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More investor idiocy

I don't know how many times I've seen seemingly sophisticated investors throw money at ventures that are clearly pie in the sky dreams that could never become a reality.

Sadly, aviation is one of those areas which all too often sees an indvidual or small group of enthusiasts sell their "dream" to others whose chequebooks are many times larger than their IQs.

We saw this here in New Zealand with the Martin Jetpack, a project that was clearly a folly right from the get-go but which soaked up taxpayer funds and private investor capital like a sponge, ultimately to fail spectacularly, as I predicted.

Well now there's a new generation of aviation investment "opportunities" that are attracting the stupid and ignorant who, for whatever reason, seem to have little understanding of the science involved and are unwilling to listen to the warnings from those who do.

I am talking about the AAM (Advanced Air Mobility) sector, an emerging market which, it is promised, will bring flying cars and autonomous air taxis into our lives.

One of the biggest players in this make-believe market is a company called Lilium.

For quite a few years now, they've been promising to deliver an autonomous, electrically powered eVTOL craft that will be able to move up to five people at speeds of up to 300KPH and over distances of up to 300Km.

Like most of these AAM companies, they're big on promises and short on delivery.

I have voiced my skepticism in a number of forums in respect to Lilium's claims and the alleged performance of their demonstrator but despite the reservations expressed by myself and others, the company has raised almost a billion dollars in startup funding.

Let me repeat that and type it very slowly for those who don't read fast:

O.n.e.. b.i.l.l.i.o.n.. d.o.l.l.a.r.s!

Now I'm not a qualified aviation engineer or designer but even I can see that this craft is never going to deliver on the promises made for it so don't take my word for it. Take this guy's word instead:

For those who can't be arsed watching an almost two-hour long video laced with a lot of science and engineering-speak (and I can't blame you, just skip to the summary at the end if you like) the TLDR is as follows:

Lilium have made a bunch of claims for this craft that simply can not be verified using existing science/engineering.

Even the paper they published in response to criticism from established and qualified engineers is littered with misinformation and bogus references -- things that point strongly towards the "scamminess" of this venture (and the AAM industry as a whole).

At the very least, some of the claims made for this craft are reliant on battery technology that does not yet exist yet, despite this, they're proposing to have the craft in service within a couple of years. Sadly, battery tech has bit a pretty hard plateau right now and there's no light at the end of that tunnel this casts further doubt on the viability of Lilium's offering.

The evolution of this train-wreck is now following the same path as that of the Martin Jetpack... they have plans to go public. This will ensure that current investors do end up making a profit, by selling their shares to unsuspecting (and even more naive) public investors whose expectations of returns will be based on bogus claims and forecasts.

To bolster the floating of the company, Lilium has recruited some "names" from the industry, including figureheads from Airbus and Rolls Royce. This is exactly what MJP did just before going public and it's an important step in convincing dupes that the company and its products have integrity and a future.

It makes me really angry that we see this "formula for investment success" play out so often:

1. VCs spot something that has sizzle and is an easy sell to the public as a disruptive technology that will soon be an important part of our future.

2. Invest just enough money to get a prototype working and then saturate the media with press releases and create the perception that "we're nearly there".

3. Hire in some well known names from elsewhere in the industry who are prepared to sell their soul to the devil for a few pieces of silver.

4. Further pump up the profile and public expectations.

5. Float the company on the stockmarket -- allowing the initial VC investors to quit their shares at a huge profit.

6. Time passes, the product/company fails.

7. Company is liquidated, all the investors (except the initial VCs who cashed out earlier) lose their shirts.

Honestly, I've lost track of the number of times this has played out, especially in the tech and aviation sectors -- yet nobody seems to heed the warnings that are issued by those of us that understand how science/engineering do not support the claims being made.

Stay tuned... the AAM sector is going to see a *lot* more of this, as every snake-oil merchant and their dogs see an opportunity to wow the world with promises, 3D renderings and outrageous claims -- all backed by cynical VCs that are well versed in the pump and dump strategy I've outlined above.

Tragic really.

Oh, and as a footnote... the hobby of flying RC model aircraft is being literally destroyed by regulators who, directed by idiotic politicians, are also buying into this hyperbole and promises that the skies will be filled with air-taxis, flying cars and delivery drones.

So many feeble minds at work here :-(

Carpe Diem folks!

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