There are several definitions of the word. This company fits one, often used by VCs and the media, which is that a startup is a company still developing a product, either with no revenue of not enough to cover its expenses, and funded by external investments.
My personal definition is a company which is still looking for a product-market fit.
> often used by VCs and the media, which is that a startup is a company still developing a product, either with no revenue of not enough to cover its expenses, and funded by external investments.
It would imply that a bootstrapped business can not be a startup.
> My personal definition is a company which is still looking for a product-market fit.
My first company became profitable on the night of the launch thanks to incredible product-market fit. Showing up to work the second day surely felt like still working in a startup, although product-market fit search was already behind us.
Personally, I define startups to be business ventures where the rate of change and the freedom to take sudden turns is still high.
I once got contacted by a major (at least by national scale) company with a history of 100+ years and revenue in the billions of euro, asking if I'd be interested in working in one of their departments, describing it as "a startup of some sorts".
A startup is a company which faces significant risk of its equity going to zero, which has also never had a period in which the risk of its equity going to zero was negligible.
Tesla is still a startup, so is Rivian
Google is not a startup, Bank of America back in 2009 wasn't a startup although risk of equity going to zero was huge, but it had a darn long spell in which the risk was nonexistent.
There are a few startups where that definition needs some flexibility, specifically startups that are based on large assets. A farm might be a startup, even though its key underlying asset (land rights) really will never approach zero. It could still fail without ever getting into net zero equity.
I don't think thats true. Lots of companies aren't really innovating but just do small variations on existing solutions with nice marketing. Think about all the new companies we see now: ad tech, cyber security, employee collaberation etc etc. Are they all operating in unknown models? They may not have a product market fit but thats a different beast.
Tesla filed a lawsuit for precisely this questionable practice.
“According to the lawsuit Tesla claims, Jesica Siron took proprietary information regarding manufacturing project management, controls specification for manufacturing equipment, specifications for manufacturing equipment...”
I think a lot of companies will allow engineers to come up with their own questions for candidates without much oversight. This can lead to the above scenario where an engineering interviewer thinks this could be a good way to check if an engineer is a key contributor or a low performer to their current role. However, it is important that interviewers are trained to ask questions like this in general rather than specific terms to avoid this appearance. I personally doubt that many companies use interviews to get IP from previous employers.
Who within an organization sanctions this kind of thing?
I recently was in a such a situation too with another R&D AV organization. In light of comments like this, its becoming increasingly clear that they just wanted the IP
They could be checking to see whether you'd be likely to disclose Rivian IP in the future.
Seems like a, "Sorry, can't do that. I honor my contracts." would suffice. If the interviewer pushed again for proprietary information, their intent would be clear.
That's what I'm saying - I said "I can't do that" and their demeanor changed totally and obviously. It was super obvious they were lining up people to do deep presentations on their previous employers IP.
You can't really build a car factory on nights and weekends. Factories require billions of dollars in investments. I don't see how you can expect them to have delivered a car before raising money
Isn't that exactly what's happening tho? This money is ending up into companies that will fail - only the compensation the employees get in this competitive market will build real long term value.
A a few months ago it was "deliveries will begin in June". Then it was July. Then August, and now September. I'm sure they'll get there, but I wouldn't hold my breath while waiting.
That's true, but it was heavily hand assembled with a pretty terrible design that doesn't seem like it could have been sustainable. They only built about 2,500 units over 4 years and cancelled it when they finally got their first sedan into production.
I'm not sure that this was actually better than the Rivian scenario, since Rivian actually has a van, truck, and a large SUV in the early stages of production during their first year. Its a pretty ambitious move, tbh.
Of course, Rivian has the advantage of being a second mover. Tesla had to work a lot harder to get the batteries sorted out back in 2007.
And thus it's a bad business by definition, which doesn't merit billions of capital investments.
Even if the investment thesis is that the whole world is rooting for them, and government will turn lots of blind eyes because of the "green mission", and they'd be first in line ESG funds allocation of capital...
