THE HYPERLOOP

California isn’t thinking BIG ENOUGH!

I’ll never get over Chris Christie nixing the tunnel to New York. The future is coming, we’ve got to prepare for it. Which is why we need high speed rail, right?

Not if it’s the slowest bullet train in the world and it’s gonna take until 2029 to complete.

They say I’m a dreamer
But I’m not the only one

Used to be we counted on politicians and artists to inspire us, to presage the great leaps forward. Now the only people doing this are techies. Hell, the music industry still hasn’t gotten over Napster and is selling CDs and arguing about streaming payments when the public has already moved far beyond it. What kind of bizarre world do we live in where the public is ahead of an industry? It’d be like United introducing coast to coast turboprops or taxi companies promoting less punctual, dirtier cabs. The key is to get ahead of people! Have them come to you!

I’m going to print Musk’s explanation of the Hyperloop below, because although it seems like science fiction on the surface, once you get into the details it seems…possible. Then again, I’m just an arts guy and don’t know much about science. But I remember the sixties, when John Glenn orbited the Earth and we were all enthralled and inspired by science. What are we inspiring people to do now, post tinted pictures on Instagram?

We need leaders. Don’t bother watching the parking meters.

PAYPAL BANKING

Squeezed out of PayPal, one thinks anything Musk has to say about the company is sour grapes. Until you dig down into his vision for the enterprise.

PayPal’s success was built upon the low cost of transactions. To turn it in to more than a payments service is to both revolutionize banking and serve the customer. Once again, when you read Musk’s explanation below it will all make sense. Especially the money market fund that paid more than any other just to keep customers in the system. It would make no money for PayPal itself, but cement customers to the system, for their ultimate benefit. That’s a far cry from the modern banking system that wants to charge you at every turn and deliver less.

COAL

My inbox is filling up with naysayers pointing out that the Tesla’s electricity, its fuel, is generated by coal-fired plants. And that is true. But nowhere do you see it written how inefficient the internal combustion engine is, that’s one of the main selling points of electric cars, they they’re much more efficient in turning their energy source into propulsion. Cars are 10-20% efficient, a Tesla is 60% efficient.

Welcome to the new America where everybody lives in an echo chamber and has knowledge an inch deep. They know what a Tesla is, but have no idea how it works, what its benefits are. This is a major issue in the information society, people just don’t know what’s going on. Furthermore, those with a negative agenda can spread falsehoods to achieve their goals. I mean how many people know about the above-stated efficiency of electric vehicles? I certainly didn’t.

Find a further explanation below.

GOING PUBLIC

That’s what those with short term thinking who want to lose control of their companies do. Tesla went public because it needed the cash. But Musk wants to keep SpaceX private because public scrutiny would hammer and ultimately hobble the developing company. But what about the workers? What about their ability to profit on their stock?

Musk sent SpaceX employees a memo containing the below:

“‘For those who are under the impression that they are so clever that they can outsmart public market investors and would sell SpaceX stock at the “right time,’ let me relieve you of any such notion. If you really are better than most hedge fund managers, then there is no need to worry about the value of your SpaceX stock, as you can just invest in other public company stocks and make billions of dollars in the market.'”

Everybody’s a self-stated expert, everybody can do anything, hedge funders are dumb people making easy money. No, the truth is running a hedge fund is a skill. And if you think you can compete with the pros, you’re truly demonstrating you’re an amateur. Eric Clapton can play rings around you on the guitar and George Soros can eat your portfolio for breakfast.

SPELLING COUNTS

“Marketing people who made grammatical mistakes in e-mails were let go…”

People judge you by your mistakes, especially if it’s your gig. Ever hear of spellcheck? Use it, especially if you’re looking for a job or interacting with someone higher up the food chain. I know a woman who judges who to date based on the spelling mistakes. You think looks are everything…not to many winners.

If you can’t perform the essence of your job flawlessly, we’ve got no time for you.

