Define: Get Musked, Getting Musked, Got Musked also Being Musked
To be put out of business, suffer financially or otherwise have your business model or capital severely disrupted or made obsolete because of something that Elon Musk has done, will do, or will indirectly cause to happen through his actions.
Usage:
“United Launch Alliance really Got Musked when Elon made those reusable rockets”
“Do you think we should sell our short positions in Tesla before we Get Musked?”
Explanation:
By now most people know what it means to “be Zuckerberged” – That is to say being screwed out of a company or venture in the way that Mark Zuckerberg of Facebook fame is noted for doing. But what is “Being Musked”?
When Elon Musk proposes something most people think it’s ridiculous, until it isn’t. It’s usually a bad idea to bet against Elon Musk.(Quote: “never bet against Elon in anything” – Peter Thiel, PayPal co-founder)
Let’s take a look at some of the industries that he has so far disrupted:
PayPal made online banking and money transfer possible. I remember before I had a paypal account and I had to send some money overseas. I went to my bank and filled out a very long form, which was on carbon paper so it made multiple copies. When paypal came about it made online commerce not only possible but easy.
The banks never saw it coming, Those lucrative wire transfers went away. Now in 2018, 20 years later, it would be unthinkable to walk into a bank and fill out a wire transfer. I can do it online, or via paypal, or via a myriad of other online services.
Whatever business PayPal took away from the banks though, I think they actually made the whole banking segment larger by enabling new business models, so it’s possible that the banks not only didn’t lose anything long term but actually gained a whole new digital skillset as a response. But Western Union or your bank’s wire service definitely Got Musked.
His next company was a space rocket company. Lots of people said it wasn’t possible, that it was a waste of money, that he would fail. Among the loudest critics were Boeing and Lockheed Martin who had been given lucrative space contracts from Nasa for years.
Elon Musk said he could do it better and cheaper, and it seems he was right. Everyone was very surprised when he first landed a rocket on its tail, then 18 months later flew the same rocket. Then in 2018 he flew the Falcon Heavy – another impossible rocket.
Now he’s announced the BFR.
But who’s Getting Musked in all of this? Well Boeing and Lockheed Martin’s United Launch Alliance are looking pretty silly right now with their $350 Million per launch price tag of the Delta Heavy, compared with Spacex estimated $90 Million for Falcon Heavy(1). Falcon Heavy has approximately twice the lifting capacity as the ULA Delta Heavy too!
The European Union’s Ariane rocket made by Airbus also looks a bit silly at more than double the cost to launch of Spacex Falcon 9(2).
Russia has Been Musked big time, announcing recently that the space launch market was never that big anyway and they’d rather not compete thanks very much. Very strange considering that they had the only viable launch platform some time ago and appeared to be growing their commercial space offerings.
For the moment ULA keep insisting that things like Falcon Heavy and BFR are impossible and will never work, but they don’t have a better or cheaper alternative. Even if they do, they will be forced to build something along the lines of Spacex’s reusable launch systems, and these guys take a long time to do anything, so even if planning has already started they may lose the next 5 or more years of launch business to Spacex.
What’s crazy is that Spacex is working on improving the reusability of everything they send into space, they think they can actually reuse everything but the fuel, which only accounts for 10% of the cost to launch a vehicle.
So who’s Getting Musked in the space race next? I’ll tell you who – telecoms people.
There are few companies that are hated more than telecoms companies as they duke it out amongst politicians, bankers, estate agents and journalists as the most hated.
The USA has a crazy system of telecoms which looks pretty anti competitive to the rest of the world. Land of the free? Pa! Rubbish I say – Regional monopolies prevent people from switching internet providers, and these monopolies seem to be enshrined in law. There is only meaningful competition in a minority of areas.
Because of the regional monopolies that cable companies enjoy they are free to do what monopolistic companies do – namely overcharge their customers for poor service and prevent newcomers from disrupting them. They do this by denying access to their poles and conduits to prevent other companies moving in. Even where they are explicitly prevented from doing so they do it by the backdoor by insisting that every attachment to a pole is certified by their engineers who never turn up.
