Tesla’s Innovative Capital Financing

It’s interesting to look at this one statement regarding Tesla’s finances, $9m in the bank after taking deposits on 1,200 orders. I picked a number at random, a number between the $4k and $60k deposit required when placing an order calculated that they have taken $20m in deposits, which means they have burned through half of the money committed by customers before delivering but a fraction of the orders they took.

This might not be a bad thing because I’d bet that a very large percentage of those customers would still have placed an order with a deposit even knowing that Tesla lacked all of the capital to deliver on the cars they committed to selling.

You couldn’t do it because of SEC regulations covering the number of allowable investors (as well as being accredited investors) but it would be quite dramatic if Tesla had come out and said from the get to that the first 1,000 customers would in fact become investors in the company in exchange for a larger upfront deposit. That could have generated the additional $20m that Musk says he needs to break even without all of the drama they are experiencing right now.

In an employee meeting, Musk shared the company’s finances, which indicated that Tesla has about $9 million in cash.

[From Tesla Motors seeks cash to keep moving forward | Green Tech - CNET News]

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Home Automation – WiFi Thermostats

I’d buy one of these. We have had an RF thermostat in our house for 5 or 6 years now, it’s a pretty neat and reliable device that has a portable receiver that you can take from room to room, and a base unit that then responds and controls the forced air heater. It’s programmable to 4 different daily settings. What I really like is that the portable remote allows you to heat your home to the baseline room that you place the remote in, in other words, rather than the thermostat responding to a fixed location you can move it from room to room.

What is really cool about the Ecobee is that it can respond to utility alerts regarding power conditions. For a forced air installation alone this would be a non-issue, but for a HVAC installation this is quite significant.

The Ecobee connects to a thermostat through a standard HVAC interface, and hooks in to the Internet via a home WiFi network. The thermostat regularly synchronizes its data with a secure Web portal. Once networked, the thermostat can receive alerts, too, from whoever installed the device. Dolmer noted that utilities “are becoming a huge part of what we’re doing,” far ahead of Ecobee’s plans, and that utilities might purchase and install new thermostats in order to both improve conservation and send messages to customers, potentially at little or no cost to the customer.

[From WiFi thermostat puts power (and cooling) at your fingertips]

MacBook Pro Tradeoffs

A lot of people are talking about the new MacBook Pro battery life, or more specifically the lack thereof. It’s actually interesting to consider the design choices hardware manufacturers have to make when designing portable gear, in this case weight is probably a driving issue because the new MBP is slightly heavier than the model it replaced.

The 20% reduction in battery life that Mossberg references is easy to explain, the battery itself is almost 20% smaller… the new MBP has a 4,700mAh battery while the old MBP had a 5,600mAh battery. Less battery capacity, less battery life between charges and it means less weight which slimmed down the overall package to be in range for the older generation MBP.

Much worse is the loss of battery life. When used with its discrete graphics processor, the natural mode for the kind of audience at which the Pro is aimed, Apple claims it will get just 4 hours of battery life, versus the 5 hours it claimed for its predecessor, which also used a discrete graphics processor. That’s a whopping 20% reduction in battery life.

[From MacBook Pro Tradeoffs | Walt Mossberg | Mossblog | AllThingsD]

More troubling is that as the battery degrades over time you will be more affected by the lack of battery power meaning you can likely expect to be replacing it sooner than the old MBP.

Tesla = Segway 2.0

I love the idea of the Tesla, a high performance electric car that is fun to drive and good to look at. I wonder if it ends being the next Segway, a promised revolutionary product that ends up being underwhelming in reality. I drive by their new showroom in Menlo Park all the time and there just doesn’t appear to be a lot of stuff going on there on a typical day. With tax and licensing they are selling a $125k car, which is a lot of money in any economy, and when the novelty wears off I wonder where they go. Maybe instead of comparing it to the Segway, a more appropriate comparison is the DeLorean.

Chairman and Chief Executive Elon Musk said Friday that Tesla would cut as many as 87 staff and full-time contract workers, or 24% of the 363-person total. The company also will attempt to raise $25 million, rather than the $100 million it had been seeking.

[From Electric carmaker Tesla plans big round of layoffs - Los Angeles Times]

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Vote No on California Bond Measures

Every election cycle I post my voter guide, which not only covers candidates but also the bond measures that California voters have to decide on. This year I am not going to do that and instead urge all California voters to vote NO on every bond measure on the ballot.

The proposition process has gone from being a tool the citizenry could use to redress wrongs and set priorities in the absence of leadership from Sacramento. Instead of the proposition process being the voice of last resort for the People, it is now a tool for politicians and interests groups who cannot get what they want through the legislative process.

