There are bright spots hidden amongst the economic woes. Tesla, Aptera, and any start-up that can stay afloat will reap huge rewards that would otherwise be impossible during times of economic plenty.
A Bit of Background
In the early 1900s, all automotive companies were start-ups. There were hundreds. Over time, though, a few companies pulled ahead of the rest of the pack (think Ford with the Model-T). Because of Ford’s high volumes they could under-cut the smaller companies. They acquired other companies that showed promise or innovation (that’s why Ford owns Mercury, Lincoln, and others). Most of the small start-ups that didn’t get acquired by a large company were eventually forced out of business. Since then, it has become increasingly difficult for a start-up company to break into the automotive industry.
The past 15 years have shown us a similar phenomenon with internet companies. Google, Yahoo, and Amazon were all once small start-ups. They pulled ahead of the pack and have since been acquiring other promising or innovative companies while forcing others out of business. It is becoming increasingly difficult to break into any space occupied by one of the internet giants.
A Recession Hits the Big Boys Hardest
Jumping back to the automotive industry, the large companies are being forced to scale back heavily. They are laying off talented workers, they are less aggressive in their marketing, and they are certainly not in the market to acquire promising start-ups. In fact, a few of them are on the verge of bankruptcy. Large companies rarely gain market share during a recession.
The Little Guys Can Reap the Benefits
For Tesla, Aptera, and the other little guys; they can push forward without worry that the big boys are going to swoop down and stamp them out. The large companies are so caught up in their own bleeding that Tesla and Aptera’s progress is of almost no concern. Tesla and Aptera can hire all the great talent being laid-off by the big boys. They can get top notch designers, testers, engineers, and marketers at a steeply discounted rate. Their advertising, in all its forms, is becoming drastically more affordable. Start-ups can fill niche spaces in the marketing world that larger companies have been forced to vacate.
In short, if Tesla and Aptera use this recession as an opportunity to gain talent and market share, they will be positioned perfectly to ride a wave of growth as soon as things start to look up.
What do they have to do, not just to survive, but to thrive? I will be posting my thoughts on this soon. Leave a comment and let me know what you think.
