Andalucia Steve

...living the dream

Why isn't the world worshipping Elon Musk?

Some thoughts the Tesla/Space-X boss.

 

We all know who Elon Musk is, Tesla, Space-X yada yada, yet he seems underrated by the press and positively despised in the comment section of tabloid newspapers. I'd like to address that here by highlighting some of his thought processes. Normally I aim to blog about 1000 words for a nice bite-sized read, however to cover Musk's brain in such limited space will be a zesty challenge so please forgive if I overrun!
 
Musk is seen by some as a nutcase who smokes dope on the Joe Rogan show, makes unfortunate Tweets about the 'pedo guy' and who got into a very public altercation with rap artist Azealia Banks about acid-taking etc. Only last Friday (1st May 2020) he made a seven word tweet that devalued Tesla stock by $14 billion dollars. Yet despite his maverick social media profile he is capable of thoughts of the loftiest brilliance.
 
I can't for the life of me remember where I originally read it (and I've been unable to find a source - doing a weekly blog doesn't allow as much time to research as I'd like), but the thing I first heard about Elon Musk that really impressed me was the simple idea he had to validate the ownership of bank accounts for use with PayPal. I was a web developer back in the 1990s involved in building e-commerce websites. We used to do them from scratch in those days before generic e-commerce platforms had matured, so I was familiar with the problems involved in taking and making payments online. Systems soon evolved to take payments by credit cards since the card companies had a more modern infrastructure, expiry dates, CV codes etc. Banks however, with their systems rooted in the dark ages had no way to validate the ownership of an account online. Say a client sent you an email with his bank account and you needed to send him some money for the exchange of goods, how did you know the bank account was actually his and not that of some hacker? 
 
Elon came up with the simple yet brilliant idea of paying two micro-payments to the account, say $0.34 and $0.83. The client had to read these numbers from his bank statement and enter them in the PayPal website. Musk had therefore generated the equivalent of a PIN number to verify the account. At first I thought how dumb, to give money away to verify a bank account, but as I thought more about it I realised it was genius. The two numbers would never cost PayPal more than $1.98, an expense which would easily be offset by the reduction in fraud and that would enable PayPal to transact directly with bank accounts, which had much cheaper transaction costs than anything else. You could for example send cash via say Western Union, but then the Western Union agent, usually the post office, would need to be paid to validate the identity of the payee by physically checking the passport which is a costly process in comparison. So from then on, I hailed Musk as a genius capable of conceiving ideas the like of which I could not. 
 
PayPal was not even Musk's first multi-million dollar venture. He'd already founded an online city guide, Zip-2 with his brother Kimbal in 1995 which was sold in 1999 with Musk getting $22million for his 7% share. Prior to that, while in college, Musk has spoken about his musings on the essential matters which would most affect the future of humanity and came up with five things. These were:
 
The Internet
Sustainable energy (both production and consumption)
Space exploration (more specifically the extension of life beyond earth on a permanent basis)
Artificial Intelligence.
Rewriting human genetics
 
Clearly the guy thinks big. Unlike other students with big ideas however, Musk is realising them one by one. With the founding of Tesla in 2014 Musk helped create the first successful new car manufacturer in America in over 90 years. Right now, as CEO, Musk is on the verge of winning a 3/4 billion dollar remuneration payout as part of compensation plan that depended on the company achieving a six-month period of $100 million dollar market capitalisation. This would make him the most highly paid executive in US history. The incredible thing about this is that when Musk negotiated this contract, such a target was unthinkable. The company was only worth $60 billion at $250 per share back then. Musk made it happen, even though he's a part-timer dividing his hours between several other companies. The other somewhat unsung truth about Tesla's success is the way it is transforming the automotive industry away from the dealership model that has pervaded for over a century to a direct model where cars can be bought online. The low maintenance of electric vehicles is also challenging an industry that fed off consumers need for servicing and repair. Musk doesn't just compete in a market, he smashes it to pieces.
 
Musk also heads Space-X, the rocket-company he founded in 2002. In case you've been living under a rock, Space-X has been successful too, winning a number of private and public US defence contracts. By making as much of his rocket technology as reusable as possible, he has undercut the price of all competition for launching satellites. Musk has said many times he sees the future of mankind as multi-planetary. The idea is that by sticking only on planet earth, mankind could (in fact probably will) succumb to some sort of extinction event. Only by having colonies on other worlds can the human race escape such events and survive into the future. This is a lofty goal but one which Musk is edging towards. Again, one of the things that most impresses me here is how Musk is funding Space-X. One of the key planks of the strategy is the Starlink Internet programme, a network of satellites designed to bring Internet connectivity to all parts of the globe. As well as the much publicised plan to bring affordable Internet to poorer countries in Africa and so forth, Musk has another trick up his sleeve. The satellites will exchange data using line-of-sight lasers. Because space is a near vacuum and there is no medium in space to slow the light signals down, transmission of information will be even faster than the fibre optic cable used on the ground. This lack of latency is expected to be of extremely high value to certain commercial sectors that depend on timely information such as stock brokers. The premium service is expected to provide big bucks for Space-X to fund its future developments.
 
Somewhat crazily, these achievements in themselves would be remarkable enough, yet Musk continually applies his brain to disrupt other industries. Tesla's energy grid batteries are beginning to change the way electricity companies handle the storage of electricity, while boosting the future of fledgling solar and wind-power industries. The Boring Company is set to revolutionise travel by establishing a tunnel network that promises to reduce congestion and journey times. Tesla has recently entered the car insurance industry. By using the data from its own network of cars, Tesla can fine tune risk assessments allowing it to offer insurance at up to thirty percent less than its competitors who themselves are tentative about insuring Tesla automobiles because they have only been on the roads for a decade so the old school actuarial data they use is insufficiently mature. Neuralink is Musk's foray into the world of medicine, developing high bandwidth brain to computer interfaces. He also founded and Artificial Intelligence organisation called Open AI. (He's done all this and yet I have trouble finding something to blog about once a week!)
 
