“Hou Xiaodi is selling a house in America recently.”
The former CEO of Tucson, the first self-driving truck listed in the United States, seems a little disheartened and intends to leave Tucson, a sad place.
Why did Hou Xiaodi sell the house? One is that he is fighting a reputation lawsuit and needs money urgently; the other is that when Tucson’s stock price is at a high point in the future, he used his savings to buy a lot of stocks. Now, Tucson’s stock price has fallen by more than 90% in the future, and the stock is like waste paper. But according to the law, Hou Xiaodi has to pay a lot of back taxes, which is also a huge sum of money.
In fact, Hou Xiaodi and Tucson’s future dilemma stems from the “lively but unapplauded” driverless truck public road test at the end of 2021. A short-selling report questioned Tucson’s difficulty in developing L4 self-driving trucks in the future, and the stock price plummeted by 50%.
The arrogant Hou Xiaodi urgently recruited 500 people in China and the United States, just to give a severe blow to the short-selling institutions and the secondary market. A person close to Hou Xiaodi said, “Hou Xiaodi worked very hard. In order to complete the industry’s first driverless truck public road test, he worked hard, slept 4 to 5 hours a day, and was admitted to the hospital several times. He has some tragic heroic colors on his body.”
However, Hou Xiaodi, who was desperate, led the team to complete the test, which was called “comparable to landing on the moon” by the employees, but the capital market still did not buy it, and the stock price continued to weaken. This caused a rift between him and Lu Cheng, who is good at capital operations, and triggered the final palace fight.
Why is Tucson in chaos?
Xu Ye, a future employee of Tucson, said, “Hou Xiaodi is a tech-savvy and slightly paranoid person, and he endows Tucson with a soul. Therefore, Tucson is like a child who is not strong in stress resistance, self-respecting and sensitive. It is necessary to refute. But too much insistence on oneself, eager to prove oneself, disregarding the market environment and existing capabilities, and thus dragging down the company.”
Business operation is a combination of a series of complex problems. However, the deep-rooted problem of technical people is that they are used to simplifying complex problems into single-point problems, simply thinking that X and Y can be used to solve them.
People can share joys, but not sorrows. Later, Hou Xiaodi also pointed the finger at Lu Cheng, who is proficient in capital operations but incapable of controlling the situation, and gradually got involved in more departments, hoping to use his own way to manage Tucson. Lu Cheng, together with another Lianchuang Chen Mo, fought against Hou Xiaodi in the company. You know, when the company went public, the three of them left a good story behind.
After that, Tucson entered a period of turmoil. The Iron Triangle sowed seeds of suspicion among each other, and spent the next few months turning each other down, bringing each other down and making the industry laugh.
First, Hou Xiaodi invited Lu Cheng and Chen Mo out of the board of directors, and then Hou Xiaodi was voted out by the board of directors. Hou Xiaodi, who was not reconciled, made a comeback, pulled the first two together, and cleaned the white board of directors with a super voting power of 1:10. The price of the alliance between the three is that Hou Xiaodi will be emptied and handed over all management rights and voting rights.
After the farce ended, the “capitalist” Lu Cheng returned to the CEO position, and an all-staff email waved the big knife of layoffs to the employees. The U.S. team dropped sharply from 1,000 to less than 500. Among them, the operation and testing teams are at the center of the storm, and the proportion of layoffs has exceeded 70%. Even if the research design (belonging to the map department) and the algorithm team are in a better situation, 50% and 20% of the staff will be laid off respectively.
Liu Sen, a future employee of Tucson, said that the large-scale layoffs caused the company not only bleeding, but “internal injuries”, and the surviving technical team is no longer enough for the company to continue to develop the L4 self-driving truck business. Because of the large number of job vacancies, “many teams don’t know how to continue working.” Many employees, including Liu Sen, have contacted several Chinese OEMs to discuss new job opportunities.
Tucson layoffs, turmoil over internal power grabs. But Hou Xiaodi, Chen Mo, and Lu Cheng are good at technology, business, and capital respectively. They complement each other on paper, but they are against each other in secret. Everyone lacks overall awareness, and they will only use their best methods to deal with any problems. , and will question the means of others.
Liu Sen said, “The road test at the end of 2021 was originally planned for 2020. After completing the road test for half a year, we will continue to advance the R&D plan for 2021. In March 2022, Hou Xiaodi took the post of CEO and began to do large-scale promotion and operation work. Lu Cheng became the CEO in November, and he wanted to save some money, so he reversed all of Hou Xiaodi’s previous plans, and decided to lay off staff and save money.”
