TechStuff Goes to a Better Place

This is uh, this is fantastic, big fan. Uh the last time I was here, I used a joke longtime fan, first time co host, and uh, we can't use that one again. Yeah, but I'm doing that thing where you just say it anyway. Um. Yeah, So thank you so much for having me on the show, especially because this is a topic that you hipped me too. And I think, um, I think that this presents a fantastic cautionary tale, yes, and a fantastic almost hariensic experience on our part. Yeah. Yeah.

What Ben is referring to is the topic better Place a company that This was actually a request that a listeners and in the listener Russell via email wrote in and said it would be great if you could do a podcast on a better Place electric car project. Following up on your Tesla podcast. It would be interesting to show the other approaches that are being tried around the world. And before we get into this, I really want to give a shout out to Max Chafkin, who wrote an

article for Fast Company. It's a phenomenal, phenomenal piece that really details the entire life cycle of Better Place, which it was not long. So, first of all, spoiler alert folks, better better Place. Better Place has gone to a better place. Yeah, it's gone somewhere for sure. And uh, it's it's strange because I think that's such a fantastic name for a company. It made me so sad, particularly considering what the whole thrust of this company was. As Soul has already mentioned,

it has to do with electric vehicles. And the article at Fast Company, by the way, if you ever want to look it up, is called a Broken Place, the spectacular failure of the startup that was going to change the world. And really that is a pretty accurate assessment

of what went on. It's um, you know, it's unfortunate because again, the the the premise, the whole purpose of this company was a noble one, right, The idea of creating an infrastructure for electric vehicles because one of the things we talked about, and and Ben you've talked about this a lot on car stuff, is how going to an alternative fuel source is a huge, huge endeavor. Yeah, because there's already such a massive conglomeration of sunk cost

in our current fuel sources. You know, the the idea of uh rebuilding essentially an interstate system and and and rebuilding every single gas station that we have, and just think about how many gas stations you see in twenty four hours and having having to make just even just one gas station every fifty miles into an electric one is a herculean endeavor. And I just want to put

in um put in one seed here. The reason you know, you've heard this story about why they named this company a Better Place, right, it's uh yeah, it's apparently it's based on the founder Shy Augussi. Uh he had a

visit to the World Economic Forum Switzerland, you remember this. Yeah, he went to that that forum, which was had a whole bunch of young entrepreneurs obviously, and he started getting interested in this idea of alternative fuel Yeah, yeah, absolutely, and uh he there was a question asked by a guy named Klaus Schwab there who said, how do you make the world a better place by and uh, this guy who would go on to found Better Place decided that,

you know, this would be my inspiration, right, and and that led up to the origin of this origin of this company. In two thousands seven, they publicly launched. Yeah, and I'm sorry, I guess I'm jumping over because we should talk about their grandiose plan, right. Sure, But back in two thousand five was when he went to this meeting, and uh, you know, his his idea of a better place was to get the world off of oil dependency.

And uh, one thing we have to point out is shy Agassy came from Israel, and uh, and obviously if you want to you have to look at politics as part of this. It's not an economics. It's not just the idea of a green movement, right, which was already becoming a huge thing in the mid two thousand's. The green technology was one of those kind of rising star industries that idea that we should really invest in this

because it's the next big thing. Anyone who was paying attention to tech in the mid two thousands, mid to late two thousand's, you know that was like a buzzword of buzzwords. Right. It's kind of faded since then, Not that people are less interested in developing green technology, it's just no longer this like for a while it was

a bandwagon thing, right. Yeah, that's that's a perfect way to say it, because for for a number of years, for a period of time, this would be something where every company, every tech company especially had some sort of green initiative, right, it was you were just supposed to have one, you know. Yeah, And so shy Augussy was

really kind of jumping on this this momentum. Uh, and he well, we'll be talking a lot about him in this podcast and about how he kind of had these grandiose ideas, Like you said, this grandiose plan, this enormous kind of showman sort of persona, very P. T. Barnum, very Elon Musk in many ways, will be will be kind of comparing him and contrasting him with Elon Musk as well, because there's another guy who very similar in that he went with electric vehicles as his as one

of his big initiatives and is definitely a market marketing genius, very type a personality, very charismatic, but also can rub people the wrong way. You know, he's he's got a very specific vision and if you don't fall in line with it, there can be lots of friction. Well so is shy Agassie. But I guess he perhaps had a

less um strategic approach, a methodical Yeah. So that grandiose plan was to be able to come up with a system and infrastructure that would support a fleet of electric vehicles, where in ideal situations, you could get an entire country, in this case Israel, to switch from gasoline powered vehicles

to electric vehicles. Uh. And I mean it was he he was starting to make promises before there was any kind of idea of a company, let alone a business plan, Like there wasn't even there wasn't even a thing to have a business plan yet, and he was already starting to make these sort of big promises. Um. He and another guy uh started to think up, Uh, you know what, how could we how can we create a proposal for this?

