The Model 3 Moment
Production hell will punch you in the face
“Everyone has a plan until they get punched in the face.” — Mike Tyson
As more founders, operators, and investors jump into the ADCU, I keep thinking about something one of our founders mentioned to me last week.
“I like so-and-so, but they don’t have the temperament for this business.”
The person wanted to invest, and even though this founder liked them, they weren’t going to let them. The founder wasn’t convinced the person would remain calm when things went wrong. The hard truth about hardware startups is that this shit is hard. And things will go wrong.
Some people are ready for that, others are not. I was actually impressed with the maturity of this founder; they don’t need more cash right now, and more importantly, they’re actively selecting who they want around the table. They want steady hands with them on the wheel.
That metaphor is intentional. Yes, in crisis moments few people are steady hands on the wheel. But the other, more apt reason is because it invokes one of the most well-known examples of things going wrong: The Tesla Model 3 production hell.
So much has been documented here that it was hard to actually select the right quotes for this piece. Ashlee Vance’s Elon Musk biography, while great, actually predates the Model 3 ramp. And Isaacson’s biography comes after the carnage.
This article ended up summarizing the Model 3 Moment succinctly:
In the interview Thursday, Musk alternated between laughter and tears.
Reflecting on how close Tesla came to dying: “The closest we got was about a month. The Model 3 ramp was extreme stress and pain for a long time — from mid-2017 to mid-2019. Production and logistics hell.”
“There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he said.
“I thought the worst of it was over — I thought it was,” he said. “The worst is over from a Tesla operational standpoint.” He continued: “But from a personal pain standpoint, the worst is yet to come.”
Making one of something and then making thousands of something are completely different activities. And the gap between those two things is where companies go to die.
Successfully scaling production requires immense skill, focus, temperament, and raw executional capability. You and your team must be maniacal problem solvers. And even then there’s no guarantee you’ll make it.
Very few companies have successfully traversed this — arguably only Tesla and SpaceX. You can quibble here and there about others (we’d posit Rivian and a few others have as well). But the general point remains the same. There are a lot of ADCU startups. And not many have gone through this yet.
We’re writing this now because some of these companies are starting to gear up for their own Model 3 Moments, and we want to be lucid about what it will take.
Ultimately it will be up to these individual companies to traverse this final great filter. We are optimistic, but more people — especially investors — need to understand that this wave is coming.
It takes a ton of work. You’ll get punched in the face. So long as you keep pushing through there’s a path to the other side.
Up until the Model Y came out, there’s been a dozen different times Tesla almost went bankrupt, but it didn’t. They found their way through production hell.
They had their Model 3 Moment. And they survived.
You don’t wish it upon anyone. But in hardware land it will always come, so be prepared for it.
“This is simply something important. It must get done. We will keep doing it or die trying. I don’t need a source of strength for that. Quitting is not in my nature. I don’t care about optimism or pessimism. Fuck that. We’re going to get it done.”
– Elon
Go get it done. Good luck.
