Elon Musk, Money Out of Thin Air

 In other words, how Elon Musk finds inventive ways to make or save money, essentially out

of thin air, by tapping existing technology in a new way.

This applies to Tesla, SpaceX and The Boring Company.

Tesla - computer on wheels, residual capability.

SpaceX - to make life multiplanetary, fully and rapidly reusability.

The Boring Company - digs tunnels, sell dirt.

Extracting new value and opportunity from an existing product or technology.

By the end of this video, you’ll see how these companies, together, will make billions of dollars of profits by finding opportunities to stack innovations upon one another and by leveraging technology in novel ways.

Let’s drive in.

https://www.youtube.com/watch?v=SLYE1uevT04

Tesla

Tesla’s mission is to accelerate the world’s transition to sustainable energy.

To be fair, they have.

And are.

More so than any other company on the planet.

You may think Tesla is a car company.

IT IS NOT.

Tesla is an energy company whose core technologies are batteries and software -- both of which are in MOST of their products, including vehicles.

A Tesla is not a car.

It’s a computer on wheels.

While its external form looks familiar, that’s about as far as the similarities go.

Most people still don’t get this, but they will.

And because a Tesla vehicle is a computer on wheels, Elon Musk has found and is capitalizing on a handful of residual capabilities worth billions, that no automaker or self-driving company has a hope of replicating.

This matters.

Tesla will win full self-driving.

I won’t give a lesson in deep learning today, but the importance of data -- LOTS OF IT -- cannot be overstated.

Whoever has the most data WILL win.

To date, Cruise has driven just a few million autonomous miles.

Waymo, about 20 million miles.

Tesla?

A little over TWO BILLION miles.

Tesla’s data lead is about TWO ORDERS OF MAGNITUDE more than second place.

This data is incredibly valuable in monetary terms.

Autonomous driving will be a trillion dollar industry.

And this is our first example of a residual capability.

See, Tesla has been manufacturing vehicles for years with all the necessary sensors to not only drive autonomously in the future, but those same sensors today are COLLECTING data and training the AI -- a residual capability.

It’s like when you search Google.

Every time you do this, you’re training Google’s search AI to be better.

Once Google’s user base hit a critical mass, no one had a hope of catching them.

This is why we don’t “search” for things now.

We “Google” them.

In effect, when a customer buys a Tesla, they are paying TESLA for the privilege of collecting data to improve their self-driving AI.

Meanwhile, Cruise and Waymo first buy a car, then fit expensive hardware, then pay someone

to drive it around.

At this point, no one has a hope in hell of catching Tesla on full self-driving.

It’s game over.

Over The Air Updates and Upgrades

Can you believe that in 2020 there’s only one vehicle manufacturer on earth who can provide over-the-air updates AND upgrades to their vehicles?

Automotive manufacturers are good at hardware and manufacturing but in general, suck **** at

software.

Then along comes Tesla, who make a computer on wheels, and are great at software.

By building “smart” vehicles, Tesla created a number of residual capabilities.

Tesla’s get BETTER after you buy them.

I don’t just mean the infotainment.

I don’t just mean new features like sentry mode, dog mode or smart summon.

Although those are cool.

I’m also talking about over-the-air PERFORMANCE and FEATURE upgrades.

Being a computer on wheels, Tesla can basically overclock their vehicles.

Tesla has increased RANGE over the air.

Increased ACCELERATION over the air.

Decreased braking distance over the air.

Increased charging speeds.

These are real, legitimate performance improvements that are simply impossible to offer in a “dumb car”.

any of these are free but others come with a price, like the $2,000 acceleration upgrade or the $300 rear heated seats upgrade.

The amazing part is for Tesla, this is money out of thin air.

Just a few lines of code.

Truly absurd.

And the only reason any of this is possible is because of the residual capabilities of a computer on wheels.

Are you noticing a pattern?

Robotaxis

This is the holy grail.

Once Tesla solves full self-driving and has regulatory approval for robotaxis, everything changes.

This is the single most important example of a residual capability.

All Tesla vehicles manufactured since October 2016 have the necessary hardware for full self-driving.

With the push of a button, Tesla will launch its Robotaxi app and overnight, practically its entire fleet awakens.

