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The two companies, one founder and 50-year time horizon that will shape the future
Civilizations are constrained by energy, intelligence, physical labor and transportation. The central thesis of this publication is that Tesla and SpaceX are building an end-to-end industrial stack for a radically different future.
The will play an oversize role ushering in an era where energy is cheap, intelligence is abundant, machines do most physical work and humans are no longer geographically constrained to a single planet.
This is closer to the build-out of rail, electricity and the telecom network combined than it is to a product cycle. Energy, intelligence, autonomy and space logistics have suddenly collapsed into a single bet. And it’s one hell of a story to cover.
Luckily there’s still a market efficiency I can exploit. The most important industrial system of the 21st century is being built in plain sight but few are analyzing it correctly, and despite success after success, cynics still abound.
It’s a little perplexing after the last 20-years of progress at Tesla and SpaceX that analysts are still getting it wrong. They remain excellent at pricing incremental change, but terrible at pricing nonlinear systems under construction.
Most analysis asks questions like:
What are Tesla’s margins next year?
How does SpaceX compare to other launch providers?
Is xAI “behind” OpenAI and Anthropic?
These are not meaningless questions, but they are second-order.
The first-order questions are: What’s the probability that this system will be built, and what’s the market size for a company that brings energy, autonomy, robotics, communications and space logistics into one integrated system?
It reminds me of a passage from Howard Marks memo on bubbles:
The dream of an enormous payoff justifies – no, compels – participation in an endeavor with an overwhelming probability of failing. There’s nothing wrong with calculating expected values this way. Leading venture capitalists engage in it every day to great effect. But assumptions regarding the possible payoffs and their probabilities must be reasonable. Thinking about a trillion-dollar payout will override reasonableness in any calculation.
And that’s the difference, while most agree these projects have trillion-dollar payouts, I don’t think these endeavors have an overwhelming probability of failing. That’s why they continue to defy the logic of Wall Street analysts valuation models. Because the market is willing to price these companies (whether in the public or private markets) the way venture capitalists do.
That creates unbearable cognitive dissonance for traditional finance-types.
These are capital intensive, regulated, personality-driven bets that break governance norms. But that’s also exactly the point: who else is bringing together new paradigms in energy, intelligence, labor and transport, and who else has the ability to coordinate them without institutional drag?
That’s what makes this collection of companies rare and valuable. And that’s why I chose to cover the combined companies of Elon Musk. Public understanding here is dangerously shallow. Coverage oscillates between hero worship and outrage, with very little serious thinking in between. So most people will only understand these companies once the future they create is already here.
Collapsing the gap between comprehension and consequence for those that choose to read it is why this publication exists. If you want an easy way to follow along, please subscribe, and I’ll be your guide.
This is a long project, and it’s still early days.
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