And that other guy would be Um Andresor, who was CEO of a company called Bioprocessors, And they wrote a white paper called Transforming Global Transportation, which became kind of

a rock star white paper at various conferences around the world. Right, like, of course you've read Transforming Global Transportation, And even people who used to work for Better Lace are still like, even after all the the crazy kind of roller coaster events that they've gone through, and even uh, even after the ones who will say, like you, I guess it kind of went off the reservation, Uh, they will still cite this paper as being an inspirational paper. So it's

not that necessarily the ideas were bad. It's just a question whether or not they were actionable and the way that the Better Place went about it, right, the application of of these ideas, And you know, I'm I'm just gonna get on one little soapbox here, Jonathan. It's true that the state of global transportation and the state of global energy supply is ultimately the way it's going now.

It's unsustainable, and sure, it's it's not gonna be a perpetual motion machine, and it's it can be often politically charged for people to say that, but especially as you and I were talking about off air earlier, especially in the case of Israel, neighbor neighbor, too many uh nations with which it has at best, and a sense of animosity right there there's certainly huge amounts of conflict between

Israel and a lot of oil producing nations. So Israel has some very politically motivated reasons to get off of the dependency on oil. The United States is not that much different in many ways. If you look back to the proposals under the the Bush administration about moving to a hydrogen based economy, one of the big incentives was for uh, for for this this national security reason to

get off of the dependency for oil. And so it's not just this environmental approach, although that's largely the way Better Place was positioned because it's it's a feel good way of saying, hey, this is an impor and technology to invest in, but from a uh, you know, just a national security standpoint, it also had real importance. So this is something we have to address because otherwise no one would have sunk money into this this venture. And as it turns out, people sunk a lot of money

into it. Oh yeah, let's see. So the first the first round, because it was first, they got a hundred million from one investor alone, just a hundred million, plus thirty million of his own particular his own fund, so a hundred million from his company and thirty million more from him, and then ultimately they raised another two hundred million. So I think you you know, some reports say two

hundred fifty million. Ultimately you're looking around three hundred million in that initial funding round, and that is a lot

of money, don't know if you realize this. Yeah. So, so one of the reasons we can talk about, uh, this being a great case study is that if you look at the dot com era, the dot com bubble burst, one of the things that that people bring up over and over is how these companies that didn't have any sort of way of generating revenue, they had no product, yet we're getting crazy amounts of venture capital early, early, early in their phase in their life cycle, and it

meant that you had people with tons of capital, were burned through and no real incentive to rain all that in and take a very methodical and and conservative approach to building a business plan. Yeah. I think that's a really good point because in when you first brought up this idea, this this seems like such a fantastic comparison. Now, of course it's not exactly apples to apples, but but with so much money to to have all of this cash and none of the focus required the strategy right.

If you had a smaller investment, then you would be forced to focus on how do you how do you bring about this idea of creating a an infrastructure that will support electric vehicles throughout an entire nation. You know, if you have a limited budget, then you have to say, all right, we can't do everything, so let's focus on what we can do and prioritize what we can do, and that way we can really focus, be really really careful, and we can build incrementally. When you get this huge investment,

then you think, hey, we can do everything. So let's let's do you know, let's have first of all, let's have crazy amenities. You know, let's let's do that startup thing where you have the uh the headquarters office that has all the bells and whistles. Yeah, yeah, exactly, that kind of thing, the the infinity swimming pool that's in the executive lounge, that kind of musical guests, yes, you know who knows, uh, we do. We will talk more about that a little bit late or two. Not the

musical guest part, beside the crazy amenities. And it just meant that you lacked that focus and that was probably one of the many reasons because this this is a complex issue. It's not like you can point at one thing and say this is the reason this ultimately failed. That's yeah, that's that's an excellent point too, because one of the one of the valuable things that a dissection of this situation does is it helps give us a behind the curtain look at why so many similar companies

fail or succeed. And and when we look at when we look at a lot of these companies, here's the thing that gets me. Um. One thing a lot of companies have in common with this, whether it's auto or just pure tech, is that there is very easily a cult of personality that forms. Yes, yes, as I mean, we see that in over and over again, right uh.

And it depends on the personality how that cult ends up kind of being uh projected, like how how the fans fall in line, because you could say that about Bill Gates, could certainly say that about Steve Jobs Elon Musk very very similar. So you can see this over and over. Not every company has like the figurehead that people identify around. Sometimes it's more around a brand and not a person, but you still get this kind of

cult of personality. It is just depending on whether or not it it forms around an individual or around just a brand identity. Now, we haven't really talked about what they had planned on doing, and that's largely because they didn't have a really firm um plan in place until

after the company itself had formed. Now the company formed in two thousand seven, and generally speaking, the plan was to seek out government subsidies and tax incentives to try and develop a positive environment for electric vehicles, and that Better Place would partner car manufacturers to develop cars that would be electric, that would have specific types of battery packs that would be compatible with what Better Place would provide,

which would be charging stations and battery swapping stations. So the idea would be, if you bought a car that was compatible with Better Places stations, you would be able to recharge there and get your battery swapped out for a subscription fee. This, this to me, was fascinating, this idea that that Agassi had of how about we create a company that's similar to cell phones. Yeah, you buy a you buy a package and a service, right, Yeah, you get a subsidized car that would be like a

subsidized cell phone. This would be like the way cell phone plans traditionally have been in the United States. It's not like that all around the world. You know, there's some places in the world where you buy the unsubsidized phone full price, but then your monthly service services are