CONCLUSION

All of the foregoing are lessons learned in Ashlee Vance’s excellent book

“Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future”

You can read it for tips, but you should really read it for inspiration.

Not everybody can win, not everybody can rule the world, but you can certainly try. Or align with a leader who is trying to accomplish these goals. Life is most fulfilling when it has value. It sucks to live with no cash, but once you get a certain amount you’re happiest when your life has meaning, which is usually accomplished through work. Ignore the constant trumpeting of numbers, they’re oftentimes fake, instead of focusing on the dollars look for the accomplishments. Did the artist have another hit? Do they still play their music? Does someone experience your product and smile? Are you changing the world?
That’s today’s goal.

For the loser now will be later to win
For the times they are a-changin’

THE HYPERLOOP 2

“‘The sixty-billion-dollar bullet train they’re proposing in California would be the slowest bullet train in the world at the highest cost per mile,’ Musk said. ‘They’re going for records in all the wrong ways.’ California’s high-speed rail is meant to allow people to go from Los Angeles to San Francisco in about two and a half hours upon its completion in – wait for it – 2029. It takes about an hour to fly between the cities today and five hours to drive, placing the train right in the zone of mediocrity, which particularly gnawed at Musk. He insisted the Hyperloop would cost about $6 billion to $10 billion, go faster than a plane, and let people drive their cars onto a pod and drive out into a new city.”

Musk is famous for overpromising when it comes to cost and delivery date, but he always delivers. With fifteen years to accomplish his goal, wouldn’t we be better off giving him a chance as opposed to investing in an antiquated system?

This is how the Hyperloop works:

“Billed as a new mode of transportation, this machine (the Hyperloop) was a large-scale pneumatic tube like the ones used to send mail around offices. Musk proposed linking cities like Los Angeles and San Francisco via an elevated version of this kind of tube that would transport people and cars in pods. Similar ideas had been proposed before, but Musk’s creation had some unique elements. He called for the tube to run under low pressure and for the pods to float on a bed of air produced by skis at their base. Each pod would be thrust forward by an electromagnetic pulse, and motors placed throughout the tube would give the pods added boosts as needed. These mechanisms could keep the pods going at 800 mph, allowing someone to travel from Los Angeles to San Francisco in about thirty minutes. The whole thing would, of course, be solar-powered and aimed at linking cities less than a thousand miles apart. ‘It makes sense for things like L.A. to San Francisco, New York to D.C., New York to Boston,’ Musk said at the time. ‘Over one thousand miles, the tube cost starts to become prohibitive, and you don’t want tubes every which way. You don’t want to live in Tube Land.'”

PAYPAL BANKING 2

“‘Almost no one understands how PayPal actually worked or why it took off when other payment systems before and after it didn’t. Most of the people at PayPal don’t understand this. The reason it worked was because the cost of transactions in PayPal was lower than any other system. And the reason the cost of transactions was lower is because we were able to do an increasing percentage of our transactions as ACH, or automated clearinghouse, electronic transactions, and most importantly, internal transactions. Internal transactions were essentially fraud-free and cost us nothing. An ACH transaction costs, I don’t know, like twenty cents or something. But it was slow, so that was the bad thing. It’s dependent on the bank’s batch processing time. And then the credit card transaction was fast, but expensive in terms of the credit card processing fees and very prone to fraud. That’s the problem Square is having now.

‘Square is doing the wrong version of PayPal. The critical thing is to achieve internal transactions. This is vital because they are instant, fraud-free, and fee-free. If you’re a seller and have various options, and PayPal has the lowest fees and is the most secure, it’s obviously the right thing to use.

‘When you look at like any given business, like say a business is making 10 percent profitability. They’re making 10 percent profit when they may net out all of their costs. You know, revenue minus expenses in a year, they’re 10 percent. If using PayPal means you pay 2 percent for your transactions and using some other systems means you pay 4 percent, that means using PayPal gives you a 20 percent increase in your profitability. You’d have to be brain dead not to do that. Right?

