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Does Elon Musk need market research at Tesla?
Posted on December 09, 2019 by Charles Morris
Conventional wisdom in the auto business is that buyers don’t want cars that look different or unusual - they want cars that look exactly like the new cars everyone else is driving. That’s why all the pickup trucks (and SUVs and sedans) on the market in any given decade look the same, and that’s why, for the mainstream press, the Tesla Cybertruck’s unconventional appearance seems like a marketing death sentence.
Above: Tesla CEO Elon Musk (Flickr: Steve Jurvetson)
A recent article in the Wall Street Journal sums up this view, calling Tesla “reckless” for not conducting market research before designing the Cybertruck. Presumably, if the company had sponsored some focus groups or consumer surveys, it would have learned that potential buyers want an electric pickup truck that looks like existing pickup trucks, and all the Sturm und Drang over the Cybertruck’s unconventional looks could have been avoided.
Writer Sam Walker calls Tesla’s design “a gut hunch - a wild bet,” and quotes Musk saying, “I do zero market research whatsoever.” To Walker, this is “a tough strategy to defend [and] seems especially reckless in the age of Big Data.”
As you can imagine, many of Tesla’s defenders do not agree - the WSJ article sparked a lively discussion on Reddit. A few of the reactions:
“I wonder if most of the great disruptive inventions in history were subjected to focus groups to see if they should be made.” [TeamHume]
“The Cybertruck is a really good example of the customer not knowing what they want. I don’t own a truck. I had no idea I wanted a Cybertruck, in fact, the first day it was revealed, I said ‘ewwww, no interest.’ Then I placed an order for it the next day.” [mysql101]
Above: A look at Tesla's new Cybertruck (Image: Tesla)
“This article amounts to telling Elon to play it safe. And if he had followed that approach Tesla probably wouldn’t exist today. Tesla is trying to shift the whole market, not make incremental improvements to existing offerings.” [ceramiccollie]
As ceramiccollie pointed out, the error that Mr. Walker and so many others fall into is failing to realize that Tesla is creating a new market for a new class of product - a product that consumers don’t know they want, because it doesn’t exist yet. Focus groups and market research would have been useless to the inventors of railroads, automobiles, the internet or smartphones, because there was no way existing consumers could have any idea of the potential of these innovations.
This is not an original observation. To paraphrase Henry Ford, if he had performed market research before introducing the Model T, consumers would have told him that what they wanted was “faster horses.”
It’s also worth noting that Musk’s often-repeated assertion that he pays no attention to marketing or market research is debatable. True, the company buys no advertising, attends few auto shows, and bestows no free airfare, shrimp or cocktails on automotive journalists (the latter is surely a misguided policy). However, it does a fair amount of informal, behind-the-scenes marketing, and more important, it has an uncanny ability to generate constant free publicity. The Cybertruck’s shocking appearance itself can be seen as a form of marketing - it generated more discussion about the company than any amount of advertising could have done (and completely eclipsed GM’s ill-timed announcement of its own electric pickup). Elon Musk insists that he rarely thinks about marketing, but that hasn’t prevented legions of pundits from describing him, Zen-like, as a marketing genius.
Furthermore, Tesla may not sponsor focus groups or pay marketing consultants to conduct research, but that doesn’t mean Elon Musk isn't soliciting feedback about the kind of products Tesla should be making. Instead, he uses Twitter and thinks in terms of first principles. A legacy automaker might convene a focus group of paid participants in a stodgy conference room and ask: “What should we do to make our pickup trucks better than what our competitors are offering?”
Above: Musk's "market research" differs from that of legacy automakers considering his nearly 30M Twitter followers (Twitter: K10)
In contrast, Musk asks millions on Twitter, "What would you love to see in a Tesla pickup truck? I have a few small things in mind but what do you think are small, but important nuances & what would be seriously next level?" When Medium/Twitter user K10 recently pointed this out, Musk responded, "This may sound crazy, but asking real people what they'd like in a product is a great way to meet their needs," and later added, "Huge thanks to everyone who contributed ideas to Cybertruck. It’s better because of you! ❤️❤️❤️"