less than what do we get in the US. In the US, you buy a subsidized phone, but then you're under contract for you know, usually two years is typical, and you get you know, you're paying for that really in those those fees month to month as opposed to buying it all up front. Well, he was talking about doing a similar thing with cars, where your purchase price

for a car would be lower. He was saying at the time Agassy that the electric vehicles would be about half of what you would get for a uh comparable gasoline powered car, which had other experts in the field scratching their heads and say, say, what, how are you making this promise? How can you promise to produce an electric vehicle for that low because we're building electric vehicles and it is expensive. Yeah, even if you build them

like gangbusters. That's the thing that's something that even Ellen Musk has not reached yet. The economy of scale, right yeah. He His for approach was to go with let's build the sexiest electric vehicle we can, which was the Tesla Roadster. And sure enough, there are people who are like, man, that thing just looks like it looks like it's fast when it's standing still. Yeah, let's have celebrities drive it,

Let's have let's have people, let's influence the influencers. Right, so we're getting people who are not just celebrities but also business leaders, particularly since they were catering mainly to San Francisco, they were getting all the other tech company leaders, you know, like Google for example, getting really interested in these vehicles. And then they said, what we'll do is

will continue to court the high end market. At first, We'll use that money to build out an infrastructure, supercharging stations, things like that. That's what you're starting to see now with the super charging stations being built across the United States. Even in states where it is not currently legal to buy a vehicle, you have to leave the state to buy it. It's not that it's illegal to drive it.

It's perfectly legal to drive the vehicles. But because of you know, that's an entirely different episode, but because of issues with car dealerships because Tesla they sell the cars direct, right direct to the customer, unlike all other auto manufacturers that go through dealerships. Right, the big three give wholesale to a dealership who then sells to the end user. With with Tesla, you're right, that is ah, that is a different bag of badgers or a box of circuits.

But um, but it is really important to say because I think that's a brilliant comparison. When we look at this, if we compare better Place and Tesla, one of the big big differences, right, maybe I would submit to you the biggest difference is that Tesla said one car, make it awesome, top of the market, and then baby steps

and and better Place. Their approach was, let's try and aim for the moderate car, the basic car market, trying to hit at your average consumer, right, go for that person, and then you will end up just just hitting that across the entire market, which in this case really was Israel, like we were saying before, although there were plans, grandiose plans again to immediately expand in other markets like Denmark

in Australia. Those were the three original ones Israel, Denmark, Australia and with more plans of expanding into the United States and other countries as well. Now you you also had you had also mentioned before. This is good because when we talk about the cult of personality and the beginning, people really on board with better place. And he even um he even made an appearance at TED conference. Right in two thousand nine, he took the stage at TED conference.

He laid us plan of selling millions of electronic vehicles in Israel. He supported it with this idea of the infrastructure. They wanted to make the charging stations in the battery swapping stations. And you know, it was a compel argument, the idea of look, we're not saying build an electric vehicle with no support. We're saying, let's partner with electrical vehicles like some manufacturers, uh, and partner with them to

produce vehicles. Will also produce the infrastructure by building out these charging stations and battery swapping stations, and then there'll be no excuse to not swap over. You just tell the customer, hey, look, it's a cheap vehicle because we're

subsidizing it. It's lower than your car. Note if you bought a gas vehicle, yeah, you don't have to you'll have a subscription where you'll end up paying a certain amount per month, but look, it's going to be lower than your gas bill would be like to to pay for the fuel to fuel your car, right, and you'll

even be able to charge it at home. I mean, think about some of the promises were crazy, Like you could have a basic charging cable installed in your house for free, or you could pay five bucks and get a robot automated charging station you pull. Imagine pulling into your garage and a robotic arm jets and style plugs into your vehicle without you having to do anything else. And that's just five hundred bucks a five dollar installation fee to have a fully automated robot arm doing this perfectly.

And this had people excited at ted. I mean they got like one of the crazy super long standing ovation. Whereas you had probably a few people in that audience, I would imagine a few people who might have had I don't know, some experience with robotics, let's say experts. Yeah, people who perhaps worked in the auto industry. Those folks were probably still sitting in their chairs thinking, hang on, how can you promise this this free cable installation when

something like that has real cost. I mean, that's incredibly expensive to put in by itself, let alone a robotic one that is fully automated. And you know, you that's so much research and development to test a system like that, To build a system, test it, make sure that it works properly. You don't want to have, you know, a robot arm that's just blindly trying to plug in a cable and scratching up your vehicle. It's trying to charge

your cat. Yes, exactly right. You know the next thing, you know, Fluffy's got a couple hundred volts running through her. That's not that's not good business, right, Well, yeah, absolutely, And even if we look at it from the angle of the proprietary nature, which is another sticky thing in

these kind of private public partnerships. Right, you're the idea of sure, you can buy this vehicle from this manufacturer and you can charge it at these stations, But if you buy an electric vehicle from any other manufacturer, it's not compatible with these charging stations. See that's all right, ben. Let me ask you this. Let's say that you, as a consumer, go to an auto dealership and you're looking at a line of let's say it's a used car dealership.