‘So because about half of PayPal’s transactions in the summer of 2001 were internal or ACH transactions, then our fundamental costs of transactions were half because we’d have half credit cards, we’d have that and then the other half would be free. The question then is how do you give people a reason to keep money in the system.

‘That’s why we created a PayPal debit card. It’s a little counterintuitive, but the easier you make it for people to get money out of PayPal, the less they’ll want to do it. But if the only way for them to spend money or access it in any way is to move it to a traditional bank, that’s what they’ll do instantly. The other thing was the PayPal money market fund. We did that because if you consider the reasons that people might move the money out, well, they’ll move it to either conduct transactions in the physical world or because they’re getting a higher interest rate. So I instituted the highest-return money market fund in the country. Basically, the money market fund was at cost. We didn’t intend to make any money on it, in order to encourage people to keep their money in the system. And then we also had like the ability to pay regular bills like your electricity bill and that kind of thing on PayPal.

‘There were a bunch of things that should have been done like checks. Because even though people don’t use a lot of checks they still use some checks. So if you force people to say, “Okay, we’re not going to let you use checks ever,’ they’re like, “Okay, I guess I have to have a bank account.” Just give them a few checks, for God’s sake.

‘I mean, it’s so ridiculous that PayPal today is worse than PayPal circa end of 2001. That’s insane.

‘None of these start-ups understand the objective. The objective should be – what delivers fundamental value. I think it’s important to look at things from a standpoint of what is actually the best thing for the economy. If people can conduct their transactions quickly and securely that’s better for them. If it’s simpler to conduct their financial life it’s better for them. So, if all your financial affairs are seamlessly integrated one place it’s very easy to do transactions and the fees associated with transactions are low. These are all good things. Why aren’t they doing this? It’s mad.'”

Makes complete sense, right? That’s what separates the winners from the losers, the innovators from the also-rans, they see a problem and come up with a solution the average person could not think of, which is why analytical skills are key. Which is why Steve Jobs said to get a liberal arts education, because if you know how to think, this ever-changing world is your oyster.

COAL 2

“For both engineers and green-minded people, the Model S presented a model of efficiency. Traditional cars and hybrids have anywhere from hundreds to thousands of moving parts. The engine must perform constant, controlled explosions with pistons, crankshafts, oil filters, alternators, fans, distributors, valves, coils, and cylinders among the many pieces of machinery needed for the work. The oomph produced by the engine must then be passed through clutches, gears, and driveshafts to make the wheels turn, and then exhaust systems have to deal with the waste. Cars end up being about 10 – 20 percent efficient at turning the input of gasoline into the output of propulsion. Most of the energy (about 70 percent) is lost as heat in the engine, while the rest is lost through wind resistance, braking, and other mechanical functions. The Model S, by contrast, has about a dozen moving parts, with the battery pack sending energy instantly to a watermelon-sized motor that turns the wheels. The Model S ends up being about 60 percent efficient, losing most of the rest of its energy to heat. The sedan gets the equivalent of about 100 miles per gallon.”

My driver subscribed to Spotify Premium.

I read in “Consumer Reports” that my car was recalled. Well, kinda. If you live in the southeastern part of the country the moisture might lead the Takata airbag to explode upon collision, causing shrapnel to fly through the interior, killing a couple of people already, and being the paranoid guy I am I wanted it fixed.

But I live in Los Angeles.

But my car came from Florida. It sat on the lot there for the better part of a year. The land of humidity, which causes the problem.

Actually, just the other day they decided to recall my car for the entire United States. But I hopped on the phone early and got them to agree to replace the inflator, after I scanned and sent the original sticker with the Florida location.

But my car is a Saab and Saab is out of business.

But it’s not really a Saab, but a Subaru.

But GM’s got to fix it. Which means it’s like bringing your Mercedes to the Hyundai dealership. My natural anxiety is sky high. Live long enough and your car is misrepaired many times.

Took months for the part to come in, but today was the day. So I sauntered on over to the dealership, actually, I endured hellish traffic, you really can’t drive in L.A. anymore, and after dropping off my vehicle I pulled up the app for UberX.

