Tesla Explained: Tesla, Apple, and Disruption

Tesla Explained: Tesla, Apple, and Disruption

Sponsored by The Great Courses Plus. Click
on the link in the description to start your free trial today. Tesla has been the instigator in the great
auto disruption we’re currently watching play out. They’ve brought one of the lowest
cost, high performance electric vehicles to market in the Model 3. Proven that owning
an EV is not only a viable option, but cheaper to own and operate than a gas car in the long
run. In essence, they’ve been a major disruptor in the automotive industry. I think part of
that success stems from how they operate, which is more like a Silicon Valley tech company
instead of an automotive company. And other new EV companies may follow the same playbook. And this is where a lot of you will get angry
with me again … because yes … they have a lot in common with companies like Apple.
As much as some of you may hate Apple, I really do think Tesla shares many of the same traits.
But the comparisons also extend to companies like Google too. With Apple announcing their
new iPhones today, I thought it was worth taking a look at how Tesla’s EV disruption
has similarities to Apple’s smartphone disruption that happened a decade ago. All I ask is that
you hold off on a flame war in the comments until you hear me out. If you still disagree
with my assessment at the end, let loose. Before I dive in, take a moment and hit the
subscribe button and notification bell, so you don’t miss out on future videos just
like this one. I’m Matt Ferrell … welcome to Undecided. Most of the time product and user experience design is looking at addressing a specific
issue, feature, or problem. It’s not uncommon to have an answer presented as the solution
before you’ve even addressed what the problem is … or better yet … what the question
even is. In holistic product design you’re taking a step back and looking at the full
picture. Seeing how all of the different pieces of the product interact and relate.
And seeing how a customer’s interactions with your company and products are affected
throughout the experience. Apple is one of the best companies in the
world at doing this. I can feel the rage growing in some folks out there, but hear me out.
Apple has always been an incredibly secretive company. They try their hardest to prevent
any details of products in development from leaking before they’re ready to announce
them. And the vast majority of the time they’re not announcing a product until it’s ready
to ship immediately or within a few weeks. There’s a couple of good reasons for this.
One is surprise and delight. The big reveal of a new product has a wow factor and garners
attention. The other reason, which is more important, is that it gives them time to iterate,
polish, and think through the full experience of that product. As Steve Jobs is famous for
saying: When you think about focusing, right? Well, you think focusing is about saying yes. No. Focusing is about saying no. Focusing is about saying no. You’ve got to say … no, no, no … and when you say no it’s going to piss off people. Focusing is about saying no. And the result of that focus Is going to be some really great products where the total is much greater than the sum of the parts. And at WWDC in 2013, Apple put together a
great video reiterating that idea. The entire Apple manta is stated clearly in the
video with, “The first thing we ask is what do we want people to feel?” And, “We simplify,
we perfect, we start over, until everything we touch enhances each life it touches.”
This is holistic design in a nutshell. Tesla’s manta is centered around first principles
thinking, which is about breaking down complicated problems to generate original solutions. Tesla’s
existence and success can be mapped pretty clearly to that principle. And it’s really
not far off from holistic design. Both are beginning with questions rather than the answers.
Both are about creating your own theories and how to apply those to a better product,
experience, or manufacturing technique. Both Apple and Tesla design their products
and operations with the full product life cycle in mind from manufacturing to disposal.
Apple rarely takes parts off the shelf from suppliers. A good example is in recent years
is how Apple brought processor design in house. Their A series of mobile processors are among
the fastest available today. And by bringing it in house, they can custom tailor their
silicon to their product features and software needs. Other mobile phone makers are using
off the shelf parts with features that are meant to cover a broad spectrum of needs.
The end result is an iPad Pro that uses less power than a typical laptop, but still beats
the performance of a majority of laptops on the market. iPhone’s often have smaller
batteries than their competition, but will last as long. This comes down to the tight
optimization that Apple is able to accomplish between their hardware and software. Tesla designed their own battery pack and
cooling system instead of using third party suppliers with more generic, ready-made parts.
One outcome of that is the super bottle, which you may have seen Sandy Monroe talk about
on Sean Mitchell’s recent interview. It’s more than that. The super bottle is a great example of how the normal automative companies don’t work together and Tesla does. That super bottle crosses many lines that you can’t cross here. If I’m in charge of engine cooling or battery cooling. I don’t want nothing to do with cooling the cabin. And yet we’ve got the motor cooling … the battery cooling … and electronics … and electronics. And all going through one little bottle that’s got some clever Ball valves that open and close to make sure everything is getting heated or that everything is getting cooled to where it needs to be. So I’m taking something that I would have a pile … like this … of bits and pieces. And I’ve got this super bottle. I mean … I…. I… I… We all thought that was the best thing in the whole damn car. Tesla has also designed their own self-driving