This also led to Tucson being pulled by the limits of different thinking in the future, and the strategy was chaotic, which planted a hidden mine for itself, which would explode at any time in front of the sparks of the capital market.
Tragic short-selling, stock price plummeting: a battle of technical men to rectify their names
This is a forced and imperative test.
In April 2021, TuSimple will be listed on NASDAQ in the future, becoming the world’s first listed autonomous driving company. During that time, it was the highlight moment of this poorly publicized company. Countless Chinese and foreign media rushed to report on it. The capital market is also optimistic about the future of Tucson. Within three months after listing, the company was immersed in the joy of doubling its stock price.
(On April 15, 2021, TuSimple will land on Nasdaq in the future)
However, the tree attracts the wind.
In August, a short-selling agency published a report pointing out that Tucson will have difficulty in developing L4 self-driving trucks in the future. As soon as the news came out, the stock price of Tucson Future fell by more than 50% in just a few days, and many employees resigned. The accusation of the short-selling agency was like a thorn in Chen Mo’s heart.
Before the listing, although TuSimple will be unable to make ends meet in the future, Chen Mo, who participated in promoting the listing, has strong confidence. A Tucson employee close to him told Leifeng.com, “Chen tacitly believes that income performance can be poor, but it must not be faked. Now, the outside world is pointing fingers at Tucson’s future core technology, which is tantamount to questioning that he has deceived investors. “
The stock price plummeted and employees left in large numbers, which also made Hou Xiaodi, who was focusing on algorithm research and development, unhappy. He decided to fulfill his promise before the arrival of 2022, proving that Tucson has the ability to develop L4 autonomous trucks in the future. This plan was proposed in 2018, and has been skipped many times since then, and the final cashing time is at the end of 2021.
Although Tucson is stronger than algorithms in the future, it still cannot achieve large-scale unmanned driving. Liu Bai, a former employee, said that before Tucson cooperated with OEMs in the future, it thought that the problems of vehicle platform, supply chain and productization could be solved in the cooperation between the two parties, but in fact it was more difficult than expected.
Hou Xiaodi told the company’s executives that he could not accept another postponement of the plan. At his request, the Tucson Future USA team urgently added manpower, and all staff began to work around the clock. An employee said that in the future, the total number of Tucson’s Sino-US team has increased from 1,500 to 2,000.
(Hou Xiaodi, co-founder of TuSimple Future)
Fortunately, Hou Xiaodi was relieved by the test results.
Only two days before the end of 2021, Tucson successfully let a self-driving heavy truck without a safety officer pass through the city and drive continuously on the highway for one hour and twenty minutes.
After this battle, Tucson will once again achieve unprecedented achievements in the future. In Liu Sen’s view, the completion of the world’s first public road test of driverless trucks can be called a successful moon landing. “This incident has made many colleagues think that driverless driving is feasible.”
However, he admitted that Tucson will also invest a huge cost “comparable to going to the moon” for this road test in the future.
Hou Xiaodi is full of hope that the road test will boost the flagging stock price and convince investors of the company’s self-driving technology. Surprisingly, on the day the news was announced, Tucson’s stock price fell by 9.2%.
Some employees faintly feel that although the test target has been completed, the most desired stock price has not risen, which must have a huge impact on future strategy and morale. Next, the company may kill the donkey and initiate layoffs. Even if it does not lay off employees, it will lay off a few.
Lu Cheng, a Wall Street-born CEO, does have such a plan. Huang Xin, who is close to Tucson’s future executives, told Leifeng.com, “Lv Cheng plans to expand the number of recruits in the middle of the year in order to catch up with the project, and lay off employees in a small range after the completion of the project. On the one hand, there are indeed more people in the company.”
However, this plan was blocked by Hou Xiaodi. Soon after, the layoffs did not proceed, and Lu Cheng left Tucson Future instead.
The Enmity between Technology and Capital: Expulsion and Expulsion
Lu Cheng’s departure stemmed from Hou Xiaodi’s doubts about his ability to operate capital.
At a meeting in January 2022, Hou Xiaodi asked Lu Cheng why the company had proved that it had the ability to develop L4 self-driving trucks, but the stock price was still falling.
Lu Cheng replied that the overall market environment is tense, and the decline of other technology stocks will not be spared.
Hou Xiaodi does not agree with this statement. Two people who worked with Lv Cheng and Hou Xiaodi revealed to the media that after the meeting, Hou Xiaodi, who was originally focused on technology, began to frequently supervise other businesses not managed by him, such as human resources and marketing.
Liu Sen told Leifeng.com that Hou Xiaodi’s management style is to only look at the results after handing over the power, regardless of the process. If the results are not as expected, then he will intervene.
