Design, Develop, Create

Tuesday 19 September 2017

A nice example - 'sunk costs'

Elon Musk provides what I think is a nice example that captures 'sunk cost', aka NRE (non-recurring engineering) expenses.
From the 10:50 mark in "Revenge of the Electric Car" (2011).
Musk "I'm ecstatic, this is fantastic, awesome day, it feels like victory..."
"This is the first production roadster.."
The 'first copy' or sunk costs of a new product.
At 12:50
Musk: "Well so far this is a very expensive car (nervous laugh). Call this the 50 million dollar car (nervous laugh), because that's about the amount of money I've invested in Tesla (nervous laugh). So (pause) it's kind of expensive."