computer instead of continuing to use an off the shelf system from Nvidia or another company.
This helps to make them a master of their own destiny. Reducing their dependence on
a third party supplier for a core piece of technology means that they won’t be held
back in rolling out a new product or feature because that suppliers hardware isn’t yet
capable of what they need it to do. And Tesla is able to tailor the silicon and software
to complement each other and achieve incredible efficiencies. Google may have started as a search and ad company, but they’ve always been an artificial
intelligence company under the hood. Using machine learning and algorithms to figure
out relationships between websites and content in order to surface the most relevant search
query. Or machine learning to put just the right ad, in front of the right person, at
the right time. Google Now parsing through your web history, emails, and calendar, to
figure out what notifications and reminders to display on your Android phone when you
start your day. And right here on YouTube, figuring how what videos you are most likely
to be interested in watching with suggestions on your home screen or along the side of videos
just like this one. They are an artificial intelligence company through and through. The head of Google Now has said: “You want to pick problems that are hard
for humans, and easy for machines, not the other way around. It’s about making the
technology do the heavy lifting for you, rather than doing it yourself.”[3] -Aparna Chennapragada But unlike the holistic design approach, Google
tends to look at technology and features first, and then see if there’s a product that can
come from those breakthroughs. There’s no better example of that then Google Glass.[4]
There was a product that had some amazing technology, but if you asked a simple question
of the average consumer, “what problem does this solve and why do I need it,” they’d
come up empty. There’s a graveyard of half-baked Google products over the past decade that
resulted from the technology first, product second mentality. Google Buzz, Google Wave,
Google Talk, Google Nexus Q, Google +, and Allo.[5] And those are just a few. On one hand the “fail fast, fail often,
but always fail forward” mentality that drives much of silicon valley, can bring about
rapid change. You learn what works and doesn’t work and quickly change direction. How does this tie into Tesla? On the surface
Tesla looks like a car company, but they’re really an energy company driven by software.
They’re heavily invested in AI and machine learning to enhance their products, with the
obvious one being auto pilot and self driving. Tesla’s Autonomy Investor Day event walked
everyone through their approach to computer vision and the exponential growth of machine
learning systems in autonomous driving. The end result is a product that could make cars
an appreciating asset because the car you own could be earning you money as part of
a ride sharing network. “Buying a car today is an investment into
the future. I think the most profound thing is that if you buy a Tesla today, I believe
you are buying an appreciating asset — not a depreciating asset.” – Elon Musk[6] They’re using machine learning in their
Energy products too. Tesla developed its own software in-house
to monitor, control and monetize Megapack installations … Autobidder, Tesla’s machine-learning
platform for automated energy trading. Tesla customers have already used Autobidder to
dispatch more than 100 GWh of energy in global electricity markets. And, just as Tesla vehicles
benefit from continued software updates over time, Megapack continues to improve through
a combination of over-the-air and server-based software updates.[7] And that brings me to the constant software
updates that Tesla brings to all of their products. Much like Google, Tesla is constantly
tweaking and adjusting their systems and features they put in front of their customers. As soon
as a feature hits a certain level of readiness, it’s rolled out for everyone to start using
right away. Apple overturned the music industry with the iPod and iTunes. And then they did it again
with the iPhone and the mobile phone market. Steven Sinofsky, the former president of the
Windows Division at Microsoft, wrote a great article in 2014 titled, “The Four Stages
of Disruption.”[8] Those stages almost read like the stages of grief when it comes to
the incumbent being disrupted. And you can see that the pattern fits what we’re seeing
today in the auto industry. Stage 1: Disruption of Incumbent
– The disrupter introduces a new product with a distinct point of view.
– The incumbent discounts the disrupters product as irrelevant to existing customers. When Apple released the iPhone, the reaction
from the phone industry leaders should sound familiar to what we’re hearing today.[9] ”There’s no chance that the iPhone is
going to get any significant market share. No chance.” – Steve Balmer, Microsoft
“We’ve learned and struggled for a few years here figuring out how to make a decent phone.
PC guys are not going to just figure this out. They’re not going to just walk in.”
– Ed Colligan, Palm “It’s kind of one more entrant into an
already very busy space with lots of choice for consumers. But in terms of a sort of a
sea-change for BlackBerry, I would think that’s overstating it.” -Jim Balsillie, Blackberry Sound familiar? Like Ford Europe’s CEO,
Steven Armstrong, mocking Tesla only being able to produce 7,000 cars a week.[10] Or