Suddenly your Tesla can go to work and earn you money any time of day or night.

Not only will this cause one of the biggest ever step-changes in an asset value -- think about it, a car that can passively bring in twenty, fourty, fifty thousand dollars a year in revenue is surely worth more than one that can’t -- but it will send Tesla’s valuations skyrocketing.

They’ll take a cut of every robotaxi fare.

Out of seemingly nowhere, Tesla will see a flood of BILLIONS in annual profits.

All the result of a residual capability.

Once again, Elon Musk has swung his giant brain around and outsmarted everyone.

Finding another way to print billions out of thin air.

It’s this next-level thinking, and Tesla's ability to stack innovation upon innovation, to find new ways to monetize existing products and to move at such an embarrassingly disruptive

pace that no one has a hope of catching them on anything that matters -- it’s because

of this that Tesla makes up the vast majority of my stock portfolio.

I’m not just investing in Tesla for today.

I’m investing because I see so many residual capabilities that will increase revenue and

profits in the future.

SpaceX

The mission of SpaceX is to make life multiplanetary.

The most important step in achieving this is developing a fully and rapidly reusable rocket.

From a hardware point of view, SpaceX is moving toward a SINGLE product.

Starship.

This ****-off massive ship is how we will colonize Mars.

Elon Musk estimates we’ll need about 1,000 starships.

In the meantime, Falcon 9 and Falcon Heavy wil be used to launch payloads to orbit until Starship is ready.

Starlink

To date, SpaceX is the ONLY company who can re-use their orbital-class rockets.

This brings their launch costs down by a STAGGERING amount and accounts for why SpaceX is doing more than half of all launches worldwide.

And with lower launch costs come residual opportunities that were previously impossible.

Not only can SpaceX launch other people’s stuff for pennies on the dollar, but they can launch their OWN stuff which creates an opportunity to do things that literally NO OTHER COMPANY ON PLANET EARTH CAN.

Like Starlink, an internet constellation that will ultimately provide broadband access to

every square inch of the planet, give or take.

Starlink looks set to bring in billions of revenue annually and the entire business is ONLY possible because of reusability.

Starlink, which could become a $100 billion dollar company is basically a happy accident of trying to colonize mars.

Talk about a residual capability.

Starship Earth To Earth

Starship will be used to transport people anywhere on earth in under an hour.

THIS decade.

With capacity for 100 passengers, the ability to fly more than a dozen times in a day since the trips are so short, and with tickets set to be priced somewhere between an economy and business class flight -- a few thousand dollars -- the numbers get crazy real fast.

I know it sounds mad, but SpaceX will be competing with major airlines and private jets by the end of this decade.

All because of a residual opportunity coming from reusability.

If you need to move something or someone to another place on earth as fast as possible,

Imagine a medical emergency…

or an urgent matter of national security.

The Boring Company

As the name alludes, The Boring Company digs tunnels.

Faster, smarter and better than everyone else.

But it’s not just the greatly improved speed, or significantly reduced costs of tunnelling

that show the innovations of The Boring Company.

It’s what they do with the mess.

Instead of having to dispose of tonnes of muck as they dig, The Boring Company makes bricks out of the waste.

Some of these bricks can be used to reinforce the tunnel walls, others are given away for

public housing and the rest, sold.

So yeah.

When you have a big brain and innovate for breakfast, you can even find a way to sell dirt.

 

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Elon Musk has proven himself as a master of extracting new value and opportunity from an existing product or technology.

Not once, not twice, but many times, across many companies.

The end result is that these 170 IQ moves will make billions out of thin air, embarrass much of the so-called “competition” and inspire others to follow suit.

Elon Musk is operating on another level.

People fail to see the hidden potential buried in the products and technology his companies create.

He’s laying the foundations for future revenue and no doubt, he’ll think of dozens more ways to print billions in the future.

Your job is to pay attention and to notice.

As an investor, if you identify opportunity before others, you’re at a distinct advantage.

What other seeds of potential are germinating beneath the surface of Tesla, SpaceX and The

Boring Company?

Time will tell.

What is the most exciting residual opportunity?

Can you think of others?