I don’t see how taxis survive. How could an entire industry be asleep?

Well, we saw that with Napster and the record companies. How could someone not want a CD? How could someone not want a dirty taxicab?

So you can see your car around the corner on the app and it comes to pick you up and the driver calls you by name and first and foremost you’re worried about your rating.

Did you read that Maureen Dowd column? You should. You see she was in L.A. and Uber wouldn’t pick her up, not soon anyway, even though cars were swarming around her hotel. And when she finally got inside she found out why. SHE HAD A POOR RATING! For not showing up when she should. She didn’t respect the Uber drivers and as a result they didn’t respect her. Time is literally money. Be ready when they arrive.

Now Maureen ultimately made a good point, are we going to be rated in every facet of life? Is this what the world has come to? But the point of my story is that when the Ford Fiesta picked me up I greeted Oscar by name and started a conversation, because I wanted a rating of five.

And we discussed the history of his driving and how to get to my house and after a moment of silence, wondering whether it was good or bad to keep talking, I noticed he was listening to KRTH.

That’s the oldies station in case you don’t know.

“You like the oldies?”

YES. I HATE THE BOOM BOOM, THAT’S NOT MUSIC!

And this guy was just around thirty.

Whew!

And as KC and the Sunshine Band started streaming out of the speakers Oscar began talking about the music business, about compensation, and that’s when he started talking about Spotify.

“You use Spotify?”

YES.

“Free or Premium?”

PREMIUM!

He got the app. That’s where it starts. He didn’t even use the desktop version until after he subscribed. And he wanted to listen to Pink Floyd’s “The Wall.” But on the free version of the mobile app you can’t pick and choose what you want to hear, it’s like Pandora, jumping around the tracks. And this frustrated Oscar so much that he paid. 99 cents for three months.

“Are you gonna pay the ten bucks a month for Premium after your trial runs out?”

OF COURSE!

He can’t live without it.

Now I’m not saying this is scientific research, it’s purely anecdotal. But the foregoing is exactly what Daniel Ek is saying, that free mobile leads to paying customers.

But you don’t want to hear that.

“Driving Uber Mad”

If Apple were all-powerful, iTunes Radio would have killed Pandora.

But it did not.

You think the way everybody’s speculating next week Apple is gonna announce that Jimmy Iovine was cured from cancer and Steve Jobs was brought back from the dead. Most people don’t even think about on demand streaming services, YouTube serves them well, if they listen to music at all! As for all the cries about the decimation of the music business… How bad can it be when Doug Morris re-ups at Sony for $20 mil and Taylor Swift sells out stadia and grosses triple digit millions! Does Pandora pay lousy publishing rates, do labels take the lion’s share of streaming revenue, is the middle class of artists challenged in the new music era…OF COURSE! But the public cares not a whit, just ask Jay Z, whose Tidal is desperately trying to merge with another service before it loses so much cash Jay shuts it down.

Let’s get some clarification here, there’s streaming radio and streaming on demand.

We’ll start with radio. It’s called Pandora. Because you don’t get to pick and choose what you want to hear, the rightsholders get less. But how satisfying an experience is the listening? If you like Pandora, you know nothing about music or you’re not really listening. The genome project works not a whit, the recommendations suck, but it’s free and it’s good as background music.

Background music… That’s how the majority utilize Pandora. Which generates some revenue for the financially-challenged company and some royalties too, but doesn’t break artists. People have to be foreground listening in order for them to know who it is they’re hearing and want to hear more. To believe that streaming radio is gonna save the music business is to believe the last fifteen years didn’t happen. We live in an on demand culture. That’s what’s decimating television. People want to watch what they want when they want and they don’t want the commercials. Come on, no one wants to wait for anything anymore! But they’re gonna sit back and listen to automated radio? No, it’s not the future. It’s just that Tim Westergren did a great job of selling his company, it’s got mindshare, and no one’s filled the vacuum since, most people have no idea how Spotify even works. So, can Apple put a dent in Pandora? NOT IN AMERICA! We’ve already learned that! But outside the U.S. Apple can win
with iTunes Radio, because it will land first. Whoop-de-do! Apple can lose money just like Pandora and not break acts all the while, who cares!