Bob Lutz, former GM CEO, saying that Tesla is “heading for the graveyard.”[11] And
that we all just need to wait for the big auto companies to step in and start producing
EVs. Stage 2: Rapid linear evolution
– The disrupter rapidly adds new features and capabilities after gaining traction with
early adopters. – The incumbent begins to compare their full-featured
product to the disrupted product to show deficiencies. Tesla has been rapidly improving their manufacturing
process to reduce costs; beginning to upgrade their Supercharger network to even faster
charging speeds; and rolling out new features to the fleet, which will ultimately culminate
in self-driving. Meanwhile, we have companies like Toyota creating ads touting their “self-charging”
electric vehicles (a.k.a. hybrid cars).[12] Or Lexus trying to hit slow charging times.[13]
Or BMW’s “Wait or Drive” ad campaign.[14] Stage 3: Appealing convergence
– The disrupter sees opportunities to acquire broader customer base by appealing to slow
movers. – The incumbent considers cramming some element
of disruptive features into existing product line to show they can keep up with trends.
This is the stage I think we’re in right now. I think you could argue that the new
Tesla Insurance is a part of trying to capture slower adopters. Same with the upgraded Supercharger
speeds and new locations. The current cars that Tesla are making can go toe-to-toe with
the competition, but they’re continuing to push forward with motors that can last
one million miles. And it’s looking like Tesla may be on the cusp of a battery pack
that’s rated to last one million miles, too.[15] These kinds of advances push an EV
from going toe-to-toe with an internal combustion car, to blowing right past them on the cost
and maintenance fronts. This is the kind of thing that will pull in the slow movers. And on the side of the incumbents, you have
pretty much every car company in the world having announced some portion of their fleet
moving towards EVs. Most of the 2020 models and beyond. Even Toyota.[16] Stage 4: Complete reimagination
– New entrants to the market can benefit from all the disrupters product has demonstrated.
– The incumbent is too late and goes into retreat. As I said, I think we’re somewhere around
stage 3 right now, so there aren’t good examples here yet. We’re just now starting
to see new, from the ground up EVs hitting the market that can compete with Tesla’s
offerings, like the Porsche Taycan. And we have entries coming from other new auto manufactures
like Rivian and Byton. The true reimagination of the industry has yet to take shape, but
I’m betting that it’s autonomous cars. The cars we’re seeing made today still resemble
traditional cars, but with a different power source. The power of computers and software
will completely upend cars as we know them. We’ll start to see cars without steering
wheels. Seating that’s tailored more to comfort and entertainment than to operating
a vehicle. And with robot taxis we’ll see fewer and fewer people wanting to own a car
in the first place. And if you’d like to learn more about disruption,
check out The Great Courses Plus. Where you can get access to incredible lectures and
courses from top professors from Ivy League and other great universities around the world.
Experts from places like National Geographic, The Smithsonian, and the Culinary Institute
of America. You’ll have unlimited access to over 11,000 video lectures about anything
that interests you from science, math, history, literature, or even how to cook, play chess,
or become a better photographer. In my case, courses like Critical Business Skill for Success
where I learned more about industry disruption, like Netflix’s domination of the video rental
market and how disruptive innovation is often the hardest to respond to. To support Undecided
and get access to The Great Courses Plus, click on the link in the description to start
your free trial today. Thanks to The Great Courses Plus and to all of you for supporting
the channel. Setting aside what you think about Apple or
Google, I think it’s pretty clear that Tesla isn’t a car company. They’re a technology
and energy company. They approach producing cars like most technology companies approach
writing software … including their own manufacturing process and car improvements. They don’t
have model years on their cars, and they roll out new features and improvements as they’re
ready. It’s treating hardware improvements like software improvements. Nothing like a
traditional car company. This is one of the reasons they’ve been so effective in disrupting
the auto industry. The rapid, Google-like, approach to development makes them extremely
nimble and quick to adapt. Their first principles thinking is leading to a better product, much
like Apple’s holistic design approach. Okay, you can re-engage your Apple or Google
comparison hatred. What do you think? Do you think Tesla has a lot in common with Apple
and Google? Are there other companies that you think are a closer fit? Jump into the
comments and let me know. If you liked this video, be sure to give it
a thumbs up and share with your friends because it really helps the channel. There are some
other ways you can support the channel too. Check out my SFSF Shop for some cool Tesla,
Space X, science, and Undecided shirts. There’s also other links in the description for some
great gear and discounts. And as always, an extra big thank you to all
of my Patreon supporters. Your support is really helping to make these videos possible.
Be sure to check out my Patreon page for additional details about joining the crew. And if you haven’t already, consider subscribing
and hitting the notification bell to get alerts when I post a new video. And as always, thanks
so much for watching, I’ll see you in the next one.