Regarding corporate governance, the differences between Hou Xiaodi, Chen Mo, and Lu Cheng gradually widened.
Hou Xiaodi has strong characteristics of a laboratory technician. He believes that after the company implements the algorithm, the next goal is to reduce the operating cost of self-driving trucks; while Lv Cheng, who is familiar with investors, pays more attention to the company’s stock price, trying to get investors to restore their interest in the company. I don’t have much confidence in the product.
Liu Sen said, “The relationship between Hou Xiaodi and Chen Mo is very good, but Hou has a problem with Lu Cheng. Lu Cheng has worked on Wall Street for many years and is good at dealing with Wall Street people. Let him be the CEO to help TuSimple get listed in the US in the future. But Lu Cheng spent a lot of money, such as hiring a special driver to travel in a company car, treating someone to a meal and spending tens of thousands of dollars, and many things were reimbursed with public funds. So Hou Xiaodi drove Lu Cheng away.”
More importantly, Chen Mo, who once co-founded and fought side by side with Hou Xiaodi, also stood on the opposite side.
Chen Mo has started his own business many times, and TuSimple is the only listed company after his founding. The long-term development of TuSimple is of great significance to him.
An industry insider who is familiar with Chen Mo commented: “Chen Mo is very easy-going and has a high emotional intelligence. He is really good at handling business. Many people, including me, like him.”
Then, he changed the subject. “However, he has no ideals and is a BD driven by interests. If you can keep interests for him, you will feel very comfortable getting along with him.”
(Chen Mo, Chairman of Tucson Future)
The conflict between the three soon came to fruition.
In March 2022, the future management of Tucson will be greatly adjusted. Both Lu Cheng and Chen Mo will be eliminated. CTO Hou Xiaodi will take over the burden of CEO and president, and will take over the position of chairman of the board of directors from Chen Mo. This decision will take effect immediately after the announcement. In addition, Hou Xiaodi appointed two cronies as executive vice presidents, both of whom are experts in machine learning.
TuSimple announced in the future that this is “part of the executive succession plan”. However, in the first four earnings conference calls announcing this plan, none of the management personnel will change. The news shocked investors, and Tucson’s future stock price plummeted by more than 20%.
Industry insiders told Leifeng.com that the reason for Chairman Chen Mo’s compromise may be that the two reached an agreement to split Tucson’s future Sino-US business, with Hou Xiaodi focusing on the US team and Chen Mo returning to China to lead the Chinese team. In this way, the size of the team can be reduced, and political problems can also be avoided. Lu Cheng left with a large sum of money.
An interesting fact is that one month after the management change in Tucson Future, there was news of the split of the Chinese and American teams. (Afterwards, it was reported that TuSimple’s future Chinese business might be acquired by Geely. Leifeng.com learned that the deal between the two parties was not reached because TuSimple’s future American board of directors rejected it.)
However, before Hou Xiaodi’s seat was secured, the FBI and SEC approached the door, and they launched an investigation into the relationship between Chen Moxin’s Turing Smart Card and TuSimple Future.
In the middle of 2022, the U.S. government received information that Turing Smart Card occupied TuSimple’s Beijing office resources and used some employees to develop self-driving trucks. It was suspected that TuSimple was suspected of secretly sharing confidential technology with Chinese companies.
A person close to Tucson confirmed this statement to Leifeng.com: “Chen Mo’s car manufacturing company team works in the Tucson Future China office, and more than a dozen people from the Tucson Future China company helped Turing The work of Zhika uses a lot of resources in Tucson.”
The information this time was blew up by Tucson’s future HR.
According to Liu Sen, TuSimple Future America pays the employees of Chen Mo’s new company, which is also recorded in the company files. In fact, as long as you consult a lawyer, you can avoid being investigated by the US government. Afterwards, Tucson wanted to change to a third-party HR company in the future, and did not have a good discussion with HR (the whistleblower), and did not pay hush money, which caused HR to use evidence to report to the US government. Because of this incident, Tucson changed the HR company in the future.
This is the second time that TuSimple has been investigated by the US government on the grounds of “technical sharing between Chinese and American teams”.
The first time came shortly after the Tucson Future went public. At that time, the Committee on Foreign Investment in the United States launched an investigation into TuSimple, which ended with TuSimple signing a national security agreement, restricting technology access and regularly submitting reports to U.S. regulators.
Therefore, when the board members of TuSimple Future asked Hou Xiaodi to explain “the relationship between TuSimple Future and Turing Smart Card”, they did not get the answer they wanted.
At the end of October, TuSimple’s future board of directors jointly voted to deprive Hou Xiaodi of his CEO position, and Hou Xiaodi only learned about it after the announcement.
