Entrepreneurship

Small and startup companies.

Elon Musk keeps making the same mistakes at Tesla

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My friend at NYU, Prof. Melissa Schilling, (thanks, Oscar) and I have a running debate about Tesla. She emphasizes how smart and genuinely innovative Musk is. I emphasize how he seems to treat Tesla like another R&D driven company – but it is making a very different product. Melissa is quoted in this article:

Tesla risks a blowout as problems mount, but fans keep the hype machine in overdrive

Case in point: Tesla sent workers home, with no pay, for the production shutdown last week. My discussion is after the break.

During the pause, workers can choose to use vacation days or stay home without pay. This is the second such temporary shutdown in three months for a vehicle that’s already significantly behind schedule.

Source: Tesla Is Temporarily Shutting Down Model 3 Production. Again.

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Tesla once again doesn’t understand manufacturing

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Once again, Tesla demonstrates no understanding of volume manufacturing!  Newspaper: “Tesla reworks 40% of its parts.” Tesla response: “But we inspect every car carefully before shipping it!”

Tesla fires back against a CNBC report that cited unnamed employees’ complaints about the electric carmaker cranking out a high number of parts that need to be repaired or replaced. Tesla say…

Source: Tesla: flawed parts report is flawed regarding cars’ quality

But as Deming and others pointed out decades ago, you cannot achieve good final quality by doing lots of inspection. There are many reasons for this, including that inspection/testing is not 100% accurate. The whole field of statistical process control, which eventually morphed into today’s “Six Sigma,” was invented as an alternative to massive inspection.

So if Tesla claims that it can make parts so poorly that 40% need rework, but still have defect-free cars, it is an admission of ignorance. This continues Tesla/Musk’s consistent pattern of not understanding that high volume manufacturing is not just “low volume manufacturing repeated many times.” (See my October post  about Tesla’s attempts to ramp up Model 3 production.)

My suggestion for people with a Model 3 on order: don’t expect it to be on time, or have good build quality. Sorry.

Lightweight startup ideas for new entrepreneurship course

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I will be co-teaching, with Parand Darugar and Paul Kedrosky, a course on starting a company. This 10 week course requires each team to develop a real project, to the level that they can test it with potential customers. (Beta test, approximately.)

Doing this in 10 weeks can be daunting, but it can be done. I used to teach a course on hardware product development, which required working physical prototypes and 2 long reports in 10 weeks. This year we expect little or no hardware. Instead we are looking for web-enabled, mobile-enabled, or other service ideas with little or no associated hardware. What you will sell is some form of a system that fulfills a need.

Part of entrepreneurship is looking for, and “sensing,” unmet needs. Do this in your everyday life, in your courses, as you watch people on screens. Here are a few ideas to suggest how little is needed. Please, add your own. It’s ok to list an unmet need without saying how to solve it.

Classroom feedback using sheets of paper

A visual barcode based version of the teaching “clicker” that many classrooms use to gather real-time student feedback. Students hold up a piece of cardboard, which the faculty member scans with a phone. https://www.plickers.com Why didn’t I think of that?  Get rid of the student-purchased hardware, and probably increase reliability at the same time. (Although I’m sure it sacrifices some capabilities of the electronic clickers.)plickers2

Search my many sources of free books

My wife and I read a lot of books, still. In the last 5 years a number of access methods for e-books have come along. I can buy ebooks from Apple, Amazon, or others. I can also borrow them free from my local library, Amazon Prime, scribd,  my employer (UCSD’s library) and probably some other services. Each service has its own catalog and its own ways of searching. Checking each of the free services is time consuming, and half the time none of them has what I want. Solve this pain! There are many ways to solve the pain, and the concept could be integrated with existing book services/systems in a variety of ways.

 

Recent stories on AI, automation, and the future of work

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Melinda Gates and Fei-Fei Li Want to Liberate AI from “Guys With Hoodies”

Who designs software makes a big difference. And Silicon Valley employees are not a cross-section of anything, except each other. Nor need they be; but some balance is needed to make sure products are designed to help diverse people.

As a technologist, I see how AI and the fourth industrial revolution will impact every aspect of people’s lives. If you look at what AI is doing at amazing tech companies like Microsoft, Google, and other companies, it’s increasingly exciting.

But in the meantime, as an educator, as a woman, as a woman of color, as a mother, I’m increasingly worried. AI is about to make the biggest changes to humanity and we’re missing a whole generation of diverse technologists and leaders.  Source.

For one reason this problem is growing right now, see the next story: oligopoly control of AI applications in our lives.

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Another case of the “Big 5” grabbing new AI-related technology before it becomes public.

Apple acquires AI company Lattice Data, a specialist in unstructured ‘dark data’, for $200M

The strength of this pattern, where the Big 5 (Apple, Amazon, Google, Microsoft, Facebook) buy out each novel tech idea and hide it in-house,  as anti-competitive and bad for society as a whole. Apple, because of its level of secrecy, may be worse than some of the others. In a competitive world such purchases would not be a big problem – let the market figure it out. But with the huge cash levels of these companies, which itself indicates monopoly power, they can effectively stifle new ideas that might threaten them in the long run.

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Amazon’s new age grocery likely wasn’t technically possible even five years ago.

How Amazon Go (probably) makes “just walk out” groceries a reality | Ars Technica

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Theranos as innovation+disaster case study

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I just taught the Theranos case in my course on “Innovation and Industry Development,” co-taught with Prof. Elizabeth Lyons. The first half is about positioning a startup: powerful new technology, established incumbents, how should we enter to disrupt the industry and make the world a better place? Any moderate set of numbers makes Theranos’ reputed  $9,000,000,000 valuation look reasonable.

Der Untergang der Titanic

The “case” presently consists of four articles. I put together a set of overhead slides to generate and lead the discussion. The first half ends with some general lessons about disruptive innovation and whether to follow an open or closed IP strategy. The second half starts in December 2015 and discusses the crash. I also compare Theranos with the Google contact lens (another technically impossible pseudo-invention).

“That’s a type of Silicon Valley arrogance,” he said. “That isn’t how science works.” (re Google, not Theranos)

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Lots of technology policy stories this weekend

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There are lots of technology-policy-related stories this weekend.  The first three concern about excess market power in tech markets, and its effects. The remaining three are miscellaneous subjects at the intersection of technology, policy, and politics.

Suggestion: If a newspaper is refusing to let you read an article, you can often get it by searching for it (on Google – irony alert, see one of the stories below), and visiting from the search result.

And a humble brag: Only the last of these stories directly concerns He Who Must Not Be Named. Nor did I mention Juicero, whose idiocy I tweeted about when it first came to market.

Is It Time to Break Up Google?

In just 10 years, the world’s five largest companies by market capitalization have all changed, save for one: Microsoft. Exxon Mobil, General Electric, Citigroup and Shell Oil are out and Apple, Alphabet (the parent company of Google), Amazon and Facebook have taken their place.

They’re all tech companies, and each dominates its corner of the industry: Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market. In classic economic terms, all three are monopolies.

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Schumpeter: The University of Chicago worries about a lack of competition | The Economist

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Its economists used to champion big firms, but the mood has shifted

Source: Schumpeter: The University of Chicago worries about a lack of competition | The Economist

There is an emerging consensus among economists that competition in the economy has weakened significantly. That is bad news: it means that incumbent firms may not need to innovate as much, and that inequality may increase if companies can hoard profits and spend less on investment and wages.

Yes, I certainly see this in tech fields.The double consequences are scary.

Thanks to colleague Prof. Liz Lyons for suggesting this.