{"id":82,"date":"2017-08-07T02:16:43","date_gmt":"2017-08-07T09:16:43","guid":{"rendered":"https:\/\/hengreamaze.wordpress.com\/2017\/08\/07\/the-tesla-way-of-making-a-great-product\/"},"modified":"2023-08-31T23:58:32","modified_gmt":"2023-09-01T06:58:32","slug":"the-tesla-way-of-making-a-great-product","status":"publish","type":"post","link":"https:\/\/www.reamaze.com\/blog\/the-tesla-way-of-making-a-great-product\/","title":{"rendered":"The Tesla Way of Making a Great Product"},"content":{"rendered":"

How to make your product a \u201cno-brainer\u201d.<\/p>\n

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Source: Tesla.com<\/figcaption><\/figure>\n

The Tesla Model 3 is the electric car all of us have been waiting for. It\u2019s not the first all-electric EV but it\u2019s certainly garnering praises and attention well before its official arrival date unlike any other electric car. And even though there have been preorder cancellations, Tesla is still seeing an average of 1,800 new<\/em> preorders<\/a>, daily. Elon Musk called these cancellations \u201cinconsequential\u201d in the grand scheme of things while simultaneously expressing his confidence for the Model 3 by comparing it to a hamburger; a commodity food where marginal variations in price is easily displaced by even the slightest increase in quality and decrease in compromises. And that\u2019s when it occurred to a few of us at Reamaze<\/strong><\/a> who\u2019ve preordered the Model 3 why this is going to be a game changer, and not just for cars.<\/p>\n

The goal for any successful business is to move more products. Most business owners think of \u201cmoving products\u201d in a relatively linear way. The major broad strokes are quality, reliability, design, and most importantly, price. A combination of these strokes define your business model and brand. For example, a new Range Rover oozes quality and \u201ccelebrated British design\u201d. On the flip side, it suffers a bit in terms of reliability compared to most other SUVs and can cost you an arm and a leg. This is perfectly okay in Range Rover\u2019s book because it defines its business model and brand: prestige and luxury. But Tesla is no Range Rover and its business model is certainly not prestige nor luxury.<\/p>\n

Addressing Compromises<\/strong><\/h3>\n

By now, most of you will have heard of the \u201cMaster Plan\u201d, a simple set of mantras that Tesla has stuck with since its founding days:<\/p>\n

Build sports\u00a0car<\/em><\/p><\/blockquote>\n

Use that money to build an affordable car<\/em><\/p><\/blockquote>\n

Use that money to build an even more affordable car<\/em><\/p><\/blockquote>\n

While doing above, also provide zero emission electric power generation options<\/em><\/p><\/blockquote>\n

Don\u2019t tell\u00a0anyone.<\/em><\/p><\/blockquote>\n

What many us don\u2019t realize is what the underpinnings of Tesla\u2019s Master Plan actually means to the average consumer. In Elon Musk\u2019s letter to the public<\/a> in 2006, he made significant arguments for the Roadster\u2019s emissions numbers compared to a wide variety of other gas-electric hybrids and alternative-fuel vehicles, an act that almost seems desperate for Tesla\u2019s image today. While completely logical, consumers don\u2019t buy cars based on scientific calculations of emissions. It doesn\u2019t move cars.<\/p>\n

Tesla set off its \u201cMaster Plan\u201d by addressing compromises. Like many new products coming to the market seeking product-market fit, compromises are inevitable. Whether its a new pair of ultra-long marathon running shoes that offer amazing long range comfort but compromises a bit on affordability and design or a new lipstick with special pigments from the Amazon rainforest that pop on your lips but compromises a bit in terms of sustainability and cultural taboos, compromises are abundant. Tesla\u2019s proof of concept is but a stepping stone to address a decades-old myth that electric cars can\u2019t be fun sports cars.<\/p>\n

Over the course of the development, release, and success of the Tesla Roadster in 2008 and the Model S in 2012, Tesla managed to reduce perceived compromises in electric cars to a point where the question became \u201cwhy wouldn\u2019t you consider an electric car\u201d instead of \u201cwhy would you consider an electric car\u201d. By 2016, the no-compromise electric car became a reality when Tesla finally announced the Model 3. It became as much a no brainer as an iPhone. The alternative to a Model 3 is simply obsolete. Compiled data from Kelly Blue Book for average new car or truck cost<\/a> in 2015 was $33,560. Put aside creeds for protecting the environment, the Model 3 slots in at just $35,000 for the regular range model, it has a range of 220 miles on a single charge (plenty for modern commuters), it can carry 5 adult passengers comfortably, it has dashing good looks with contemporary design ethos, it is as reliable as the Model S as research has proven, it has the latest tech gadgetry and creature comforts. And combined with Tesla\u2019s new battery technology and energy generation plants, naysayers that claim EV emissions are transferred to power plants can no longer use that as a \u201ccompromise\u201d. The 35k car segment is forever changed because consumers now MUST consider a Tesla Model 3 because it is simply<\/em> a no-brainer.<\/p>\n

Critical to making that happen is an electric car without compromises.\u200a\u2014\u200aElon\u00a0Musk<\/p><\/blockquote>\n

The Model S is an incredible stunning and attractive car, and tends to garner the majority of attention when seen on the streets or in a parking lot. Aesthetics matter a lot in consumer electronics, fashion and automotive, and Tesla has got that down pat, whereas other electric vehicles have failed in that aspect.\u200a\u2014\u200aPeter Thiel<\/p><\/blockquote>\n

<\/h3>\n

Preference Displacement<\/strong><\/h3>\n

Tesla sets a new standard for disruptive and polarizing products that all product-based businesses can aspire to. For eCommerce specifically where you live and die by a product, delivering something people want with all the compromises diminished as much as possible is a key long term strategy. When new products come to market, it\u2019s almost easy to determine if it will succeed by how a businesses structures its cost so that it does not exceed what it\u2019s looking to displace.<\/p>\n

In an article by the Vox<\/a> earlier this year, it mentioned that \u201cin 2007, when the iPhone debuted, it was in a position much like Tesla, selling just 4 million units in a year when Nokia sold more than 400 million. But 10 years later, Apple is the world\u2019s most valuable company\u200a\u2014\u200awith 20 percent of the world\u2019s smartphones sales, and the vast majority of the industry\u2019s profits\u200a\u2014\u200awhile Nokia has sold off its cell phone business.\u201d I remember this clearly. Two-year contracts with $0 down and $20 monthly payments made buying an iPhone versus buying a Motorola Razor the same. Would you have purchased a Razor?<\/p>\n

Examples of preference displacement is plentiful. In-n-Out Burger is another. For $2.40, you can acquire a product of far higher standards, quality, flavor, and soul. In fact, compared to a McDonalds Big Mac at $3.99, the In-n-Out Double-Double costs only $3.45. There are no compromises either. Both have buns, lettuce, tomatoes, pickles, onions, cheese, and two beef patties. If the two stood next to each other you\u2019d be hard pressed to find anyone who\u2019d pick a Big Mac over a Double-Double.<\/p>\n