Why Tesla is like Amazon and Elon Musk like Jeff Bezos | PandoDaily

By Adam L. Penenberg
On December 2, 2012

For Tesla Motors founder Elon Musk it must feel like sweet vindication.

Less than two months after Mitt Romney called Tesla a ?loser? in the first presidential debate, the Tesla Model S was named car of the year by both Motor Trend and Automobile Magazine, beating out vehicular stalwarts like BMW and Ferrari. Lost in the hubbub, as Jason Calacanis points out in his latest post for PandoDaily, is Musk?s audacious plan to populate the country with a network of supercharger stations to provide the juice to run these Teslas.

Right now a half a dozen Supercharger stations are sprinkled throughout California. By next year, if all goes well, Tesla drivers will be able to motor cross country from Tampa to Toronto, New York to Los Angeles and on to San Francisco and points between and beyond, snagging jolts of electricity along the way. Because he?s chairman of?SolarCity, which produces these cheap and easy-to-install solar-paneled carports, Musk is creating enviable vertical integration. In essence, he?s marketing the cars at premium and giving away the gas, the opposite of HP?s much despised sell-the-printer-for-cheap-and-gouge-consumers-on-the-cartridges approach.

What?s more, these superchargers put back more energy into the grid than they take out, so Musk could be paid for producing electricity. I imagine there could be opportunities for up selling ? food, coffee, sunglasses, games, electronics and tchotchkes for the kiddies at these electrical weigh stations. Since it takes about a half hour of charging for 150 miles of drive time ? and an hour for 300 miles ? drivers and passengers will have time to kill.

I could see restaurants, lounges, video arcades, gyms, tanning salons, mini malls and the like popping up around these Superchargers, which Musk could franchise. As with the ATM network, Musk could charge fees to drivers of competing electric vehicles in need of juice, which could, down the road, yield generous ancillary revenues if the electric car takes off. Finally, that?s a likely reality.

All of this means that Musk could control an entire ecosystem and lock down customers who have bought into his zero-emissions vision for years to come.

Say, this sounds familiar. It?s not unlike what another forward-thinking entrepreneur is doing. I?m talking about Jeff Bezos of Amazon.

You don?t often hear Elon Musk and Jeff Bezos mentioned in the same breath. Other than the fact that they?re both rich, they don?t, on the surface, seem to have much in common. One seeks to become a transportation baron and has gambled almost his entire fortune on a quest to reach the stars while the other is best known as an online retail mandarin concerned with more earthly pursuits. I once had dinner with Musk (which Jason Calacanis organized) and he kept the entire table spellbound with his vision of colonizing other planets and his progress with designing a rocket through his company, SpaceX.?But Bezos has also invested in space exploration through Blue Origin, his privately funded aerospace company.

Both seem to take the long view of history, with Bezos particularly fond of historical analogies. He?s compared the dotcom boom and bust to the 1849 gold rush, the advent of electricity to the Web, and the printed book to a horse. Once on Charlie Rose he likened the?Internet?s effect on business to the Cambrian period approximately 550 million years ago, after the first multicellular creatures slithered from the?primordial ooze. It was, he explained, an evolutionary big bang, engendering both the greatest rate of speciation the world has?ever seen and its greatest rate of extinction.

?What?s very dangerous,? Bezos summed up, ?is not to evolve.?

And evolve, he has. Starting as a simple online bookseller, Amazon?has over its 17-year history grown into a mammoth cybermall that has accumulated a stratospheric market cap?of $144 billion. It peddles a mind-bending array of products ? everything from books to music, movies, and video games to apparel, gadgets, gardening tools, lab equipment, health?and beauty aids, sex toys, and even uranium. Along the way, Amazon incorporated one-click purchases, unvarnished user feedback into?product pages, launched Marketplace, which allows third-party sellers?to list new and used products next to Amazon?s, moved into hardware with its Kindle, and instituted free shipping and video streaming to Prime Members for $79 a year.

Bezos has ingeniously seduced Amazon customers into remaining within his ecosystem. He holds millions of credit cards and offers competitive prices ? often the lowest prices? ? on almost anything you could want. Amazon Prime members get free shipping. Meanwhile the Kindle is a piece of hardware that plays Amazon content on it. If you prefer your iPad, you can still read Kindle books on its app. No matter what you?re shopping for, Amazon has you covered, and Bezos wouldn?t have it any other way.

This is something Musk could accomplish in the physical world. Buy his car ? and Tesla will at some point sell a line of automobiles with a sticker price under $40,000 ? and you drive into an ecosystem that Musk controls.

First, though, he has to set up a network of Supercharger stations around the country, and success is by no means guaranteed. After all, Better Place, which recently raised an additional $100 million in venture funding, has been trying something similar. It offers what it calls ?a market-based transportation infrastructure that supports electric vehicles? in the form of a switchable battery ? with decidedly mixed results.

Musk, on the other hand, has been beating the odds for years, and just when you think he?s out, he comes roaring back. While he has his eyes on the stars and colonizing Mars, he may also be, with the Tesla, Supercharger and the ecosystem it could spawn, on his way to controlling a vast slice of the earth beneath our feet.

Adam L. Penenberg

Adam is the Editor of PandoDaily and a journalism professor at New York University. Author of several books, including the critically acclaimed "Viral Loop", he has written for The New York Times, Forbes, Fast Company, as well as many others. Follow him on Twitter @penenberg.

Source: http://pandodaily.com/2012/12/02/why-tesla-is-like-amazon-and-elon-musk-like-jeff-bezos/

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