Teslas, Teslas, Interests and Dogmas
Last week I enjoyed the quiet exhilaration of riding a Tesla around Nob Hill in San Francisco before the annual SNS Dinner. Tesla plans to go into production next year with a first run of 600 electronic cars, priced at under $100k each. Charged overnight, the single-charge range is reported to exceed 200 miles. It was notably faster than my 5 Series, and with the open top any sound the car made was easily drowned out by the urban noise of passing cars and pedestrians.
As we sped to an estimated 70 MPH within the distance of a city block I couldn’t help but wonder why Detroit had not seen this coming. With all of the capital, factories, expertise, supply chains and dealer networks, how could Detroit miss the revolution? Toyota may have leaped into the hybrid market while Detroit slept, but now the Tesla team has raced passed a global auto industry still waiting for hydrogen and ethanol 85.
Electrons and venture capitalists are indeed a powerful combination. Now the auto industry can bear witness to what those of us in Silicon Valley know oh so well, markets can quickly bifurcate into the quick and the dead. Those who adapt to the realities of their surroundings (customers, demands, goals, budgets) succeed while those who freeze or insulate themselves as a coping mechanism ultimately dissolve.
Dogma Bums Often Lose
I’ve been lucky enough to see a series of technology innovations rock markets while well-heeled gorillas watched and parried. I saw VoIP get dismissed as a toy by seasoned telecom pros with decades of experience in telephony only to see ShoreTel go IPO earlier this year. I saw powerful new security solutions struggle for acceptance against more established technologies only to ultimately succeed and help to establish a billion dollar NIPS market. I saw server load balancers give way to more sophisticated application front ends in the application delivery space and again drive powerful new capabilities and economies. Today I’m again involved in the classic struggle against innovation’s discontents in the emerging world of server and VM security, but enough about that for now. I can certainly relate to what Tesla may be up against.
What occurred to me when I raced around San Francisco’s sloping asphalt in the Tesla was the yet ever increasing power of the electron. The Tesla team has managed to credibly invade an industry that has survived without deep core innovation for close to a century. The auto industry has shifted wealth and populations on unprecedented scales.
From Route 66 to the high-rises of Dubai, from drive-ins to drive ups and the countless paradises converted into parking lots, the oil and piston age has transformed us. Yet it could not transform itself.
The Tesla prototype roadster may be perhaps a bigger threat to the world of oil and spinning pistons than Toyota’s extremely successful hybrid architecture. As a technology enabler I couldn’t help but wonder how much of those trillions spent on oil and steel were being invested over the years in genuine innovation versus “Potemkin Village” labs populated by gold watch industrialists, union “regulationists” and other innovation discontents commonly pre-occupied with the preservation of the comforts of dying status quos.
Or perhaps the true visionaries in the auto industry were drowned out by self-serving department heads, companies, partners and industries fully committed to the perpetuity of pistons, carburetors and oil consumption? I’ve seen innovation die on the vine in large enterprises and I can certainly see the ironic alienation of labor when I deal with large government bureaucracies. Like the legacy PBX players who denied VoIP and today the netsec types tuning exploit signatures, the auto industry may be destined to pay the piper for years of innovation neglect. Companies can grow to a size that tends to stifle innovation.
While the automobile engine has been well insulated from the sweeping changes of the 20th century and has in itself become a symbol of an era, it may be about to suffer that common fate experienced by once all-powerful monarchs, institutions and even cultures who preferred the comforts of isolation to the ongoing churn of contemplation and exploration.
Trivia and Irony: While a team of Silicon Valley entrepreneurs build an electronic car outside of Detroit, the oil producing nation of Iran cannot refine enough gasoline for its own domestic consumption.
I expect Detroit to fight hard on all fronts to stop the Tesla, rather than embrace the innovation for what it is: a fast sports car that doesn’t use gasoline or oil or emit harmful vapors. The Tesla is a potential game changer on a level that could yet again shift wealth from the anachronistic to the bold, despite levels of industry power and wealth capable of propping up tired bureaucracies and backward-looking political systems rife with inefficiencies, corruption and the lure of heavily-subsidized insulation.
In Silicon Valley we are used to the churn of disruption. Yet I was still shocked to ride in the Tesla and contemplate the possible large scale disruption of such a powerful and entrenched industry. Certainly the Tesla team has a long way to go and Detroit, Inc will not go down without a fight.
The metaphorical power of what I experienced -whether Tesla succeeds or not- will transform the world and enable unprecedented disruptions well beyond the auto and energy industries. I think it may even represent a bigger shift than that signaled when Henry Ford started buying black paint in volume.
Special thanks to Michael Halperin for the photos of the Tesla and to Tesla Motors for the ride around Nob Hill.
Disclosure: I’m the VP Marketing for Blue Lane Technologies, a winner of the 2007 InfoWorld Technology of the Year award for security, Best of Interop 2007 in security and the AO 100 Top Private Company award for 2006 and 2007. Blue Lane is also a 2007 Best of VMworld Finalist in data protection. I’ve been a marketing executive at Juniper Networks, Redline Networks, IntruVert Networks and ShoreTel. I’ve been an Always On blogger/columnist since 2003.