Tesla, the Electric Mule

Tesla, Inc., formerly (2003–17) Tesla Motors, the American electric-automobile manufacturer, was founded in 2003. And… it was not founded by Elon Musk (just clearing the common misconception) but by American entrepreneurs Martin Eberhard and Marc Tarpenning and was named after Serbian American inventor Nikola Tesla. Elon Musk was one of the few people who provided the initial funding ($30 million) and served as the chairman in early 2004, after he sold PayPal.

Going back to how Tesla started…

Eberhard was freshly divorced and looking for a sports car but was also very concerned about the impact it had on the environment. He then set his eyes on the AC Propulsion tzero. AC Propulsion was a small company from San Dimas, California, that specialized in alternating current-based drivetrain systems for electric vehicles. He loved the car, saw its potential and quickly became an investor in the company. He looked into shaping it into a car manufacturing company not just some small boutique and R&D workshop.

AC Propulsion tzero

But co-founder Alan Cocconi and his partner Tom Gage were not keen on making it a production car. Thus, borrowing the lithium-ion tzero as a demonstrator they approached their silicon valley investors and pitched their idea. So, AC Propulsion was like a catalyst for Tesla.

Tesla began searching for a chassis to build their first car and they ultimately settled on the Lotus Elise. Tesla worked out a licensing deal with AC Propulsion to use their motor and controller for the powertrain. With Musk on board, the deals all set and money in the bank, they hired Ian Wright (a person with a rich experience in building race cars) to build their first-ever car, the Tesla Roadster. 

Tesla Roadster

It had its official launch party in July 2006. Tesla booked the first 100 orders at $100,000 and the debut was planned for sometime later in the same year but due to issues related with the design and engineering of the car, the debut kept getting delayed and pushed back until 2008. Finally, the car set its debut and sold a little over 2400 units in between 2008 and 2012. The motor used in the Roadster was a 3-phase, 4-pole, induction electric motor with a maximum output of 248-horsepower and a torque of 200 FT-LB. Later in its production, the torque was boosted to 295 FT-LB for an even faster acceleration, it went from 0 to 60 mph in under 4 seconds and did a quarter-mile in just over 12.5 seconds.

In 2012 with the launch of the Model S, they entered the luxury car segment. The Model S was a spacious and stylish luxury sedan. This luxury sedan was a quiet beast, ‘quiet’ because it made no sound at all, it's electric and ‘beast’ because it created a horsepower of 588 and a maximum torque of 920 FT-LB and went from 0 to 60 mph in just 2.3 seconds. Its regenerative braking system helps your battery get back some juice every time you slow down. The Model S has seen many upgrades over the years from 2012 to 2016, but essentially it is the same generation car because Tesla does not distinguish its generations on the basis of modifications and developments on a particular model like other OEMs do.

Tesla Model S

Tesla distinguishes their generations by making a new vehicle. They come up with a new vehicle for a new segment for every new generation because that was their plan, going from the top of the pyramid to bottom.  Tesla was able to jump its production from around 15 cars per week in 2010 to about 1000 cars a week in 2015. In 2015, Tesla decided to launch a new generation, the Model X. The Model X was an SUV, it went from 0 to 60 mph in 2.9 seconds – that almost matches the Ferrari 488. The inspiration was taken from the Audi Q7. Musk wanted the car to have doors that could open easily in tight spaces and third-row seats that could be accessed without folding the second-row seats, thus came the ‘falcon door’ design with this model. The Model X was a highly anticipated car, it received 30000 pre-orders.

Tesla Model X

Next came the Model 3 in 2017. It was the third mass-market car in their line-up. The Model 3 booked 305,000 reservations in the first week itself. It was a lighter, smaller and more attainable, rear-wheel drive, single motor sedan. The production capacity for Model 3 is 5000 cars per week. It was the number one selling car of 2018, it even beat the Toyota Corolla, now that’s some feat. There are different variants ranging from $42000 to $60000. It goes from 0 to 60 mph in 5.6 seconds for the lower tier models and from 0 to 60 mph in 3.3 seconds for the top-level, all-wheel-drive performance model. It produces a horsepower of 450 and a torque of 470 FT-LB.

