Nov 2, 2017
book review: TOTALED: THE BILLION-DOLLAR CRASH OF THE STARTUP that TOOK ON BIG AUTO, BIG OIL AND THE WORLD
A Guest Post by Dr. Harold Goldmeier
Blum
seems to hit the right benchmarks of SWOT – i.e., the traditional marketing
analysis and planning formula to explain the strengths, weaknesses,
opportunities, and threats to Agassi and Better Place. It's clearly
impossible to separate the two.
AN
ISRAEL ELECTRIC CAR CRASH THAT INSPIRED AN INDUSTRY
Book Review of
TOTALED:
THE BILLION-DOLLAR CRASH
OF THE STARTUP that TOOK ON
BIG AUTO, BIG OIL AND THE WORLD
By Brian Blum
BLUE PEPPER PRESS
LCCN 2017908600
| ISBN 978-0-9830428-1-5
| ISBN 978-0-9830428-2-2
(ebook) © 2017
Review by Dr. Harold Goldmeier, a public speaker and
writer teaching business and politics to international university students in
Tel Aviv and Jerusalem. His book Healthcare Insights: Better Care Better
Business is available on Amazon. His Articles and Reviews appear on American
Thinker, Arutz 7, Life in Israel, and in Jerusalem Post and more. He was a
Research & Teaching Fellow at Harvard.
Business
books, next to romance novels, are the popular genre of reads today. Totaled by
Brian Blum is one of the best, detailing "how to" and "how not
to" build a business, from vision through total execution. It is a
required read for every entrepreneur and "wannabe," for business
school students, founders, and everyone who loves heroes and visionaries
despite the company's implosion – or because of it.
Blum
captures in Totaled the exigent pace and exasperating
"what next" climate at start-ups. The Better Place electric
vehicle (E.V.) company is Israel-based, where the culture and environment
nourish the young. Blum's writing style turns a nonfiction case study
into an exciting read more resembling a detective page-turner. You feel
the energy of founder, Shai Agassi, as he travels the world soliciting support
for his revolutionary twist on E.V.s that will change the world and his
commitment to the bigger picture – clean environment and independence from
foreign oil. Every chapter pulls the reader to root for Agassi and Better
Place, who come close to scoring a win but miss the brass ring.
Blum
seems to hit the right benchmarks of SWOT – i.e., the traditional marketing
analysis and planning formula to explain the strengths, weaknesses,
opportunities, and threats to Agassi and Better Place. It's clearly
impossible to separate the two.
The
tone and tenor pick up as circumstances beyond management control unfold.
Right decisions made for all the right reasons have sour outcomes.
Self-interest of others collides with those of the founder, catapulting
Better Place and Agassi into death throes and collapse.
The
reader is never quite sure if Blum is writing fiction or non-fiction, a memoir
or a novel. The superbly written, easy to read, real-life story, told
from historical reconstruction, is interlaced with conversations and reports on
strategy meetings; readers feel the tension and emotions as, concomitantly,
global events slam the auto industry and international economies. Better
Place was founded in 2007 just as the U.S. economy began crumbling, destroying
the housing and auto markets that are the engines driving the U.S. economy.
At the
center of the Better Place story is Israeli founder and visionary Shai Agassi.
His revolutionary method of putting electric vehicles on the roads
demands a lot of money and backing from tycoons and governments. Agassi
is already rich from having sold another start-up. He sells a lot of
important people on the notion that Better Place is a "seminal company
that is going to change how the world functions" (page 34).
Agassi's
seemingly biggest antagonist is the oil and gas import king of Israel. He
is worth $4B, with worldwide business interests. E.V.s will definitely
hurt his income, but the king becomes a backer of Agassi's mission with seed
money. He takes a personal liking to Agassi. At first, Blum
suggests, it's about fulfilling the adage of keeping your friends close and
enemies closer in case E.V.s take off. Eventually, this mogul comes to
believe in the possibilities and commits his own energies and money to build
and later try to salvage Better Place.
Former
prime minister and president of Israel Shimon Peres introduces Agassi at fifty
government meetings and to international powerbrokers. The reader gets
the feeling of being in an observer's chair in the meetings the way Blum offers
just the right quotes in context.
Mr.
Peres introduces Agassi to Carlos Goshen, CEO of France's Renault, who tells
Agassi, "We think the future is electric. We have the car, and we
think we have the battery" (page 29). Goshen's intention is to set
Renault apart from hybrids manufactured by other carmakers. It is not to
be. The company never sells the car to Better Place at the low enough
price Better Place needs to make the car and battery system economically
competitive.
Blum
begins the story of Better Place on page one describing Agassi, who "[w]as
– and still remains – one of the smoothest-talking, charismatic entrepreneurs
the high-tech world has ever seen. Like his idol, Apple co-founder Steve
Jobs, Agassi – a poker-playing Israeli boy wonder – is never at a loss for
words. After just a few minutes, he can turn even the most skeptical into
a believer – and for Agassi, who treated business and negotiations like a
binary game of high-stakes cards, there were only the believing faithful and
those yet to be converted."
Heroes
must have vision, persistence, chutzpa, spirit, money, management skills and
luck to succeed. It helps to have an overflowing bowl of
TUMS antacids on the reception desk. When times get tough, out pops
a darker side of Agassi, who, we can see, becomes a tormentor and bully at
times. Blum does not see Agassi through rose-colored glasses, and he
ascribes to him a good share of the blame for the failure of Better Place.
E.V.s
held much of the car market for two decades beginning in the 1920s, but they
petered out with the influx of cheap oil and gasoline. They did not
accelerate fast enough, were not exhilarating enough for daring young men and
socially liberated women of the roaring twenties. Manufacturers neglected
producing them in flashy, sporty styles. Most of all, E.V.s continue
having limited road range per charge and slow battery-charging capabilities.
These factors still inhibit the industry in 2017, but new technologies
and a cultural shift are taking hold. Better Place led the way; it was
the fifth largest start-up in history when launched in 2007.
Blum
makes the reader feel a part of Agassi, as if he were inside Agassi's head, as
he grapples with problems and makes pitches. His primary failing is to
ignore management issues to the detriment of company growth. His vision,
skills at poker, gift of gab, and personality are not enough. The chapter
titled "The Battery Switch Station" and those that follow describe
his opposition to the devolution that might have saved Better Place.
Relatives manned critical positions in the company. Other positions
went unfilled. The company experienced rapid turnover. The
infrastructure of Better Place the company needed more organization, purpose,
and direction than Agassi the oracle provided.
A book
from which I take excerpts for the business management and marketing classes I
teach in Tel Aviv for international university students is going to be
complemented with stories and events from Totaled. I now see
Agassi, with whom I have had some email correspondence and one brief
conversation for articles I write about investing in E.V.s, as a hero of
business. I believe that Blum sees him that way, too. China was
always the market for Agassi, and its companies are robustly building E.V.s.
China, Britain, California, and other governments are laying down new
laws requiring all cars to be electrified by 2024 or so. Scoot is
partnering with China carmaker CHJ, adding battery-swapping cars to its San
Francisco lineup. I can see Agassi smiling, reading the press
announcement.
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