In the UK things are much better with a healthy level of competition. There is essentially a public utility company (that is now private) that maintains the core network and connections to people’s homes. Much like the Post Office they have to ensure a minimum level of service to all customers, even rural ones.
That minimum level though is really quite slow. Things like FTTH (Fiber To The Home) is slow to roll out. There are a few companies operating private fiber or coax networks but these are hit and miss. It seems only a minority of customers are happy with their service at the moment. The saving grace is competition which keeps the prices relatively low.
Those are two fairly advanced countries though. What’s the internet like in Indonesia or The Philippines or in Niger or Zimbabwe? What about places that suffer from censorship like China, Russia or Egypt?
Well all these censoring governments and service providers are in for a rude awakening. They are about to Get Musked. SpaceX plans to pay for it’s BFR Mars mission by providing high speed internet access anywhere on earth for a low monthly cost from a massive constellation of nearly 12,000 low earth orbit satellites(3).
Even better, the system will be called StarLink – which is suitably sci-fi for me.
Now if the cost of accessing said network is $20 or under per month, I’ll buy it, and I’m pretty happy with my broadband service! But that will be half the cost and 10 times faster, so why not?
I may even keep my wired connection for a bit, but not forever. I don’t have a landline and haven’t had for 15 years because what’s the point when the mobile phone has provided such reliable and useful service?
It got to the point with my landline where the only people that called it were my grandmother and snakes selling double glazing so I binned it.
What’s preventing everyone on earth from taking advantage of such a system?
Comcast and Verizon should look out – they are about to Get Musked.
It doesn’t end there either – all of Elon Musk’s companies tend to be very vertical, that is to say they tend to build their own technologies in-house and limit outside suppliers as much as possible. They even shuffle work between each other, like when SpaceX helped Tesla build the terminals for it’s high performance battery pack, or when Tesla supplied the batteries for Crew Dragon – or indeed when Spacex engineers used Tesla hardware in the construction of The Boring Company test track.
So who cares if SpaceX is highly vertical and about to deploy nearly 12,000 satellites? Well.. If they make those satellites in house, and it looks like they plan to, they will be the largest satellite builder on earth, meaning that they can probably take contracts off the big boys like Airbus Astrium, Northrop Grumman etc, so existing satellite builders might be about to Get Musked as well.
So what about Elon Musk’s other companies? Well Tesla is a fascinating case study. For many years they were viewed as an intersting curiosity – but the important car journalists wrote them off. “Electric cars will never be popular” they said, “Where is the infrastructure?” they said. “The range is too small” they said.
Just google Bob Lutz(4) and see what he has to say. He’s been predicting doom on Tesla since 2010. I bet he feels pretty silly now that the Tesla model 3 is the biggest selling midsize luxury sedan in the USA, although he probably isn’t actually feeling silly at all because he seems to lack enough self awareness for that. In fact – at the current trajectory Tesla are on course to sell more than BMW and Mercedes Benz combined by the end of the year.
And what then? A new sports car, a pickup truck, a small SUV, compact cars etc etc. I think that BMW and Mercedes Benz don’t need to worry too much as they will always have a market, but it might just be a lot smaller. No, I think Toyota and VW should be more worried.
At least VW has a plan to electrify all their vehicles by 2022, but will it be fast enough? The Tesla Model S is recognised by a great many people as being the finest car available – a big, expensive sedan that we are constantly being told there is no market for, and yet Tesla is constrained by production, not by demand. Every single Tesla product at the time of writing has a waiting list for it from Model S and Model 3 to solar roof tiles and powerwall batteries.
It’s disruption on a massive scale, and I’m sure there are plenty of auto bosses who are pretty worried right now. I wouldn’t follow the “shorts” stories either – I saw a very strange business insider article recently that was not only poorly written but was completely baffling. It went something like this (TLDR):
“Tesla is going to fail because other automakers can make more cars faster and more profitably. Tesla is struggling to meet demand for it’s Model 3. There is no market for smaller electric cars because the worldwide market is only 1%. Tesla is burning through cash while not doing anything”(5) (Link at the bottom of the page if you would like to read the whole article.
