JohnBysinger
Posts: 33
Joined: Mon Jul 18, 2016 2:16 am

Re: Fenix Power: A new third party battery replacement?

Mon Feb 04, 2019 9:04 pm

SageBrush wrote:BK = Bankruptcy
Of course I see this reply after I just replied about bankruptcy. Timing is everything! :)

SageBrush
Posts: 4907
Joined: Sun Mar 06, 2011 2:28 am
Delivery Date: 13 Feb 2017
Location: NM

Re: Fenix Power: A new third party battery replacement?

Tue Feb 05, 2019 6:44 am

JohnBysinger wrote: we are in an active funding round soliciting accredited investors. When this round closes, the obligations I just stated above change, but we'll be able to move forward with the formal protections you expect.
I'll skip on "accredited" since I do not care but I'll summarize my understanding of what you have written:

Presently deposits are not secured or walled off from BK. You may change that if investors put money in your company.

Fwiw, I am not posting to be skeptical. I would however like people who have already given you deposits or are thinking about it to understand that they risk losing their deposit in total and will have no recourse. I think you should escrow those deposits, and I personally would not give you a deposit without escrow.
2013 LEAF 'S' Model with QC & rear-view camera
Bought off-lease Jan 2017 from N. California
Two years in Colorado, now in NM
03/2018: 58 Ahr, 28k miles
11/2018: 56.16 Ahr, 30k miles
-----
2018 Tesla Model 3 LR, Delivered 6/2018

JohnBysinger
Posts: 33
Joined: Mon Jul 18, 2016 2:16 am

Re: Fenix Power: A new third party battery replacement?

Tue Feb 05, 2019 6:24 pm

I make no claims that there's no risk. I'm certain I articulated that in my replies above. What I have said is I'm staking my personal reputation on the promise to make good. Now you have never met me, so of course, you have no yardstick by which you can assess my word or my reputation directly. You can "google" me, look at me up, find people who know me, I've got over 800 direct contacts on LinkedIn, I'm not hiding who I am. But I also do not expect you to shoulder that responsibility either, in fact, quite the opposite, I hear your concern very clearly. It has me planning conversations with our corporate attorney to find out the legality of what I can and can't disclose about our financials, and what tools are available to provide genuine certification of the protections you seek. Because you're absolutely correct, words are words.

As CEO of a startup, I wear a great many hats, relevant here I shoulder risk, and I make business decisions that impact the business, the bottom line, our customers, and our reputation. Two of those decisions were: don't take on debt until we have sufficient momentum to shoulder the note, and the other was run the business as lean as possible while fundraising. Choosing to focus our resources where it's important, and opting out of others where the cost/benefit equation doesn't balance out.

Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option. PayPal over the last several years has a severely damaged reputation for customer service in escrow dispute cases, and while they do manage escrowed transactions for sites such as Ebay, it's not just a checkbox for us to apply it to our transactions. This leaves us with the most expensive option, a traditional escrow company, and hiring headcount to manage the paperwork involved with escrow transactions for each individual deposit. That would be the opposite of running lean, and could even cost more than the sum of every reservation made to date.

So I've made the choice to keep our resources focused where they are most useful at this time. And I'm confident that many customers would agree that keeping our expenses in check is a smart business decision, and importantly I know that accredited investors agree.

Something you may want to consider in this discussion, does Tesla escrow its reservations? The answer may surprise you.

See item number 4 here:
https://www.tesla.com/sites/default/fil ... eement.pdf

SageBrush
Posts: 4907
Joined: Sun Mar 06, 2011 2:28 am
Delivery Date: 13 Feb 2017
Location: NM

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 6:48 am

JohnBysinger wrote: Something you may want to consider in this discussion, does Tesla escrow its reservations? The answer may surprise you.
No surprise to me -- I knew it when I placed my deposit. I also know Tesla's history. And to put things in some perspective, you are not Elon Musk and Fenix is not Tesla. I'm not trying to insult you, but the comparison is off by no less than six orders of magnitude. Tesla had already invested about $1B in R&D before they took down a deposit.

