As Tesla attempts to scale, it’s likely to discover that its internal impediments, combined with competitor responses, make it much harder than anticipated. The symptoms of these problems will manifest as product launch delays, cost overruns, and higher than expected prices. Better approaches would be either to focus exclusively on a high-end niche that is too small to entice incumbents or to enter the bottom of the market with a low-price product and disruptive business model.Thomas Bartman, Why Tesla Won’t Be Able to Scale, Harvard Business Review 2015
Tesla has faced conflicting reception in the market since its inception. There are those that are bullish on Tesla and its ability to disrupt the automobile industry, and then there are those that eagerly point to every single misstep that Elon Musk and his company take along the way to serve as proof that the company is doomed to failure.
Personally, I’m pretty bullish on Tesla for one core reason: they have changed what success looks like by creating an environmentally-beneficial, aspirational product. They didn’t just create an electric vehicle. They created a sexy, fast electric vehicle.
The debate around Tesla is heated, but there is one element to the company that fascinates me, and I’ve noticed companies like Impossible Foods have also been able to tap into incredibly well: human desirability.
The surest strategy for replacing the most destructiveImpossible Foods Sustainability Report 2018
technology on Earth is to deliberately create foods that deliver
greater pleasure and value to consumers of meat, fish and dairy
foods, then simply offer them as a choice — and let market
demand take care of the rest.
Impossible Foods understood something critical about human nature that had a profound influence on their ability to scale: people will only change their habits if they want to change them. There were a number of variables that they could play with to crack their business, but the two that stick out to me are the product and the go-to-market strategy. The way they tapped into human desirability is hugely important here.
The Product. Core to Impossible Food’s product is their plant-based heme, a protein that gives meat its umami and ‘meaty’ taste and texture. By combining a series of plant-based proteins from soy, yeast and wheat, they are able to not only replicate the mouthfeel of meat in texture but also taste (almost there). A few years ago when I was back home visiting family, I dragged my parents to a great restaurant in town that just launched the impossible burger, eager to try the burger out and see if it lived up to the hype. My father and I ordered an Impossible burger, but my mother decided she wanted the real thing, not ‘that fake stuff’. When our food came, both my father and I took our first bites. As my father said, “you know, it’s not the best burger I’ve ever had, but if you never told me it wasn’t real beef, I wouldn’t have noticed a thing”. My mother tasted the burger too, and was impressed. A few years later, whenever my parents go out for burgers, it’s my mother that always gets an Impossible Burger. It tastes good, it’s healthier and she feels better for making a good choice in her consumption.
The beauty of the product is not only in its environmental impact, but in the fact that Impossible Foods clearly understood how attached humans are to their food choices. By creating a product that mimics what consumers love, they help to bridge the gap in what people want and improved sustainable consumption.
The Impossible Go-To-Market Strategy. Humans are fickle creatures and are averse to habit change by nature–we change when we must, but by god, we’ll fight tooth and nail for the status quo. When it comes to diet, resistance to habit change skyrockets. Unfortunately, we are at a point in the Anthropocene that we cannot ignore how our own consumption has affected the planet. We must change, not out of compassion, but for our own survival. The team at Impossible Foods understood this, and they planned for it through brilliant market execution.
When they started on their path towards scale, there were two core obstacles in their journey: cost of production and market reception. While their ultimate goal is to have Impossible products consumed across the socioeconomic strata, the cost of the burger would remain too high for the mass market as they didn’t have the production capability nor subsidies of the beef industry. Additionally, it was highly unlikely that the majority of beef consumers in the United States would leap at the chance to purchase a plant-based ‘beef’ patty at their local Walmart even if it was affordable. Even worse, what if their first experience with the burger was bad, simply because they didn’t cook it properly? These potential customers would get turned off for good.
To counter these issues, the company launched an ambitious, yet incredibly savvy market strategy: rather than selling direct to consumers at first, they partnered with high-end restaurants in urban areas, taught these chefs how to prepare the burger and created an element of scarcity around the product. They were able to target the types of progressive, environmentally-conscious consumers that would be early adopters (who, conveniently, also had higher disposable incomes) to try the burger. They were able to control the experience these customers had with their first Impossible Burger by working with the chefs to showcase the product. They were able to create hype and excitement around their product, and when the Impossible Burger arrived at a new location, endorsed by a famous, local restauranteur, the hype only intensified.
Impossible Foods has been able to achieve the impossible: they made a health conscious, environmentally-beneficial decision desirable––but they’ve only just begun. From 2017 to 2018, Impossible Foods expanded from selling their burger in 40 restaurants in the US to 3,000, including several new international hubs. They have successfully tapped into huge opportunities to crack the mass market as well through fast food chains like White Castle and now with Burger King. Incredible? