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Lessons from Tesla's Approach to Innovation
Winning the resources
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.
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Tesla’s innovation strategy
Tesla’s innovation strategy offers lasting lessons for any innovator, especially in terms of
- how to win support for an idea and
- how to bring new technologies to the market.
Innovation Capital
There are four factors how innovators build up their innovation capital: Who you are, who you know, what you have done, your ability to draw attention to your ideas. Most notably, innovation capital is something accumulated over time through thoughtful action.
The Cybertruck is then about getting attention and proving that Tesla is one of the world's most innovative companies, specifically for the purpose of building Tesla's ability to win support from stakeholders.
Winning the resources
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.
Commercializing the idea
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.
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First Principle
Is a foundational truth that is "known by nature". It is not an assumption or deduction based on another theory or supposition but it’s also not an absolute truth but rather an observed one, meanin...
First Principle Thinking In Practice
The CEO might re-envision the way his company tackles development, by bringing in other departments that don't normally get to participate in this work, and creating incentives for original thinking from anyone in the company.
On a personal level, you may make yourself more open to other people's perspectives and find value on discussions that you may not have previously had.
4 Steps For First Principle Thinking
- Identify the problem you want to solve.
- List all the reasons you can't solve this problem.
- List all obvious solutions that apply but don't solve the problem adequately.
- Ask yourself: "If I could create a solution based on my desires, what would that solution be?"
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"I tend to approach things from a physics framework. And physics teaches you to reason from first principles ra..."
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The Two Types of Thinking
Comparison thinking: comes up with solutions based on pre-existing ideas. It is the way we normally think but it also limits the solutions to possible permutations of what already exists.
First principles thinking: starts free of preconceptions by studying the fundamentals of something and then working your way to a new thing. This helps you understand complex problems.
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First Principles Thinking
Is the act of deconstructing something to the fundamental parts that you know are true and building up from there.
Also called reasoning from first principles, it effectively he...
Elon Musk
“Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. Then I asked, what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”
First Principle
A first principle is a basic assumption that cannot be deduced any further.
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