My Tesla Thesis
Posted on June 19, 2018 Leave a Comment
Disclosure – I own Tesla stock and am very optimistic about the Company’s future
Scenario One —BMW/Mercedes but with better long term margins
- Overview: Tesla is unsuccessful at disrupting the entire auto-industry, instead scaling to become a mid-sized luxury auto maker, similar to BMW group, by 2022 (eg. ~1 million vehicles per year, up from ~100,000 in 2017 but much smaller than Volkswagen’s ~10 million per year). However, Tesla should have higher operating margins than other automakers due to vertical integration (Tesla’s lack of a dealership model makes the biggest impact, but also the more heavily integrated manufacturing/supply chain). Energy storage / solar roof grows into a decent sized business (maybe equivalent to ~$10bn standalone valuation or 4x Solarcity), but the economics are not as good as originally hoped for. 100% ownership of a new Chinese gigafactory allows for upside. Software powered services business (self-insurance, entertainment system, an API to access Tesla’s dataset, supercharger network) also offers incremental revenue and margin upside, but these remain modest businesses.
- Financial takeaways : certain investments today (eg. in Autopilot) may not realize their full potential, but Tesla has a clear path towards revenue and margins greater than Daimler/BMW (ie. >$100bn revenue, >$20bn EBITDA). Capex efficiency becomes more important over time to the long term value of the company.
- Hypothetical long-term stock price target (5–10 years): $400–450
- Ross’ estimated likelihood of this scenario playing out: 25-30%
Abundance & Decentralization Part III: The Great Decentralization of Everything
Posted on June 4, 2018 Leave a Comment
Part 3 of a series on Abundance and Decentralization. View part 1 here and part 2 here.
Energy generation and food production are next
The revolution will be decentralized. This has been the rallying cry among technology’s early adopters since bitcoin first exploded into the mainstream consciousness in early 2013, and it is the guiding principle for those building “Web 3.0”, the next generation of web services that intends to use the technological insights underpinning the decentralized, open-source nature of bitcoin and other cryptocurrencies.
With the rapid proliferation of decentralized platforms and applications — computing power (Ethereum), decentralized storage (Filecoin), decentralized asset exchanges (0x Protocol, Airswap), decentralized social media (Numa, Peepeth), decentralized room-sharing (CryptoCribs) and more — new web services promise to empower individuals to own their own data, confidently exchange with third parties without a “trusted” intermediary, and participate in a resilient web less susceptible to hacking, censorship, and fake news.
But this revolution is not limiting itself to web services.
Two of the economy’s largest subsectors, energy generation & transmission and food production & distribution, are ripe for a decentralized revolution. Around the US (and across the world), products and services are beginning to emerge and make their way to market, with much of the infrastructure now in place for these aspirational disruptors to grow exponentially over the next decade or so. Read More
Abundance & Decentralization Part II: Sustainability in the age of Bitcoin
Posted on June 4, 2018 Leave a Comment
Over the past few months I have encountered various discussions and analyses on what is required to make a system, product, organization or organism last a long time - not just 5 or 10 years but 100+ years:
- In Money, blockchains, and social scalability, Nick Szabo argues that the most valuable trait of bitcoin and other blockchain projects is its in-built inefficiency: massive energy consumption by custom-built computers solving cryptographic puzzles for which the “sole output of the computation is just a proof that the computer did a costly computation”, and the need for every full node around the world to maintain the entire blockchain. In Szabo’s words, “the secret to Bitcoin’s success is that its prolific resource consumption and poor computational scalability is buying something even more valuable: social scalability.”
- The Energy Gang podcast spent time dissecting how US Energy Secretary Rick Perry conflated grid reliability with grid resiliency - today we have grid reliability (at least, everywhere but Puerto Rico), but it remains fragile and needs increased resiliency with distributed, local generation and localized storage capacity.
- Dan Barber’s The Third Plate makes reference to the Mennonite philosophy that you start raising a child one hundred years before he or she is born - that the environment, systems and traditions in which a child’s parents and grandparents were raised help to define the environment in which the child itself is ultimately raised. In order to achieve his quest of building a better food system, Barber looks for examples in which humans and human technology compliment and enhance natural ecosystems in a virtuous cycle rather than using technology to force an ecosystem to bend to mankind’s will.