-----
I'll be delighted to be proven wrong but the more I read your posts the more I think you are hawking vaporware.
Last edited by SageBrush on Wed Feb 06, 2019 9:15 am, edited 1 time in total.
2013 LEAF 'S' Model with QC & rear-view camera
Bought off-lease Jan 2017 from N. California
Two years in Colorado, now in NM
03/2018: 58 Ahr, 28k miles
11/2018: 56.16 Ahr, 30k miles
-----
2018 Tesla Model 3 LR, Delivered 6/2018

SageBrush
Posts: 4907
Joined: Sun Mar 06, 2011 2:28 am
Delivery Date: 13 Feb 2017
Location: NM

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 8:28 am

JohnBysinger wrote:And I assure you, every deposit will result in either an installation or a refund.
JohnBysinger wrote:I make no claims that there's no risk. I'm certain I articulated that in my replies above.
2013 LEAF 'S' Model with QC & rear-view camera
Bought off-lease Jan 2017 from N. California
Two years in Colorado, now in NM
03/2018: 58 Ahr, 28k miles
11/2018: 56.16 Ahr, 30k miles
-----
2018 Tesla Model 3 LR, Delivered 6/2018

SageBrush
Posts: 4907
Joined: Sun Mar 06, 2011 2:28 am
Delivery Date: 13 Feb 2017
Location: NM

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 9:13 am

JohnBysinger wrote: Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option.
I took a minute to look at escrow.com.
If I understand correctly the charge is the greater of 6.5% or $10 so you can escrow a $150 deposit for $10.

If you do not have $10 to cover a deposit, how in the world are you going to pay for the engineering resources needed for R&D ? Please do not try to insult our intelligence by saying that you are the engineering brains. Your LinkedIn profile makes it crystal clear that is not the case. And as for facility and tools, I'll venture a guess that they currently are a PC and an internet connection.
2013 LEAF 'S' Model with QC & rear-view camera
Bought off-lease Jan 2017 from N. California
Two years in Colorado, now in NM
03/2018: 58 Ahr, 28k miles
11/2018: 56.16 Ahr, 30k miles
-----
2018 Tesla Model 3 LR, Delivered 6/2018

JohnBysinger
Posts: 33
Joined: Mon Jul 18, 2016 2:16 am

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 9:35 am

SageBrush wrote: No surprise to me -- I knew it when I placed my deposit. I also know Tesla's history. And to put things in some perspective, you are not Elon Musk and Fenix is not Tesla. I'm not trying to insult you, but the comparison is off by about six orders of magnitude.
The comparison is quite valid, even with the difference in scale. Let me explain:

Tesla took in several billion dollars in deposits on the Model 3, which weren't escrowed, they were spent on the development and production of the car (or elsewhere in Tesla, there's no way to really tell.) And despite those billions, Tesla's stock investments, more billions in loans, their house of cards came perilously close to collapse. Elon confirmed this. "Single digit weeks":

https://www.forbes.com/sites/christophe ... bb8e0a6212

Now we all know they didn't, but if you're assessing risk from an actuarial point of view, your deposit had a very high risk associated with it. And you knew it, and that's ok because again, you're absolutely correct, Tesla has Elon. And he has an excellent track record of problem solving and success. But if the collapse were to happen, those deposits would evaporate, even with Elon's net worth, there's no way he could personally cover them either.

For Fenix? Even if you assume some kind of horrid worst case scenario, fire, death, lawsuit, whatever, We've accepted 4 figures in deposits, Even if Fenix burns to the ground, I have multiples of that in physical assets I could liquidate and make right with my customers, and I would. This is why I'm being as brazen as I am about how I am staking my personal reputation on repayment or delivery. Because I know that I can. Heck, I could get a job at Wal-Mart and pay everyone off in a month or two, and if it came to that, I would.

So I argue that while you're correct that Fenix is not Tesla, with regards to the security of our deposit vs one for the Model 3, I submit that our risk is lower than theirs ever was.