Posts created 37754

100 thoughts on “Tesla Explained: Tesla, Apple, and Disruption

  1. Except tesla has been bailed out many times and the only reason it’s still here is the government they also have quality control issues

  2. Matt ,, I hate both Google and Apple , so I would not be the best person to ask, great video and my 1st time here keep up the all the hard work and thank you for doing it ,,

  3. In the midst of your presentation you mentioned that the disruptor releases new features "when they're good enough", though they keep refining. It occurred to me that this describes Tesla releasing the S and X before they had "mastered" auto manufacturing, leading to complaints about fit and finish. They had to know they had not reached perfection, but it was time to start production and get the cars to customers, the small – but visible and nagging – flaws be damned. From that perspective, they did exactly the right thing.

    Thanks for the point of view. I'm sure it will inform my thinking in years to come.

  4. Matt, I love your channel. It seems that over the past 50 years we've been experiencing constant disruption of industry after industry: telephony, photography, computers, travel agencies, retailing, advertising, television, newspapers, taxicab service, and most recently aerospace. It was only a matter of time for the auto industry to take its turn in the barrel.

  5. Agree on disruption however the industry is a low margin hard business-but Tesla is taking market share rate of change -not current market share is key-next they need to pull an AMZN out of the hat and start -breaking even qtr after qtr -just DO NOT loose $ -continue to Grab share-lots if it! Both in solar, utility scale batteries, and automotive

  6. Most Americans can’t afford to buy an apple 🍎 phone ☎️ just like the over priced Tesla we can’t afford it, the average Americans IQ is only 90 so….. how will stupid Americans afford to buy a Tesla, oh I for got they will just snatch the Tesla just like snatching an iPhone 📱 from the hand 🖐 of stupid lazy people.
    That is what Democrats call taking from the rich and giving to the poor and stupid a transfer of wealth.
    Aren’t you happy to be a Democrat.

  7. Apple's competition didn't include the Germans. South Korea and China are not known world wide for luxury products like Germany. Tesla is gonna have to compete with Porsche, VW, Mercedes Benz, BMW and Audi at making cars. That's a WHOLE different ball game.

  8. The reason that an Ipad pro is more energy efficient is that it is made using arm, the software on laptops means that they need to use the x86 architecture that is much less efficient, it is a bad point, the fact that Apple makes the CPU does not matter, apple is not making the most efficient arm CPU.

  9. I'm sorry but the big difference between Apple and Tesla is that Apple makes a profit and for pretty much the entire time it has been a public company has posted yearly profits.

    Tesla hasn't made a yearly profit ever!

    You know nothing about the auto industry, manufacturing production or automotive engineering which is why 90% of what you say about these subjects is WRONG!

