How to kill a company doing a Musk

I’ve seen a number of companies die over they years. Sometimes it’s a statement from the CEO showing arrogance but, more often, from a mistake in strategy. After all, it’s easy to make a comment and miss the mark; it’s even easier to make a strategic movement and miss the mark.

Therefore, the recent dumping of Tesla stock and anti-Tesla demonstrations all stem from Elon Musk’s actions with Donald Trump, his on stage actions at rallies, combined with his DOGE actions laying off 1000’s of people in jobs in America that, seemingly, not all should have been laid off. But the media are covering a huge amount of negative news about Tesla. Here's just a few recent headlines:

• Tesla sales slump 40% across Europe as Elon Musk backlash grows
• Tesla Likely Finished In Germany As 94% Surveyed Say They’d Never Buy Musk’s EVs
• Tesla is no longer exceptional — thanks to its Chinese rivals
• Tesla recalls all Cybertrucks after using wrong glue to stick on steel panels | The Independent
• The Big Question: would you still buy a Tesla?
• Major Tesla investor says Elon Musk must choose: Tesla or Trump | The Independent
• Will Elon Musk step down as Tesla CEO after $800 billion value freefall since December? - The Economic Times
• Elon Musk: has he made Tesla toxic?

After the damage done to Twitter (advertising bombed after he told sponsors to f**k off), has he done the same to Tesla? After all, Tesla is open to huge competition today, not just from traditional car companies like BMW and co, but also Chinese firms like BYD. It is strange as Elon Musk was a hero of mine, but rather than calling him Tony Stark/Iron Man, most of my friends are calling Lex Luthor (Superman's nemesis).

It made me think of several companies in history who I worked with that did similar things. Does anyone remember DEC, Wang, Olivetti or Osbourne computers?

DEC were acquired by Compaq after their founder, Ken Olsen, stated adamantly that no one needed a computer in the home. Wang failed after the founder’s son was thrown to the forefront and bet that the best strategy was combining hardware and software as one when, back then, what people wanted was open software from anywhere – which led to the rise of Microsoft Office – with any hardware they wanted. Olivetti, which today could have been Apple, failed when the founder was allegedly murdered by the CIA on a train.

The story of Ariano Olivetti is really fascinating, as are those of Olsen and Wang. I mean, why would the CIA want to kill him? Basically, because he challenged the whole notion of American capitalism, paying staff more than any other company, giving them benefits for health and holidays that went against the norm, and an entrepreneur who truly tried to change the very idea of what capitalism was long before ESG and political correctness invaded the halls of Western corporate culture.

Each entrepreneur is a fascinating story, and perhaps the most interesting one for me is the battle between Steve Jobs – he of Apple fame – and Adam Osborne. Who? Well, Adam was a British computer designer who founded several companies and launched the Osborne 1, the first commercially successful portable computer.

More than this, Adam Osborne built a $100 million company and destroyed it with a single announcement.

This was back in the 1980s, before PCs, laptops and mobiles were mainstream. Back in the day when the CEO of one of the most powerful computer companies – DEC – said no one would want a computer in the home. Well, Adam made one and created a massively successful company. In fact, it was doing so well that Steve Jobs rang Osborne’s company one day and asked to speak with him. Osborne’s secretary said he was not available but asked Mr. Jobs if he would like to leave a message. Steve replied: “yes … tell Adam he’s an asshole”.

Lovely.

Why was Jobs so pissed off? Because Osborne1 was beating Apple’s plans hands down, launching the world’s first portable computer that could fit under an airline seat and, more importantly, bundled with lots of useful software.

Interestingly Osborne and Jobs had very different beliefs about product. Osborne believed in the MVP model – Minimum Viable Product – and to avoid building the perfect product. Just build one that has enough for the end user and add features from there ever after. Jobs wanted to launch the perfect product from day one.