But then we get to on demand music streaming, i.e. Spotify and the new Apple service.

And then we deal with free.

I want to point you to this article, wherein it talks about closing Spotify’s free window in Spain. REVENUES WENT DOWN AND TOOK A LONG TIME TO RECOVER!

“Clamp Down On Free Spotify? Now Is Not The Time For Knee-Jerk Decisions”

Never argue with the data. The data tells us free generates paid. May be counterintuitive, but don’t expect anybody in the music business to understand science in a business built on intimidation and falsehood.

Also, as stated above, the public has no idea how Spotify even works! That you can synch playlists so that music sits on your hand-set like you own it and there are no bandwidth costs. That’s right, Spotify’s been here for years and people still don’t know much about it!

As for Spotify free mobile… Ever try it? It sucks! You can’t hear what you want when you want, which is why conversion to pay is so high when you give it away free on the hand-set. But nobody strumming a guitar or working at a label has ever used Spotify mobile free so they don’t get it.

And the truth is YouTube is completely free!

But if you got rid of YouTube and…

Do we really want to go back to piracy? Most people don’t want to pay for music. Not now anyway. Try to make them and they’ll either tune out or steal. Which is so easy it ruined the recording business. You want to go back to that era?

No, the only hope is to wait for a completely mobile world and sell convenience at a fair price. That works. Just like Spotify and YouTube killed piracy…

But where does this leave Apple?

With nothing new to offer that’s gonna make any difference.

Yes, Apple’s got everybody’s credit card. And if they give their new on demand streaming service away for free for three months people will sign up in droves. And then they’ll cancel.

As for star deejays on iTunes Radio? After a week, who cares? If they did, everybody would be paying for Sirius XM, which features this regularly. But they don’t, because they’re cheap, even though Sirius XM is a business.

Right now on demand streaming music is a business. But it’s trying to gain more subscribers. Meanwhile, everybody involved is greedy and unwilling to wait for people to understand streaming, never mind pay for it.

Apple will help getting the message out.

But why do you think it will win? Jimmy Iovine couldn’t make Beats’ streaming music service win!

So, welcome to the club Apple. Thanks for shining light on the sphere. But just because you’ve got a good brand and a history in music that does not mean you’ll win in the future. Today the story evaporates quickly and then you have to do the hard work of adoption. And it turns out the public has no loyalty. It abandoned MySpace for Facebook… The story is advertising and promotion don’t win online, it’s all word of mouth for excellent products. Instagram and Snapchat were not sold by hype. Why does everybody believe that a big press story will put Apple streaming over the top?

It won’t.

P.S. Remember when all-powerful Microsoft was gonna kill AOL with MSN? Didn’t happen.

P.P.S. If starpower were everything, Tidal would be a juggernaut.

No wonder they all drop out of school.

That’s right, if you’re getting your MBA you’re learning how to get along. Those who change the world do not. They’re one step ahead of everybody else and frustrated that those behind them don’t get it, so they act in mercurial ways and get laughed at…until everybody embraces their creation and lionizes them.

Kind of like the Beatles. They were a joke before they ruled the world. With their long hair and yeah-yeah-yeahs.

My eyes were bugging out as I read Ashlee Vance’s tome. Because Elon Musk is all about changing the world. And we see very little of that in the music business anymore. In the arts, money is king. We laud the box office, not the reviews. Stagnation is rampant. But Elon Musk is going for the big reach.

What kind of guy does this?

One from a completely screwed-up background with something to prove.

That’s right, America’s turned into the land of pussies. Where parents are their kids’ best friends and everything is done in a group, no one wants to stand out. But the truth is those who change the world were never included, were never just like everybody else, they got beaten down again and again until they triumphed.