Still all those elements don't propel you to SaaS type margins such as Google or Microsoft or Facebook.
Frothy valuations for companies which are building stuff in the real world are driven by the promotional power of said stuff and the CEO marketing ability, in fact people are fascinated by cars, it looks cool and it's out there in front of you.
IMO, you really aren't wrong about it being a bad business. There's a reason that so few have been successful. I can count on one finger the number of American companies that have been founded and made it past 100k units in my lifetime. One hand for those that made it to even the first few thousand units.
Its not an investment that I'd want to make. I'm glad that folks are trying anyway, though. I love cars and love the products, but I can't rationalize it as a great business to invest in.
They have been delivering to their commercial customers, however. Amazon's been taking deliveries of their new vans, and at least one R1T was sold to Blue Origin.
Ford first invested $500 million in Rivian in 2019.
At the time they also announced that they'll be using Rivian's skateboard platform for Ford's cars. Later on that has been scrapped.
So why do they continue investing?
I don't really know but it might be an option for future collaboration / licensing Rivian's IP.
Rivian has been working on EV technology since 2009. Ford... not so much.
I think the reason you see so many EV announcements from Ford (and GM and Honda and Mercedes and...) in 2021 is because they all suddenly realized they need to press a panic button.
However, you don't just build battery / electric drive train expertise overnight so Ford might be keeping their options open for collaborating with Rivian in the future.
It could be the other way around; that Ford sees them as a potential customer for the various non-EV-specific parts that go into cars, and that a start-up might not have the infrastructure to make themselves.
Or they could collaborate on charging standards and access to networks of fast-chargers.
Ford make the parts that are unique to Ford vehicles, like chassis and engines. Things like seats and brakes, which are common to all vehicles, are bought.
> Rivian has been working on EV technology since 2009. Ford... not so much.
You say this like Ford is floundering with no clue. But that’s not the case. They have 100k reservations for the F-150 Lightning, which by all accounts is pretty impressive (https://youtu.be/J2npVg9ONFo).
If you think for some reason that the F-150 Lightning that ships won’t be as impressive, or it’ll be more expensive or that people who reserved it won’t buy it … then please share why you think so. But otherwise a knee jerk “old car manufacturer doesn’t know what they’re doing” doesn’t appear to fit the facts.
I think the parent commenter may have been referring to how Ford was floundering with no apparent clue. In 2019, there was little public indication of the legacy automobile manufacturers being serious about EVs. Meanwhile, Tesla had been investing in battery manufacturing technology for years.
It takes a long time to thoughtfully design a new chassis, electrified or not. It also takes a long time to build up manufacturing capacity, especially when they key ingredients such as battery cells were not integral to the chassis of the past.
The F-150 Lightning has clearly evoked interest. It could have come a lot sooner. But perhaps Ford can be an effective fast follower, especially if it figures out how to address sticky points like 1) managing dealer relationships and 2) writing software. These issues are business/cultural challenges, so may require more care to address than engineering problems, which Ford has a history (a century!) solving effectively.
>. In 2019, there was little public indication of the legacy automobile manufacturers being serious about EVs.
That's just not true at all. Nissan has been selling the leaf for a decade, for starters. VW had the e-golf in 2017. Everyone else has been dabbling to some extent or another.
The problem thus far is that electric vehicles have not been profitable to manufacturer.
> I think the reason you see so many EV announcements from Ford (and GM and Honda and Mercedes and...) in 2021 is because they all suddenly realized they need to press a panic button.
Alternatively, maybe because the traditional manufacturers timed the critical point where it made economic sense to focus on electric cars in the same way?
They're skating towards where the puck is, not where the puck will be. I believe it's impossible to win this kind of technological race without appearing to be early. So my prediction is most of them will fail.
You might be correct if the "critical point" arriving meant that established manufacturers could just buy the cost-and-performance-critical parts of EV manufacturing in volume, at low cost, from their suppliers as they're used to. But they can't, because the advancements that make this the right time are not sold on the open market. Getting there requires at least five years of R&D and billions invested, and in that time their competitors will have advanced further.
