TESLA - Patterns of Success

Aktualisiert: 9. Nov. 2020

How is it possible for you, for me and for any of thousands of resourceful companies to achieve a commanding and long-lasting competitive edge?

This article reflects my view of the evolution of TESLA compared to the Business Innovation Process we suggest for our customers and will derive useful consequences for the design of a sustainable growth process for any organization.

Warning ;-) : I have come to the conclusion, that TESLA is a generational company, a very rare company and I am invested in TESLA because looking forward I see a more than 20x growth within the next ten years. Please check my assumptions and let me know your thoughts. That way we may all learn from TESLA's evolution, failures and successes.

Primary sources: TESLA Impact-Report, HyperCharts, TeslaDaily, VISTEM

Let me present a short overview of a generic Business Innovation Process. When I write 'our company' I mean your company, my company, any company which wants to grow sustainably.

source: www.vistem.eu

  1. What is the purpose of existence for your company? Why would the world care?

  2. The "Value Proposition" establishes a great value your company will contribute to your customers wellbeing and success.

  3. The "Business Model" makes sure you will earn the needed money for your own exponential and sustainable growth.

  4. The "Execution Plan" establishes a credible way to create a growing sustainable business

  5. ... furthermore, you must make sure, that your company is able to evolve beyond the current limits of your current thinking.

Step I. Grand Goals

I would like to start with the first and exceedingly important question in our five-step journey along the Business Innovation Process: What is the overarching goal of your company? Why should it exist?

As of this writing (November 2020) TESLA is the most valuable car company in the world. With more than 60.000 employees it is no startup anymore. But it is growing like a startup averaging 50% per year, which it wants to continue for the next ten years. While all major car companies are writing losses and shrink, TESLA grows and is consistently and increasingly profitable.

What is going on here?

Elon Musk, CEO and dominating shareholder of TESLA, refers again and again to the mission of all his companies:

  1. Enable a growing and sustainable civilization on earth

  2. Insure humanity against an eventual global catastrophe by creating a multiplanetary civilization

You will not find anything about cars in this mission.

This is the mission, that drives the creative processes in Elon Musk's companies.

For TESLA the focus is on climate change and within this framework on reducing greenhouse gas and toxic emissions.

The objective was worded as:

The very purpose of Tesla’s existence is to accelerate the world’s transition to sustainable energy.

To achieve this goal TESLA will create an entire sustainable energy ecosystem. Energy production, storage and usage.

source: TESLA Impact-Report

The widely known car&mobility business is only a subset of this ambitious endeavor.

Very interestingly during the first ten years of its existence TESLA wanted only to kick the 'Big Boys', the other automotive companies, into action. TESLA even encouraged competitors to use its patents to accelerate their own inevitable transformation.

The small company was belittled and widely ignored

  • until BMW and other premium brands lost significant business in the US to TESLA in 2018

  • until TESLA achieved price parity with ICE vehicles (ICE..Internal Combustion Engine) in 2020

  • until TESLA was the only major automotive company with healthy balance sheet and profits during the Covid19 crisis of 2020.

Again: What is going on here?

Step II. Value Proposition

Why is there no demand problem for TESLA but a critical market contraction for its competitors? (Numbers for US, Oct 1st 2020,source: US vehicle sales 2020 )

The hypothesis behind "Value Proposition" is, that you must identify one or more great needs of your customers, which other companies cannot or will not fulfill.

Here we go ...

“Since its founding, Tesla has been focused on increasing the utility of products - making them better and more useful to our customers - while at the same time making them increasingly more affordable. Tesla fundamentally believes that you shouldn’t have to choose between price, quality, usability, and sustainability.”

This statement leads to fundamental design decisions for every TESLA product.

source: TESLA Impact-Report

Relevant reservations a consumer might have comparing TESLA products with competing ICE-age (Internal Combustion Engine) products must be addressed.

Today TESLA is providing a superior driving experien