On Thursday, Elon Musk held a "Cyber Rodeo" to celebrate the opening of Tesla's new factory in Austin, Texas. Giga Texas, as the factory is known, is where the company plans to make its Model Y crossover as part of its plan to deliver 1.5 million electric vehicles this year. It's also where the company plans to build the upcoming CyberTruck, though Musk indicated production has been pushed to next year.
The factory itself is quite impressive. Musk says it's the largest factory in the world by volume, and that if you stood it on its end, it would be taller than the Burj Khalifa, the tallest building in the world. I've been in the Burj Khalifa, but I wasn't invited to Cyber Rodeo so I'll have to take his word for it.
The event was also quite the show, with 15,000 people listening to live music and an appearance from Musk on stage to talk about the future of Tesla. It was something he said about the company's past, however, that I found most interesting.
"When we first started out at Tesla, I thought maybe we had--optimistically--a 10 percent chance of succeeding," Musk said as he started his remarks. It wasn't the first time Musk has said something similar. As far as I can find, it came up in a 2019 podcast interview. "I never really thought before it actually happened that it would be that successful," he added back then.
It's hard to argue Tesla hasn't been wildly successful. It's the most valuable car company in the world--and not by a little. Its market cap, at just over $1 trillion, is more than all of the other major automakers combined.
That's despite the fact that Volkswagen and Toyota each produce close to 10 times more cars. On the other hand, when it comes to electric vehicles, Tesla accounts for around three-quarters of all EVs registered in the U.S. It also happens to have made Musk the wealthiest man on earth.
That said, I'm not sure Musk was wrong for being pessimistic about Tesla's chances. Building a car company from the ground up is very difficult. Cars are complicated machines with literally thousands of moving parts. Most of Tesla's competitors have been around for generations and have established factories and suppliers. In the beginning, all Tesla had was an idea: that you could build a car, powered by electricity, that people would actually want to buy.
You can make the case that it's a noble idea. If you believe that electric vehicles are important for the future of the planet, the obvious hurdle is that you have to convince people to buy them. The idea behind Tesla was that electric vehicles didn't have to come with compromises.
The thing is, that might be a great idea, but having a great idea isn't nearly enough. "Prototypes are easy," Musk said on stage at Cyber Rodeo. "Production is hard."
That's true. It's been especially hard for Tesla. The Model 3 famously almost bankrupted the company, with Musk saying the company came within a month of that fate during what he referred to as "production and logistics hell."
According to Musk, the thing that made Tesla isn't a great idea, it was the people. "Thanks to the incredible work of the Tesla team, over many years, we got here," Musk said as he thanked his team.
Even if Musk is the very public face of Tesla, it's certainly not something one person can build on his own. You got the sense, watching Musk speak, that Giga Texas represents a sense of accomplishment and a sense of validation that the company has actually made it. More importantly, it seems he recognizes that it took the collective effort of thousands of people to get there.
That's an important lesson for every leader. Your great idea probably gives you--optimistically--a 10 percent chance of success. It's probably worth 10 percent of the company you are building. The rest is completely dependent on the team you build.