Propositions are regularly loaded up with loophole language that is the ballot equivalent of Congressional pork, carve-outs that apply to specific organizations or interests and serve to pervert the original purpose of the measure behind the bond. The backers of these propositions count on voters not reading the lengthy and often complex voter guide that is mailed to every registered voter, and by attaching a lofty title to the proposition and some flowery introductory language, along with an avalanche of television and mailer advertising, well most of these measure end up passing.

Yet both expenditures are perfectly legal, local twists in California’s high-stakes bond-measure game. Fred Silva, an expert on bond measures and a senior fellow at California Forward, a nonpartisan group trying to improve state governance, says the loopholes are always spelled out in the fine print — 61 pages of which are jammed in back of California’s November 4, 2008, Official Voter Information Guide. “It’s really a buyer-beware situation,” Silva says.

[From Reading the Fine Print: How to Spot the Loopholes, Legal Doozies and Loose Phrasing in California's Ballot Initiatives - News - LA Weeklypage 1 - LA Weekly]

California is already on the hook for over $100 billion of debt (aka “bonds”) and the ultimate cost to taxpayers when including interest is typically 2x the face value of the bond. We have something like $51b in bonds already sold and another $54b in authorized bonds that have yet to be sold, meaning the interest rate for the authorized but unsold bonds has yet to be set. A recent bond auction, recent as in recent weeks, was oversubscribed only after the State increased the interest rate to 4.25% (versus Fed Funds Rate of 1.5%) and keep in mind that there is a tax advantage for buyers of state bonds and on top of all that, these are short term bonds. The conclusion is that the cost of borrowing is skyrocketing and this will affect every bond measure that is on the ballot.

There is another way to look at the bond issues. If the cost to taxpayers is 2x the face value, what that means is that the taxpayer sees only 50% of his/her tax dollar going to the issue they are voting in favor of.

If I told you that Prop 1A for high speed rail between Los Angeles and San Francisco will cost $20 billion and $10 billion of that will be for interest and another $1b will go to things that are not part of the construction process like “environmental studies, planning, and preliminary engineering activities,” and another $1b will go to regional transit authorities for intercity rail projects, and $250 million will go to “administrative costs,” would you be quick to vote in favor of that proposition? This is exactly what the Prop 1A high speed rail measure provides for, it’s all right there in the 7 point italic font of the voter guide.

You can be in favor of high speed rail and be against this bond measure knowing that of $20 billion of California taxpayer money, only $7.75b will go to building a high speed rail system… do you really believe that a high speed rail system linking 400 miles between 2 major cities in the state can be built for $7.75 billion (btw, rebuilding 1/2 of the San Francisco Bay Bridge will cost $6.5 billion)?

It is long overdue that voters exhibit some fiscal discipline in the face of a lack of it coming from government. When asked to vote on a measure that will result in your tax dollars being spent, ask yourself what you are buying and do the research rather than just taking your education from a 15 second tv spot.

Airship Ventures

I saw this today while driving around, it’s a big ‘ol Goodyear Blimp without the Goodyear logo plastered on it. In fact, it’s plan gray and the “Airship Ventures” text on it is kind small. It’s big, no question about it but I’m not so sure flying around in a zeppelin would do much for me. Watching it today I was impressed by how quickly it can move around.

Airship Ventures Inc.’s zeppelin arrived in the Bay Area on Saturday, passing over the Golden Gate Bridge en route to its new home at Moffett Field, a former naval air station in Mountain View, about 40 miles south of San Francisco.

[From Calif. company to offer rides on zeppelin airship]

Tech Companies Start to Stand Up to Repression

This is great news and we should encourage these companies – all companies really – to continue their efforts on this front so that when they are tested they will have the backbone to stand up for their code regardless of the cost they must pay to do so. The test is not defining the values but rather standing up for them when it matters.

The code, written over the past two years by technology companies, public interest groups, academics and socially conscious investment funds, covers an array of human rights issues that Internet firms might encounter in repressive countries.

[From Tarnished tech firms to adopt code of conduct]

Walker Fenton for OpenSocial Board

It’s election season and I want to draw your attention to my colleague Walker Fenton’s bid to join the OpenSocial foundation board of directors. In his own words here is why he wants your vote.

NewsGator was a launch partner in OpenSocial, and all of our widgets today support the OpenSocial specification. The reason why i’m interested in serving on the board is to better represent our Media clients as the technology matures… we are off to a good start, but adoption is limited from the development community as the users haven’t materialized. One way to get broader adoption is to help Media companies take advantage of the technology to better serve their audiences, which will drive usage and in turn encourage the development community to better support the spec. We at NewsGator are in a great position to help drive that effort, and a seat on the board of the OpenSocial Foundation will help us achieve these goals.

[From Hair On Fire: Speaking of Elections..]