Even sound because now you're talking about all sorts of different auto manufacturers being represented on this one lot, right, Because otherwise, if you go to a dealership, you're looking at like a you know, let's say it's a Toyota dealership, they're all Toyota vehicles. But if you go to a used car dealership, you might see Toyota's, you might see you know, cars from General Motors, you might see cars from Forward, you might you know, all of those could

be represented in a big used car lot. If you buy a gas powered vehicle and then you need to refuel your vehicle, Um, do you have to worry about what kind of fueling station you pull into in general? Now, because any fueling station you go to is going to

have fuel pumps that fit all cars because that's standardized. Right. Yeah, So you don't have to worry, Like if you bought a car from Toyota, or you bought a car from Ford, or you bought a car from anywhere else that was a gasoline powered vehicle, then any gas station you pull into you can be confident the gas pumps are compatible with your car. But now, let's say you on an electric vehicle. Let's say it's a Tesla, for example, And let's say that there are other cars like Better Place.

Let's say the Better Place also had cars out on the market. Now you've got a vehicle that has a proprietary port that you have to plug into, which means that only certain types of plugs are going to fit your vehicle and others will not. Now you have to worry about where you can go to recharge your vehicle. Now, most of these electric vehicles are going to have some sort of of plug in to it so that you can go into a an electric vehicle charging station and

have some kind of standardized approach. But if you want a supercharger like the Tesla supercharge approach, that's proprietary. And that's also the one that will give you a half charge of your vehicle in twenty minutes, which is still

crazy science fiction stuff to me. Man. Yeah, And and although it's crazy science fiction stuff, if you're a motorist and you are on your way from point A to point B, the thought of spending twenty minutes to get a half charge on your vehicle, it's probably probably something you're not crazy about. Forget the fact that you're probably gonna go way further than you necessarily need to on a half charge. Right, You're you're driving range these days is pretty decent um from just a a an idea

of I have to stop and refuel my vehicle. That's not a very attractive proposition, right. Yeah. One of the one of the great buzzwords for that is range anxiety, yes, which was one of the things that Better Place was trying to address. Right. They were saying that by building out this infrastructure throughout an entire country and to allow the battery swapping, which was a big one them. Tesla's

also looking into that as well. Uh, it means that you would take away this range anxiety, right because you could just pull into one of these stations, and because you have put them throughout the entire country, you could swap it out. However, again, if you wanted to ever have as a consumer the freedom of choice to buy a different electric vehicle, you can't avail yourself to those

kind of stations because they're not compatible. Nope, you have to hope somebody makes an adapter at best or that they build out comparable stations so that you end up having these side by side, Like, I can imagine a refueling station where all right, here's where Tesla drivers have to pull in. Here's where Better Place drivers would have had to have pulled in had that actually continue to work. Here's here's another thing. Now there's a bit of a tangent.

So so forgive me on this, sure, but can you imagine how how angry you would be if you did something that was like the equivalent of jail breaking your your Better Place vehicle and then it got bricked. Can you imagine breaking a car right to the point where you can no longer charge it? And yeah, that would be And if we're talking about a model that's similar to cell phones, this is not something that's out side the realm of possible. So this is disturbingly possible or

or it was. Now one thing I want to go back to you said earlier. Um, you made the great point that is another thing different to the Tesla model, which is the Better Place wanted a network of cars that people could choose from, sort of like how if you want an iPhone with Apple, then all you do, all you can do is buy some kind of iPhone. But what they wanted to do is be more of an Android to Tesla's Apple, right, you could buy any one of a number of cars. However, it didn't work

out that way, did it. There was only one manufacturer that Better Place was able to work with in the history of better Place being around. Better Place was around from two thousand seven to two and the only manufacturer, and at bed please correct me if you know the pronunciation, and I screw it up Renault renew See. I, being first of all, being American, I'm ignorant. Second all, being a non driver, I'm also doubly ignorant. So Renault Renault,

which I should have guessed based upon the spelling. Renault was the only manufacturer with which Better Place was able to form a relationship in its brief existence. And there was really only one vehicle that was produced yet, the Fluence ze UH. And this was a new vehicle too, because it better Place predates the Renault UH. This Fluence at least UH that came out in two thousand nine. And it's not a bad car, man. It's got a it's got a twenty two kilowatt lithium I am battery

it um. It's range UH is a hundred fifteen miles for you and I or for the rest of the world, and uh this, you know, this seems like a pretty good car to use. Um it's still you know, it's still around. You can you can still buy them. They're still being maid in uh South Korea, and the ones they think made in Israel were are the ones used in Israel rather were made in Turkey. So so it's

it's a legit vehicle. Yeah. The only issue here is that now better place no longer has those battery swapping stations. They still have some charging stations. We'll talk about that when we get towards the end of the podcast. But the you know it was it was one of those things where if if it had worked, you would have had a battery swapping station be able to swap out

in five minutes. And if you had a subscription where you're not paying on that per swap, there's no incentive for you to not swap out the battery, right if it's covered under your subscription that that you're that comes along with buying one of these vehicles. Then you drive in, you have your battery swapped out. Takes maybe five minutes, but that's about the same amount of time you'd spend at a typical fueling station, yes, which goes exactly to um.

