NYU Professor Scott Galloway Puts Tesla and Lyft in the Same Category as WeWork | Hacker News Reader

NYU Professor Scott Galloway Puts Tesla and Lyft in the Same Category as WeWork

businessinsider.com

14 pointsmuzz18 comments

Original URL (business insider simply copy / pasted): https://www.profgalloway.com/mdma

Tiny previous discussion: https://news.ycombinator.com/item?id=21163923

While Galloway is always interesting, I felt like this was not one of his better posts - the thinking feels quite shallow.

- Those graphs seem poor. He took a small sample size and drew the trend line that fit his narrative even though the data sure doesn't look to me like it can be fit with a linear trend line.

- I don't think any analysis of Vision 1's success or failure can be judged solely on short-term returns given Son's described long-term vision. NVIDIA and Uber are shown as failed investments in this piece, but, while I'm certainly no expert in the area, it seems like both companies are quite well positioned for long-term success as dominant leaders in their industries.

- The Vision Fund is sure fun to shit on, but I'm not 100% sure what they've done to deserve being described as criminals.

- That is definitely not the right definition of addiction.

- I'd be curious to hear more about his evaluation of Robinhood. I've used both Schwab and Robinhood for quite a while and in my mind Robinhood's advantage has been less about the fees and more about Robinhood being a tech-focused company that makes interacting with the stock market so much more convenient than Schwab does.

They already dumped Nvidia for a loss I believe:

https://www.cnbc.com/2019/02/06/softbank-vision-fund-sells-n...

Interesting, thanks for sharing.

That seems like a very shortsighted time to cut and run from NVIDIA, but they probably spent more time thinking about it than I have.

Tesla is a good way to fund research for spaceX thou

Company that loses money every quarter cannot fund anything.

their battery and motor research are used in spaceX too. I 'm not saying they re making profits, but they have large market cap

Lyft, sure. Tesla? Maybe he hasn’t driven one? It’s just a better car than a BMW 3-Series. If the Tesla truck is better than an F-150....

I think the Prof covers it here

"...Yes, he is a genius, Tesla has changed the world for the better (I believe this). And … Tesla doesn’t have the scale to compete in a well-run, low-margin business — auto."

I'd love to hear counter-arguments..

The problem is comparing a bunch of businesses with a model that depends on taking a loss on every transaction, even while skirting the law.

If nothing else Tesla could just become another luxury car company, and those haven’t ever been particularly price sensitive.

Tesla is priced as a luxury car, but to really be one they have to do some serious improvements on their interior design. Current Teslas has a really cheap look and feel.

Low-margin yes, but is the motor vehicle industry really so well run? GM was the biggest auto company in the world for decades, then it basically went bankrupt. Toyota has been blindsided by both electric and self-driving technology. When will a Volkswagen car get 'sentry mode' which can identify the person who keys it?

The incumbents have enormous corporate inertia which has allowed the smaller Tesla to develop a better car. And by the time the big guys catch up, Tesla will have the scale needed to compete

>> self-driving technology

Which _does not exist_ yet, and will not exist for at least another decade in a form that can be mass-deployed on public roads without causing mayhem.

> but is the motor vehicle industry really so well run?

Is Volkswagen well run?

Judge for yourself:

https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal

https://www.bbc.co.uk/news/business-47578888

https://www.theguardian.com/business/2019/sep/30/volkswagen-...

To give my opinion: The Dieselgate scandal shows that Volkswagen (and other implicated companies) are not well run.

You could make the argument that this kind of cheating is a form of optimising for profit and therefor doing it well is "well run". But I find that argument sociopathic and short-term.

And it opens the can of worms of the broader context of the industry: Are you doing something, well or not, that you shouldn't be doing at all (in this case, producing engines that turn fossil fuels into pollution)

But, make your own mind up.

> Low-margin yes, but is the motor vehicle industry really so well run?

My understanding of different businesses is this: If you are in a high-margin industry, you can screw up and still be around and maybe even thrive (think Coca-Cola/MS and their ventures into so many fields). If you're in a low-margin business, you're already walking on thin-ice and have to be operationally great. That tilts the odds against many of the newbies. Of course, I don't want to comment on Tesla's operational capabilities or write it off like Prof Galloway does.

I agree, Tesla does seem an odd inclusion - I was of the impression that each car was sold at a profit - vs Lyft, Uber, and all the other “gig” companies that all make losses on every transaction.

I don't know - the news around Tesla has been about his efforts to raise capital and efforts to cut costs before the money runs out, so it sure sounds like they haven't found the path to profitability yet.

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