Sure, Elon Musk’s dad was an asshole. But he was also picked on at school. And you can get your mommy to go to the principal and complain, but the truth is the bullies will always taunt you, because you’re not like them, and everybody wants you to be just like them.

Yesterday the L.A. “Times” ran a front-page story on how Elon’s businesses are the beneficiaries of government money. What’s the point? That’s America. Look at runaway film production, enterprises go where the cash is. But the real story is we pick on the winners, because we just can’t believe they’ve triumphed, we want to bring them down a peg.

So Elon Musk dropped out of a Stanford Ph.D. program, after two days. But he got multiple degrees from Penn, he was educated. That’s another thing wrong with the whiners, those who believe they’re entitled to bucks. They equate paying dues with doing hard work. So, you worked a day job while your band rehearsed at night. Maybe you’d have been better off getting a degree, challenging yourself. But the truth is the hoi polloi don’t want to put in the effort. They need time to watch movies and smoke dope. When the truth is winners have no time, they’re working 24/7, jumping off what they’ve learned at school, which isn’t how to run a business, but THINK!

Musk created Zip2, a directory company in the early days of the internet. Eventually sold to Compaq, he lost control after a while, because those with the money, his investors, wanted a more experienced player, who, of course, screwed it up.

And then came PayPal… Yes, that’s where Elon made his real bucks, but the truth is his vision for the company far exceeded eBay’s, read his explanation in the book, you’ll get it. eBay did not, because eBay was run by managers. It’s creators we revere, who truly establish value.

And then came SpaceX.

It doesn’t get that much press. And that which it does doesn’t permeate the public consciousness. Because idiots are diverted by Bruce/Caitlyn Jenner. Who cares what this has-been does, let Caitlyn live in peace. Meanwhile, Musk is generating real products. And he’s optimistic.

OPTIMISM! If you lived through the sixties, you remember it. That’s what the protests were all about, changing the world, the way things had always been done, from civil rights to the Vietnam war. But the right wing has rewritten the decade, at the same time giving free rein to those who pollute our world and create global warming. Do we need to move to Mars? Electric cars will help our pollution problem.

But Musk is the enemy.

Now if you read this book for tips, forget it. Innovators are born. That’s one thing Lady Gaga got right. And if you’re born this way you’re a leader, you have to be in control. If you wanna work at a company you’re a sheep. And we need sheep. But know who you are, don’t complain you can’t drive if you need someone else to give you directions.

And Elon risked his entire fortune. And almost ran out of money more than once. All in pursuit of his dream.

You want to hoard everything you’ve got and complain when someone else won’t give you the cash you think you’re entitled to. Well, not only is there no free lunch, those complaining never win.

Now I’m not saying Elon Musk is flawless. I’m not saying his companies will continue to triumph and we’ll all colonize the Red Planet. I’m just saying we need big thinkers in our society. Those not beholden to the rabble-rousers who want to bring you down. We need optimism, not pessimism. And you don’t achieve this by eliminating negative speech, by putting on a happy face, but by leaping forward.

I didn’t think I cared about space. But we got much more than Tang from NASA. And we’re getting much more than cheap rockets from SpaceX and cool cars from Tesla.

Immigrants like Elon Musk not only create jobs, they push our great nation forward because they epitomize its ethos.

So, write your pop ditty, create your dumb app. Look to sell out. Be all about lifestyle.

But the truth is while you’re doing this there are a bunch of faceless people who are thinking big, willing to sacrifice their lives in pursuit of the great leap forward. They are the true Americans.

They promised us life-changing art and all we got were superhero movies and pop songs written by committee.

It won’t be this way forever.

Change always comes from the outside.

And it is never sold, only bought. If someone is telling you how great they are ignore them. Because we know greatness when we see it, we clamor for it. We want to get closer to it.

And if you don’t want to ride a rocket and buy a Tesla after reading this book…

Have fun in your TMZ, Instagram world.

You can build a monument to yourself on social media.

Or you can stop wasting time and change the world.

What are you gonna do?

“Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future”