Rahul Gaitonde

Budget 2020 increased already-high tariffs on imported electric vehicles, in all forms:

The customs duty on completely built units of electric commercial vehicles have been increased from 25% to 40%, whereas the one with the internal combustion engine has been increased from 30% to 40%. The tax on semi-knocked down forms of an electric passenger vehicle, three-wheeler has been increased from 15% to 30%, whereas semi-knocked down electric, buses, trucks and two-wheelers has been raised from 15% to 25%. 

“Government hikes duty on import of electric vehicles by 5-15%”, The Economic Times, Feb 2020

This is of course protection, to incentivise domestic manufacturers of EVs. I am reading Reset by Subramanian Swamy, who describes the effect of decades of such protectionism by successive Indian governments during the twentieth century:

…we sought to produce everything that we could, and the items that we could not, we strived to produce sometime in the future through an enforced programme of import substitution.

In such an environment,

… even if the market was small, there was practically a guarantee of making profits, for the price was fixed on a cost-plus basis, and the unequal distribution of income ensured enough buyers to make the production beat the break-even point… what we lost was the price and quality that could have come from competition, and therefore the tax-paying consumer became the ultimate loser.

The policy has had one part of its desired effect: Elon Musk of Tesla has declared that duties make it impractical to launch in India:

For other countries, we pay in part for the local factory by selling cars there ahead of time. Also, gives a sense of demand. Current rules in India prevent that, but recent changes in sales tax give hope for future changes.

— Elon Musk (@elonmusk) August 1, 2019

But as the book describes, it is extremely unlikely that being protected from Tesla and other world-class EV manufacturers is going to allow domestic car companies to create even better vehicles. If and when tariffs are loosened, customers will choose with their wallets. These tariffs will only delay the inevitable.

…fairly unique product cultures often develop within each company. This typically stems directly from the personalities and proclivities of the founders & senior executives within the organization and ultimately permeates throughout the entire organization… Through my time in Silicon Valley, I’ve found four specific product cultures dominate tech companies: engineering-driven, data-driven, design-driven, and sales-driven product cultures.

This article then goes on to describe each one of these cultures. Definitely a useful read if you’re a product manager, good read if you’re in the tech industry, but also helpful if you’re not – whether you’re a passionate user of a product or evaluating making a significant purchase of subscription to one, it helps to have a sense of the company’s culture. It’ll inform the decisions they make, features they’ll get around to building, the way they’ll address issues, treat your data. And therefore help you set better expectations with yourself.

Some more thoughts on the auto-industry’s inevitable EV discontinuity (earlier):

As a bottom-up EV company, Tesla also seems to be fundamentally software-driven. This isn’t necessary to build EVs, but it is probably going to be the model for successful auto manufacturers after the shift to EVs, regardless of whether Tesla itself wins or not.

A manufacturer having a continuing relationship with a specific vehicle after it has been sold to a customer is a novel concept. This is more like an iPhone that receives continual software updates over a certain lifetime that not only makes new features available but also makes existing hardware behave better.

This is a fundamental change. For example, to a Quora question about “Does Tesla update or change its cars with each model year?“, this answer:

Digit 10 of the VIN is the ‘model year’, but for Tesla this is the year the car was manufactured, not a ‘model year’ per se.  From when it was introduced in June 2012 the car has been continually updated.  

Part of this is by design – the majority of cabin controls are via the 17-inch touchscreen, with software updates pushed to the car via its onboard 3G connection every couple of months.  Sometimes these are cosmetic tweaks, sometimes bug fixes to the software itself, and sometimes new feature introductions such as ‘creep mode’ and ‘hill hold’.

Physical changes to the car also happen continuously.  Some are to introduce new features – such as parking sensors (park distance control) or electronic folding mirrors – and it may or may not be possible to retrofit changes to existing cars depending on the feature.

Some changes are under the covers, such as redesigned suspension arms, or more subtle, such as the recent change to the bezel around the instrument cluster.

Bottom line – Tesla continually tweaks the car to introduce new features, or to improve existing features.  There is no such thing as a ‘Model Year 2014 Tesla Model S’.

In fact, Tesla’s global over the air software update system means that 

Doug Field, a former Apple Inc. and Ford Motor Co. F -1.70% engineer who is now Tesla’s engineering chief, notes that, rather than “batch large changes all at once,” Tesla continues to make tweaks after a product launches, much as the software industry does.

This means it can seamlessly make major changes to basic elements of a car that would have required manufacturers to otherwise make a major recall [1]:

Tesla shipped an over-the-air update that, according to CR’s testing, improved the braking distance by 19 feet. It’s a wild idea: your car automatically downloads some code, and it’s instantly safer… CR’s director of auto testing (and the person who originally flagged the issue), said he’d “never seen a car that could improve its track performance with an over-the-air update.