As the Osborne computer took off, it wasn’t long before the company grew to $100 million revenues and 3,000 staff. Jobs was furious. Apple employees recall him wandering hallways ranting: “This guy doesn't get it! He's not making art. He's making shit!”

So, what went wrong? Why isn’t Osborne the Apple of 2025?

Well, it all went belly-up when Osborne announced the next generation of his system in early 1983. The new computer – called The Executive – would deliver significant advancements on the Osborne1. By the end of 1983, the company was bankrupt. Why? Because dealers immediately cancelled all existing orders, preferring to wait for the newer model, which led to a catastrophic cash flow crisis.

18 months from $0 to $100 million. 6 months from $100 million to bankrupt.

The Osborne Effect was born. What is The Osborne Effect? The Osborne Effect is a social phenomenon of customers cancelling or deferring orders for the current soon-to-be-obsolete product, as an unexpected drawback of a company's announcing a future product prematurely. In technology, this is a particular issue due to the fast rate of change, and  The Osborne Effect is generally known as the best way to cannibalise your company by announcing a replacement product before it is ready, resulting in the existing product demand disappearing.

This is why Apple keeps all of its announcements secret until they are ready to ship and load and supply. They learned a lot from Adam Osborne. Equally, and also of interest, is that his final venture was to launch a company called Noetics Software in 1992 to work on artificial intelligence. Whatever happened to that idea?

Finally, just to finish the story, Osborne died in 2003 due to a brain disorder. While Adam Osborne achieved significant wealth and success in the early days of the personal computer industry, he did not die wealthy. There are lots of lessons here and, in fact, it reminds me of the story of Canadian financier Sir Henry Pellatt … but I’ll save that one for another day.

Anyways, going back to Tesla. Has Elon Musk done to Tesla what Adam Osborne did to Osborne computers? Not at all. What Elon Musk has done to Tesla is not a premature product announcement. It’s more to do with being hugely confrontational and provocative. It reminds me more of Gerald Ratner's speech at the Institute of Directors in 1991, where he admitted their products were crap (shit). This coined the term Doing a Ratner, and I wonder if Elon has done the same to Tesla.

The customer view, taken from The Guardian: 

‘Our daughter keeps asking us to sell it’

As a birthday present in 2019, my wife booked me a test drive for the Tesla Model S. I thought, “My God, what an amazing bit of kit”. It was very smooth, very fast, and I was keen to drive something more environmentally friendly. So we bought one.

We’ve now done about 80,000 miles on it – driving to Switzerland one year, Italy another, and last summer to the south of France. It’s been incredibly cheap, reliable, spacious, and with virtually no servicing.

But we are horrified by Trump and Musk’s extreme politics. Our 26-year-old daughter keeps asking us to sell it. When I saw Trump and Musk showcasing the models outside the White House, I felt a bit sick. I’m on Tesla owners’ forums, it’s getting very polarised.

We’re now in a series of constant dilemmas. I don’t want to have to put stickers on my Tesla like others are, with things like, “Love the car, not the CEO”. I feel very torn. The second hand market has plummeted. Our warranty runs out in 2027, and then we’ll see. I never thought owning a car would be this difficult.

Jonathan, 64, Oxford

‘Do we regret it? Morally, yes. Practically, no’

Last spring, my girlfriend and I were looking for a new car. A Tesla wasn’t even on our radar, but it turned out to be a cheaper option than the electric alternatives, and during a test drive it felt like the best car I’d ever driven … unfortunately. We thought, let’s go for it.

‘Do we regret it? Morally, yes. Practically, no’

Last spring, my girlfriend and I were looking for a new car. A Tesla wasn’t even on our radar, but it turned out to be a cheaper option than the electric alternatives, and during a test drive it felt like the best car I’d ever driven … unfortunately. We thought, let’s go for it.

When Musk started campaigning for Trump last summer, I began to get questions about the car. Now it’s even worse. Friends or colleagues joke around, saying: “Ah! So you’re for Mr Musk?” But for me, having something that’s in any way a symbol of the far right is extremely painful. We feel a moral pain at being owners.