This outcome isn't obvious yet, so I might still be wrong, but that's where my money would be. I suppose that purchasing one of the startups working on this is a more promising option, but I'm not at all convinced.
This is largely because Tesla is supply constrained and they’ve chosen to prioritise fulfilling of orders in the USA which are more profitable. When Berlin Model Y production kicks off at the end of the year, the story might well change.
At the end of the day, regional sales numbers are irrelevant. The number that matters is global sales.
So you're saying Volkswagen sells more because they build more cars? Like Volkswagen's got expertise in car manufacturing or something? Maybe that's why they're the second biggest car manufacturer globally.
Does Volkswagen currently produce and sell more (pure) electric cars than Tesla? As GP said, regional sales numbers are irrelevant.
The established manufacturers obviously know how to make cars, but are behind on battery cells, packs, drivetrains and software. That VW currently out-delivers Tesla in some markets is not a rebuttal.
If they’re actually out-producing and outselling them globally, that would be an interesting development.
> That VW currently out-delivers Tesla in some markets is not a rebuttal
They've taken over the biggest EV market from Tesla. That hardly fits the narrative of it being "impossible to win this kind of technological race". Look at the trend:
The case that the big car companies won't remain big car companies is flimsy at best. It's a product of wishful thinking more than practical realities.
VW haven’t taken Tesla market, they (along with Stellantis) have expanded the euro EV market with more economy options. Growing the EV pie is good for all companies invested in EV.
Based on current landscape, it seems to me that the companies best poised to “win” in the transition to EV are Tesla, VW and Hyundai, with mixed/wildcard entries from Stellantis, Ford, maybe Volvo. Companies like Toyota, Nissan and Honda could go either way but I’m not seeing promising signs of them taking the inevitability of EVs seriously. No, the Leaf isn't serious.
The thing about Tesla is it’s hard to overstate the technology lead they have over rivals—particularly in terms of manufacturing costs through aggressive part simplification & count reduction (e.g. gigapress, octovalve) and wildly superior software engineering. Tesla is also the only automaker with no legacy ICE investments that need to be written down and no legacy vehicle market. And Tesla don’t have a legacy dealer network to worry about; they can sell direct when most other brands have to keep dealerships sweet.
I’m not saying Tesla have it in the bag, but if they keep up their current pace and release more hit products, they do have the potential to become a top 3 automaker within 10 years. Or not. Nothing is certain.
The idea that Toyota is somehow going away any time soon is faulty.
> No, the Leaf isn't serious.
The Leaf is one of the best selling EVs in the history of EVs.
> The thing about Tesla is it’s hard to overstate the technology lead they have over rivals—particularly in terms of manufacturing costs through aggressive part simplification & count reduction
Fantasy. The reality is Tesla is raising prices again and again:
Meanwhile Volkswagen is reducing prices on the ID.3 and ID.4. The cost savings of the common MEB platform enable them to do so. It lets them price models under the limits of government subsidies:
Nobody is saying Toyota are "going away". They will remain a major auto-maker, but I doubt they'll be in first or second place in 2030. It all depends on how quickly the economy car segment transitions from ICE to EV.
Toyota is a hybrid leader but an EV laggard. Their decision to dip toes into many electrification strategies is going to prove costly and wasteful.
> The Leaf is one of the best selling EVs in the history of EVs.
Despite being on the market for eleven years, it's already a distant second to the Tesla Model 3. Tesla sold more EVs in one year (2020) than Nissan has sold in a decade (2010-2020). And the future isn't looking bright: 2020 was the worst sales year ever for the Leaf.
The Nissan Leaf is much like the Prius was a decade ago, a darling of certain early adopters with near-zero mainstream appeal. But at least Toyota took their hybrid investments and successfully applied them to mainstream vehicles like the RAV4, Highlander and Camry. Nissan haven't leveraged their EV investments, they squandered them.