And this, perhaps unimaginable just a few years ago:

… the automaker remotely unlocked the full battery pack capacity of Model S/X 60/60D vehicles with 75 kWh battery packs [for Florida customers in the mandatory evacuation zone looking to escape the path of Hurricane Irma in 2017]

This was because

Tesla used to offer the option to buy a Model S or Model X with a 75 kWh battery pack software-locked at a capacity of 60 kWh. The option would result in a less expensive vehicle with a shorter range, but the option to pay to remotely enable the longer range at a later stage… a representative confirmed that the company has put in place the emergency measure to temporarily extend the range of the vehicles of Tesla owners in the path of Hurricane Irma.

And while I can’t find coverage of this feature having been implemented, an idea of what is possible:

We are going to move all info and settings to the "cloud" (aka server) so any Tesla you drive in the world automatically adjusts to you

— Elon Musk (@elonmusk) August 20, 2017

This means a car that’s actually gets better over time, as this writer states, describing improvised auto-pilot, an improvement in the range of its long-range models, a speed boost, automated wipers that used “the first production deep neural network trained with over 1 million images for the detection of water droplets in a windshield and additional weather cues” and the braking improvements above. 

Finally, it also means the manufacturer has a relationship with the car and therefore the end customer unmediated by dealerships. This is transformational to the company’s organisation and to the economics of selling cars, but we won’t get into the details here.

That a major publicly-listed international car manufacturer, EV or not, has adopted this system of building and maintaining cars is a genie that can no longer be put inside a bottle. It has to become mainstream now.

[1] Update: Of course, not everything can be fixed via software: “NHTSA said there are no known crashes or injuries associated with the Model X recall. The recall covers 14,193 U.S. vehicles and 843 in Canada. Tesla will arrange for the replacement of the mounting bolts and will also replace the steering gear if needed, Transport Canada said.”

From this piece:

For most people, retirement means they are finally free to do whatever they want without worrying about money. They could finally leave their jobs, travel around the world, and set their schedules so it fits their rhythm of life.

However, this is a low bar for freedom. Giving away thirty-plus years of your life to an indifferent career is like spending all your youth with a partner that you’d rather not be around. When you finally break free of that job or relationship, you’ll be left wondering what else you could have done with all that misspent energy.

And

The problem with freedom-as-leisure is that it is fundamentally asymmetrical. You have to work significantly more hours for each hour of leisure you may gain, which means that if you hate your job, you have to accumulate a lot of misery before you can cash it in for freedom.

As long as you aren’t working to payoff immediate debt, according to the article you can reframe the way you think about work

This is where you realize that work isn’t about retirement; it’s about working on the things you’d do if money wasn’t even a factor… not because they’re profitable, but because you enjoy the hard work it takes in building them.

The first thing that the freedom-in-work model does is that it lowers the threshold of money you need to continue your work. When work in itself is fulfilling and worthwhile, you become more content with a minimal lifestyle.

This is because money no longer serves as a reliable signal of your worth and priorities. In the freedom-as-leisure model, the amount of money you made from your job was of utmost importance. If money was the only justification for your continued employment, that salary better be high enough to make your time worth it.

I learnt a couple days ago about Britain’s plans to advance the deadline to stop sales of petrol and diesel vehicles from 2040 to 2035. The article also mentions India’s own deadline of 2030.

As I read though the article, I realised how slowly the auto industry moves at a macro level. We are talking about fifteen years from today. Cars sold in 2005 aren’t that different from ones sold today. The car I drive today is the exact same model introduced in 2005. Today’s model, two generations after, is slightly roomier, slightly more powerful, slightly more fuel efficient,  and has a lot more electronics in it. But it’s not radically different.

Meanwhile the phones, computers, wearables we use today were probably unimaginable in 2005. The sophistication of software we use today (Photo editing, Maps, Uber, Zomato, Netflix, Slack, even Whatsapp) would not have been possible to imagine on mobile then. Nearly everything about information technology has been transformed during that period; comparatively very little in automotive technology has.

No wonder auto manufacturers are concerned and are complaining. If Norway, India, Britain actually meet their targets, the cars on the road then are unlikely to be from the manufacturers who make cars today. Massive disruption is afoot because the industry has just never gone through a major discontinuity and therefore has no idea how to retool itself quickly. Even the oil shock of the early 1970s, now almost fifty years old, has not led to any major lasting changes. 

Given all this, maybe Tesla’s stock price rise is justified. It is the only car company that’s got it together – manufacturing, software, infrastructure, distribution.