Do we regret it? Morally, yes. Practically, no. I hope this will be a passing moment, that the brand will outlive Musk. We hope someone can take over as CEO from Musk.

Patrick*, 40, Belgium

‘I’m a Tesla fanboy who jumped ship’

When I first drove a Tesla, while I was visiting Las Vegas for work in 2019, I was absolutely blown away. Going back to my Ford Mondeo felt like travelling back in time. I got the Model 3, which was a joy to drive, like a go-kart around the country roads, and later we got the Model Y.

I didn’t see the rightwing stuff coming. When Musk aligned with Trump, we thought, well … the car’s great. I was still prepared to stick with Tesla right up until Musk’s so-called “Roman salute”. The day I saw that, I thought, “Oh, man”.

My car was up for renewal a few weeks ago. I was on the phone to Tesla – they were really persistent, trying to convince me to stay – when a Polestar 4 [a competitor] drove by. I booked a test drive the same day and now I’m waiting for my Polestar 4 to arrive. I’m prepared to take a slight step down in software.

I was like, “Actually, I’ve got to stick to my morals, without that I haven’t got anything”. Even so, the Polestar is made in China, and we thought, is that any better? It’s almost impossible to have a fully ethical supply chain today. But Elon really put me off staying with Tesla – I’m a Tesla fanboy who jumped ship.

Henry, 50, Bedfordshire

‘There’s no way I’d sell my Tesla because of the CEO’s political views’

They are incredible cars. I bought a Model 3 Performance in 2019, and get software updates on a regular basis so the car consistently improves and offers new features. For me, once you’ve owned a Tesla, there’s no going back. It’s the iPhone equivalent of cars – everything works really well and is easy to use.

We’ve seen on the news the fools who think it’s OK vandalising Teslas. I get quips from friends, saying, “Has anyone keyed yours yet?” But this hasn’t worried me about my car. I don’t think these activists represent more than a fraction of a per cent of the population.

There’s no way I’d sell my Tesla because of the CEO’s political views. I disagree with some things Musk says and does, but I could say the same for everyone, and I don’t see what the fuss is about with Doge. The attacks he’s endured have been disproportionate and dishonest. What I worry about is how easily people can be programmed to hate a company to such an extent. It’s been pretty astonishing. Tom, 51, Spain

‘It really hurts to think that some of our savings have gone to someone like Musk’

I’m not rich, and my wife and I planned for a long time before we put our savings together to buy an electric vehicle. A car is not a status symbol for me, it’s a practical object and we wanted to reduce our carbon emissions as much as possible.

There’s no Tesla showroom in Slovakia yet, so a couple of years ago we had to get a company in Bratislava to import one from Austria. Tesla drivers here still wave at each other because we’re so rare. While buying it, a friend warned me about Musk. Back then I just thought, probably if you dig deep enough into any corporation you’ll find someone with unpleasant views.

But if I were buying a car today, there’s no way I’d get a Tesla. It really hurts to think that some of our savings have gone to a company led by someone like Musk. When he started supporting the AfD in Germany, or his associations with Trump, or what they’re now doing to USAid and federal employees – I’ve just felt worse and worse about giving the company thousands of euros.

It’s now worth a lot less than we paid. And it was a lot of money to us, we can’t just ditch it. It’s a symptom of a rather sad time that we live in, really.

Steven, 50, Slovakia

*Some names changed.

 

Postscript1: just after writing this X, formerly twitter, is being acquired and merged with xAI, also owned by Musk. A brilliant or bad move?

Postscript2: if you are a fan of Tesla, here is an advert created purely by using AI LLMs by Fiction Factory. No humans appear in this film. It is all created by AI.

https://www.youtube.com/watch?v=-vABdeB3C74

 

Thanks to Christopher Ho for the reminder of the Adam Osborne story.