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The Tesla Business Model: A Lesson for All Companies

Ever since Henry Ford and his production line, the automotive industry has been a mix of
traditional methods and cutting edge ideas. As the years have progressed, little has changed.
However, in recent years the start-up company Tesla has given other companies plenty to think
about. With its success developing, producing, and marketing electric cars that offer style and
performance, Tesla has gone from a small company with a big idea to one that makes corporate
America sit up and take notice. While its business model provides plenty of lessons for auto
dealers and manufacturers, the basic principles can apply to any business.

Innovation and Taking Chances

Most companies today choose to play it safe, largely due to the recent recession. However, as
has always been the case throughout history, it is those companies who never lost their desire
for innovation and taking risks that made it to the top and stayed there. What has made Tesla so
successful has been its willingness to take chances and not be afraid of failure, while also
refusing to let its innovation be directly tied to the company's bottom line. A perfect example of
this is General Motors, which despite having designs for electric vehicles as early as 2002,
instead chose to focus production on traditional gas-powered vehicles. By doing so, it now finds
itself years behind anything Tesla has on the market for consumers.
63 Cyber Warnings E-Magazine – July 2015 Edition
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