A person at a gathering today expressed wonder at how all of the products Google has made and the impact they’ve had on our lives has been underpinned by ads and billions of clicks.

The cynical view of the company is that it creates products with the sole intent of gathering more information about you and creating more destinations to serve you ads.

The more optimistic view is that Google  remains a company that seeks to ‘organise the world’s information and make it universally accessible and useful’. And that they are thrilled that the success of ads from an early day has helped them with the cash to fund this mission. I would like to believe that this is how management thinks, despite the company’s growth over the past twenty years and the founders stepping back.

Over ten years ago, I wrote of Google and Microsoft

Companies like these are larger than the “next big thing”. Their own “thing” is so incredibly significant, so humbling. 

– June 2009

Google’s Gmail, Photos, Android have done a tremendous job organising personal information. Maps and Search are modern-day wonders that have indexed and organised the real and virtual worlds. But there are new types of information constantly being created. There is so much more left to be indexed, made sense of and ‘made accessible and useful’. 

This is a mission spanning at least fifty more years, probably much longer. And if ads can help achieve it, so be it.

I use iOS Shortcuts multiple times everyday to make life easier in little ways. Many of those are to log things about my life. Some are fun, like automatically tracking when I arrive and leave the office, using iOS’ geofencing support. Others are useful, like logging expenses (which I have done for nearly three years now). But some others are important. When I sought treatment for migraines last year I logged my pain on a scale every day, and continue to do so. It helped see the effect the treatment was having. 

Recently I added a Shortcut to track my water consumption. I know there exist several apps that help remind, track and visualise water intake, but I wanted to build my own so it was flexible, extendable, shareable and reusable. The shortcut is exceedingly simple, run from Launch Center Pro (manually, but quickly) and taking input from a list:

The only difference is I plug the data into Apple Health in addition to my usual plaintext file format. It makes for quick visualisation, which I would have to build manually with the plaintext CSVs. 

But I realized that the phone is already tracking my Steps and Sleep via Bedtime (both only approximately), and I can easily have my meditation log feed into the ‘Mindful Minutes’ heath category. In short, even without an Apple Watch, Apple Health is becoming a repository of my wellness data. Because it is possible to export data from the Health app, my current thinking is to embrace the summary and visualisation it offers and expand it, over time, to more categories. 

Azeem Azhar in his excellent newsletter Exponential View:

Cloud computing infrastructure will be the substrate of the exponential age. In some sense, like controlling the power plants, roads, and factories, for the economy—while also having the deepest insights on which parts of the economy are doing well, and which aren’t.

I found this blog post particularly helpful. It’s so well written that it’s hard to quote a paragraph that describes the essence. This is what the post is about

[Overcommunication] can dramatically improve your work life, not just in the short term but for the entire arc of your career. 

An employee helps take care of their manager by proactively communicating project status and what, if anything, is impeding success. A manager helps take care of their employees by making that communication psychologically safe even when it contains bad news, and by offering constructive support to solve problems. 

The writer goes on to describe how communicating more than is strictly necessary helps in the following cases:

• Implementing a new process
• Dealing with a personal struggle
• Working on a long project
• Something awesome happened
• Manager doesn’t understand what you do day-to-day
• Feeling overwhelmed
  

And ends with describing how to overcommunicate with an example, summed up as ‘great communication is honest. relevant, respectful and concise”. It is also, importantly, distinct from cover-your-ass communication.

I found this important because at the startup we’re now at a stage where multiple things happen independently of each other. There are immediate fixes, current planned tasks, longer-term projects and somewhat more strategic thinking. Across sales, marketing, business development, engineering and operations. While most of the team is in a single location, it’s no longer feasible to keep the entire company apprised of all of what’s happening at a single meeting.

We have to overcommunicate.

From the book ‘The Upstarts‘ about the early success of Airbnb and Uber, this bit:

Uber’s financial results also looked promising.The company was exhibiting an elusive phenomenon called negative churn, in which users who joined the service were more likely to stay with it and gradually increase their frequency of use than they were to leave. In other words, once customers joined Uber, they turned into a sort of high-yield savings account. The lifetime value of a user seemed unknowable, perhaps unlimited. 

The more general definition of negative churn seem to be a state where a business generates more revenue month on month (MoM) from existing customers even as it progressively loses some of them.

Good SaaS businesses can display negative churn. But a wealth business is a particularly great candidate for a negative churn business when it’s achieved momentum. A wealth manager generates revenue

• (a) from new customers added MoM
• (b) from existing customers investing more MoM
• (c) from the MoM growth of existing assets under management

Even when customers from a cohort inevitably churn, increased revenue from (b) and (c) can counteract that loss, continuing revenue growth from that cohort. In particular, (c) is unique to wealth/investing.