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The World is Changing Fast, Are You Staying Ahead of the Game?
Both Steve Jobs and Elon Musk understood that in order to be an industry leader going forward, things needed to be done differently and they both set out to lead that charge. Most people forget that 25 years ago Apple was almost bankrupt, and 10 years ago Tesla was fighting every day to keep its head above water just to stay in business. Both companies found a way to move beyond their competition and disrupt industries that had been doing things the same way for over 50 years. What was their secret? Former Executive at Tesla Motors, Apple Computer, and GAP Inc., George Blankenship explains how they both simply focused their company in a different way, and the rest is history.
What it takes to be an industry leader today is very different than it was twenty years ago. At the turn of the century, companies that led their industry were undoubtedly the best at operational excellence and performing necessary tasks. They excelled at managing things like gross margin, payroll, supply chain, debt, and timely product refreshes — things that “need to be done.” In today’s world, managing these things properly remains important, but is not enough to keep you as the leader in your industry. Companies that will lead their industry into the future fully understand the importance of performing necessary tasks well, but rather than simply focusing on incremental improvement and best-in-class operations, they will focus their time and energy on “what could be possible.”
Think back to the year 2001. The Sony Walkman had given way to the Sony Discman CD, but now a new storage media was coming of age, solid state drives. These drives were small, about the size of a postage stamp, but had enough capacity to hold about 15 songs. So, what were all the leading portable music tech companies doing at the time? They were all aggressively trying to create the newest, best, small music player that could hold about 15 songs, and by switching out the memory card, could play a different 15 songs. They were doing what needed to be done — trying to beat the competition to the next big CD-quality portable music player that could hold an entire album on a memory stick. The race was on!
So, what did Apple do? Apple stood back and looked across what was going on in the entire tech industry and then focused on “what could be possible.” Around the year 2000, high speed internet access was becoming more widespread and people were starting to download things from the internet. Music compression algorithms were getting better which meant smaller music files, and hard drive storage was getting smaller and less expensive. Unfortunately, at the same time Tower Records went bankrupt and Virgin Records went out of business, which some say happened because of a file sharing software called Napster, which allowed people to “share” their music with anyone else who had a Napster account, thereby distributing music for free. So, while other companies were focused on creating the next mass-producible portable music player that could hold about 15 songs, Apple stepped back and focused on a bigger picture. Apple figured out how to utilize all the things that were going on in the tech industry at the time and instead of just trying to create another portable music player, they set their sights on a bigger picture — completely redefining the music industry — which in turn brought about iPod and the iTunes Music Store. iPod didn’t just play one album, it was “1,000 Songs In Your Pocket” which totally marginalized every other player in the market. The iTunes Music store went on to sell over 30 billion songs that were all legally paid for and downloaded from the internet. The iPod eventually became the iPhone, the iPhone became the iPad, the iPad became the Apple Watch, and if you think about it, they all run on basically the same technology just done differently. They all have a screen, they all have a computer inside, they all have buttons for input, they all connect to other Apple devices and connect to the internet. This progression of products all came about because someone was asking “what could be possible.” To be clear, Apple still does a very good job of managing all the things that “need to be done,” but their ongoing success comes from focusing on “what could be possible” and having the conviction to make it happen. As a result, Apple went from flirting with bankruptcy in the late 90’s to being the most valuable company in the world about 15 years later. That’s what can happen when you focus on “what could be possible.”
Elon Musk did the same thing with Tesla. He didn’t set out to design the next great car and then go about selling it the same way the automotive industry had done for over 100 years. He looked around and saw battery technology getting better, global CO2 emissions increasing every year, people comfortably using touchscreens for just about everything, and cellular technology becoming more available everywhere. So, he thought maybe it’s a good time to start “migrating humanity to sustainable transportation” by capturing energy from the sun, storing it in batteries at your house, and then using it to power your car and your home with clean energy. As a result, Tesla today is more valuable than the six highest volume car companies in the world — combined!
These are the kind of things that can happen when a company focuses on “what could be possible” and then goes the extra mile to make it happen. All companies can do this, they just need to focus their energies in a certain way and have lots of conviction. And before anyone looks at this and says focusing on “what could be possible” is easier for companies like Apple and Tesla because they’re huge companies with lots of money — that is not the case. I joined Apple shortly after it almost went bankrupt, when it was a small company with a small market share and no stores. Tesla in 2022 sold a little over 1.4 million cars. When I started at Tesla, we were selling about 30 cars per month and people came to work every day knowing that there was probably about an 80% chance the company would go under, but they came to work every day and did things that almost everyone said was wrong, and wouldn’t work. It did work, and today almost every other car company is now playing catch up because of what the Tesla team did about a dozen years ago — and that was to do exactly what Apple did about a decade earlier; simply focus on “what could be possible” and have the conviction to make it happen.
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