Innovation


Tesla Demonstrates Why Small Companies Can Innovate Fast

Digital Hollywood Content Summit speaker and friend, Allen Lau, has written a wonderful article on the how small business can have the advantage when it comes to innovation. 

Using Tesla as a case study, he makes the point that while large corporations have more resources at their fingertips, start-ups and small organizations are much more efficient in making (and executing) bold decisions quickly - something that just might prove to to be “your biggest competitive advantage.”

What do you think? 

allenlau:

image

Recently Wolfgang Dürheimer was sacked by Audi.  According to a high-ranking Volkswagen Group source, the former Audi Head of R&D failed to create a bold electric-vehicle strategy and was unable to handle the “complexity” of his job.  Dürheimer has expressed skepticism about the progress of battery technology and also killed plans to sell a production version of the R8 e-tron.  So there might be some truth to that.

Today, it is hard to talk about electric cars without mentioning Tesla.  Tesla. like Apple, which neither came up with the idea for tablet nor smartphone (nor music player for that matter), wasn’t first with an electric car.  This year, Tesla is targeted to sell about 20,000 cars.  It is a drop in the automotive market.  And yet, few would argue that Tesla is currently one of the most innovative car companies in the world. 

Take its super charging station initiative as an example.  Tesla is building out supercharging stations across North America.  They will allow cross country electric-only journeys without paying for energy.  Yup, cross country for free.  Tesla clearly didn’t invent charging stations but it was the first car company that is bold enough to create this network to give away electricity for free forever.  The solar powered stations generate enough energy that Telsa can even SELL electricity to other people potentially.  Essentially Tesla is building a power company within a car company.

How about a 90-second battery swap?  Pioneered by the now bankrupt electric vehicle company, Better Place, the switching station concept is not new either.  But it is the first car company that is building a large network for swapping batteries for car owners.

Touch screen is another example (see picture below).  Tesla is the first company that puts a gigantic 17” touch screen in the car (with a browser, SDK etc.).  Tesla owners never have to worry about monthly mobile data payment as Tesla pays for it.  

Note: please don’t “drink and drive” and “read and drive”.  The following picture was taken by a Wattpad user who was reading a Wattpad poem written by popular boy band Emblem3’s Drew Chadwick in a Tesla.  I trust the car was stationary when the picture was taken.  :-)

image

How about Tesla’s smartphone app?  Among other features, the app can remotely turn the car’s air conditioner on even the driver can be nowhere near the car.  It is only feasible because of the “free” mobile data paid for by Tesla.  Again, not the first app created by a car company, but the app does take remote control to the next level.

Having a CEO who co-founded PayPal must have helped.  Internet companies are used to warp speed and I am sure Elon Musk is no exception.  Remember, most car companies kick out new models every 4 years.  That’s 40 Internet years.

But there are other reasons too.  Many large corporations are very consensus driven.  Bold decisions like building out a nationwide supercharger network (or smaller but out-of-ordinary decisions like paying for mobile data perpetually) take forever to get approval (if they get approved at all).  In the case of Tesla, all it takes is Elon Musk put the hammer down and the wheels will get turning.  :-)

If you are a startup company, the ability to make bold decisions quickly (and execute) is your biggest competitive advantage.  Large competitors might be more resourceful. But remember, Speedy Gonzalez always wins.  Always.

Read more about the “Speedy Gonzalez” effect here