Autonomous Cars, Tesla and The Next $500bn Opportunity?

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I just got into a fun discussion about autonomous cars and the future of transportation (here), which lead me to thinking a lot, which lead to this blog post rambling.

I like to say that one day owning a car will be a lot like owning a horse. That’s not the point of this post but I will discuss my rationale.

Compared to a car, a horse is not a very practical form of transportation. This is because they’re slow, require a lot of TLC, and can be very difficult to ride.

A car offers much more transportation utility versus a horse. It’s infinitely more useful in transporting you from point A to point B.

And that’s what transportation is. Getting you from Point A to Point B whether it be by land, air, sea or one day space.

The form or method of transportation we choose to get from A to B is all based on utility.

For example if I want to get from Austin to New Orleans I have a few different options like driving, flying or taking a bus. I hate wasting time in a car all day so flying offers me the most utility and that’s what I would choose 99 times out of 100.

But if I want to get from Austin to San Antonio, I would probably drive because Uber would be too expensive and flying too much of a hassle. For transportation over a short distance, driving often offers the most utility.

That’s why we own cars.

We used to own landlines too, but eventually cell phones and then smart phones came and offered infinitely more utility versus the landline. Communication has never been the same!

And that same thing is going to change when the autonomous electric cars start rolling out…

So here’s my prediction:

“Autonomous vehicles will disrupt transportation like the cell phone disrupted communication.”

Wait… but that’s not alll…

This is taken from Elon Musk’s Master Plan, Part Deux (must read):

Sharing

When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else enroute to your destination.

You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.

This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.

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.

So not only will you be able to relax on your commute to work, but autonomous electric cars will also be able to:

  1. Pick you up from any location
  2. Transport you from Point A to Point B without any input
  3. Drive other people around and make $$$ when you’re not using it

oh…

and TESLA WILL OPERATE ITS OWN FLEET.

This is great… but what does it really mean? 

In the near future (less than 15 years), car ownership will decrease due to the increased utility offered by the fleets of autonomous electric cars.

Why would anyone take out a loan, pay for maintenance, insurance, gas, parking, tickets and tolls for vehicle ownership when you can summon a vehicle from anywhere and get from Point A to Point B?

The technology that TESLA and probably everyone else is building will “Expand to Cover the Major Forms of Terrestrial Transport” so virtually any situation will be accounted for.

And all of the big players know what’s at stake.

Whoever wins the autonomous car race will be the next $500 billion business.

Uber’s chief product officer:

“That is not a situation where the tech is going to be evenly distributed,” he said Tuesday at a technology conference in San Francisco hosted by Bloomberg.

Whichever company can build driverless cars will have a unique edge over competitors, he added. It is a means of achieving the “lowest possible price, and highest possible reliability,” Holden explained.

And that is why…

So what does this mean for business?

Eventually we’ll all go onto monthly or pay-per-use contracts with Uber, Tesla or whoever wins the autonomous car war. These companies will compete for your business much like the way Sprint and Verizon do today.

So instead of:

College debt -> Car debt -> Mortgage debt

There will be this empty space in the middle that represents a huge opportunity to sell to millennial / gen-z consumers with more expendable income.

What fills the gap?

I’m not sure, so please tell me in the comments.

/ramble over

I realized that I did another one of these on bitcoin a while ago.

Travel Hack Your Way to Free First-Class Flights with AJ Dunn of Abroaders (BWB 009)

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Ever wanted to know how to sign up for 2 credit cards and fly yourself anywhere in Europe for free?  What about spending $74 dollars on a first class international flight that would cost most school teachers months’ worth of salary?

We’re joined by AJ Dunn of Abroaders who breaks down this reward heavy game where you can play like a baller with some simple creative problem solving.

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Show Notes:

AJ walks us through how to reverse engineer your way to your target goals.  That could be flying first class internationally, taking a ton of domestic flights, or any other number of goals.  We also touch on fundraising, recruiting talent, and building an app.

Keep an eye out for their full app going live in a couple of weeks and visit Abroaders.com to join the Beta Testing!

Outro Song: Jon Bellion – Guillotine ft. Travis Mendes

Episode Links:

Forging an Identity and Reaching Your Potential with Undefeated Pro Boxer Ed Latimore (BWB:008)

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I’m totally burnt out on soft “wantrapreneur” type of advice commonly found in other podcasts, books, and blogs. Life is hard, business is hard and both can be total shit. Pretending otherwise is pointless.

That’s why I love following Ed Latimore on Twitter. He’s an intellectual warrior, unafraid to attack the issues many of us choose to ignore.

Here are some samples:

When he’s not running one of my favorite twitter accounts…

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Uber, Lyft and the Ridesharing Exodus in Austin

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Austin is a mess right now.

We’ve been forced back to the dark ages before ride sharing was embedded into our lives.

Due to unnecessary government intervention:

  • Thousands of people are out of jobs (Forbes)
  • Unregulated underground ridesharing has exploded (TWC)
  • Hospitality revenue reportedly drops 20% (TWC)
  • Startups are breaking the law to fill the void (Austin Monitor)

It sucks.

Right now you can step off a plane almost anywhere in the world and call a car with your smartphone in minutes… except for Austin.

But blame for the ridesharing exodus solely belongs to Uber and Lyft.

Why?

Because with an $8.6 million dollar war chest, they ran a HORRIBLE campaign that failed to get voters out to the polls.Continue Reading

Projects Are The New Resume, Hustling and Manliness with Alon Shabo (BWB: 007)

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I had a feeling this show could go in a lot of different directions and Alon didn’t let me down.

Even through the audio issues (Alon was getting his apartment in Medellin serviced at the time), we went through a ton of topics like the red pill, manliness, copywriting, fitness, and generally just being a badass.

The three main points of success:

  1. Projects are The New Resume
  2. Sell First (worry about everything else later)
  3. Stop Appeasing Everyone

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Hustle Con 2016 Review – Margins Matter, Free Fruit and Tuxedos in 1974

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David Bladow, a co-founder of Bloomthat opened Hustle Con 2016.

He talked about how the flower delivery service launched, got funded and the moment he realized they only had four months of cash left. BloomThat was operating in too many markets and burning $550k per month. They simplified and reduced their burn rate to $15k per month.

He ended his talk with something like…

“What we discovered is that gross margins matter”

Well duh dude!!!!!!

Going into Hustle Con, I had really high expectations for the event. Entrepreneurs I know who went last year had very positive feedback, the speaker lineup was incredible, and the tagline “Startup tactics for non-techies” was practically written for me.

But the “Startup tactics for non-techies” never manifested.

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