Tesla Model 3

So, since they’ve covered all the segments… any guesses on what’s next for the Tesla line-up?  It’s the new Roadster 2020, that has been slated for production in 2020. The new roadster will be built on an entirely new Tesla chassis unlike the previous one and will have several other substantial changes, it's essentially going to be a completely different car. Tesla claims that the new roadster will be able to reach 60 mph in about 1.9 seconds and a 100 mph in 4.2 seconds, that is as fast as an F1 car. The car is expected to be priced for around $200,000.

Tesla Roadster 2020

Over the past two decades, Tesla has caused a massive disruption in the EV market and is the reason why the market has started rising again. Elon Musk never fails to surprise us… don’t even get us started on Space X.

Abrogation of the Provisions of Article 370

Quick Facts:

1.    More than 7 lakh military personnel are generally deployed in Kashmir. 10000 more were added on 5^th August 2019.

2.   More than 41000 deaths have taken place in 27 years – the anatomy of Kashmir militancy in numbers; that is an average of 4 deaths a day.

3.   On 28^th June 2019, the Minister of Home Affairs, Amit Shah stated that the PM Modi’s led Central Government has taken a zero-tolerance policy to curb terrorism in the valley following which he proposed to abolish Article 370 as a temporary provision in the Lok Sabha.

4.   On 5^th  August 2019, Article 370 was abrogated. 

Historical background of the story:

Post-independence, there were 3 provinces (Kashmir, Hyderabad and Junagadh) that were problematic for the then Minister of Home Affairs, Sardar Vallabhbhai Patel as it was difficult to get them on board for a secular, united India. Out of these provinces, Patel was not very interested in Kashmir because of the fact that it had 80% Muslim population.

Hari Singh, the then Maharaja of Kashmir was not very happy about the Jawaharlal Nehru – Sheikh Abdullah (then Chief Minister of Kashmir) friendship as he feared that if Kashmir becomes a part of India, Nehru might put it under the leadership of Abdullah; but being a Hindu king he did not want to join Pakistan as well. Hence, he wanted an independent Kashmir. Thus, he put forth a stand-still agreement to both nations for allowing no change in the ongoing agreements until a future for Kashmir has been decided. Pakistan signed the agreement but India asked for a negotiation.

Meanwhile, Pakistan waged a sudden attack on Kashmir. Maharaja Hari Singh asked for help from India. India agreed to help Kashmir but with a condition; this led to the signing of the Instrument of Accession – which joined Kashmir with India.

This matter went to the United Nations (UN); which then led to the UN decision, asking Pakistan to withdraw their troops and India to have minimal army presence in Kashmir until the valley situation is stabilized. And once the situation settles, Kashmiri people will be able to decide their political future with a referendum. Thus, Article 370 was formed and since then the situation of Kashmir has not improved because of which the people never got the opportunity to execute the referendum. This also led to the formation of POK (Pakistan Occupied Kashmir).

Article 370 was a ‘temporary provision’, its purpose was to join/link the Kashmiri constitution and the Indian constitution.

Till 1965 Kashmir elected its own PMs.

The union list has 97 subjects for which parliament makes laws, out of which 94 such are applicable to Kashmir, these 94 were added over a period of time by making amendments to Article 370. Not just that, out of the 390 Articles, 260 are applicable in Kashmir – so the question is where is the autonomy of Kashmir which they asked for?

Article 370 and 35 A:

Key points:

-       Separate constitution and separate flag.

-       Dual citizenship (to Kashmir and India).

-    The Indian Supreme Court had no jurisdiction in J&K. In other words, the law and order of the Indian Supreme court were not applicable in J&K.

-        Indian parliament had limited rights to make any laws for J&K.

-    The Indian central government had powers for taking decisions related to only external affairs, defense and communication.

-    In 1954 article 35 A was included in the constitution of India by the then president, Rajendra Prasad.

-      According to this article people termed or identified as permanent residents of the state will only be the people residing in Kashmir on or before 14^th May, 1954 or people residing in Kashmir, 10 years prior to this date and who have acquired any property in the state.

-       Land, property, government jobs, scholarship, voting rights, are entitled to Kashmiris only.

-        35 A gives Kashmir the provision to define their permanent residents. In simple terms, no one can make use of the state resources of Kashmir, apart from its defined permanent residents.

The current decision taken has not really abrogated the Article 370 entirely, but it has used a part of the article to abrogate the entire Article itself except for clause (1) which treats Kashmir as a part of India. 