It goes exactly to the fantastic point you made there about the difference with You know, no matter how amaze seemed from a technical standpoint, it is to charge a battery in a half charge of battery in twenty minutes, it's still it's still a huge downer when you think, man, if I had just had an internal combustion engine, I

could be on my way already, exactly right. And keep in mind, you know, this is also trying to be a very special case, right because, as as studies have shown, your typical driver, at least in the United States, drives at most around forty eight miles in a day. All right, Well, if you're driving ranges a hundred and fifteen miles, then you you have got that more than covered, which means that all you have to do is just remember to plug your car in at the end of the day

and it'll be fully ready for the next day. You don't have to worry about that range anxiety really kicking in because you've got more than enough capacity. It's when you're doing something special, like a long range trip. Let's say that we're decided we've we're gonna go to Disneyland. We're doing a cross country drive to go to uh Anaheim, California.

You and I always talk about that, I mean in my head, you know, was because you know, fall is coming around, and fall that's when they do the Haunted Mansion overlay with Nightmare before Christmas, which of course you and I both would really left to go on, you know, and we gotta go together because that's spooky. Man, you

don't want to go by yourself. Um. But yeah, if we wanted to do a cross country trip, then clearly we would need that infrastructure there in order for us because we're gonna go so far in a day that you could conceivably go beyond that driving range easily conceivably hundred and fifteen miles certainly, because uh, you know, it's not like we're gonna drive a hundred miles and then spend the night and then another hundred miles that's gonna take us forever to get out there, right. Yeah, So

that's a really good point. So this this idea works, um, you know, it works in theory. Yeah, And what I gotta ask you, man, what happened? Yeah, you know what happened. It's actually a laundry list of problems. Sorry. Ultimately, we're getting to May two thousand thirteen, when the company had

declared bankruptcy and ended up being sold for pittance. So it raised about a billion dollars a little less more like, you know, somewhere between nine million and a billion, but it counts between friends, right, it was it was auctioned off. It's such a fraction of that. If you add up everything, including the assets of the company and its intellectual property, it's about twelve million dollars. That's that's a huge, huge insult there in a way, I mean, not even insulting.

It was just sad. Right, Yeah, it's a it's a fire sale because of the first question you have to ask is what happened to all of this money? It didn't evaporate, surely. Yeah. The thing that happened was that costs were h we're greatly beyond what was anticipated, and the build times were greatly beyond what was anticipated. So costs end up spiraling out of control. And they just weren't good at at They weren't very good ministers of the money, the capital that they had. So first of all,

let's let's talk about some of the stuff. The building out that infrastructure incredibly expensive. They had guests that a typical charging station would cost about five thousand dollars. Later on it would turn out to be closer to two million dollars. So their plans to completely outfit Israel with these charging stations. Originally they were looking at a twenty

million dollar UH cost to completely do the country. Once they realized that they were you know, they were one quarter lower than what or rather it was gonna cost four times as much per station. You know, that's an eighty million dollar price tag just for those charging stations alone. And you know, then the delays and building that ends

up adding up more costs, so that was huge. Right. Secondly, the partnership between Better Place and other companies only ever resulted in that one vehicle, right, the Renaults, the Renault sedan.

So if you didn't like that car, there was no incentive for you to go and buy one, right, you know, there was no other choice, So you had this or any other like gasoline powered vehicle, which is completely to go back to our earlier comparison completely like saying, oh, I want to Android phone and uh Google and this one manufacturer saying, uh, something very much like the old Henry Ford quote. You can have any color model T want,

so long as it's black, right exactly. Uh. Based upon the different reports we've read, essentially somewhere between fourteen hundred and fifteen hundred of those cars were sold total period. So you can't support a company that has been going through a billion dollars in capital by selling four hundred cars. The math just doesn't really add up there. Uh. Third, that initial heavy funding, like we said, could have been

the company's undoing. The fact that they had so much money to play with early on meant that they did not really focus and create a very conservative plan, and they ended up doing lots of crazy stuff, including like luxurious off spaces. They had a visitor center that was meant to be uh kind of an immersive experience to explain to you the wonders of the electric vehicle and the better place infrastructure, Right, wasn't it? Yeah? You read about like it made me think kind of of the uh,

the World's Fair type things seen an Iron Man. Uh, you know those movies where you had this this crazy kind of high tech immersive experience that was well beyond what you needed. Like the Fast Company article described it as being a there was a holographic theater where a holographic version of Agassi would would tell you about better place, and that the theater had the theater seats weren't just seats, they were vintage car seats that were all arranged in

a certain way. Um. And that there was like a mile long track where you could do a test drive of an electric vehicle. And it was just one of those things where you could see how much money was being sunk into selling the idea and not so much in making the idea become real. Uh, making the T

shirts before you get the band together to rehearse. Yes, this is making me think of someone we both know, actually, but no, it's uh yeah, it's that that whole whole idea where you're selling the idea, you're so in love with the idea, and you're so convinced the idea is a good idea that you're spending all your time convincing everyone else it's a great idea and not spending the time actually making the idea happen. We we actually mentioned

this also off the air. Creative folks know this. You don't talk about your book before you write your book. You know, don't talk about your screenplay before you're finished writing your screenplay. You are setting yourself up for failure when you start talking about a project before you've actually finished the project. I have experienced this personally. I have been guilty of doing this. I think every everybody has.

