Monday, November 18, 2013

Racing Along the Electric Highway

I recently had an opportunity to hear Elon Musk, Founder and CEO of Tesla, speak to a select German audience of journalists and Tesla owners.  In fact, I’m pretty sure the person who took this picture was the 6’4’’ guy standing in front of me, forcing me to peek around him at the great man. 

Tesla offers a modern example of how human ingenuity can turn a well-established market on its ear.  Contrary to popular belief, people don’t actually want cars.  What they want is convenient mobility and - if they can afford it - a status symbol. 

Tesla’s CEO also recognizes an important truth about people: Most will not lift a finger to save the environment - let alone give up their beloved SUV - just because it may be better for the world.  It’s not that people are inherently bad or hate polar bears but convenience and comfort will always trump high ideals. 

And let’s face it, owning an electric car is not at present as convenient as owning a gas guzzler.  You have to wait ages to get your Tesla.  You can’t charge it at a regular gas station.  There’s only one Tesla service station in all of Germany.

So what do you do if you want to reinvent the mobility market but you can’t - yet - compete on convenience or price? 
  • You make it a status symbol to get the early adopters, knowing that once you get enough swing mass you can focus on other market segments. 
  • You have really cool shops with hip and polite young sales reps who have clearly drunk the Tesla Kool-aid. 
  • You team up with family friendly franchises like McDonald’s to establish convenient charging stations. 
  • You invest in R&D to come up with faster ways to charge than filling a gas tank, such as battery changing stations. 

Most importantly, you show people how the world can be a better place with little or no inconvenience to themselves, whereby any minor inconvenience incurred initially is offset by cool early adopter status.  That, my friends, is how you change the world.

And sure enough, that's pretty much what Tesla is doing, building their own electric highway to bring a new generation of mobility to the masses.  Right now the plan is 10,000 cars on the German roads by 2015, which is a small drop in the bucket compared to the overall German automotive market.  However, if this business model is successful we’ll see electric car adoption spike dramatically over the next decade. 

For you doubters, remember how quickly the iPad took off: quickly passing status symbol status to become a mainstream business tool, inspiring a promising niche business in computing accessories and forever changing how laptop manufacturers and software vendors design their products.

The world is at a critical juncture right now, where established business models persist in trying to hold out against the rising tide of distributed human ingenuity.  This isn't touchie feelie 'power to the people' claptrap, it's a modern business reality.  And it's happening all around us:

  • Business leaders cling to the status quo as social networks democratize the leadership function. 
  • Utilities conglomerates lobby for enormous energy projects that will take decades to get off the ground while private citizens get on with putting solar panels on their homes. 
  • Movie studio executives, venture capitalists and other folks who that have traditionally controlled which ideas make it to market are being sidestepped by the likes of Kickstarter and the Maker Movement.  

And while established car manufacturers make teeny, tiny incremental improvements to reduce gas consumption, visionaries like Elon Musk are reinventing the market.  Whether he succeeds or fails, the mobility industry - among others - will never be the same.

OK, it's just a car but as I listened to Elon Musk's vision for the future it really hit me that the fires of creation are burning brightly, fueled by social platforms, ubiquitous information and enormous technical possibility.   Everything, simply everything, about business as we know it is going to change over the next ten years.

Tomorrow's leaders will be people who partner with others to change the world in a climate where worth is measured not by what you know, but what you share. 



3 comments:

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  2. Amazing post.......it is interesting to know.....thanks for the post.

    ReplyDelete
  3. It is interesting know the latest updates for automotive industry...Great one.

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