The article 370 (3) states that 

“Notwithstanding anything in the provisions of this article, the President may, by public notification, declare that this article shall cease to be operative only with such exceptions and modifications and from such date as he may specify. Provided that the recommendation of the Constituent Assembly of the state referred to in clause (2) shall be necessary before the president issues such notification.” 

In other words, the President can modify or even repeal Article 370 in consultation with the Constituent Assembly; but no State Government or Constituent Assembly existed in Kashmir, thus, the powers were transferred to the Parliament of India. The Indian Parliament can thus take a decision in collaboration with the President to declare it null and void and that’s what happened. This also leads to the abrogation of Article 35 A. Thus, Article 370 was itself used against it to make it null and void.

The Stand of Various Parties on the Abolition of Article 370:

In Support:

o   Bahujan Samaj Party

o   Shiv Sena

o   Aam Aadmi Party

o   Biju Janata Dal

o   AIADMK

o   Telugu Desam Party

o   Telangana Rashtra Samiti

Against:

o   Janta Dal (United)

o   Indian National Congress

o   Dravida Munnetra Kazhagam

o   People’s Democratic Party

o   Trinamool Congress

o   National Conference

o   CPI (Maoist)

Opinions:

Of the people who SUPPORT the move:

-     Economic Development in Kashmir: they believe that the economy in Kashmir will now develop since people will be allowed to buy land; will be allowed to invest in businesses and other opportunities that will cause a rise in the prices of land and locals will thus be able to lease their properties and make money; companies will start investing and bring in employment; education opportunities may arise, students might come in from other states; might also create an opportunity for government jobs.

-      More jobs = less terrorism: the overall development will create job opportunities for people, lead to a decrease in unrest among people and thus reduce terrorism and other crimes.

-       Share benefits under the Indian law: The Indian laws will now be applicable to Kashmir as well which will allow it to take benefit from the laws like RTI, RTE, and others.

-     Good for Kashmiri pandits: the Kashmiri pandits will now be able to return. (Click here to read more about it.)

-     Psychological impact: one flag – one nation; will make the Kashmiris feel more integrated with India.

-        Hotel Industry can experience a boom since many limitations will be removed.

-        Military expenditure and other resources deployed in Kashmir will reduce.

-        Ladakh will develop at a faster pace.

Of people who OPPOSE the move:

-   Kashmiris did not consent: thousands of troops were sent suddenly, without the consent of Kashmiri residents, the internet was shut down, telephone lines were disconnected, suddenly all communication mediums were cut-off. Government took the decision so discretely the residents couldn’t even bat an eye.

-     Kashmiri politicians under house arrest: 400 politicians in Kashmir were locked down under house arrest, including 2 former chief ministers. The common public was also locked inside their homes.

-      Fascist and undemocratic: since the Kashmiris were not consented many people believe it was an illegal move. Dissolving the state assembly and imposing the President’s rule without any elections was as good as a move under dictatorship. No ear was given to the people of Kashmir or the democratically elected politicians.

-    Unconstitutional cheating: this decision was taken when the state assembly was not existing, hence the Indian Govt used a loophole from the Article itself – this move was thus termed unconstitutional. Indian govt took the decision when the Kashmiris were vulnerable.

People felt cheated because the Indian Government said that they are deploying 10000 troops in the valley as they were expecting a major terrorist attack form Pakistan army-backed terrorist groups the real truth was hidden. (to counter this argument people said that: if this was not done and if the news was made public, there would have been a panic attack in the valley, it may have also alarmed the terrorist groups and cautioned them. Things would have then turned out to be worse. The act would have been much more violent than it was. People would have responded more violently if the army was not deployed and the correct news was out and above all if they were informed about the correct news it would be as good as elongating the already existing debate of 70 years).

-       Illegal Occupation: separatists say that Article 370 was the only legal connecting factor between India and Kashmir and thus after its abolishment there is no legal ground or evidence that Kashmir is legally a part of India.

Mehbooba Mufti tweeted – “unilateral decision of the Indian Govt to scrap article 370 is illegal and unconstitutional which will make India an occupational force in India”.

There could be a problem in the UN or even worldwide; some say that Kashmir has now become an Indian military occupied state.

-     No debate No discussion: On 05/08/2019, in the Rajya Sabha, the Indian Government decided that J&K along with Ladakh will be declared as Union Territories of India, without any debate or discussion on the bill.