    Tesla is a bankrupt company with a leader that committed securities fraud and has lied over and over to investors, customers and employees.

  10. If you want folks to get behind and trust machine learning….get auto correct like we see when I am typing this to work competently…lol

  11. Matt, really enjoyed this video! Tesla is a different car company, but it’s still a car company…
    I really think the future for the automotive industry is electrification and Tesla is showing how to do it.
    About Apple and Google, i’m a Apple guy but I also enjoy the way Google is able to bring fantastic products to the market.

  12. The reason we invested in Tesla is that we saw something bigger than Tesla making cars. Even if they stop making cars today. They would still have a strong edge of being profitable as an energy company. Elon said once in a shareholder's meeting, "we don't have no shortage of ideas by no stretch of the imagination." And what I have seen so far, I believe him. I do believe that eventually a legacy automaker or 2 will fall but I doubt Tesla is going anywhere. Look at Mercedes Benz even they have recently started to mend their rocky relationship with Tesla according to the CEO of MB.

  13. You dont need to keep repeating and going on about how people hate Apple… we get it! There are far more Apple lovers than haters anyway so cool off 🙂

    Otherwise thanks for this video!

  14. The mode y is starting to remind of a Ford Focus.. looks like they better get a design team in there quick cause these new telas are looking outdate before they even come out lol

  15. Next market crash, Ford and GM will need govt bail out , Tesla will not ! When market levels again and starts to grow slowly, Tesla will thrive, Ford and GM will inevitably dissapear forever. I see the future written all over the wall.

  16. Great video and production. Could you look into doing a video on Hedera hashgraph and their Hbar. Maybe you could reach out and get an interview with someone from Hedera. It’s leading edge tech needs to be shared with the world. I believe that companies like Apple and Tesla will use this tech in the future it’s transaction speed is faster then anything else out in its field. It’s ABFT secure, that means it’s the most security available and it is fair and lightweight when it comes to bandwidth. For more info check out Hbarprice.com this is a good start. Thanks for all you do. Great content as always. I really appreciate it. 🙂

  17. Tech companies are the way to make money today, if you want investors, you BETTER look like a tech company. Anyone who disagrees thinks that humans are WAYYYYYY smarter then they are.

  18. Professional Disruption analyst Tony Seba, agreeing with your views on what the 4th stage of disruption of the transportation industry will look like.

  19. Apple went through these stages 15 to 10 years ago. Apple is now resting on its laurels and became an incumbent phone maker.

  20. In many ways Tesla is like early Apple. I just hope Tesla doesn’t get stuck up their own arse and start blaming customers when things go wrong. Modern Apple is not innovative and has so much cash, unlike Tesla which is perhaps the most innovative but is cash-restrained. Now Tesla won’t ever be like Android companies but I also hope they can learn to be better for consumers than Apple.

  21. You say Tesla is "more like a Silicon Valley tech company" than a conventional automaker. I'd say Tesla IS a Silicon Valley tech company. But it's patently silly to say they're not also a car company. Their first web address was, after all, www.TeslaMotors.com. And while they may bear some traits in common with Apple, in so many ways they're vastly different. Elon holds a bold vision, which he's not afraid to explore. Whereas Tim Cook spends his days churning out the next iteration of the iPhone/iPad. The great shame is that he doesn't have the imagination or intellectual horsepower of a Steve Jobs or an Elon Musk. Not is fault, of course. But the end result is that he's sitting on a company with enormous potential and a ton of capitol and, basically, idling the thing in the parking lot.

  22. Matt Ferrell: Thank you for a complete, thorough, well explained piece on Tesla. I will certainly be sharing it with EV NaySayers and Tesla FUDsters in times to come. You made many of the points that ANALysts, Pundits, Experts, Talking Heads, and Internet Trolls routinely overlook or attempt to dismiss without facing or confronting them.

  23. Brilliant analysis! I don't see how others don't see what's happening with Tesla is exactly what happened with Apple. Also I plan on purchasing a Model3 when my enlistment contract is up, so I don't hope prices go up over the next few years, unless Musk meant the appreciating asset was just the full self driving software and not neccessary the entire fleet, which I'm hoping is the case. Great vid.

