retail news in context, analysis with attitude

by Michael Sansolo

Imagine you had an acclaimed business with a solidly protected competitive advantage. What are the chances you’d give it all away?

The answer is “not very likely,” but that’s what makes the news from Tesla Motors so compelling. No matter what business you are in you need consider this news because Tesla has done something so counter-intuitive to accepted business thinking that it may be beyond brilliant.

As reported last week in the San Jose Mercury-News, Tesla unilaterally surrendered all of its electric car patents. And let’s be clear: these were valuable patents. Tesla, if you haven’t noticed has drawn raves throughout the automotive world up to and including Consumer Reports and Motor Trend.

So the patents for Tesla’s technology clearly have some great value and now you can find them on the Internet because Elon Musk, Tesla’s CEO, sees the picture differently. Rather than thinking outside the box, he’s eliminating the box.

As Musk explained in a blog on Tesla’s site, the release of the patents could change the way cars are made. Essentially Musk is giving up an advantage in the small market of electric powered cars in hopes that Tesla’s patents will (pardon the puns) fuel a surge in electric car manufacturing.

In his blog Musk wrote, "If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property land mines behind us to inhibit others, we are acting in a manner contrary to that goal."

Of course, as a number of Silicon Valley experts explained to the Mercury-News, Tesla’s radical move could prove very profitable especially if electric cars start seizing a larger share of the world’s two-billion-strong automotive fleet. The benefits could range from a stunning jump in the number of electric charging stations to opening up a huge market for Tesla’s battery production.

It’s not like there aren’t precedents, especially in Silicon Valley where Tesla is based. Think about the growth of the Android phone operating system, which Google allowed to be openly sourced.

There’s no way of knowing in 2014 how this move might play out in 10 or 20 years. It could be a disaster for Tesla or it might change the very cars we all buy. Yet it still raises issues and ideas for any industry and any business on how to change the very rules of business.

It calls into question a topic that was long discussed inside the food industry for 20 years by leaders like Danny Wegman and Bill Grize (then CEO of Ahold US). That is the recognition that just as there are places where businesses compete, there are many others where cooperation is far better.

That thinking has fueled constant improvements in the industry from scanning to more standardized coupon designs. Could it possibly extend to changing shoppers’ attitudes on preparing meals and certainly on better understanding of food safety?

In other words, at times we really are all bigger together than we are on our own. Tesla’s big idea is about to provide an incredible case study. Don’t ignore it.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
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