Comma.ai CEO George Hotz has canceled its self-driving car project called Comma One after regulators sent him an inquiry about the car. Hotz' misfortune provides investors with a great lesson to learn from.
Hotz tweeted that he will cancel the Comma One project. He also said that the company would be exploring other products and markets instead.
Hotz tweeted this after he tweeted that the National Highway Traffic Safety Administration (NHTSA) sent him a letter, expressing safety concern about the project. The letter also accompanied a special order that required Comma.ai to provide more information about Comma One.
Hotz tweeted that the NHTSA contacted him for the first time and they started with a threat. Hotz' tweet was accompanied by a link to the letter the NHTSA sent him.
Hotz also tweeted that it isn't worth it to deal with regulators. Would rather spend my life building amazing tech than dealing with regulators and lawyers," he said.
The comma one is cancelled. comma.ai will be exploring other products and markets. Hello from Shenzhen, China. -GH 3/3
— comma ai (@comma_ai) October 28, 2016
Would much rather spend my life building amazing tech than dealing with regulators and lawyers. It isn't worth it. -GH 2/3 — comma ai (@comma_ai) October 28, 2016
Got this in the mail today. https://t.co/BsEANVWoXn First time I hear from them and they open with threats. No attempt at a dialog. -GH 1/3
— comma ai (@comma_ai) October 28, 2016
The NHSTA said in the letter that they're concerned that the safety of Comma One customers and other road users would be at risk. The regulator urged Comma.ai to delay selling their or deploying their product on public roadways until they can ensure its safe to use.
What was once a promising and disruptive opportunity in the automobile industry has turned sour for Hotz. But investors need not experience what he experienced; they just need to learn this valuable lesson.
According to The Motley Fool, Hotz is clearly very smart and was backed by smart investors that have a good track record. But they went into the auto industry without knowing full well the possible risks and pitfalls that await them.
The excitement of an opportunity for a new business in the auto industry has blinded them. Their excitement got in the way of them seeing clearly the bigger picture.
Though it's important to get excited about a new opportunity, it's important not to let it blind you to the risks and pitfalls that could take place. That kind of thinking usually doesn't work out well. Besides, the decisions around, self driving car projects need to be taken care of rather wisely.
