When the future is written as history I expect to see a chapter all about Apple and how the company missed out on extending itself into the future because it did not buy Tesla. Yes, that Tesla. The once affordable and now high flying electric vehicle company.
It’s not a difficult chore to see some of Apple co-founder Steve Jobs in Tesla’s Elon Musk. Both capitalized on the vision thing early in life and road it far into the sunset of riches. Both were great risk takers willing to bet the farm on a new direction. Alas, at least for Apple, only Tesla’s Musk dares to Think Different™.
The Future Is Robots
After Steve Jobs’ second coming to Apple in 1997, he set about to stabilize the company he co-founded, improve financials, and slim the product line into profitability. The advertising campaign back then was pure Jobs and Apple– the famous and award winning Think Different™.
Here’s to the crazy ones. The misfits. The rebels. The trouble-makers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules, and they have no respect for the status-quo. You can quote them, disagree with them, glorify, or vilify them. But the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
That ad copy formed the basis of Apple’s advertising campaign in 1997 and ran for a few years. It’s called “Here’s to the Crazy Ones.” Who does that ad copy best apply to today in 2017? Apple CEO Tim Cook? Or, Tesla CEO Elon Musk?
Before you answer that, consider this. Musk has done what has not been done in a long, long time. Build a new vehicle from the ground up that has hundreds of thousands of customers waiting to buy. Elon Musk, the brash, hubris-laden CEO thinks robot software will make Tesla worth as much Apple, Inc. Apple is worth north of $760-billion while Tesla is worth south of $50-billion. There is a $700-billion gap to close.
How will Tesla be worth more than Apple?
If we’re able to maintain a 50% growth rate for 10 years and achieve 10% profitability number and have a 20 P/E, our market cap would be basically the same as Apple’s is today. Now, that’s going to require a bit —on the order of $700-billion. Obviously, getting there will require some significant capex.
What would all that money– capital expenses– buy? A few choice Musk phrases:
I may be completely delusional
Here’s to the crazy ones, right? Robots anyone?
…heavily involve Tesla going at the machine that builds the machine…
It’s all just software.
Which involves, by the way, a tremendous amount of software. This is not just a bunch of robots that are sitting there. It’s programming of the robots and how they interact. And it’s far more complex than the software in the car.
Robots need software to run. That’s where Musk is taking Tesla. Will he get there in 10 years? Apple’s executives and members of the board of directors could take a cue from Steve Jobs’ playbook, circa 1997.
And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
Apple should have bought Tesla.