-    Special status -to- Normal State -to- Union Territory: This transition form Special Status to Union Territory implies that the democracy level is much lower now since the Central Government has an upper hand over it. Democracy will become less because even though ppl can elect between the parties, the elected party will not have full power over the state as they will have to consult with the Central Government before taking any major decisions. If this can be done to J&K, it can be done to any other state in the future – a classic example of this is Delhi where the state and the center exist with each other and are at conflict since the past 5 years.

-       Pakistan’s reaction: Pakistan, the hostile neighbour to J&K reacted by saying it will downgrade its diplomatic relations with India and suspend bilateral trade with India. (Click here to read more about it.)

Some snippets of people’s reactions to the move: 

(see the entire tweet here)

Even if we accept and conclude that the decision was correct since it will bring about economic development in a place that was held back for so long; is there a guarantee that it will remain a success in the long run? It might fail because the state will not be integrated with India unless and until the people are.

While people are in a continuous debate about this abrogation, no one really knows about, nor can anyone accurately predict the long-term repercussions of this move. Will it turn out to be like the Demonetization decision, where the intentions were right but the implementation was a failure to a great extent? Let’s just wait and hope for the best.

Unicorn Startups

Topics covered: 
- Meaning; 
- Unicorns in India; 
- How to spot a Unicorn Startup?
- Reasons behind their rapid growth.

A unicorn startup is a privately held startup company valued at over $ 1 billion. The term was coined back in 2013 by the US-based venture capitalist, seed investor and founder of Cowboy Ventures, Aileen Lee. Thus, the statistical rarity of such ventures can be best-defined by choosing a name which represents the mythical creature. 

Other than Unicorns, there are decacorns and hectocorns. A decacorn is a word used for those companies over $10 billion, while hectocorn is the term used for a company valued over $100 billion.

According to TechCrunch, there were 279 unicorns as of March 2018. The largest unicorns included Ant Financial, DiDi, Airbnb, Stripe and Palantir Technologies. Lyft is the most recent decacorn that turned into a public company on March 29, 2019. Thirty-two new unicorns startups valued at $1 billion or more were born in the Silicon Valley this year. They included flavored nicotine seller Juul Labs (valuation: $38 billion), food-delivery service DoorDash ($4 billion), and sneaker company Allbirds ($1.4 billion). The new unicorns join an already sizable herd. According to startup-tracker CB Insights, there over 300 unicorns, roughly half of which are based in the US. They are valued at a cumulative $1 trillion.

Unicorns are supposed to be rare. But the “unicorns” of Silicon Valley no longer are. In 2014, 42 new unicorns were born in in the US alone, 43 in 2015, 22 in 2016, and another 34 in 2017, according to PitchBook. US tech industry has averaged 35 new unicorns a year for the last five years, more than eight times the rate from when Lee coined the term.

                           

There are way too many unicorns in Silicon Valley now. Unicorns companies valued at over $1 billion were once a rarity in Silicon Valley. Lately, though, unicorns are everywhere. Companies are now distinguished by how quickly they earned it. In June 2018, electric-scooter company, Bird became the fastest startup ever to achieve unicorn status, reaching a $1 billion valuation a little more than a year after it was founded. Other unicorns are so wealthy that we talk about them unironically as decacorns.

Unicorn Startups in India:

India’s four largest unicorn startups are in the areas of online payments, e-commerce, ride-hailing and education. Some say that India's unicorn startups are more like workhorses, catering to the most basic needs that people are already spending on. The most typical example of this could be the app called Chalo, one of Waterbridges recent investments, offers commuters real-time bus timetables and locations. It couldn't get more mundane than public transportation. Out of the top 10 Indian Unicorns (based on value), 9 are in online consumer space, the one outlier being an independent wind and solar-energy producer, named ReNew Power. On the other hand, in China, 3 of the top 10 are online consumer companies, 2 are bricks-and-mortar businesses and the rest are a mix of hardware and B2B.

India’s startup club of unicorn firms is growing faster than ever. In 2019 alone, India has produced over half a dozen unicorns so far, a new one was added just last week. Icertis, a contract management software platform raised $115 million led by US-based venture capital firm Greycroft and Premji Invest. The other unicorns created this year include grocery startup BigBasket, trucking logistics firm Rivigo, e-commerce logistics firm Delhivery, software firm Druva, fantasy gaming startup Dream11, IT healthcare firm CitiusTech and Ola Electric, the electric vehicle arm spun off from ride-hailing startup Ola, itself one of India’s earliest unicorns, according to data from Venture Intelligence.