- In Alex Danco’s Snippets newsletter he describes the way the human immune system has been designed to tackle problems that it has never encountered before by making a huge number of “random” antibodies. Most of these are wasted, but when one detects a new threat the immune system “scales up a huge, often unnecessarily over-reactive defense, and chases away the germ threat. And then, forever onward, the body has infrastructure available to deal with that kind of threat. So if that same germ ever shows up again, boom. The immune response is swift and massive.”
The extent to which inefficiencies and in-built redundancies are crucial parts of what makes these systems sustainable is notable, and serves as a rejection of the prevailing management theories of the last century which today permeate our economy. Read More
Ross’ NYC Top 5 List
Posted on April 19, 2018 Leave a Comment
After 7 years in NYC, I’ve been to a lot of places and seen a lot of things; most have been great, but some are definitely better than others. Recognizing that in a city like NYC there is always going to be 100 things I have missed, here is my NYC Top 5 list:
Tourist Attractions
- Walking the Brooklyn Bridge
- The Whitney Museum (and the High Line)
- Visiting Liberty Island
- Smorgasburg
- Running/cycling through Central Park
- Shoutout to all Broadway shows
Parks
- Central Park (duh)
- Brooklyn Bridge Park
- Fort Greene Park
- Inwood Hill Park
- Bryant Park
- Shoutout to Washington Square Park, which is more concrete than greenery but full of amazing people
Outdoor Bars
- Westlight (rooftop of the William Vale hotel – Williamsburg)
- Brooklyn Barge Bar (Greenpoint)
- Bar 65 (at the top of the Rockefeller – same view as Top of the Rock)
- the Frying Pan (Chelsea)
- 1 Rooftop Bar (DUMBO)
- Special shoutout to drinking on the roofdeck of the East River Ferry
Sitdown Restaurants
- Bistro Petit (Williamsburg – $$)
- Annicka (Greenpoint – $$)
- Cosme (Flatiron – $$$)
- Birds of a Feather (Williamsburg – $$)
- Nix (Washington Square Park – $$$)
- Special shoutout to Marlow & Sons, an all day cafe that punches above its weight (Williamsburg – $)
Quick-bite Restaurants
- Superiority Burger (East Village – $)
- Vanessa’s Dumplings (Lower East Side – $)
- Daily Provisions (just north of Union Square – $)
- Bagelsmith (Williamsburg – $)
- Delaney Chicken (Urbanspace, Midtown East – $)
- Shoutout to Xian Famous Foods
Pizza
- Pugsley Pizza (Fordham)
- Williamsburg Pizza (Williamsburg)
- Full Moon Pizzeria (Fordham)
- Roberta’s (Bushwick)
- L’Industrie (Williamsburg)
- Special shoutout to Tony & Tina’s Pizzeria (Fordham) – NYC’s most underrated slice
- Second special shoutout to Emmy Squared (Williamsburg), which didn’t feel right including as “Detroit” style pizza, but is delicious :)
Coffee Roasters
- Parlor Coffee
- Cafe Grumpy
- Toby’s Estate
- Devocion
- Birch Coffee
- Shoutout to George Howell as my favorite coffee roaster overall, but Boston-based
Breweries
- Other Half (Gowanus)
- King’s County Brewer’s Collective (Bushwick)
- Grimm Artisanal Ales (East Williamsburg)
- Sixpoint Brewery (Red Hook)
- Greenpoint Beer and Ales (Greenpoint)
- Special mention to Bronx Brewery/Brooklyn Brewery, which introduced me to good craft beer and are great breweries, but didn’t quite make the cut.
- Extra special mention to the Bronx Beer Hall, the OG craft beer bar of my heart.
Daytime Activities
- Royal Palms Shuffleboard Club (Gowanus)
- Board games at Berg’n (Crown Heights)
- Cycling the Hudson River Parkway
- People watching in Washington Square Park
- Watching Manchester United at Smithfield Hall NYC (Flatiron)
- Shoutout to all boozy brunches
Nighttime Activities
- Comedy at Upright Citizen’s Brigade
- Jazz at Blue Note / Jazz Standard / Smalls
- Cocktails at Please Don’t Tell
- Dancing to a band at Pianos or Baby’s All Right
- Getting in the jacuzzi at Le Bain
- Shoutout to House of Yes – I haven’t been clubbing there but have heard ridiculous stories
My favorite New York things
Posted on April 6, 2018 1 Comment
An incomplete list of experiences that make NYC my favorite city in the world.
