What's one basic similarity between Elon Musk and Steve Jobs? They both obviously mastered the art of the splashy product reveal. Under Jobs, events launching new Apple products were a circus of frenzied expectation. Musk managed something similar this week with Tesla's new, lower cost Model 3.
Basically instantly, 276,000 people plunked down $1,000 to reserve a Model 3 for delivery at an unknown date (and a not entirely certain price point). My Inc.com colleague John Brandon called the unveiling "bigger than Star Wars." That's saying something.
But at a more fundamental level, how was Musk able to recreate that old Jobs magic and inspire insane levels of customer trust and excitement? A recent post by tech industry veteran and commentator Ben Thompson offers a thought-provoking answer: Both men understand something about disruption that most people, even the experts, miss.
Disrupting the disruption orthodoxy
The classic tale of disruption as told by Clay Christensen is that scruffy, low-end competitors blindside slower and more established industry behemoths. In the business equivalent of pirates in dinghies attacking a gargantuan tanker, successful disrupters start out cheap and fast and only later sail out to meet the market with higher-end products.
Thompson argues Jobs understood that if you're good enough -- if you think big enough -- you can turn the disruption orthodoxy on its head. Apple led with excellence. It offered a whole new category of quality from day one. And Musk has taken a page out of the Apple playbook to do the same.
By their sheer initial awesomeness both Tesla and Apple wiped the slate clean, putting their products on an entirely different level from their competitors, Thompson claims. A Samsung is a phone. An iPhone is an iPhone. A Chevy is a car. A Tesla is a Tesla. By creating an incredible level of excitement and trust both companies managed to start high-end and work their way down market from there.
Back when the iPhone launched, Thompson argued that it "was, contrary to the then-conventional wisdom, not likely to suffer from low-end disruption, and not only has that proven to be correct, Apple has in fact expanded its global marketshare. And now, with the iPhone SE, Apple is expanding the high end to a price point accessible to customers in developing markets who very much want an iPhone but simply don't have the means to afford top-of-the-line prices."
It's this understanding that "a high-end approach can drive growth at lower price points" that Musk has borrowed. Just as the iPhone was a category apart -- a symbol of excellence that was instantly more than just a nice phone -- "Tesla ... means amazing performance and Silicon Valley cool ... It was Musk's insistence on making 'an electric car without compromises' that ultimately led to 276,000 people reserving a Model 3, many without even seeing the car: after all, it's a Tesla."
Could other innovators borrow this alternate approach to market dominance? Sure, but that's predicated on making a product of real, certifiable greatness, which of course is "devilishly hard." But if you can manage it, leading with a game-changing high-end product has advantages. When you wipe the slate clean with uncompromising quality, you create loyalty and that can buy your company breathing space to work through future bumps in the road.
That's why the demand for Apple's products has so far weathered a perceived decline in the quality of its software, and why "Tesla will likely receive similar grace when and if the Model 3 comes in late and over its promised price. After all, it will still be a Tesla," concludes Thompson.
Want more details of his comparison between the companies? Check out the fascinating, in-depth post.
Do you agree with Thompson that Tesla and Apple are relying on much the same playbook?