But luckily for both you and I, uh, when we did, when we've done stuff like this in our past, we weren't losing almost a billion dollars. No, no, we and most we lost maybe something that would have entertained I don't know, fifty people at most, a little bit of self respect. I'm gonna be candid, yes, okay, I mean there's only so much more of that I can lose before I'm I'm just tapped out. But even this wasn't

These three reasons were not the only reasons. No, uh, you need to look at some pretty nasty other reasons too. I mean, okay, so we've got incredibly complex organization, right. They had offices in Israel for a while. Their headquarters was in Palo Alto, California. That's where Agassi was living,

was in Palo Alto. Uh. He at one point decided to take a vacation, took a long vacation, like half a year, vacation, went to Israel, metal woman, decided to essentially separate from his wife and start dating this woman, uh, and decided to relocate to Israel. And so now he had changed the global head orders to Israel, not to Palo Alto, which ruffled a lot of feathers in the company. But the company also got so complex that they had to hire an outside management firm to come in and

try and make sense of everything. It just it balloons so quickly. And I guess he also there was some nepotism going on. He hired a lot of his own family to be in very important positions, none of which, by the way, none of the people in his executive team had any experience in the auto industry, right, or in green technology, very important, two big strikes. Right as far as I know, none of the top executives were

civil engineers either. So you're trying to build out an infrastructure for an electric vehicle, which is a green technology, and you don't have experts in any of those areas occupying the top positions in the in the company. Now, on top of that, there are also lots of reports. The Fast Company piece particularly spelled this out that Agassi has um he's he's not necessarily a humble in adividual.

He's quite the self promoter. And even going back to that those early days with the white paper, he started to liken the work that they were proposing, keep in mind they hadn't built anything at this point, but saying that it was going to be transformative, like the work by Edison or even James Watt. So these are the folks who you know who brought electricity to the world. Really, they were the ones who helped build out that infrastructure

like Promethean pretty much. Yeah, and he's saying, look, we're gonna do the same thing without even having done anything yet. It was all like, it's very easy to talk about it, it's really hard to do. As as what they he learned. He also said that he kind of implied he had the qualities of the bravery of Churchill, the vision of JFK, the determination of Reagan. So we're suggesting that Hubrists may

have played a part in the failure of this company. Um. And it was funny because you know, he he actually went public with this idea. This is that going back to that you don't talk about it before you do it. He went public with the idea for a better place

before he even quit his previous job. He was at another job for another like three or four months before he quit, and he and really, you know, he said, he talks about in the interviews about how oh yeah, after I announced this, just a few days later, I quit my job and I started better place. Now what happened was he talked about it, and then three months later the job where he was he had thought he was going to become the next CEO, and they went with someone else, and then he quit his job and

started better place. Not saying that the things are definitely connected, but you know, in hindsight, it looks like that. So yeah. He also talked about ordering a hundred thousand Renault cars between two thousand eleven and two thousand sixteen. Like to have a hundred thousand a fleet of these cars to sell to the Israeli market. Uh. And eventually he said Israel and Denmark numbers here. Yeah. Yeah, So a hundred thousand cars in Israel would account for more than half

of all new cars for the car market. So in other words, you're looking at fewer than two hundred thousand new cars in Israel are going to be purchased in any given year. That's just how big that market is. And he was expecting to have more than half of that market made up of the better place cars. Now, no, not a single car manufacturer has a share over fift of that market. Young Day is the one that has the biggest So I think it's home Day. I might be wrong about that, but I know that it was.

So that means that not only would he be dominating the new car market, but suddenly consumer behavior would completely change and instead of people being interested in various types of cars, everyone would suddenly be focused on this one car. Keep in mind, there's only one model available and it was a Sedan. So if he didn't want a sedan, then you know you, I don't know why you would

end up buying this car. And if you had a larger family then like there's so many situations, Jeff, larger family or you're you're just a college student buying their first car, and cars can be very difficult to afford. It made it's kind of tough for uh, it's kind of tough to get in the United States. If you if you've never lived somewhere else, You've never really read

about this. But the United States having such a car culture, sure it becomes sort of expected that someone will have a car, and there are these rites of passage for it. But that is not in any way the case across the rest of the world. A car is a big investment here, it's a huge investment in other places where you know, cost of living and housing and uh, basic

staples of food are more expensive. To begin with, just the layout of cities, because a lot of these cities are so old that you know, they're not laid out for vehicles, like for cars, Yeah, very narrow streets, Yeah, just so. And so the question then becomes, you know, uh, what more of a more of a thing, like what do I have to do as a car company to convince you to spend all this money and take on all this bird in this inconveniences ownership? And I think

there was a miscalculation there. Yeah, well, considering that they only sold a hundred cars in the first couple of months that they had cars to sell, and most of those customers were better place employees, I think you're right, Yeah, and just just wasn't gonna happen. What was that thing you said in the beginning. Uh, it was one of those robot arms statements. Oh, the car will be cheap because it would be subsidized because you would have the

subscription fee. It turned out that the cost of producing these was so high. Uh. And and Renault was the