What? So your article says that nobody wants a model 3 therefore Tesla will fail, and they can’t make enough to satisfy the massive demand so Tesla will fail – so which is it guys? Is there a massive demand or isn’t there? Are they struggling to produce enough cars to satisfy the demand or is the demand in fact non-existent?
Also, what part of 3500 cars per week is worth writing off? At the time of writing we are waiting to see whether Tesla reached their weekly production goal of 5000 Model 3 cars, but the last data we have suggests they are already making 3500 per week.
Any idea how many BMW 3 series or Mercedes C classes are sold per month in the USA? Here’s a clue, it’s less than Tesla is making of the model 3 at the moment. Here’s some more news, they will make more and faster in the future. They have planned capacity up to 10,000 units per week. That’s colossal and will put a big hole in other brands sales.
It’s worth talking about the financials too – the shorts say that Tesla burns money faster than any other company. If you subtract capital expenditures and cost of sales, it’s true, Tesla makes a huge loss on operations. What the shorts fail to realise though is that Tesla is making huge grid storage battery systems, smaller home battery systems and integrated solar panels while operating the largest network of electric charging stations in the world.
They will find ways to recover costs and deliver profits, they will have to if they want to survive, but I’d also bet that they could run on debt for the next 10 years. Elon Musk has a great many friends in high places that would be willing to invest, and a completely private rocket company worth an estimated $20Bn that he can use to finance Tesla.
I think the short case is over hyped, it’s just people trying to make a quick buck.
So that’s two groups of people that have “Got Musked”:
- Legacy auto makers
- Short sellers
Who else needs to be concerned right now?
Well I think Tesla presents a clear and present danger to power utilities. Already their large deployments of grid scale batteries are making gas peaker plants obsolete. As more grid scale storage is added it may even make hydro peaker plants obsolete.
As more renewables come online the battery backups will keep the lights on throughout the night sending the marginal cost of energy to zero. As the cost of electricity plummets (and we have to pay off publicly subsidized projects like nuclear power plants) we might find ourselves switching to electricity for heating and cooking.
For companies like Total, ExxonMobil and BP that leaves plastics and chemicals as their only business streams. As cars, busses, lorries, ships and basically everything else than runs on fossil fuels become electrified these existing energy giants will have to diversify quickly or die. Some are already doing it, they are closing less profitable oil fields and investing in grid scale solar and offshore wind.
Even huge engineering companies like Siemens and GE are divesting, closing or downsizing their fossil fuel operations (things like turbines for coal and gas power stations) while they invest heavily into renewables like solar and wind.(4)(5)
Those that don’t move fast enough however are doomed. Politics doesn’t even come into it, businesses will choose the cheapest, best option and that looks like renewables, and Tesla stands to profit from it.
It’s not just Tesla either. The stated aim of Tesla is “To hasten the worlds transition toward sustainable energy”. Even if they fail they have spurred massive electrification efforts in legacy automakers.
Next will come the oil companies, they’ve already started to feel the burn in Norway which currently has the largest penetration of electric vehicles.(8) Soon enough major grid operators will be stuck with billions of dollars worth of stranded assets – plants that aren’t cost effective to run – because Tesla grid storage (and that of other companies) will be so much cheaper.
The distribution utilities, fossil fuel extraction companies and legacy car makers have all Got Musked by Tesla, or will be in the near future. What else can Musk disrupt with Tesla?
Well we haven’t talked about autonomy yet – people seem to think that Tesla is struggling with autonomy, and that may be true, but it’s nothing new. There is such a time unit as Elon Time or Tesla Time. Simply double or triple the estimate and you’re about there. Interestingly though, almost everything he promises does eventually materialise.
