Elon Musk has some advice for other leaders trying to keep pace with digital disruption: slow down and start simple.
The Tesla CEO, widely considered to be one of the world’s most innovative leaders, argues that he’s now suffering the consequences of not taking that advice, amid confusion over the capabilities of its hotly-anticipated Model 3 electric car.
The Model 3, due for release in July, will be a simpler, more affordable product than the Model S and Model X that came before. It’s nevertheless seen by analysts as the most important product launch for Tesla to date because its lower price tag could help the company crack the mass market.
Musk is concerned that many customers think the Model 3 is a more advanced car than the previous two offerings, much like the iPhone 7 compared to the iPhone 6, for example. In a letter to shareholders yesterday, he said such misperceptions are one of the biggest challenges facing the company this year.
“We’ve got a much better supply chain in place. We didn’t have that with the Model X or S. As far as we know, there are no issues. That strategy appears to be paying off.”
“Model S will always have more range, more acceleration, more power, more passenger cargo room, more displays, and more customization choices,” Musk said. Both cars, however, will have the same autopilot functionality.
Later, on a call with analysts, he suggested that his product development strategy hadn’t been ideal. “[Model] X became a technology bandwagon of every cool thing you can imagine all at once. That is a terrible strategy; you want to start off simple and add things over time,” he said.
Musk put this apparent error of judgment down to his own “hubris”, indicating that sometimes it could be best for leaders to keep some cards close to their chest after experiencing a Eureka moment. After all, those of us lucky enough to possess a whole trove of innovative products could benefit from streamlining their release to keep rivals on their toes and maximize revenue potential.
To be sure, launching an aspirational, high-end product first may have given Tesla the brand recognition and cache that it enjoys today, meaning CEOs should perhaps take Musk’s advice with a grain of salt.
At least in Musk’s view of the world, patience is a virtue—and not just because of the potential for confusing customers. Taking more time to optimize supply chains before going to market, he said, also helps avoid some big pot holes down the road.
“We’ve got a much better supply chain in place,” he said on the call. “We didn’t have that with the Model X or S. As far as we know, there are no issues. That strategy appears to be paying off.”