicle designs for multiple use cases. Reusing the skateboards over and over again while the chassis will be customised or repurposed.
Repair: Modular components extend vehicle lifespans
Vehicles from around the world can find a new multi-life in a different applications or use case. E.g. from transporting people first to last mile items in the second-life..
Refurbish: Tiered service levels as vehicles age.
E.g. a "new" vs. "refurbed price".
Recycle: Battery and material recovery at end-of-life
I have written very often about circular EV battery platforms. No need to repeat.
Platforms in all cases enable discovery - match - and transactions more efficiently. If product design and business model support this - also with the help of Digital Product Passports - then I am confident this is a big circular project.
4| FSD to scale profitably and fast
With #Waymo and others there are different players out there. But their ability to scale is very limited.
Waymo too much tech
The loaded tech stack of a Waymo is adding up to almost USD 40.000 for cameras, lidar, software and sensors. Consequently the price of a vehicle is close to USD 100 K without a perspective that anybody would be able to put this investment in to scale.
Refitting cars is costly and time consuming!
Tesla FSD on a different level - de facto
Tesla will be moving from Level 2: "FSD supervised" to "FSD unsupervised" - announced for California and Texas in 2025. Tons of video material by the community is produced, shared, liked, commented and leads to improvements.
We saw videos of Cybertruck picking up owners after shopping going through very busy parking lots with people, their shopping carts and kids in the summon mode.
What we saw now indicates clearly a whole new level. Whether what we saw at the event was operator guided or not. The approval processes will take care of it anyway. But the images were impressive. And this is what the Tesla team wanted:
The Magnitude of Cortex AI
Cortex AI is set to be one of the largest AI supercomputers in the world, with an initial deployment of 70,000 AI servers, including 50,000 NVIDIA H100 GPUs and 20,000 units of Tesla’s custom Dojo AI hardware. These servers will be crucial for training and refining AI models that underpin Tesla’s autonomous driving technology, energy management systems, and other AI-driven innovations.
The scale of Cortex AI is staggering, requiring up to 130 megawatts (MW) of cooling and power just to get started. To put this in perspective, that’s enough energy to power a small town. Projections indicate that by 2026, the supercluster’s power needs could soar to 500 MW, raising concerns about the sustainability and environmental impact of such an energy-intensive operation. (Source Medium).
Waymo is in a hand full of geofenced cities.
Not even the whole of the cities. More or less like 6 years ago. According to an influencer to scale across the country would take 19.490 cities to go, taking 19.000 years to map all cities in the US...
Roll out is slow and operations are still too expensive. Hence, they are not ready to scale.
Scaling speed of AD solutions
However, many had to recalibrate as they could not imagine that somebody would go all the way and work future backward with a target price in mind. Lidar developments of many players were stopped.
The lidar R&D unit will be wound down by the end of 2024, affecting about 100 employees. Operating expenses for the lidar R&D unit are expected to total approximately $60 million in 2024 (including approximately $5 million related to share-based compensation expenses). While this action is not expected to have a material impact on Mobileye’s results in 2024, it will result in the avoidance of lidar development spending in the future.
Augustin Riedel is summarising in a post earlier his perspective on this field:
Augustin is an expert in mobility and puts in a lot of passion and effort. We disagree here, and this is ok.
5| A Platform Ecosystem Portfolio - not a single bet
Tesla does not rely on one platform play somewhere in the enterprise. They bake platforms as the manifestation of the purpose "Accelerate the transition to sustainable energy" into their design of strategy, brand experience and value creation. They layer on top of each other different #mobility, #energy, #AI, #insurance, circular models.
Like in nature a more modular, interoperable system is more adaptable and thus future proof. I do not know many companies that have such a portfolio of platform ecosystems in market, see "Now" vs. 1-3 years, 3+ years in the last column.
Note the list above is a mix of existing and potential platforms. Some are not really platforms most likely as Tesla would not necessarily plan to aggregate all external opportunities while it is smarter to amplify the verticalization play, brand-led B2C opportunities and selective B2B PaaS.
(circular) platform-ecosystem funnel
We all know funnels from the sales cycle management as well as innovation management. I argue businesses will need platform ecosystem funnel management. It is not done progressing one opportunity and hoping it will hit (assuming innovation success rates of 10-15% makes clear you need many more attempts and parallel pathing).
In some form or fashion there will be funnel management available in businesses. At the end of the day the stages above are illustrative of important tasks. Whether it is a product, service or whole business model, is not that important.
Business Model innovation not always in scope
However, having worked in innovation most of my life and being in the world´s biggest innovation community #innov8rs I can tell you that not a single time I was attending a virtual or live session, it was about business model innovation. Always more of the same.
Hence, when incumbents spend all their energy on the next better product and they have no repeatable way to innovate towards business models, then it is no surprise that most disruptions come from outside today´s sectors. Hard is scaling, not the idea itself.
Tesla will layer with scale
But once you do, you can layer on top of each other business model after business model. You help customers B2C and B2B to have a unified circular experience, while Tesla has the ability increase personalisation, innovation etc. based on ever more and better data.
I envision it almost like a green JengaTM (by Leslie Scott) tower of businesses models stacked up...You do not build such a business model "tower" co-incidentally. It takes structured effort, circular and platform skills, from top management to teams. Of course also as foundation the right tech enablement and architecture (I use MACH to make it shorter as a reference)
A Final Call to Action:
Dear CEO, dear board member, the moment to shape your future is now. Don’t let media narratives or short-term market reactions dictate your course. Your purpose is your compass, and while you must respect your investors, your greatest responsibility is to guide them toward long-term, transformative success. The time has come to embrace platform ecosystems, drive business model innovation, and have the courage to take calculated risks that can redefine your industry.
PS: do not bet against the guy that had a large rocket caught mid-air today....