Tesla Motors still one man’s company

We’ve had sad news this past week, as 3 people from Tesla Motors died in a plane crash. I feel sorry for that small company, knowing too well how hard it is to find competent collaborators, and how much one single individual is worth in a small team. Come to think of it, can Tesla Motors survive without those 3 people?

Yes, of course! But does that mean that any single person working at Tesla could leave this company without notice, and that the company would keep on going unchanged, I doubt it. There was the chief engineer of the roadster, Martin Eberhard, whose abrupt departure created several issues that took a while to settle. I met Darryl Siry once, he was Tesla’s communication officer, but he left, and his successor has a much lower profile. Some people can be changed, but not Tesla’s actual CEO, Elon Musk.

Since Martin Eberhard left, Elon Musk is the über-manager of Tesla, supporting it with its own money when times are hard, which are quite frequent. In fact, M.Musk’s commitment to the company he created is such, that if he were to leave the company, Daimler (who has a partnership with Tesla) would get the right to review its partnership, and could even terminate it in some cases.

Sounds crazy? Certainly not. It will stay like this as long as Tesla is not a profitable company, and nobody expects that within the next 3 years. They have to bring their new Model S to market, and even in the best scenario, it will take several years before that start making any money. Even mighty Toyota lost money between 1997 and 2004, before the Prius started to sell in large volumes.

So Tesla can loose one engineer, but it cannot afford to loose someone with deep pockets to support it… As long as it’s not making money… But will Tesla ever makes money? Tesla Motors was incorporated in 2003. Venture capitalists expect a company to return several times their original investment within 5 years, and to any normal banker, a new business must be profitable in less than 3 years. Tesla Motors is very far from those expectations, and the farther it is, the more it will need M.Musk.