Sometimes, what we assume is the “right” way to accomplish something isn’t the way you’ll be the most successful. Sometimes, going against the wisdom traditionally prescribed can lead to the best outcome.
Could this be what your business needs? Could you end up lighting a fire under your business by doing what is least expected of it, and of you?
Elon Musk has done exactly that with his Tesla brand in recent years. Think about what shareholders, investors, and potential customers want from a company when a new product is about to launch: they want a timeline and numbers they know they can rely on.
Musk actually uses the opposite strategy with his Tesla car models, and it has shaken up the industry. His production dates have been scheduled increasingly sooner with each new model, and the number of cars planned has also increased far beyond what any expert believes is possible to produce in that amount of time.
The big question is: why set himself up for failure? Musk is fully aware that his targets are unreasonable, and he makes no apologies for that. He believes that the tight deadlines and unattainable numbers actually push the people in his company to work harder to achieve these goals than they would if the targets were lower, thus surpassing the targets of what would have been “reasonable” goals. By doing so, they remain ahead of the competition, even when they’re missing every deadline.
Is this something you could try to employ in your own business? Regardless of whether you offer a product or a service, rapidly increasing your goals or moving up your targets could – in theory – increase the work ethic in your company as your employees work hard to come close to meeting those targets.
Another Tesla business strategy that’s counterintuitive to most traditional advice relates to building a product line. Most business strategists will suggest creating less expensive products to begin with, to appeal to more customers. Once you’ve developed a customer base, you can introduce more expensive products that customers will be more willing to spend money on, because your brand has been established.
If you look at how the Tesla car models have been introduced over the years, the exact opposite strategy has been employed. In fact, you can see Elon Musk’s “master plan” (his words) at the end of one of his entries on the Tesla company blog. That plan, which has worked quite well for him so far, is as follows:
- Build sports car
- Use that money to build an affordable car
- Use that money to build an even more affordable car
- While doing above, also provide zero emission electric power generation options
- Don’t tell anyone.
How could that translate to your brand? The idea is to start with luxury. Create the best version of the best product you intended to make and sell, one day, and sell that one first. Starting with the luxury product, in limited quantity, helps build a clientele with plenty of money to spend, all while building exclusivity. Your margins are higher, and therefore what you take home is higher.
This leaves you to build the next most expensive product, which you can now market to your existing clientele while also allowing your brand to become more accessible to people with less money. Finally, you use the money you made from those middle ground products to create the most accessibly-priced of your products, which are now in high demand because your brand has a reputation among all types of customers.
Your lower-priced products will now sell faster, because demand already exists, and you will hopefully have used the capital from your earlier sales to create a higher-quality product for a lower price than you might have, if you had been only just starting out.
These business plans may not seem like a formula for success when you look at them as concepts on paper. When you consider the incredible strides Tesla has made by employing these exact strategies, however, you may find they’re worth considering.