1. The morning rush hour dance through Grand Central — streams of humanity intersecting in a coordinated fashion as they try to take the path of least resistance towards their destination, the twinkling starry sky watching over them.
2. Late night pizza. All varieties, but especially dollar slice.
3. The thrill of reaching the peak of the Williamsburg Bridge by Citibike and taking in the skyline as you speed up on the downhill.
4. Enjoying a glass of wine and strolling out to the rooftop at the Whitney Museum.
5. The simple but unexpected joy of having a barista, bartender or yoga teacher remember who you are, reminding you that you are a part of the tapestry of NYC and can make a lasting impression on others.
6. Subway jazz at W4th st, string concertos at Union Sq, and my favorite charismatic Latin guitarist at Bedford Ave.
7. Raising a liter of Dunkel to sing the Bierhaus song at Hofbrau House with the rest of the bar.
8. The cheers and support strangers offer as you run through the streets of the city (most frequent in The Bronx).
9. The utterly magical experience of running the New York Marathon.
10. Walking with non-New Yorkers or Manhattanites past the casket factory enroute to, and then seeing their reaction as we walk into, Royal Palms Shuffle Board Club.
11. Seeing a friend’s band at an intimate venue and seeing people who don’t know the band members fall in love with their music.
12. All you can eat sushi in the East Village, pushing your body to the limit with salmon sashimi orders at Groupon prices.
13. The build up to a Man Utd game at Smithfield Hall, home of the New York Reds, with chants and beers before breakfast.
14. Group Karaoke at the Bronx Beer Hall, Sing Sing, in K-Town, or any bar across the city where we can get on a microphone.
15. The unparalleled respect New Yorkers show to the the pockets of nature throughout the city, and how they fully utilize those spaces throughout the Spring, Summer and Fall — Central Park is the ultimate playground.
16. Mid-afternoon strolls from the office to Bryant Park for a game of Connect 4 or simply to stretch the legs under the arching London plane trees.
17. Showtime on the subway, especially when the showtime artists are mediocre but trying their hardest.
18. Revelry (food, drink, laughter and more) at The Farm on Kent, run by the wonderful people from North Brooklyn Farms.
19. Catching moments of brilliance in between the average at Upright Citizen’s Brigade improv nights.
20. “Commuting” via the roofdeck of the East River Ferry on glorious Summer/Fall evenings.
21. The cool nonchalance with which New Yorkers embrace the fact that the world’s most creative and innovative projects can be found in their city.
22. Late night sessions at Flushing Meadows during the US Open, drinking Grey Goose Honey Deuce cocktails to cool down in the summer heat.
23. Dollar oyster Happy Hours at Crave Fish Bar with JPM colleagues.
24. Befriending a world class chef at the local neighborhood French-Korean fusion joint.
25. The glamor of attending a theater or musical production and weeping with joy at being in the presence of incredible artists.
26. Feeling like a true Brooklynite – listening to Subway Sets at Brooklyn Grange, the incredible rooftop farm in the Navy Yard; attending a late night sermon of funk from Reverend Vince Anderson and the Love Choir at Union Pool.
27. Epic summer sunsets viewed from the Brooklyn bank of the East River, in DUMBO, Williamsburg or Greenpoint, with the silhouette of the city skyline set against an orange and pink-hued twilight.
It’s so good they named it twice.
Thank you, New York, New York.
The Transport sector is now more polluting than Power plants. Electric cars are not the only answer.
Posted on March 27, 2018 Leave a Comment
It sounds unorthodox, but networks of dockless electric scooters and electric bikes could prove to be the technology that finally allows urban city dwellers to reduce dependency on cars, and in turn allow for cities to finally evolve into sustainable hubs with improved quality of life for its residents.
