Tesla: Elon Musk, genius or moron? – Economy – The Opinion

In Los Angeles, November 21, the show began with smoke, lasers and fiery plumes. Then a new futuristic electric pickup landed on stage; a hallucination with sharp angles, straight steel panels with a super-bad look.

"It does not look like anything else," said Elon Musk, Tesla's general manager, who had dressed black for the occasion.

The highlight of this incredible show came a few minutes later when the company's design director threw large steel balls at the windows of the pickup truck to show how robust they were. At impact, they immediately flew away. "P … Oh my God," said Mr Musk.

Tesla shares fell 6.1% the next day.

It is possible that all this will no longer matter when the Cybertruck will be marketed to the general public, assuming this is the case. Mr. Musk posted tweets suggesting that orders were pouring in, and critics of the pickup design were unimaginative. "No one is" expecting "the Cybertruck," he wrote.

Here's what we're sure of: The boldest thing about this vehicle is not its style – it's the way it was designed, designed and launched. This is not the kind of calculated strategic decision that would be expected from a listed, valued $ 60 billion company. It's more like the fruit of an intuition – a crazy bet.

On November 5, two weeks before the Cybertruck debut, Musk spoke about the project in a little-noticed interview during a US Air Force technology event in San Francisco. On this occasion, he also described Tesla's approach to market research.

"I do not do any," he said.

Take a second to think about it. Before launching a brand new product aimed at achieving a smashing entry into the most competitive and profitable pickup truck segment in the US automotive market, Tesla's CEO said he did not think it was necessary to consult potential customers.

Ignoring market research would seem like a difficult strategy to defend in any industrial period, but it seems particularly imprudent in the era of big data. Amazon, Apple, Google and Facebook, among others, have become giants by harvesting and analyzing mountains of customer data. They do not make bets. Before making operational changes, they engage in experiments to evaluate the outcome.

In a forthcoming book, The Power of Experiments: Decision-Making in a Data-Driven WorldHarvard professors Michael Luca and Max Bazerman show how such pilot experiments have helped organizations like eBay and the UK tax authorities make better decisions. By testing different strategies on a limited number of unsuspecting users before implementing them, companies can blindly and blindly eliminate work in order to design products and processes instead. "That better reflect the many quirks of human behavior."

Of course, companies that make "things" can not always afford that luxury. Tesla can not be expected to produce in series ten different pickups to find out which one the audience prefers. But I explain the problem to you: today, most Earthmen have devices in their pocket that record everything they think and do. And if this data can not help you determine what type of pickup customers want, you still have the option to contact them and ask them. Businesses get dozens of ideas from social networks, crowdsourcing platforms and online suggestion boxes.

Elon Musk's refusal to conduct customer studies is unusual for a CEO of a tech company, but his behavior, as a manager, is not. Many Silicon Valley "superheroes" who run the companies they founded have become great believers in their brilliant insights.

"People often try to make products they think others would like, but they do not appreciate themselves," Musk said at the November 5 technology event. Tesla's approach is to begin by imagining his "Platonic ideal" of a car. "I think if you do that, people will want to buy it," he said. If it's irresistible to you, it will be for others. "

As a newcomer to the pickup segment, where customers are often extremely loyal to a brand, Tesla has every interest in creating a distinctive product that attracts new buyers. And if the impressive specs Musk has made regarding Cybertruck's ride height, towing capacity, acceleration and entry-level price ($ 39,900) pass the production stage, its style could be less of a problem.

On November 5, Musk also announced that Tesla's new car had been designed so that people in the street would turn around. He described it as "an armored individual vehicle coming from the future". The risk, of course, is that some people refuse to buy it precisely for the same reason. Would not it have been logical to ask them the question?

If there is one general lesson in governance to draw from all of this, it is the one that involves determining how, in the future, successful leaders should divide their time.

An old maxim, often attributed to Albert Einstein, says that if you had an hour to solve a problem and your life depended on it, you should spend 55 minutes thinking about the problem and five minutes to implement its solution.

In the past, most CEOs have done the opposite. They sailed through product ideas to find one with which they felt comfortable enough to bet everything, and then spent most of their time making it. But as data from experiments becomes more accessible, Einstein's strategy seems more appropriate. If one can know the market response to any situation, the leader must focus on identifying the right problem.

Some of the largest companies in the world have been driven by the search for an answer to an undeniable problem. If you think about it, all of Amazon's business plan has been around a question: why can not people buy anything at any time without leaving home?

In his recent book LoonshotsSafi Bachcall tells the story of Edwin Land, founder and former CEO of Polaroid, who is best known as the father of the instant camera. The idea came to him in 1943, in the form of a simple question posed to him by his young daughter. While one day Mr. Land took some pictures of her, she asked him, "Why can not I see them now? ".

Tesla has also built around a great question: why should not we build zero emission vehicles that everyone wants to drive?

If the company had kept to this goal, it would almost certainly have led to mountains of customer studies. But somewhere along the way, Mr. Musk and his team had to be distracted. They focused on a problem that may not have been a problem if they sit outside their meeting rooms. "The pickups have been the same for a very long time – something like 100 years -" said Musk at the launch event. We wanted to try something different. "

I can not blame Mr Musk for wanting to be a unicorn, thinking he is, or even preferring to make things that better reflect his own tastes than those that the public on a crowdsourcing platform. In business, history has sometimes given birth to true visionaries whose "all-in" bets have changed the world. In this category, the name of Steve Jobs from Apple will probably come to your mind.

But in less than a decade, however, circumstances have changed. The volume of incoming customer data, combined with advances in artificial intelligence and machine learning, helps companies decode the behavior of individuals in proportions that humans could never achieve.

In simple terms, today's geniuses study problems. Only morons make bets.



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