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As we talk about enabling and driving innovation, the recent announcement of the Tesla Truck showcases that there is one huge, glaring problem we continue to fail to recognize: People don’t like change. This seems to get worse as we age. There is a path to doing innovation right, which Apple demonstrated with the iPhone; recall that before the iPhone the most popular smartphones had keyboards and came from companies like Palm, Nokia and Research In Motion.
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As we approach the holidays, let’s talk about doing innovation right.
The Tesla Truck Mistake
I watched with fascination how the Twitterverse responded to the launch of the Tesla truck, which is arguably the most aggressively innovative design that segment has seen since the Corvair Pickup of the 1960s. That one didn’t sell particularly well, and I know this because I had one, or more accurately, my father had one, and it became my daily driver after my Sunbeam Alpine decided to repeatedly destroy the hydraulic line running from the clutch peddle to the clutch. (It is kind of sad that I figured out how to fix that problem about two weeks after I sold that car, but I digress).
What made the Corvair pickup innovative is a rear-engine design that allowed for a very low central truck bed, which was ideal for moving heavy things because it had a side ramp. If you wanted to have motorcycles, a refrigerator, or your heavy stuff, it was a godsend; for a light truck, it wasn’t bad at towing. With no hood, it was amazingly easy to park. But man, did it look different, and folks continued to buy the old design as a result.
The reason is that GM under-marketed the vehicle. We saw this again with the Tesla Truck. On spec, it can out-pull any truck, and its rear ramp is handier than any I’ve seen in market, making it ideal for those who use their truck for recreation. It is built more like a tank (making it much more rugged) than other trucks, and it is priced attractively. I doubt Tesla can make that truck for that price, but we’ll see.
I’ll grant you it does look like one Twitter users said, “like a 1980’s view of a future truck” (it would fit right in with the 2008 movie “Death Race”). I expect, given its ground clearance and electric motor advantages, it will out-climb anything, too, but folks can’t get over how it looks and lamented that the design wasn’t more like the earlier drawings, which looked more like a standard pickup.
Recalling the iPhone
At the time the iPhone was released, the closest to its design was the LG Prada phone, a design-forward, co-branded device from LG using a fashion brand. It did not sell well despite the fact it had a huge screen, was much better for entertainment and was both attractive and had a popular co-brand. It didn’t sell well because people thought smartphones should look like the Palm and Research In Motion (BlackBerry) phones. Apple spent a ton of money getting people comfortable with the design, and the result was the market flipped to it.
Up until recently, Apple drove the design innovation in the segment, even though I could argue the keyboard phones were more useful, you can’t argue the iPhone wasn’t more fun. What was also interesting (and this is a hint to Ford, which dominates the pickup truck market) is that Palm and Research In Motion, rather than fighting back, pivoted to the iPhone design language and lost the market.
The lesson is that innovation often comes with a hidden cost of high marketing, because you have to make the benefits of the innovation outshine our reluctance to try new things. We have a saying, “If it ain’t broken, don’t fix it,” and, if you want change, you have to do a lot of work to convince the buyer that what they’ve been trusting is broken, so they move to the innovative offering you are bringing to market.
Wrapping Up: Musk vs. Jobs
Musk does seem to use Jobs’ methods, which means he will attack the perception hard that the truck is a stupid design and he has two years to change hearts and minds. I’d say that Ford was screwed, but Musk also tends to under-market, which is going to create risk; we saw this with the Tesla X, which hasn’t had the impact the Tesla S did.
There are two things we should take from this: Done right, innovation can flip a market like Apple did with the iPhone; done wrong it can kill a product like the LG Prada or Corvair pickup. The other lesson is that the entrenched vendor needs to defend its dominant design, otherwise if the challenger executes, the entrenched vendor will soon see that the challenger owns the market it once owned. Ford and GM remain at risk of becoming Palm and Research In Motion if Tesla executes, and Tesla could execute.
By the way, there is a third path, and that is to anticipate the change and innovate out of it yourself. But you still have to change those pesky perceptions. There’s something to noodle on over the holidays.
Rob Enderle is a principal at Enderle Group. He is a nationally recognized analyst and a longtime contributor to QuinStreet publications and Pund-IT.