Although Hou Xiaodi has a lot of voting rights, after Chen Mo and Lu Cheng left the company, their voting rights still appear weak compared to the other four board members.
As for the reason for the impeachment of Hou Xiaodi, industry insiders speculate that the purpose of Tucson’s future board of directors may be to “show loyalty” to the US government departments and prove that they still have the power to control Hou Xiaodi and Tucson’s future.
In this way, Hou Xiaodi was expelled from the company in embarrassment, and the management power fell into the hands of others.
The counterattack of a down-and-out CEO: joining forces, compromising, and being emptied
After the Gongdou farce, the board of directors was not happy for long. Ten days later, the story ushered in a new chapter: the down-and-out CEO returned to the company again, kicked out the board members, replaced the interim CEO, and all actions were completed in one go.
Hou Xiaodi is not the hero of the novel Shuangwen, in order to return to the future of Tucson, he gave almost everything.
Tucson will adopt AB shares in the future, Hou Xiaodi recalls Chen Mo and Lu Cheng, and the three jointly use super voting rights to temporarily form an alliance. As a price, Hou Xiaodi handed over all the management rights and voting rights of the company, Lu Cheng became the CEO again, and Chen Mo remained the chairman.
(Lv Cheng, the current CEO of TuSimple in the future)
After TuSimple experienced a U.S. government investigation and a drastic change in management, its stock price has fallen by more than 96% from its peak. Many investors have decided to initiate a class action lawsuit against TuSimple for securities fraud.
Lv Cheng, who is well versed in investor psychology, decided to increase income and reduce expenditure. He laid off at least 50% of TuSimple’s future US team, and shifted the company’s business focus from reducing the operating costs of self-driving trucks to developing a software platform to match self-driving trucks with shippers.
In the eyes of many employees, Chen Mo and Lu Cheng are both businessmen. The main task of this return is not to promote technology research and development, but to increase the stock price. In the future, Tucson may focus on the research and development of L2+ autonomous driving technology to cater to investors’ preferences.
“Overthrowing all the previous technology accumulation is tantamount to self-cutting. What’s more, TuSimple has little engineering experience in the future, and it is difficult to promote the implementation of L2+ automatic driving.” Zenier, a former employee of TuSimple, analyzed.
This move did not play a significant role in the secondary market, but it extinguished Hou Xiaodi and his team’s hope for the future of Tucson.
Hou Xiaodi’s company account has been withdrawn since November 2022, and he has not appeared in the company for nearly two months. It is reported that Hou Xiaodi, who lost his real power, once expressed to some core technical employees that he might start a business again, hoping to get their support.
Hou Xiaodi got some positive answers. One of the employees told Leifeng.com that Hou Xiaodi has a firm belief in achieving the goal and is willing to achieve it in a compromise way. Even if the goals he proposed at the time were so ambitious that they seemed impossible to achieve, but afterwards it proved that his decision was correct.
To some extent, Hou Xiaodi’s second venture is his obsession with unmanned driving.
“Compared to other people, the saddest person must be Hou Xiaodi.” Huang Xin said emotionally, “Without Hou Xiaodi, Tucson would not be where it is today.”
In Huang Xin’s memory, Hou Xiaodi did not sell any shares in the company in order to prove that TuSimple can implement L4 autonomous driving technology in the future. Due to being busy with company affairs, Hou Xiaodi only slept for four or five hours a day for five years, and he went to the hospital several times due to his overwork. “None of us can beat him, he sacrificed himself for the company.”
Zenier believes that Hou Xiaodi has less management experience and is more suitable to be the chief scientist. In the past, he led the team to focus on technology research and development, but did not have enough knowledge of the capital market and company operations.
In any case, the core figure who established Tucson’s future technology research and development, and even the company’s culture, has been defeated, and the power has been handed over to Lu Cheng and Chen Mo, who pay more attention to the capital market than products. In the future, they will lead the broken boat of Tucson to a new direction.
“The future of Tucson is no longer what I imagined.” Someone said.
Ruthless capital’s killing of donkeys: departure, job hunting, hard work
When did the layoffs start? Until now, Wan Qing is still not sure. He only remembers that when he was on vacation in other places, he woke up one morning in December, logged into his work Slack account as usual, and unexpectedly found that the account had been taken back by the company.
California law stipulates that layoffs of more than 50 employees must be made 60 days in advance, and wages are usually paid 60 days in advance. In order to prevent employees from losing data, the company will take back employee accounts.
Wan Qing immediately logged into his private account to learn something from his colleagues, only to see that the product manager had left a message saying goodbye to his colleagues.