When he says autonomous driving is coming, it really is. And what will it disrupt? Well anything that requires a human driver to start with. We might start to see new ideas built on autonomous platforms like little shops that come to you, or perhaps business people will choose to work out of constantly roving offices, maybe the office comes to you for that big meeting. Your car may take the kids to school or take grandma to the doctor. Your online shopping may ruthlessly hunt you down wherever you are for added convenience.
There are millions of applications yet to be invented that autonomy will enable, but the first part of it is coming very soon with the Tesla Network – where all Tesla vehicles can be pimped out while you aren’t using them to go and pick people up and make money while you’re doing something else.
There are some pretty obvious losers here, taxi services, ride hailing companies (like Uber and Lyft – who are both pursuing autonomy) and public transportation.
Elon Musk is Boring
It’s true. After a series of tweets in 2016 in which he expressed his frustration at being stuck in traffic, Elon Musk proposed to build a tunnel from his house to his office.
Being a lunatic billionaire has its advantages. He was able to use his wealth to buy a tunnel boring machine which he took to SpaceX headquarters and promptly started digging a hole (presumably towards his house).
After funding the company using sales of baseball caps and flamethrowers he announced an ambitious project to start tunnelling under LA, then he would fill the tunnels with super fast pods that could carry people around. This all sounds made up – but it isn’t.(9)
Things got real when Chicago awarded Musk’s tunneling startup, The Boring Company, a contract to build a high speed link between O’Hare international airport and downtown Chicago.(10)
Musk promised to fund the entire venture himself in return for all the ticket sales from the system.
All very interesting – but who Gets Musked?
In this particular instance it’s public transit contractors (who are private companies), but more importantly it’s the private contractors that build such utilities. These sorts of projects, whether it be a subway tunnel, a bridge or a railway, almost always run over budget and over schedule. This isn’t a bad thing for the contractors though, because they re-price every 6 months or so and pocket a boatload of cash from you and me, the taxpayer.
The Boring Company isn’t asking for a penny of public funds, it’s a completely private enterprise, meaning that there is no risk of budget overruns, not to us anyway – The Boring Company will bear the cost and we will get the benefit from the infrastructure they build.
This is a pretty obvious idea and I’m sure it’s been done before, but isn’t this a better way of paying for public utilities? I’m sure that some people will decry this system because you and me, the taxpayer, end up putting much more money into the pockets of the infrastructure builders over the lifetime of the project through fees. Also being one operator leaves the door open to monopolistic behaviors. Even so, I’m willing to take the risk on this one.
Perhaps in the future The Boring Company will offer fixed price tunnel building so that public entities (a state, city or country) can buy the completed project for less than 10% of what the existing infrastructure companies would charge.
We’ll see, but to me it looks like civil engineering companies and public transit utilities will Get Musked by the successful completion of this particular project.
The Chicago project is just the beginning, more are planned….
We haven’t even mentioned HyperLoop yet, a system that can travel in excess of 600 MpH and run in Boring tunnels. If that ever happens the rail passenger, rail freight and short haul flight companies will Get Musked as well.
We have an amazingly optimistic future ahead of us. Be optimistic, be unrelenting!
Signing off! Myles.
(1)https://en.wikipedia.org/wiki/Falcon_Heavy
(2)https://en.wikipedia.org/wiki/Ariane_5
(3)https://en.wikipedia.org/wiki/Starlink_(satellite_constellation)
(4)https://www.yahoo.com/news/former-gm-product-czar-bob-lutz-asks-tesla-132500757.html
(5)http://uk.businessinsider.com/tesla-terrifyingly-different-from-ford-gm-fca-2018-5
(7)https://www.ft.com/content/c1fb080c-2ab5-11e8-9b4b-bc4b9f08f381
(8)https://oilprice.com/Energy/Energy-General/Norways-EV-Adoption-Starts-To-Affect-Oil-Demand.html
(10)https://www.theverge.com/2018/6/13/17462496/elon-musk-boring-company-approved-tunnel-chicago
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