Thread by @trengriffin

1/ SpaceX also does this:

"From software to electric drive systems, Tesla is steadily bringing more development tasks in-house. Icompetitors will have little choice but to follow suit, upending their old business models and supply chains..."

asia.nikkei.com/Business/Autom…

2/ "Elon Musk prefers to make everything he needs or have multiple suppliers. He doesn't want to buy components from traditional suppliers of launch who want transfer prices to be high. This is a what I have called “wholesale transfer pricing." google.com/amp/s/25iq.com…

3/ "the legacy satellite manufacturers didn't want to make small satellites since that would require new engineering and a new business model. Most importantly, they didn't believe they would sell many more satellites if they were cheaper." google.com/amp/s/25iq.com…

4/ To do things like this a business can't be reliant on traditional suppliers that don't want to change. This picture was taken~ 20 minutes ago.

Jeff Bezos is doing the same thing with suppliers on Blue Origin. Apple did it with iPhone. Blackberry said: "They put a Mac in it!"

5/ "This Falcon 9 launch brings the total constellation to 300 satellites for Starlink on orbit, extending SpaceX's lead as the largest commercial satellite operator in the world." You can't do this begging a supplier for parts/price. Control your fate! news.google.com/articles/CBMiU…

6/ Why didn’t traditional rocket, satellite and auto makers see this? They use Siren Call Ratios like IRR, P/E and RONA create a fatal focus on short term financial results, which eventually “shipwrecks” businesses. Bezos and Musk learned from Morris Chang.google.com/amp/s/25iq.com…

7/ One key problem OEMs created for themselves by chasing Siren Call Ratios instead of cash flow and unit economics is put this way by Morris Chang:

"Americans measure profitability by a ratio. No banks accept deposits denominated in ratios.”

E.G., RONA can be deadly Siren!

8/ JeffBezos isn't confused about the need for Blue Origin to make its own rocket engines. It's not possible to outsource this to increase Siren Call Ratios like RONA or P/E and still be competitive.

"Your Siren Call Ratio is my opportunity."

This picture is from today:

9/ iPhone broke all rules. The operating system alone took up 700 megabytes of memory, and the device used two processors. The BlackBerry ran on one processor and 32 MB.

BlackBerry CEO: "If iPhone catches on, we’re competing with a Mac, not a Nokia,” google.com/amp/s/25iq.com…