only company that they were working with, right. I guess you said that he was hoping, or at least the people around him said that what he was trying to do was entice other car manufacturers to join in as well, and then the company Better Place would have a lot more leverage, right, because they could put the different car manufacturers against each other and say, hey, you want to sell this car to us for thirty eight thousand dollars, but we can get a car from this other company

for you know, eighteen thousand dollars. So you're gonna have to cut some some money off of that price tag and then they could pass that on to the Better Place customers. But that never happened. Well. And also, to be absolutely fair, that strategy is a viable one. But there's um, there's there's one point that that I think we should make for anybody who who wonders why there are so few car companies in the world because if you think about it, there there's so many cars, Jonathan,

and there there's so many uh. There there's so few rather car manufacturers, and there are countries that have no domestic car manufacturing because the amount of quote unquote moving parts, the difficulty of all that, the starting capital you need in order to get into that business is is gigantic, right, Yeah, like a lot of businesses, less small businesses fail uh in the first five years. And with startup car companies it's even more difficult, uh, and and even more attrition

in that space. So Tesla, my friend, is a diamond in the rough. It's um. I wouldn't say winning the lottery because I don't think it's entirely luck based, but this is um. But it's a very it's a very

interesting contrast to what better place was, right. And then on top of all that, I mean there were times where Agassi was actually saying that he could even see them giving away a car, like you would get the subscription fee and then you would get a car like in the cell phone like truly subsidized to the point where you're not paying for the car, you're just paying for the service. Uh, and uh, that never, that never, that was never a possibility with they're the way they

were doing business at that point. And that's a U. But that's a that's kind of a more of a pure tech strategy too, isn't Because don't um, didn't you tell me earlier or maybe I just heard on this show a while back about during Console Wars, some of the console makers will, yeah, they sell it a loss and they make it up in games. Now. That only works, of course, if you are in the business of making games,

and if you have more than one game. Yeah, if you are just making one game, which is essentially what better place was doing. If you have one game and not everyone once that game, and in fact, very few people won that game, he can't really support selling the console at a loss. So that was a big issue. And then, uh, you know, there was a lot of friction between Agassi and his executive team. They were starting to get really upset with his move from Palo Alto

to Israel. Uh, he ended up hiring a lot of his girlfriends, friends and positions when they said that that even watered down this already kind of weak executive team. People who weren't really you know, some of them are really good. What they did is just that what they did was not aligned with running an auto company. And so first he was asked to kind of become a

figurehead and he refused. Eventually he was forced out. He was fired as CEO in October two thousand and twelve UM and he was replaced by Evan Thornley, who was the CEO of Better Place Australia. Because they had set up headquarters in all the countries they were planning on operating in Australia, Israel, and of course they had the Palo Alto office in the United States. So at that time the company had lost about four million dollars and not just gone through the capital, I mean they were

in the hole. And then they were losing about a half million dollars per day. So Thornley, he was a businessman and politician back in Australia, he actually had a lot of interesting things to say that Fast Company article where he was talking about the how some of the horrible deals that Agassi had gotten into. Agassi had had given all these companies contracts and then given these they

they had these huge cancelation fees. Actually hadn't really um uh negotiated with the companies at all, so he was essentially saying, like they would say, all right, well, if you cancel out of this, you're gonna owe US X million dollars, and he said, sure, signs on the dieline. And so there was no way to get out of

the contracts. And in fact, the only way they could have maybe kept the company going would be if they were able to expand into other markets, but they had already that was that meant that they had to start spending even more money. So it was just this kind of deep cavern that he found himself in. And uh, he wasn't given a long time to really try and establish anything. He was put in place in October two, twelve thornly that is, and uh then in January he was fired, So he had only had a couple of

months to really try and work anything. I don't know that. I don't know that anyone could have turned things around so dramatically in that period to make everyone happy. Yeah, that's what what could he have possibly done? Because those kind of agreements are pretty ironclad. Yeah, it's not like he was the one who signed them either, So that was kind of crazy. So eventually they were purchased by Sunrise. They declared bankruptcy. Better Place to declare, liquidated its assets

what what little there were. Sunrise U bought the company said that they would keep on fifty of the eighty employees um and that they would operate fifteen charging stations in Israel for at least two years. All the battery swapping stations gone, fifteen charging stations would be all that would remain, and ultimately they had sold about vehicles. And so that's kind of the end of the Better Place story. And again this kind of it's a it's a really

good parallel to that dot Com. It's that idea of here's an incredible opportunity, and the opportunity is real, there's a there's a real opportunity to seize uh, and there's a real way of actually making it work. The exa ample for dot com would be Amazon. Amazon came out around the time of the dot com boom and survived.

It survived and then later thrived, but it it had a real rough, slow start, and it was only through taking a fairly conservative approach, taking risks where there were risks to be had, but not doing so, not just not just saying, oh, well, we're just going to sell

everything to everyone everywhere. That wasn't what Amazon said it. First, they concentrated on books, That's what they did, and it was only after building out that business they started to kind of grow, and they did so in a very uh, very strategic way, still taking risks again when they could better. Place was more about let's aim for the pie in the sky approach and we're just gonna do everything, or at least we're gonna say we're gonna do everything and

we'll figure out how to do everything later. Yeah. The thing is that you can be an idea person, but you can't not be an engineer of some sort in this sort of space. So like if we look at Elon Musk, he he sometimes may come off as a big idea of person. You remember, the last time we were hanging out on tech stuff, we talked about the hyperloop, which is amazing, and if it were anyone other than Elon Musk, I would I would say it was just vaporwear.

