It was only about 10 days ago that Elon Musk revealed Tesla's new Cybertruck to legions of adoring sycophants and - well, the rest of the world who laughed at him and ridiculed the truck's design. Even Denny's took shots at Musk.
And why wouldn't they? The unveiling of the truck was a full scale disaster, complete with two broken windows and a passenger side back wheel that looked like it was about to fall off from underneath the truck. So, naturally, Musk claims that the cult of Tesla has already pre-ordered 250,000 of them. We documented the full unveiling circus in a writeup here.
Now, we're starting to get a glance into why the truck and its unveiling looked like such a poorly planned concept: because they were.
Musk said in early November, just several weeks before the unveiling, that the company does "zero market research whatsoever" when designing a new product, according to a new article from the Wall Street Journal.
In other words, Musk wants to enter the best segment of the auto industry: the highly profitable, billion dollar pickup truck segment, and he has done no research as to how best to meet the needs of potential customers.
Is it any wonder the company is losing close to $1 billion per year?
And how does Musk defend the strategy of doing no research? The idea seems "seems especially reckless in the age of Big Data," the WSJ says. Especially while companies like Google, Apple and Facebook have based their success by doing nothing but harvesting and analyzing data. In other words, they don't make blind bets, like Musk is doing.
In a forthcoming book, “The Power of Experiments: Decision-Making in a Data-Driven World,” Harvard professors Michael Luca and Max Bazerman show how such experiments have helped organizations from eBay to the U.K. tax authority make better decisions. By testing different strategies on a limited pool of unwitting customers before implementing them, they say, companies can eliminate guesswork and intuition and build products and processes “that better account for the many quirks of human behavior.”
But Musk isn't interested in that; rather, he seems interested only in what Elon Musk wants.
The Tesla CEO said at a November 5th event, about 16 days before the Cybertruck unveiling: “A lot of times people try to make products that they think others would love but they don’t love them themselves. Tesla’s approach is to start by imagining the platonic ideal of a car. I find that if you do that, people will want to buy it. If it’s compelling to you it will be compelling to others.”
Musk called the truck an “an armored personnel carrier from the future” on November 5th before stating at the unveiling: “Trucks have been the same for a very long time, like 100 years. We wanted to try something different.”
One thing is for sure: if the truck's specs as listed survive to production at the same price point that Musk pitched ($39,900), the styling of the truck may not be an issue with customers. However, based on Musk's inability to deliver at the price ranges he has pitched in the past <cough> Model 3 <cough>, we find it highly unlikely the Cybertruck, as shown, will be sold at the $39,900 price point.
But it's Musk's method of "shooting first and asking questions later" that the WSJ takes exception with. "Put simply, today’s geniuses study problems. Only suckers make bets," the piece concludes.
Perhaps Musk doesn't understand that as a public company you can't be all visionary (if you even want to call him that). Unicorns and rainbows will only hold the stock up for so long, until such time as investors demand the company turns a profit. Musk has been, and continues to skate on thin ice by wholly ignoring this reality and its an inevitability that could come at anytime. Burning billions of dollars is not a business plan - it only works until it doesn't.