I do want to shift the focus a bit though, you wanted me to know this wasn't meant as an insult. First, thank you for that, but I don't take it as one. I welcome the discussion! I'm very much aware that I'm not Elon Musk, and can't sit on my PayPal, SpaceX and Tesla laurels and point at many well known and public successes, and you can't step foot into working in the EV sector without that comparison at some point. So I'm doing the one thing I can do. Engage in conversations with people like you who have questions and concerns. I'm putting myself out there as much as I can. Even while I know I'm addressing this reply to you, I'm certain there are a dozen or more silently reading this. So, of course, I choose my words carefully, but I don't hold back. Because all of you need to get to know me, and right now this is the best way you can.

SageBrush
Posts: 4907
Joined: Sun Mar 06, 2011 2:28 am
Delivery Date: 13 Feb 2017
Location: NM

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 1:06 pm

JohnBysinger wrote: Tesla took in several billion dollars in deposits on the Model 3, which weren't escrowed, they were spent on the development and production of the car (or elsewhere in Tesla, there's no way to really tell.)
This is incorrect. The Tesla financial statements make it very clear that the deposits were not spent and were not counted as assets. And if we care about some semblance of accuracy in what we post, the deposits amounted to ~ $600 million
2013 LEAF 'S' Model with QC & rear-view camera
Bought off-lease Jan 2017 from N. California
Two years in Colorado, now in NM
03/2018: 58 Ahr, 28k miles
11/2018: 56.16 Ahr, 30k miles
-----
2018 Tesla Model 3 LR, Delivered 6/2018

JohnBysinger
Posts: 33
Joined: Mon Jul 18, 2016 2:16 am

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 1:25 pm

You are indeed correct about the scale/total of the deposits, when replying I couldn't remember if the deposit was 1 or 2,000, and I knew reservations were north of 250-300,000, in my haste I added a zero in a rough estimation. Admittedly I haven't looked closely enough at their financial statements to see what you're stating about the deposits. But one thing is certain, Tesla's yearly operating cost is close to $20B, or a little more than $1B per month. If Elon stated Tesla was within "single digit weeks" of locking up, that puts it pretty darn close to that $600M number, perhaps they didn't touch it, but it still came perilously close to.

Oils4AsphaultOnly
Posts: 702
Joined: Sat Oct 10, 2015 4:09 pm
Delivery Date: 20 Nov 2016
Leaf Number: 313890
Location: Arcadia, CA

Re: Fenix Power: A new third party battery replacement?

Wed Feb 06, 2019 2:19 pm

SageBrush wrote:
JohnBysinger wrote: Escrow comes with a cost. We have 3 options in this space (ignoring the smart contract discussion before), a traditional banking escrow agency, the largest and original online escrow service through PayPal, and other online PayPal competitors. The last option, companies like escrow.com and others have a minimum transaction that they will process, usually between $500 and $1000, so they're not an option.
I took a minute to look at escrow.com.
If I understand correctly the charge is the greater of 6.5% or $10 so you can escrow a $150 deposit for $10.

If you do not have $10 to cover a deposit, how in the world are you going to pay for the engineering resources needed for R&D ? Please do not try to insult our intelligence by saying that you are the engineering brains. Your LinkedIn profile makes it crystal clear that is not the case. And as for facility and tools, I'll venture a guess that they currently are a PC and an internet connection.
Isn't this being a little harsh? $10 per deposit would mean an escrow cost of $10,000 for every potential 1000 leaf customers. There are tens of thousands of leaf's that could potentially make use of a third party battery.

Although your concerns about a customer's recourse during bankruptcy is valid, so is John's cost argument with using an escrow service.

I would like Fenix to have a chance to succeed, but I'm not a buyer, because I'm not a fan of the lease model, nor do I need a replacement battery anytime soon.

Perhaps a Kickstarter campaign would be in order?
:: Model 3 LR :: acquired 9 May '18
:: Leaf S30 :: build date: Sep '16 :: purchased: Nov '16
100% Zero transportation emissions (except when I walk) and loving it!

Return to “General / Main Owners Forum”