Power Sheet – June 8, 2016
Today’s news reminds us that not everyone in a leadership role is really a leader. A true leader sees what others don’t see and goes where they won’t go, clearly out of step with the mainstream, betting on obvious folly, causing peers to think they’re crazy. For example:
-Billionaire investor Ron Baron went on CNBC yesterday to say he has invested $300 million in Tesla, believes he could hold it for 10 or 20 years, and thinks “we can make $6 billion or $7 billion” on it. Baron’s bullishness derives in large part from Tesla co-founder Elon Musk’s insane willingness to bet on the business 13 years ago. As a result, says Baron, “The competition is not anywhere. They could have caught him four or five years ago. But they can’t catch him now. He’s too far ahead.” At Tesla’s recent annual meeting Musk reminisced about the mistakes he made early, which underscores the point: Instead of mistakes, consider them investments in learning that Musk made before anyone else. He has called Apple’s apparent decision to get into electric cars “a missed opportunity” because Apple should have made the commitment years earlier.
No one can say if Tesla will dominate the electric car business as thoroughly as Baron expects. But either way, Musk was and is a genuine leader.
-Obvious folly that didn’t turn out that way is the central story of the U.S. presidential race. Who thought that Donald Trump had a ghost of a chance 12 months ago? It may well be that even he didn’t, and he hasn’t had to make a substantial financial commitment (by his standards) to his campaign because he has been able to attract so much free publicity. But he has made an all-consuming time commitment and will, barring disaster, be the Republican nominee against 1,000-to-1 odds last June. Bernie Sanders probably won’t be the Democratic nominee, but don’t tell him that. As of yesterday, he was still vowing to change the minds of superdelegates and take the nomination away from Hillary Clinton at the convention in July. And who can blame him? No one believed he would achieve any of what he has done so far.
-The latest you-gotta-believe story is the strength of the Libertarian Party’s Gary Johnson-William Weld ticket. In the latest poll it drew 11% support – to a party that has never previously attracted more than 1% of the vote. Of course it’s ridiculous to think the party could actually make a difference in the outcome of the election. Right?
-Yesterday, Keurig Green Mountain announced it would discontinue its home soda-making machine and lay off 130 workers. The concept, defended tenaciously by CEO Brian Kelley, was clearly nuts, a $370 machine you would park on your kitchen counter and use to make your own soft drinks using pods costing over a dollar each – for an overall cost far greater than that of existing sodas that are backed by billions of dollars in marketing. And you know what? The concept really was nuts.
That’s the thing about genuine leadership. You cannot know you’ll succeed. Not many people like that proposition, which is one reason true leaders are rare.
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What We're Reading Today
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