Tesla's Cybertruck Takes On Incrementalism
Tesla Cybertruck (Image: Tesla)
This may seem like a weird abstraction but I’d like you to imagine the market for a type of product as a sort of large, irregular, concave shape. Think of a shape with little caverns and bumps that is also fractal in that as you keep zooming into one area you keep seeing more and more irregular detail but at smaller and smaller scale. Now imagine that this shape isn’t fixed. It gradually changes over time, with some areas changing rapidly while others stay relatively constant. Your product fits into this market space and the more volume you can fill, the more you sell. Think of this like a young child’s toy pegboard with shapes and holes to fill.
Now here’s the big catch: It’s hard to know the shape of the cavern. You can do market research but ultimately you have to make a shape, a product, and see how well it fits. To an outsider, a pickup truck may not seem like an especially complex product. You’ve got a cab with one, one and half, or two rows of seats. You’ve got a bed for carrying stuff and a hitch for towing stuff. The critical factors seem to be things like: How many people can you carry? How much bed cargo can you carry? And how much can you tow?
In reality, modern pickup trucks are hugely optimized products. If there are two bed lengths it’s because the manufacturer knows there is bimodal demand centered at those two sizes. Towing capability is a carefully balanced trade between fuel efficiency and maximum tow weight. That giant center armrest is sized that way because manufacturers know how many operators need to store a laptop in that space. Side rails automatically deploy and tailgates are sprouting steps and ladders because manufacturers know that buyers are getting older and can’t climb up high so easily anymore. The modern pickup is designed to fit as close as possible to the walls of that irregular, slowly evolving market space.
Almost twenty years ago now, well known software expert Joel Spolsky wrote an essay, Things You Should Never Do, Part I, on the tendency among programmers to throw out existing code (“It’s a mess!”) and rewrite everything to make it cleaner. Please allow me to quote at length, because it’s worth the message:
Before Borland’s new spreadsheet for Windows shipped, Philippe Kahn, the colorful founder of Borland, was quoted a lot in the press bragging about how Quattro Pro would be much better than Microsoft Excel, because it was written from scratch. All new source code! As if source code rusted.
The idea that new code is better than old is patently absurd. Old code has been used. It has been tested. Lots of bugs have been found, and they’ve been fixed. There’s nothing wrong with it. It doesn’t acquire bugs just by sitting around on your hard drive. Au contraire, baby! Is software supposed to be like an old Dodge Dart, that rusts just sitting in the garage? Is software like a teddy bear that’s kind of gross if it’s not made out of all new material?
Back to that two page function. Yes, I know, it’s just a simple function to display a window, but it has grown little hairs and stuff on it and nobody knows why. Well, I’ll tell you why: those are bug fixes. One of them fixes that bug that Nancy had when she tried to install the thing on a computer that didn’t have Internet Explorer. Another one fixes that bug that occurs in low memory conditions. Another one fixes that bug that occurred when the file is on a floppy disk and the user yanks out the disk in the middle. That LoadLibrary call is ugly but it makes the code work on old versions of Windows 95.
Each of these bugs took weeks of real-world usage before they were found. The programmer might have spent a couple of days reproducing the bug in the lab and fixing it. If it’s like a lot of bugs, the fix might be one line of code, or it might even be a couple of characters, but a lot of work and time went into those two characters.
When you throw away code and start from scratch, you are throwing away all that knowledge. All those collected bug fixes. Years of programming work.
Trucks, even though they contain it, are obviously not software. But they’re similar in that they embody an enormous amount of work to understand what the buyer wants and needs and how to give it to them reliably and at an affordable price.
So now, at last, let us consider the newly shown Tesla Cybertruck. I encourage you to read Jason Torchinsky’s excellent Jalopnik post, A Deep Look At The Design Of Tesla’s Cybertruck, for some solid insight into the design and how it appears to be optimized for manufacturing cost.
Musk’s usual approach is to disregard existing practice and design from first principles. As a strategy, this has strengths and weaknesses but it works best when you have a really good understanding of the problem you’re trying to solve. The biggest success has been SpaceX’s reusable first stage booster technology. This is, in fact, a huge win and caught existing launch service providers, grown soft on government contracts, off guard.
The technique is much less successful when the problem domain, the market space, is more complicated and less obvious. My background is in aerospace engineering and I can assure you that building and selling vehicles to the mass market is way, way, way more complicated than launching a satellite. Long experience and the associated deep understanding of the market really matters here. This goes a long way towards explaining why foreign companies have had such a hard time taking on the domestic brands in the full size pickup truck market here in the United States. If you’re a truck buyer, Ford, Chevy, and RAM are like a long time therapist, they know you better than you know yourself.
I’m going to give Tesla the benefit of the doubt and assume that the Cybertruck will go into production and on sale in a form very similar to what they’ve shown. It is clearly a designed-from-first-principles Musk product. This is good in that it arguably brings some fresh thinking to the market, and that’s always nice to see. But it does not appear to be a product that will beat the established players at their own game.
Going back to my original concept of marketplace geometry as a space to be filled, the Cybertruck appears to be a product that can fit into a space that, for whatever reason, the big players can’t be bothered to fill. There is nothing wrong with that! This is how small, character-filled automotive companies have existed for a long time. Lamborghini, for example, happily co-exists with Chevrolet. They zag when other companies zig.
But it would be a mistake to assume that small scale success in that corner of the market implies the ability to conquer the market as a whole. That is a very, very, very long game and is probably counter to what makes Tesla an interesting and character-filled player in the automotive arena.
Author’s Note: If you find this essay interesting, please share. If you’d like to have me write for you, let’s talk.
