Home / Technology / Farhad’s and Mike’s Week in Tech: The Master Plans of SoftBank and Elon Musk

Farhad’s and Mike’s Week in Tech: The Master Plans of SoftBank and Elon Musk

Farhad: Also, Unilever, the consumer products giant, acquired the discount subscription service Dollar Shave Club for $ 1 billion. You and I had a big disagreement on Twitter about whether this qualified as tech news. You said it didn’t because shaving isn’t tech, and I said it did because Dollar Shave’s marketing and distribution wouldn’t have been possible without the internet. Also, you’re famously unshaven, so I think you regard all shaving products as backward.

Mike: Me and my coterie of close friends all wear beards, flannel and listen to “Bleach” on vinyl together every weekend. It’s a wonder I even agreed to write the Dollar Shave Club story on principle alone. Anyway, it’s not a tech company and you are still wrong, but it’s a smart idea and good on them for the huge exit.

Farhad: Some other stuff: Netflix reported that its new subscriptions slowed significantly over the last quarter. The company added 1.7 million new streaming subscribers, far below the 2.5 million it had predicted. Just a few months ago, I wrote a column praising Netflix’s business model as unstoppable. Guess I was wrong!

Mike: Some days I wish I were a columnist. You get to wax philosophical and be wrong all the time. If I’m wrong as a reporter, I get maligned on Twitter and nailed to the wall by the public editor. Can we switch jobs soon?

Farhad: No. And now some news from the right. Milo Yiannopoulos — an editor at the conservative news site Breitbart who has long been described as one of the most abusive, misogynistic trolls on Twitter — was permanently banned by the service after he led a campaign of taunts against the comedian Leslie Jones. Many on Twitter hailed the move as a much-needed victory against trolling, but just as many seemed to regard the move as too little, too late.

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Mike: I’ve been getting nasty emails and gnarly tweets for a week from his, uh, passionate followers just for writing that 600-word story.

Farhad: Also, Peter Thiel, the libertarian venture capitalist, endorsed Donald Trump at the Republican convention. There were lots of thinkpieces in the run-up to the speech — including by yours truly — but I thought the actual speech was pretty short and conventional. And after Trump’s speech, it will most likely be forgotten.

Maybe we should end by talking briefly about Elon Musk’s new master plan for Tesla? A decade ago, Musk wrote a visionary outline for the company’s future, and now, in the wake of skepticism over Tesla’s plan to buy SolarCity, he has decided to update it.

The new plan, in short: 1) Tesla will install solar panels on the roofs of its cars. 2) Tesla will build a truck and a bus. 3) Tesla will aim to make its cars fully autonomous. And 4) Tesla will create its own shared fleet — that is, Tesla will Uber-ize.

So, what do you think?

Mike: Interesting how this thing flew under the radar, probably because everyone is obsessed with the melting-down Trump campaign right now.

So Tesla’s strategy seems to be coming from one end of the spectrum rather than the other. Companies like Uber, Lyft and the overseas competitors are busy creating the network from the ground up. That is, they’re plowing money into recruiting drivers and riders — spinning the flywheel, as one Uber exec told me a while back — to fully stock up on supply and demand. And they’re doing a good job of it, it seems: Both are unicorns many times over.

This Tesla plan essentially seems to come at it from the other end. Build the fleet of cars, but perhaps allow your customers to do much of the real-world testing of how cars adapt to the road — including using the “autopilot” function, and then autonomous driving comes later on down the line.

What I’m curious about is how Tesla builds a network-effect-type service that companies like Uber and Lyft now have critical mass on. Can that come later when the autonomous vehicles are out there? Or do they not even care about a sort of transportation service and just want to give their customers the outright ability to drive hands-free, without worrying about creating an Uber-like demand?

The more I think about it, the more I wonder if Uber and Tesla would merge or at least partner somewhere down the line. Uber wants to go autonomous, but I don’t know how it gets there without building its own fleet as well.

Farhad: How Tesla competes with Uber is a good question. Musk seems to see sharing as an add-on to ownership. When you’re not using your self-driving Tesla for your own purposes, you add it to the shared fleet, and you make money while it ferries people around. “In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are,” he wrote.

But that raises some problems: If you don’t need to own a Tesla to ride in one, why would anyone buy one? And also, since as you note this is a network-effects business — where the biggest fleet will have accelerating advantages in price and efficiency — why would anyone share their car in Tesla’s fleet rather than in Uber’s, which has a big head-start in sharing?

And I think that gets to the bigger problem with Musk’s master plan. It seems a little all over the place, and in many ways far exceeds what Tesla seems capable of doing. Let’s note, after all, that Musk hasn’t even hit all the milestones on his first master plan yet.

But I guess setting big, impossible goals is pretty much the point of a visionary master plan. What’s your master plan?

Mike: Sleep in till 9 a.m., take dog to beach, go shopping at the farmer’s market, make new pasta dish for dinner. Surprisingly enough, my master plan sounds a lot like my Saturday plan. Till next week!

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