The list of unicorns created this year is at par with all of 2018, and we are just halfway through the year yet. 2018 was a record-breaking year too, with hotelier Oyo Rooms, insurer Policybazaar, food delivery firms Swiggy and Zomato, online retailer Paytm Mallsoftware firm Freshworks, payment firm Billdesk and business-to-business marketplace Udaan all becoming unicorns. 

Out of the 25 unicorns in India, so far, 15 of them are from 2018, indicating the surging number of scalable firms, the data from Venture Intelligence says.

                       

How do you spot a Unicorn?

Let us learn how to spot a unicorn from Hans Tung. He is one of the few venture capitalists who has grabbed an equal number of opportunities by investing on both sides of the Pacific. During his career, he has invested in 11 startups that have gone on to attain billion-dollar valuations, including Airbnb, Bytedance, Slack, Wish and Xiaomi.

When asked, "What do you look for in a startup?" and "How early can you tell that a company has the potential to become a billion-dollar company?"

Tung said, "What we look for are founders whose personalities and background experiences are suitable for the markets they are building. The founder and the product need to fit together. We also want the market to be big enough so that we can have the outcome of a billion-dollar company. 

With a company like Xiaomi, I invested because I understood what the founder Lei Jun was trying to do. His vision made sense to me. Usually, we invest at the series A or B stage, so the company is about one to three years old. In the US, companies have sometimes changed their model one or two times by that stage before they found the right one. In China, this happens less often. The founders tend to be clearer about what they want to do from day one. They may not get the products right the first time, but the direction is set from the beginning." (To know more click here.)

Reasons behind the rapid growth of unicorns:

1. Fast-growing strategy

Investors and venture capital firms are adopting the get big fast (GBF) strategy for startups. It is a strategy where a startup tries to expand at a high rate through large funding rounds and price cutting to gain an advantage on market share and push away rival competitors as fast as possible. The rapid exponential returns through this strategy seem to be attractive to all parties involved. However, there is always the cautionary note of the dot-com bubble of 2000 and the lack of long-term sustainability in value creation of the companies born from the Internet age.

2. Company buyouts

Many unicorns were created through buyouts from large public companies. In a low-interest rate and slow-growth environment, many companies like Apple, Facebook, and Google focus on acquisitions instead of focusing on capital expenditures and development of internal investment projects. Some large companies would rather expand their businesses by buying out established technology and business models rather than creating it themselves.

3. Increase of private capital available

The average age of a technology company before it goes public is 11 years, as opposed to an average life of four years back in 1999. This new dynamic stems from the increased amount of private capital available to unicorns. The amount of private capital invested in software companies has increased three-fold from 2013 to 2015.

4. Prevent IPO

Due to many funding rounds, companies do not need to go through an initial public offering IPO to obtain capital or a higher valuation; they can just go back to their investors for more capital. IPOs also run the risk of devaluation of a company if the public market thinks a company is worth less than its investors. 

5. Technological advancements

Startups are taking advantage of the flood of new technology of the last decade to obtain Unicorn status. With the explosion of social media and access to millions utilizing this technology to gain massive economies of scale, startups have the ability to expand their business faster than ever. New innovations in technology including mobile smartphones, P2P (peer-to-peer) platforms, and cloud computing with the combination of social media applications has aided in the growth of unicorns.

Reference: 

- https://en.wikipedia.org/wiki/Unicorn_(finance)

- https://qz.com/1510648/why-do-we-still-call-billion-dollar-startups-unicorns/

- https://www.livemint.com/companies/start-ups/india-s-unicorn-tribe-grows-faster-than-ever-this-year-1563593970553.html

- https://en.wikipedia.org/wiki/List_of_unicorn_startup_companies

- https://www.thehindubusinessline.com/companies/indias-unicorn-startups-are-more-like-workhorses/article28570070.ece

- http://www.forbesindia.com/article/ckgsb/ggv-capital-unicorn-factory/54419/1
- https://www.forbes.com/sites/bizcarson/2018/10/15/billion-dollars-or-bust-a-scorecard-of-whether-75-promising-startups-became-unicorns/