If it were any other start-up the first thing that the entrepreneur will focus on is building out an MVP, Minimum Viable Product.
MVP would be launched in the market to check if the product is viable, things like how target customers accept it, improvements to be made, etc. This step is considered crucial before the company creates a roadmap to scale.
But Tesla chose to do it differently.
Long-term goal was clear, they want to be the biggest car manufacturer in the world.
In order to achieve that, Tesla’s first strategy would be to offer the most affordable car that can appeal to the masses, around the $30,000 range.
Out came Roadster, with the base variant sold at $200k.
They packed the car with all the luxurious featured that a car owner could imagine, they even launched it to space!
All of this knowing that the Roadster would never give them the scale and profitability they wanted.
Here is what they achieved by choosing this route
From an operations standpoint
They did not cut corners, to create such a unique car they had to build the entire supply chain. Battery technology being one of the most important one, they invested in companies to ensure that they got it under control.
In terms of Tech roadmap
Once roadster was launched the only roadmap was to make the manufacturing more efficient with scale.
From a customer standpoint
They created aspiration, by launching the top-of-the-line model first, car owners aspired to own a Tesla car one day.
The Result
> 2+ million cars sold
> Entry price of $46,000
> $902 Bn marketcap
Leave a comment if you know a company with similar strategy.