At that moment, Wan Qing realized that it wasn’t just him who was laid off, but the entire department.
In the future, Tucson, a company that aims to realize L4 self-driving trucks, has laid off employees without warning, but it is expected.
After evacuating Hou Xiaodi, Lu Cheng and Chen Mo embarked on a huge layoff: the US team has been reduced from 1,000 to less than 500, and all departments including the algorithm have been affected. Among them, the operation and testing teams are at the center of the storm, and the proportion of layoffs has exceeded 70%. The research design (belonging to the map department) and the algorithm team, which are in a better situation, will lay off 50% and 20% of their staff respectively.
The laid-off employees are still serving Tucson in name, but they are no longer working in fact. Now, with the two-month salary issued by the company, they ask people around to inquire about their next job. Among them, many people’s visas belong to H-1B, which means that they must find a new employer in the next few months, otherwise they can only leave the United States.
Liu Sen, a future employee of Tucson, said that the large-scale layoffs caused the company not only bleeding, but “internal injuries”, and the surviving technical team is no longer enough for the company to continue to develop the L4 self-driving truck business. “A lot of teams don’t know how to keep working” because of the large number of vacancies.
Liu Sen has not been included in the list of layoffs, but he and many colleagues have decided to go, including many managers who have reported directly to the CEO. They have contacted several OEMs in China to discuss new job opportunities.
Many future Tucson employees emphasized that the change of leaders and business adjustment made them unable to see the hope of the company’s development, and at the same time lost the opportunity to continue learning and challenge. Tucson has many veteran employees who have worked for four or five years, which is rare in the self-driving industry where job hopping is frequent.
In the future, TuSimple will be based on algorithms. Since its inception, TuSimple has been famous for its many world-first achievements in the future. Since then, it has taken the lead in obtaining multiple self-driving road test licenses, and the first to complete the road test of driverless and self-driving trucks, making it the first in the world. The first echelon of the global autonomous driving industry. Rich and complex projects also allow Tucson people to continuously challenge the most difficult problems in the industry and accumulate more technical advantages.
Tucson people are proud of the achievements achieved through personal participation. Many employees believe that Tucson will have no competitors in China in the future, and there are very few foreign competitors. Even if there is, it must be Waymo, a Google-based autonomous driving company, and Wabbi, a start-up company, both of which are well-known in the industry for their strong technology research and development capabilities.
This spirit of continuously challenging complex issues has created a pragmatic corporate culture for the future of TuSimple. There will be no team building activities in Tucson in the future, and there will be no celebrations even after the listing. At most, the employees will send a circle of friends to express their congratulations, and then turn to work.
The strong, free technical atmosphere and the desire to realize L4 autonomous driving make most Tucson people willing to work overtime, and working until midnight is not uncommon. The future technical achievements of Tucson have also given many employees a strong sense of belonging. There have been attempts to poach the top 100 veteran employees many times, but they often ended in failure.
Now, everything has changed.
Liu Sen guessed that the company may intend to undertake the assisted driving pre-research project with the gimmick of L4 automatic driving, just to barely survive. Huang Xin, another technician, said that the changes have impacted Tucson’s future culture and slowed down the pace of research and development of autonomous driving technology, “may be surpassed by other companies within a year.”
Even though some employees are reluctant to part with Tucson’s future, they have no choice but to leave.
Looking at it now, what step did Tucson make in the future? Some people attribute that the supervision of the Committee on Foreign Investment in the United States forced TuSimple to cut off the Chinese and American teams in the future; another voice concluded that TuSimple has not launched mass-produced self-driving trucks for a long time; some people say that TuSimple is too focused on technology in the future R&D ignores investor sentiment.
A future employee of Tucson told Leifeng.com that according to the pace of market development, as long as they are allowed to continue to try for three to five years, they will be able to deliver mass-produced self-driving trucks to meet the expectations of investors and the team. However, investors are clearly losing patience, and even they themselves no longer believe in miracles.
Either way, the current Tucson future is scarred and gasping for breath. In just over a year, it seems like a lifetime away.
Tucson’s future is gradually lost, and there is not much time left for it.
This is the first article in TuSimple’s future series of manuscripts. During this period, there are more interesting stories that have not been disclosed. Interested readers, please add the author Tian Zhe’s WeChat tz–hh private chat; we will launch more self-driving commercial vehicles in the future For related manuscripts, if you have good opinions and facts, welcome to exchange news.
Note: Xu Ye, Liu Sen, Liu Bai, Huang Xin, Wan Qing, and Cen Nier are all pseudonyms. This article also contributed to the interview with Yi Silin, the author of Leifeng.com.
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