> The reality is Tesla is raising prices again and again
Tesla have been raising and lowering prices as their costs have changed. Recently the cost of raw materials like steel, aluminium, copper and lithium have skyrocketed.
This is what happens when you don't have a network of dealers: you can't conceal month-to-month manufacturer price fluctuations behind dealership negotiation.
> Meanwhile Volkswagen is reducing prices on the ID.3 and ID.4.
Because they flopped. For all the hype surrounding their launch, ID.3 and ID.4 are outclassed in nearly every respect by equivalent EVs from Hyundai—including range, efficiency, performance and driving dynamics. Teardowns of the ID.4 have shown that MEB isn't even a real EV platform. It was all hype.
Sorry, but this is just naive. Volkswagen has 26.5% of the European EV market in 2021. If the MEB platform is a flop then I think Volkswagen will very much like to continue that flop.
> Teardowns of the ID.4 have shown that MEB isn't even a real EV platform. It was all hype.
I don't know what that's supposed to mean. I don't think you know either.
In its inaugural sales year this brand new, intensely hyped, domestic branded, locally manufactured product barely edged out sales of a foreign branded, fully imported, three-year-old vehicle with an import tariff price penalty.
It's well known that a LOT of people in Europe are holding out on their purchase of a Tesla vehicle until the Berlin-manufactured Model Y becomes available. Let's see how the market share numbers look then.
A large reason is likely to double dip on the EV subsidies. Scoop 200,000 x $7,500 subsidies under the name 'Ford', then another fraction of 200,000 x $7,500 as partial owner and supplier under the name 'Rivian'
It's pretty common for automakers to collaborate. I suspect that Ford would have some option to purchase or license Rivian tech if they become successful.
I'm not sure if there is a ton of overlap. The R1T is much more expensive and has a much shorter cargo box. The F150 Lightning is much more like a traditional truck and is targeted more directly at commercial customers.
If the R1T and R1S are successful, its easy to see why Ford might want a part of both. It wouldn't shock me if they buy them completely at some point.
Maybe, but my leading guess is that there are only so many areas where a billionaire can throw billions of dollars and actually feel like they're contributing to (taking over) the future of humanity - with electric cars and privatized space transport being the safest bets.
Are you suggesting that it's vice versa? Because it seems SpaceX (even from its name) has always had a MUCH bigger vision than blue origin. Were Blue Origin pursuing reusability before SpaceX?
Bezos getting into electric cars, Blue Origin trying to get into Satellite Internet it always reeks of sub-par copycatness
> Charon made its only test flight at Moses Lake, Washington on March 5, 2005. It flew to an altitude of 96 m (316 ft) before returning for a controlled landing near the liftoff point.
The name is more ambitious too as it isn't just about exploration but expansion.
Rivian was also founded at the same time as Musk became a retroactive fouder-in-name of Tesla.
Fair point. I wonder what the reason for the lack of output is. They’ve yet to make an orbital launch vehicle, and can only land from a straight up launch… that feels like an easier problem to solve.
Meanwhile SpaceX are onto their 3rd/4th generation of launch vehicle and are doing more launches than everyone else combined.
Tesla when Elon “took over” made the roadster (a drive train for a lotus Elise), no real brand and no real identity. The founder-in-name is a pretty shitty dig. He has been directly involved in the Model S/X/3/Y
Wozniak built the Apple II. Is Jobs less of a founder?
IMO Musk is more like if Ronald Wayne had joined late and started being called founder through a lawuit settlement over something bad he had done, then took over and bailed out his cousin's company he had a financial interest in using a fraudulent merger. Maybe with the energy/grid connection more of a Kenneth Lay.
Yeah the demoed roof tiles pushing through the SolarCity acquisition were fake mockups. Later they never got them to work near the price point that pushed the deal through and now have a redesign making them close to the size of small panels.
So, is Google still a startup? When does a startup end being one?
What should I call my actual startup these days? A nano-startup? ;)