Doubtless in all these other industries, Musk has probably figured out the way to get them to pay for themselves, and has envisaged a sneaky way to undercut competition leading to a big disruption in an existing market.
 
The thing that most impresses me about Musk is that his innovations, which drive market change and arguably the direction society is taking, all take place from within the private sector. I'm a dyed-in-the-wool lefty who believes at some level, the state should be planning the future of society through policy, either with a totalitarian boardroom strategy like China or with a presidential "let's get man on the moon" approach like Kennedy. Musk is proving to me that isn't necessary. He's teaching this old dog (and many like me) new tricks! 
 

My Timemachine of Technology

How I've been lucky to live in a time of unparalleled technological change

 

I feel very fortunate to have been born when I did and to have observed the revolutionary change in technology that I have. Things whizz along so fast these days. My father woke me up in the middle of the night to watch man's first moon landing, but the rocket that took man to the moon only had a 16 bit processor and a tiny amount of memory by modern standards. These days we all have far more power in our mobile phones! It's all happened so blindingly quickly!
 
In fact I feel very fortunate to be born at all, as my parents were quite ‘elderly’ when they had me. Dad was 54 when he had me and mum in her mid forties so I'm lucky to be here. Accordingly the environment I grew up in was full of old technology that had been accumulated over many years. We had a valve radios and television that took ages to get hot before they would work. The family camera was a ‘box brownie’ – little more than a black box with a lens and a winding mechanism to advance the film. The film wasn’t cheap so we took each photograph with care, posing and saying cheese! Then it took days or weeks to get the prints back from the chemist! All these artifacts smelt old and musty, but also everything felt frozen in time as though they had been around forever.
 
Then around the mid-sixties I remember my elderly grandfather went through a number of transistor radios, all of which were made in Hong Kong. My grandad was a bit clumsy and used to drop these ‘trannies’ repeatedly. Invariably the case would break and after a few months of being held together with rubber bands and sticky tape, they would be replaced with another which was always smaller and lighter than the last.
 
I loved to take the old radios apart and figure out how they worked. The valves of old had been replaced by small blobs which were transistors. The other components had all been shrunk too, as had the printed circuit board. Even so, every component was identifiable and it was generally possible to figure out which did what.
 
By the time I reached secondary school things started to change a whole lot. My physics teacher explained to me about integrated circuits. Tens or hundreds of transistors were now being fabricated together on one piece of silicon to form whole circuits. These were found in the first pocket calculators. My first calculator, made by Prinztronic cost a fortune but only did +-/* and percentages!
 
It wasn’t long after that I saw the first microcomputer on the television. This was the commodore Pet, which today still looks more like the sort of thing you would find on the deck of the starship enterprise. The Pet seemed unimaginably expensive to a youngster like me, but pretty soon my school purchased a bunch of microcomputers in kit form (NASCOM 1 if you're curious)  and us school-kids were co-opted to spend hours soldering them together.
 
I inevitably found myself working in computers and during the 1980's the IBM PC became the default architecture for most business users. My first experience of these was the Olivetti M24, which was a dinosaur by today's standards but crucially the office had them networked together with this clever thing called co-axial cable. The first time I met with this concept I remember thinking what a waste of money! Surely if two people wanted to work on the same spreadsheet they could copy it to a floppy disk and walk to the next office with it. How wrong I was, which is a recurring theme in my life! Of course from these humble beginnings, networking really took off, bringing us to the Internet and the applications on the World-Wide Web we are all so dependent on today.
 
I'd moved to Spain by the time I saw my first smartphone, a first generation iPhone owned by a friend on holiday from the UK. It seemed so revolutionary at the time, and Apple had clearly got it right - the combination of touch-screen and scrolling GUI was a winner. Now we all have one (or more) in our pockets and think little of it. When you do think about it though, today's smartphones are far more advanced than the communicators used in the first series of Star Trek, which themselves were considered light years ahead at the time. 
 
An example of how far things have advanced is the disdain people have today of optical media, the CD/DVD discs read with a laser, which are now seen as quaint and clunky like the horse and cart of the digital world. With today's Internet speeds it a lot easier to stream a movie from Netflix than it is to watch an optical disk. A laser based tech becoming near obsolete in my lifetime! How amazing is that?
 
You might think then, like the apocryphal story of the commissioner of the US patent office, Charles H. Duell, that everything that could be invented had been invented. (I traced the quote - it was more likely a joke prophecy made in Punch magazine). This couldn't be further from the truth. the 21st century is the age of materials, where scientists are gaining insights as to how to manufacture new things at an atomic and quantum level. Quantum computers are in their infancy but promise to bring unparalleled levels of computing power. Graphene, the single atom thick layer of carbon famed for its conductivity of electricity and heat as well as tensile strength has already made its way into a commercial battery. Though at the moment it is only used to assist and enhance conventional lithium batteries,  it is expected that graphene only batteries will be used in future mobile phones and electric vehicles that will be a fraction of the size of those used today. 
 
So I've seen the world move from valves to the quantum computer in a couple of generations and technological progress is still accelerating. We're living in a world none of us could have envisaged 10 years ago. Who know what the next ten or fifteen years will bring.