Eric Jackson of the investment advisory Website The Street writes that Tesla Motors could be “heading for the same kind of ignominious failure by the end of 2012” as a number of earlier Silicon Valley start-ups from the dot.com pixie dust era of the late 1990s:
Every 10 years ago, the smart folks in Silicon Valley select some inefficient industry that is run by dummies which they are going to set straight and end up revolutionizing. Ten years ago, there were smart entrepreneurs (with Internet backgrounds) with even smarter venture capitalists behind them who started a company called Webvan designed to revolutionize buying groceries. People would no longer go to a bricks-and-mortar store, they said, they’d buy all their groceries online.After raising hundreds of millions of dollars and going public, Webvan failed. The smart Web entrepreneurs overlooked some basics about running a grocery business — online or offline — like needing to have big expensive distribution centers. Maybe if they’d had some grocery execs in the fold (on the management team or board) they might have thought of that “key success factor” for operating in that industry. But before their failure, if you’d asked them about bringing in some industry talent, their response had been: we’re trying to recreate this industry so we don’t want to tie ourselves down to the old ideas that have failed.
Ah, how important it is to balance “fresh eyes” to look at industry challenges anew with “gray hair” wisdom that can tell you which potholes to avoid stepping into.
In Silicon Valley, with lots of money, ego, and talent, you can will a lot of companies into reality — especially if they are able to capture some exciting buzz. However, success breeds lots of arrogance. Webvan was Exhibit A of how that arrogance can result in a high-profile failure.
There’s another Webvan-like company that just went public a few weeks ago and is heading for the same kind of ignominious failure by the end of 2012: Tesla Motors (TSLA).
Read the whole thing. As the Professor recently quipped, “In the future, everyone will be un-American for fifteen minutes.” Will The Street be declared Un-American by the McCarthyite Gov. Jennifer Ganholm (D-MI) for their negative comments regarding this electric car, as she attacked Rush Limbaugh earlier this month for his doubts regarding the Chevy Volt?
(Illustration: Our own little piece of un-Americanism from the start of the month.)
Related: As Victorino Matus summarizes at the Weekly Standard, “In this weekend’s Wall Street Journal, Dilbert creator Scott Adams explains how his earnest attempts to go green were thwarted by reality, impracticality, even aesthetics.”
In other words, to paraphrase the Goracle’s recent foot-shooting book title, when you stage your Assault on Reason, don’t be surprised when Reason Assaults you back.