Open Letter to Elon Musk - Tesla 3 as SDT Vehicle

Dear Elon,

It is quite fun to see the scope and sweep of your ambition, from boring holes to colonizing Mars, but I’m going to focus on one product, the Tesla Model 3. I bought one recently, and it has turned out to be better than I thought. In this letter, I’ll explain why, and the reason is not because it is electric.

I think of myself as somewhat of a “car guy.” I’ve always enjoyed cars, currently own an Aston Martin (a manual transmission one, naturally), and race in the screwball 24 Hours of Lemons with a team of my friends. Recently I was replacing my daily driver, a Chevy Volt, which I enjoyed much more in its all-electric mode than when it was running on gas, so I surveyed the market and bought a Model 3 Performance. (Reducing my carbon load was a not-incidental consideration.)

The Model 3 as an electric car is excellent, but I expected that. Smooth controls, fantastic performance, long range, and great infrastructure support. The other reason I bought the Model 3 was for the advanced automation features, current and future, and those are great, too. 

What I didn’t expect was that the Model 3 would push the refinement/innovation curve in other areas so far up and to the right. I expected more inconsistency, more obvious tradeoffs between new thinking and sophistication. I was prepared for shortcomings that I’d have to accept as a cost of goodness in other areas, but those accommodations haven’t been necessary. I realized that there was something else at work, something true and profound that took me a while to put my finger on. The answer came out of my recent experience.

Until we sold it a few months ago, I headed up a company in enterprise networking software. The single most important trend in networks is SDN (software-defined networking). Existing companies, such as Cisco and Arista, make products that have software-defined configuration and management, but can’t make the tradeoffs required for SDN in their core products (much as Blackberry couldn’t bring themselves to abandon physical keyboards.)

That’s when it hit me: the Tesla Model 3 is an SDT vehicle. That’s what’s different. Software-Defined Transportation is a leap in thinking with profound and far-reaching implications. We’ve seen SDT disrupt ride-on-demand services, but this is the first time we’ve seen a true SDT vehicle. It is obvious why the traditional car companies are worried; it is unlikely that they can make the leap.

Yes, the future is electric. That’s clear. But more importantly, the future of transportation will be software defined. Tesla is the company that gets that. Color me impressed.


Larry Zulch

Open Letter to Tim Cook - Apple and Financial Services

Dear Tim,

For many years, I’ve watched Apple’s relentless obsession with refinement create products that are focused, responsive, and sophisticated. This consistent application of corporate values has led customers to bestow upon Apple what may be their most valuable gift: trust.

Establishing trust isn’t simple. Products that we rely on must have a “trust stack” with security as the foundation. Right above security lies privacy, and then, as I have argued previously, identity. Above those are control and then, finally, communication. Each is vital to building and maintaining trust, and each has been a preoccupation of Apple’s.

How can Apple best use this trust? I suggest the answer is financial services. Apple has always been willing to take on back-end complexity to simplify the user experience, including in financial transactions. But facilitating financial transactions doesn’t go far enough. Apple has an opportunity to profoundly transform our relationship with money.

An ability for Apple able to hold and lend funds will become the platform for innovation. Consider the simplicity of just two interest rates. One for money I have on deposit, and the other for money I am borrowing. Intervals would be calculated precisely, so the moment I deposit my paycheck or other funds, I start getting interest. If I have a home loan or use my Apple credit card, I pay interest. Those interest rates will change, and if I trust Apple to set them appropriately and transparently (including a profit, of course) they could change often, even continuously.

But this is only the beginning. Today, I grant direct access to my accounts for utilities, credit cards, subscriptions, and more, each of which has a distinct and cumbersome way to manage that access. This could and should be unified and under my control. There are so many areas that are ripe for new thinking in every aspect of our financial life.

Of course there will be obstacles. Working through credit card issuance, home loans, bill payment, student loans, perceived and actual competition with other financial institutions, reporting, etc., all require significant scale and resources, which is exactly what Apple is capable of providing, and in doing so, set itself apart from others that are focused on only one part of the opportunity or are massive incumbent players institutionally incapable of making such significant changes.

It may make sense to acquire a financial institution to gain experience and reduce the time to regulatory approval. As a candidate for acquisition, I naturally think of First Republic Bank (NYSE: FRC) for their sincere and effective focus on customer service. It doesn’t hurt that they have a really good iPhone app. (I am a customer but have no other relationship with them.) 

Financial institutions will be changing over the next few years. Apple can advance the rate of that change and transform the financial industry for good. This is an opportunity with benefits for all of us.


Larry Zulch

Note on resuming Larry's Letters

Navigating the technology market in 2019 is going to be fun, but only if one finds fun at the intersection of challenges and opportunities. As I do.

My three-year task of taking on leadership of a 25-year-old company in networking was certainly consuming, and my ‘analytic energy’ went in aid of that task. But now WildPackets/Savvius has been acquired by LiveAction and I’m free to express myself.

I will post some letters on subjects I’ve been thinking about. In the meantime, a few articles I wrote on network management:

An article in on network visibility:

 Four articles in Network World:

I’ll close with a few observations on what I wrote years ago. Some were pretty reasonable. I still think the only path forward for Blackberry was to do what I suggested. My advice to Krzanich looks pretty good in hindsight. My second letter to Michael Dell presaged some of the hybrid cloud thinking. Some of the others, not so much. The world changes, and for that, I’m happy!