Last week I cycled across San Francisco to a brunch in the Marina on a JUMP Bike, a pedal-assist e-bike that can be rented for just $2 for 30 minutes. With the electric assist I cruised up SF’s notoriously steep hills and arrived at my destination without breaking a sweat. It was a truly delightful experience I couldn’t stop raving about.
Two days later I read about Fred Wilson’s similar experience using Bird Scooters, the shared electric scooter company launched in Santa Monica in 2017 which lets customers cruise at up to 15 mph for just $1 per ride and 15 cents per minute.
Both Jump Bikes and Bird have recently raised impressive funding rounds (particularly Bird’s $100mm round) with a goal of expanding within their existing markets and into new markets, following the land-grab playbook first executed by Uber and subsequently emulated by dockless bike-sharing companies Ofo and Mobike.
I’ve been interested in Ofo and Mobike for a while, but electrification increases both the convenience and accessibility of these transport alternatives.
Traveling within a city by electric bike or scooter allows for comparable performance to traveling by car (time to destination, minimal effort etc…) while costing less, producing zero carbon emissions and a delightful experience for the rider. The opportunity to scale this form of transport into a fully fledged alternative to cars is both massive and ripe for the taking.
Transportation is the biggest source of US CO2 emissions
This potent combination of accessibility and delight may finally help to make a dent in emissions from transport, which today is the biggest single contributor to emissions in the US.
In the US, carbon dioxide emissions from transportation exceeded those from electricity production in 2016 for the first time since 1978, according to data compiled by the U.S. Energy Information Administration, as increasing demand for SUVs and trucks has offset efficiency gains in transportation, while power plants have made headway in reducing emissions.
The grid is on pace to continue reducing emissions as the economics of renewables and natural gas have improved to the point where it will soon be cheaper to build new renewable capacity than run existing coal capacity. This is a stunning development and a testament to the growth of the clean energy economy, but unless we reduce transport emissions simultaneously, we won’t achieve self-imposed emissions targets.
Electric cars help with emissions, but don’t make life better
Many people, myself included, have turned to electric cars (specifically Tesla in the US and BYD in China) as the primary hope for reducing transportation emissions, but my experience with JUMP has made me question that. The transition to electric cars may reduce transportation emissions, but it doesn’t change the way we live our lives. The daily inconveniences associated with driving won’t disappear; and while we have been promised a utopian world of self-driving, ride-sharing, electric vehicles, that vision is unlikely to be fully realized for decades.
We should instead be reevaluating how we commute, optimizing and incentivizing for a commute that is both clean and can improve our lives; electric scooters and bikes offer a chance to materially improve both the way we commute and how we feel about it.
The above survey was taken by more than 3,000 students who commuted to McGill University in Montreal, which is not to say that it is representative or free from bias; however, one of the conclusions to this research made it clear that people prefer “active” or “productive” commutes vs. unproductive commutes in which time must be budgeted in case of delay.
An opportunity to build a world that doesn’t prioritize cars
I intend to never own a car again in my life, and I believe that many people could improve their quality of life (and finances) by following suit.
By increasing the convenience and accessibility of short-mid range transport options, JUMP and Bird can help to make a limited-car world possible, and in the process accelerate the ongoing change in urban infrastructure to prioritize people, not cars.
To be clear, the explosion of dockless bike sharing networks elsewhere in the world has already caused its own problems, but these pale in comparison to the negative externalities we suffer in a world designed for cars, and can be solved with an expansion of pedestrian and bicycle-friendly infrastructure (check out the world’s biggest bike garage in the Netherlands).
A taste of the future
It may not be the future of flying cars we may have imagined, but next time you get the opportunity I recommend you ride a JUMP bike or Bird Scooter: as you cruise past traffic and effortlessly arrive at your destination with a smile on your face, it’s hard not to believe that the future is already here.
It wasn’t until I attended the under-reported and casually dismissed Women’s March that I appreciated how Women must feel all the time
Posted on February 5, 2018 Leave a Comment
It wasn’t until I attended the under-reported and casually dismissed Women’s March that I appreciated how Women must feel all the time.
