It’s a classic innovation metaphor: when a brand creates a product that disrupts the market, one of those changes that alter the design of a whole category, the brand-killer fantasy is trotted out: “That’s all well and good, but wait until xxx brings out its new model, that’s going to sweep everything before it.”
The attribution of some kind of magical power to the incumbents who once dominated a market before its disruption is common enough: every time a revolutionary product appears, some analysts argue that this is because the major player in that category has fallen asleep at the wheel, but that as soon as it wakes up, its experience will allow it to come up in record time with a product that will destroy the advantage obtained by the upstart competitor, which is usually given very little or no chance of long-term success.
The iPhone-killer? Yeah, right. Each and every so-called iPhone-killer, one by one, failed miserably when they came to market, and they continued failing until the time came when every smartphone was virtually identical to the iPhone. Over the years, many smartphones calling themselves the iPhone-killer ended up failing miserably, as can be seen from the many testimonials from the time. Today, the idea of an iPhone-killer is laughable: we all know the iPhone’s place in the pantheon of technology, and that none of its would-be killers ever come close to challenging it. The best accolade to the iPhone is to lay its competitors out on a table and take a good look at them. They’re all iPhones.
The same thing is happening in the automobile industry: the analysts are saying, “Sure, Tesla’s models are great, but the company will be knocked aside when X, Y or Z arrives and launch their electric vehicle for real.” But what the analysts who attribute traditional competitors with the experience and near-magical powers that will empower them to react to disruption in the market ignore is that traditional brands have experience in what was important yesterday. And when there is real disruption in a market, what was important yesterday counts for nothing. What is important today is different, and this is where traditional brands have no experience. Or worse, they need to unlearn their experience, which is much harder — and sometimes impossible — than learning something new.
Porsche Thought It Was The Tesla-Killer…
We’ve heard talk of what would happen when Porsche brought out its new electric model, which would surely be a Tesla-killer. Well, the Germans brought it out, with great fanfare from an enthralled media, which has been receiving money and privileges from the carmaker for years, and guess what? Aside from being much more expensive, it turned out to perform worse and have a shorter range. Surprise? No, it’s called experience. Experience in what’s relevant now, not what was relevant decades ago.
What happened to Porsche has happened to brands such as Audi, Jaguar and many others. Volkswagen? Of course, many endowed it with the ability to repeat history and recreate the people’s car, and it may be able to do so — but not today, or at least not on its first attempts. The myth of the Tesla-killer, as with the iPhone-killer, is becoming boring. In fact, while the traditional brands obsess over the search for the Tesla-killer, Tesla keeps bringing out new models and winning more awards than anyone else, while at the same time building an impressive network of superchargers strategically located in more and more countries around the world. It’s also making more advances in battery development than anybody else, accumulating the experience that sets it apart from the rest. Anyone who wants a top-of-the-line electric vehicle today, and has the money, buys a Tesla. Everybody else buys what the traditional carmakers have been able to do by copying and building on what mattered yesterday.
The best testimony to Tesla’s superiority, apart from its share price, is that those traditional brands are copying its innovations. If you buy a recently designed car, it will have a large, centrally placed screen in the center of the console, something that until not long ago, manufacturers dismissed as dangerous, because it could distract the driver. It will have fewer switches, clocks and levers. Why? Because Tesla has virtually eliminated them, giving you not only a more consistent and easier-to-use interface, but also a much more economical and advantageous manufacturing platform. Soon, many traditional brands, as Porsche has announced, will be dropping their dealerships and selling directly online, just like Tesla. Soon, you will be able to line up all the traditional brands’ models in a row… and they will all look like a Tesla.
This is hardly surprising: Tesla’s goal was always to force the major brands to switch to electric, and it’s succeeding. In the future, like Apple, Tesla will sell a certain percentage of vehicles, and other brands will also sell a certain percentage, perhaps bigger than Tesla’s. And to do so, they will have relied on Tesla’s experience, or even the patents that Tesla released. When that happens, Tesla will have won. And the planet will as well, because all those lies about how electric vehicles create more pollution than internal combustion vehicles will have been disproved.
The brand killer is a myth created by people with no understanding of innovation and who attribute mystical properties to traditional players. The reality is that if those traditional brands were really so competitive, so smart and so wonderful, they would have triggered the disruption themselves, instead of being miserably caught out on the back foot first, and desperately trying to copy it later. When disruption occurs in a given industry, the critical success factors suddenly change, priorities shift, and whoever initiated the disruption has the advantage. Because, as I have said on many occasions, the value of innovation lies not in avoiding the others from copying you, but in getting them to want to copy you.
So, fewer killers, please, and more recognition of the value of innovation.