When Tesla launched, it came across as a car company being run like a startup. They hired laptop people to work on battery tech, they disrupted legal impediments to direct sales (much as Uber and Lyft have disrupted taxi cartels), and they had the de rigueur charismatic but eccentric founder.
Now it seems that like other startups, much of their early success comes from using investor monies to undercut the competition and operate at a loss.
But when investor patience with losses runs out, like all startups, hard choices must be made about the business model, and the company's honeymoon is over.
It may yet succeed, but this challenge feels like the challenges a lot of B2C startups have faced when it came time to turn a profit. Many had to change their business model in a way that alienates some of their market.
Now it seems that like other startups, much of their early success comes from using investor monies to undercut the competition and operate at a loss.
But when investor patience with losses runs out, like all startups, hard choices must be made about the business model, and the company's honeymoon is over.
It may yet succeed, but this challenge feels like the challenges a lot of B2C startups have faced when it came time to turn a profit. Many had to change their business model in a way that alienates some of their market.