Feelings of hope, empowerment, and unity I had first felt in Washington DC a year ago came rushing back as we inched our way down a sunny Central Park West on a beautiful Saturday morning three weeks ago. This was a hybrid protest/parade, both a condemnation of the words and actions by the Trump administration and a celebration of female empowerment, epitomized by activists registering attendees to vote and many signs urging people to “grab them by the midterms”. Read More
A Year in Review 2017: Personal Growth Amidst a Fragile Macro Environment
Posted on January 7, 2018 Leave a Comment
I’ve had a number of iterations of the same conversation with friends as we have reflected on 2017 in the year’s waning days: despite it being a very, very bad year for the institutions, policy makers and civilians that work to uphold the democratic conventions upon which all of life as we know it rests, it has been a successful year of personal growth and development.
Now two and a half years out of University, friends have been promoted, moved onto new opportunities and to new geographies, found love or made important next steps in their relationships. And for those whose life doesn’t look too different from this time last year, many have used 2017 to lay the groundwork for changes in the year ahead. I find myself in the latter category, but I still consider 2017 to have been a year of growth.
But I want to make it clear to my future self that I am aware how fragile this platform is: civilization and civic norms enable the knowledge market economy which has provided the opportunity for my friends and I to prosper and grow, but 2017 has shown me that we can’t take anything for granted. When White Supremacists can feel bold enough to reveal themselves and protest and not be condemned by the President of the United States it is important to take action and speak out – this is not normal, so we can’t carry on as normal. It may seem like the riskier move in the short term, but the tail risk of inaction is far, far greater. Read More
Abundance & Decentralization Part I: In a world of abundance, to be rich is to be moderate.
Posted on August 19, 2017 Leave a Comment
I recently finished reading The Third Plate: Field Notes on the Future of Food, a remarkable investigation, journey and manifesto by celebrated chef Dan Barber. The book weaves anecdotes, research, history and opinion into a compelling narrative calling for society to embrace the complexity of an integrated natural ecosystem in which humans can work hand-in-hand with nature to produce an abundance of elevated, sustainable food.
Barber persuasively makes the case that humans can strike a balance between innovation and sustainability, and while there are many memorable moments in the book there is one story that I can’t stop thinking about:
“Not so long ago I visited a highly regarded avant-garde restaurant. The menu was cutting-edge, the dishes small and exciting. After a thirty-course meal, the chef brought me back to the kitchen for a tour.
Standing at the pass, he signaled to a cook, who carried a freshly plucked chicken carcass swaddled in cheesecloth. The chicken, the chef explained, had been sent to him from a farming cooperative in France, which had raised the rare bird with the hope of preserving its superior genetics. He admitted that it was probably the best chicken he had ever tasted. But then he turned to me, almost apologetically, and said, “What the hell am I going to do with an entire chicken?”
That the chef could even ask this question is largely due to men like Frank Perdue, who found profit in breaking up the bird and taught us to cherry-pick only the most desirable parts. But it’s due also to the legacy of Fritz Haber; without the endless supply of cheap grain feed allowed by his synthetic fertilizers, our modern meat-eating ways could never have materialized.
Americans have now arrived at a point that was once unthinkable: there is no upper limit to the amount of meat we can consume.”
The chef’s inability to fully utilize the full chicken is both surprising and yet entirely predictable in today’s world in which increased output in farm fields and increased engagement in Facebook feeds are intellectual challenges to be solved. We employ the smartest engineers, scientists, financiers and economists in the world to develop creative solutions that increase efficiency and drive growth, and to optimize for productivity, yield and engagement.
There is no doubt that this system and relentless focus has produced an economy of staggering wealth that supports 7 billion people with a better average quality of life than any other time in human history; this passage from The Third Plate, however, has stuck with me because it is a perfectly articulated example of a disconnect between how we measure progress and how we define actual progress I’ve never quite been able to reconcile:
Why do we use GDP as a macro proxy for quality of life? And why is all growth and efficiency considered a net positive by default?
An Ode to the Williamsburg Bridge
Posted on June 11, 2017 2 Comments
She’s an unconventional beauty – her cool, icy exterior; her raw strength and colossal presence; her willingness to reveal her complexity and the constant burdens that weigh her down; her tattoos and her take-no-bullshit attitude.
Her functional-industrial aesthetic is born from necessity rather than design, but today fashionistas from Paris to Tokyo seek to replicate her style, clamoring for that Authentic Brooklyn look. Read More
