TOW 18: We Need To Build More Startups Like Tesla (argument #1)

              This article was written by Babur Habib, CEO of Portfolio School and contributor to Forbes.com. The article discusses the success of Tesla and similar companies and why they are favorable over other successful companies. Previously, the manufacturer would get their product to the customer through a network of middlemen. Now though, companies are taking over the whole route by themselves. Tesla, for instance, builds cars in their own factories (that they built), using batteries that they built, and sells them through their own company dealerships to customers. Habib argues that this model is superior to the old one because it allows customers more personalization in their experience. Tesla offers more customizability than any other car manufacturer, for example. Habib calls these companies “full-stack” companies.

              While there are definitely advantages to full-stack companies, such as the customer personalization that Habib talked about, they also carry certain downsides with them. Firstly, the reduction of middlemen decreases job opportunity. The factory companies and dealerships that were paid by Mercedes and BMW, were not paid by Tesla. Of course, those workers could get a job at Tesla, but this is another problem in itself. Many of the workers have no place at Tesla. Other companies that Habib identifies as full-stack are Uber (who takes jobs away from taxi-drivers) and Airbnb (who puts hotels out of business). The idea that full-stack companies are objectively good comes from a very narrow perspective, the perspective of the direct consumer. This is a little bit like saying piracy is good because you can get movies and TV shows for cheaper. Yes, it is good for the person clicking “play” but in the broader picture, it does much more damage. Full-stack companies have found a way to further exploit an ever-more desperate lower class. They are good, but only when you are giving them your money.

http://www.forbes.com/sites/baburhabib/2017/02/06/we-need-to-build-more-startups-like-tesla/#10b9bf1a19a1