David Heinemeier Hansson

August 10, 2023

Turns out nobody cared about panel gaps

One of the most fascinating aspects of Tesla's rise to dominance has been how they discarded many of the traditional values of car making. While the rest of the industry was stuck competing on the size of their panel gaps, and other aspects of precision and quality assembly, Tesla didn't even show up to participate. Their cars are legendary for being delivered with shoddy paint jobs, rattling interiors, and even mismatched doors. But it just didn't matter! Consumers voted with their wallets for poorly built EVs because well-built gas-powered cars were deemed irrelevant in comparison.

There's tremendous wisdom for product makers of all kinds in this lesson. It's the epitome of Blue Ocean Strategy. To find a breakthrough angle in commerce, it's as important to decide where you will not compete, as it is to decide where you will compete.

Tesla decided not to compete in quality assembly, and instead focus on breakthrough ideas like owning the charging infrastructure for EVs. The former is a red-ocean realm of competition against legacy car makers who've had a century to perfect their panel gaps, the latter is so blue-ocean as to appear preposterous to anyone from the gasoline past.

Another good example is platform evolution. The basic Model S platform and design is over a decade old, and Tesla is proudly selling it just the same. Most legacy car makers, with a few notable exceptions, wouldn't be caught dead pushing an old chassis in a highly competitive, mainstream category past half a decade. But it just didn't matter.

Figuring out what consumers truly care about is hard. Deciphering what they don't actually care about is harder still. When faced with nearly identical products in the same genre, they'll seemingly start comparing ever-more minute and subtle differences. But give them something entirely different, and suddenly half the shopping parameters go out the window.

If I was starting a new business tomorrow, that's where I'd focus first. Build a thesis around which aspects of the competing products – even if they aren't directly in the same category – you could probably do without, and you'll be carving out opportunity to do something else with that liberated energy. Then plow this energy into excelling on the underrepresented axis left unattended.

Easier said than done, of course. But starting to see the world through the lens of the Blue Ocean Strategy, as Tesla has done to perfection, is the way to learn how.

About David Heinemeier Hansson

Made Basecamp and HEY for the underdogs as co-owner and CTO of 37signals. Created Ruby on Rails. Wrote REWORK, It Doesn't Have to Be Crazy at Work, and REMOTE. Won at Le Mans as a racing driver. Fought the big tech monopolies as an antitrust advocate. Invested in Danish startups.