But he's led up to this and we've both seen in our respect to shows, we've both seen this the evolution in this guy. So even though he might sound like he's some big idea guy who will vanish in some weird Ponzi scheme. Everything he's done for years, He's gone to space. At least his company has sent stuff to space. Yeah, I mean, it's it's pretty incredible. He he backs up, either through his own ingenuity or by

hiring people who know what they're doing. He has been able to, uh to make great headway in his the various industries that he's entered into. So, whether hyperloop ever happens, I mean, that's an interesting idea. I would love to see it happen. Whether it ever happens, I don't know.

But the fact that he has made such incredible progress in electric vehicles in the United States already, and he's done it in this very like you know, like we said, it's just as flashy in many ways as a Better Place, but it was a fundamentally different strategy that actually has worked. Um, It's worked slowly. It's a very it's a very gradual progression, but it's actually working. It'll be interesting to see if

that continues. And to me, I think the thing to take away from this is that the again, the purpose of Better Place was in many ways noble right, this idea of getting off of fossil fuels to move to a renewable energy source. Keeping in mind that depending upon how you generate the electricity, they had said that they wanted to make sure that all of their charging stations were generating electricity in renewable ways, so either through solar power,

hydro power, wind power, whatever. Um. You know, as long as you're doing that kind of thing and you're being responsible with the way you generate electricity, that's wonderful. We want to see that happen. And in fact, I don't think anyone wanted well maybe some car companies wanted to see better place fail, but I don't think anyone really wanted a better place to fail. It was just that there was They set themselves up for failure, They didn't

set themselves up for success. Right. It's very I'm really glad you said that, because it's very important to note that in this context, there were no con men, there were no Charlatan's. There were people who were honestly trying to get a good idea from the realm of imagination into the real world, as you said, and unfortunately, um, it looks like what we've learned through our our case study of some of this stuff is that it was ultimately it was mismanagement more than a little bit of

ego and a lack of patients. Yeah, I think so. I think they were too aggressive to or e and too unrealistic. Um. I think, uh, you know, maybe we can see sunrise if whether or not after the two years or up, if they continue to support those charging stations, if we continue to see an effort to move over to electric vehicles in Israel in particular because that was

the main base of operations. Uh, it'll be interesting to see if that continues or if it will take something like Tesla ultimately making this this approach work really well. And of course other companies, other established car companies are also producing electric vehicles. They tend to be very like a small slice of the overall pie chart, that is what they offer. But it's it's something that we will

continue to see in the future. So then I have to thank you for coming onto the show and participating in this and talking about this. Uh, this incredible company and the I mean it's interesting to really look at the drama behind it. And again there's so many lessons to learn, not just in the auto industry, but in the tech industry in general. We've seen this lesson repeated multiple times that it was fun to actually dive into this.

I had no knowledge of better place before we started looking into this, this um this episode, so for me, it was really educational. Oh and thank you for the email there, Russell, and thank thank you as always Jonathan for having me on. If you don't mind, I'd like to plug a couple of things absolutely, Okay. First thing I want to plug is uh brain Stuff, which is

our everyday science show. We've got a video series on YouTube where listeners you can see Jonathan and myself and several other of our fantastic co hosts, including Lauren Lauren. I can't believe I forgot to see yes, including including Lauren, And you can see Lauren and Jonathan co hosts some stuff on there where they answer questions about everything from hair to lightsabers and twins. Uh yeah, We've we've got some I talk about whether or not a sound is

so loud can kill you? Lauren, Lauren and Joe McCormick have a great video about laugh tracks, which goes into my next plug, Jonathan, and that is for forward thinking you're plugging stuff that I'm on, Yeah, and plains. I don't know if the I don't know if the tech stuff listeners UH know about this. I assume that you do. But if this is your first time checking out this show and you enjoyed it, you can also find more future oriented topics, and not just in tech, but the

big questions of the future. And then of course I have to plug car stuff that you are on with Scott Benjament, which if you are really and if you're if you're into cars, or even if you're just interested in it but you've always been intimidated, that's a great podcast to listen to because Ben, you are really good at uh at at talking to Scott who has an incredible expertise and all things automotive, and you really are great at having this conversation with him where you can

really get to the bottom of everything from how specific parts of a car work, to trends in vehicles to all sorts of stuff. It's a great podcast. Gosh, well, thank you so much. We've got to stop our love fest here so we will except for us stuff they don't want you to know, which I can't talk about, but you should shut out, but you know they don't want me to say anymore. Yeah redacted. All right, So guys,

thank you so much for listening. If you have any suggestions, like Russell, you can write to us our email addresses tech stuffed at health stuff works dot com, or drop us a line on Facebook, Twitter or Tumbler or handle it. All three is text stuff hs W and we will taught to you again really soon for more on this and bathands of other topics because it how staff works dot com