A billionaire lying to investors! Groundbreaking.
NKLA stock is down nearly 20% since it came out that the founder is stepping down from leading the business.
Can the electric truck manufacturer survive this scandal?
Is this scandal as bad as Bernie Madoff or Elizabeth Holmes? Those are both names that no one wants to be associated with. Those are the name of people that claimed they were created fantastic businesses, but the reality was imaginary. They took a lot of people’s money and hurt a lot of people.
Nikola does not even have a product on the market.
They were able parlay their ‘technology’ into a partnership with one of the world’s largest auto manufacturers. Because electric is the future.
Things Nikola has going for it:
- General Motors has partnered with the biz to manufacture its vehicles and share some technology
- Electric is the future. The trend and market for EVs is growing
- They have a lot of investors and have raised a lot of capital.
What can we learn about this situation?
A.) Trends are bigger than any one person or company
Invest in trends that you see coming: AI, robotics, temp staffing, sharing economy, biotech, ecommerce. Do your research and find the trends that fit your circle of competence. Dump stocks that are dying or on the downward trend and invest in businesses that have caught the wave of the upward trend.
B.) Cash is king
Money gives you options. In business and in your personal life. Nikola has lots of investors and cash. This gives them the ability to hire employees and build teams that will create and execute great products. You need to make investments to reach financial independence, but you also need to have a pile of cash in cash of emergency waiting for you.
Have you seen Nikola’s products? They are creative and innovative. They are thinking about the future and what they want it to look like. This is why I love businesses like Restoration Hardware, Carvana, Apple, Hubspot.
You need to be a creator. What can you build, sell, teach?
D.) What do you want the world to look like?
Have a vision for your life. What do you want your life to look like? And then take action to make that vision a reality.
E.) Radical honesty
Once upon a time, I thought I wanted to be in the healthcare field. But I hate science and do not enjoy standardized tests. So I had to get real with myself and face that healthcare was not the right fit for me. You have to first be honest with yourself, then your family, then friends, then the world.
It is even more important to be honest when the truth is going to hurt and people will not want to hear it. No more fantasy land.
F.) Cheerleading vs honesty
One of the jobs of the CEO is to be the head cheerleader of the business. They must go out and convince the world that they are the best and that everyone should be investing in their business. This is every person should think. That they are unique and the very best at being that specific unique person. And then champion yourself to the world. But you also have live in reality. Be a cheerleader, but also recognize your pain points.
Nikola has partnered with General Motors. A successful car mentor that can guide them toward success. A spouse, teacher, business partner. Partnerships increase the possibility of success. Mentors and coaches can guide you and show you pitfalls. But you still have to drive. You determine if you are going to be successful.
H.) Learn from your mistakes
Maybe you have lied to people. Maybe you have done some bad things. Or not done things you told people you would do. We all make mistakes and let people down some time. Look at your mistakes and learn from them. How can you take your experiences and improve?
Nikola will survive this scandal. But it has yet to be determined if they will survive long term.
You do not have a choice of survival you must survive tomorrow and the next day.
I have had to reinvent my self many times and each time I get a tiny bit smarter. Because I choose to keep going and I choose to evaluate the past mistakes I have made.
Try and make one choice today that is a tiny bit better than yesterday. Tiny choices compound into big change and becomes your life.
What are your thoughts about Nikola? Leave a comment.
Would you invest in Nikola? What are your criteria to invest in a stock? Do you invest in stocks or index funds? How should CEOs be punished for bad actions?