  24. Convenience? who wants to deal with plugging and unplugging twice a day every day? Not to mention you might have to do that again when you're at the mall.

    If you forget to charge overnight or it didn't charge, you're screwed and can't go to the office.

    Get into an accident? Expect much much longer repair shop time.

    Want insurance? It'll cost more.

  25. I DON'T WANT an electric car until it's convenient like an ICE car: 1) infrastructure is in place that I can refuel at every gas station 2) recharges in 5 minutes. 3) safe battery as ICE car 4) lithium battery waste 5) wireless charging (who wants to deal with plugging/unplugging every day?)

  26. It's similar to Apple in many aspects, vertical integration, it's leading a disruptive tech revolution, etc. However I think Tesla is better than Apple for one simple thing: Open Source!
    They have opensourced their patents. Then there's this guy that is fixing the cars by himself:
    Tesla doesn't bother, they haven't done anything against him, they aren't obstructing one's right to repair! Of course sometimes they don't help him nor cooperate as much as he wants, but they aren't against him either.

  27. When Tesla figures out how to make an interior worth talking about then I'll consider them. They are eons behind Audi, Mercedes and less so BMW. The clean minimalist look isn't getting it done.

  28. there is no doubt that elon is borrowing from apple's philosophies. not just the product reveals cause everyone does that these days, but the product focus. taking bold directions that haven't been done before and having the foresight to see that it's what customer's will want. the same way steve jobs popularized computer graphics, the mouse, capacitive touch, elon is doing the same with cars. elon adopted apple's retail strategy early on, vertical integration, product focus, etc. he is giving his customers the convenience of buying a car online as easily as ordering something off amazon. this company is freakin incredible.

  29. A new Iphone.. That's what the world really needs. I'm so not glad they're so much rich than some companies which could do so more to human kind

  30. Finally someone that actually figure out the whole picture of Tesla's position on the market and their way to approach it with good products. I can't wait to see how EV market will get saturasted espetially on the low entry price vehicles. I still can't afford to have my own car. Maybe I will get Tesla one day, who knows.

  31. I have subscribed to your channel. You have made a awesome video with more deeper information which always lacks in youtube. Thanks a lot.

  32. 4:56 PM (0 minutes ago)

    About this phase 4 thing:

    I feel it is a big mistake for TSLA to be putting so many eggs in the self driving basket, especially prior to establishing owner behavioral boundary criterion.

    I am really worried about how much hope and enthusiasm Tesla fans are putting behind autonomy. Recall the ingrained primal fear we all possess against being subject to a (potentially hackable) lethal vehicle at highway speeds without a responsible human agent at the helm? (not to mention mayhem in the parking lots when Teslas create havoc playing with the summons feature)

    The reality is: Even when irrational, emotion prevails.

    Just came across this new video:

    58 – V10 is The Bomb


    Go to around minute 57 and especially at the 1 hour mark.

    A car should not be treated "as a toy". This thing could queer the whole game.

  33. Just stop for a moment to imagine the reaction of a father in the parking lot of some big box store when his baby daughter is injured (or God forbid killed) by some nerd showing how clever he/she is with their Tesla in summons mode.

  34. Hey you would look SUPER Stylish in one of our new smart watches!🔥🔥🔥No more fumbling through your purse/pocket to find your ear pods. They are conveniently stored in the watch!!! Catch the new wave!!!🏄🏻‍♂️ Defy the past, wear the future!!!! #2020Pods #earbuds #smart #smartwatch #fitness FREE SHIPPING

  35. You are really nerd… Tesla mantra is not perfection, rather clean energy, guess what Tesla’s goal is to reduce price but Apple is make more expensive.. Methodologically overlaps that’s not only here it’s everywhere, because it’s limited… grow up man

  36. Due to the heavy tie to technology in Tesla’s innovation it’s easy to see parallels to large tech companies.

  37. Reeeeeeeeeeeee Appwl is good, their no flaws! No flaws! Reeeeeeeeeeeeeee
    As an Apple owner I do enjoy and use Apple products, I am not however an Apple fanboy, Apple has better software, and that’s I buy Apple.

  38. this super well details and informative article/video i definitely would like to see more, you have my sub and attention.

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