Lessons from Tesla's Approach to Innovation

Elon Musk is a master of building and using innovation capital to win support for his ideas. To gain support:

• He leverages his past success at PayPal and Space X
• He uses "impression amplifiers". He does more than talk about the new idea. He puts it into physical form to convince skeptics.
• He broadcasts the idea through big media launches to generate a buzz.
• He compares or draws a comparison between his innovation and some other successful one to create an impression of technical superiority.

A part of Tesla's strategy, which forms the core products and requires the most investment, aims to transform an industry by paying attention not just to the product, but to the entire product ecosystem.

• Tesla tends to beat out competitors who try to leverage part of the old internal combustion vehicle architecture by operating on a completely different architecture.
• Tesla is making sure to control the bottleneck - the components that limit the performance of the system. They will thus control the profit center.
• Tesla's strategy also manages the entire set of complements needed for a consumer to ensure a quicker adoption of technology.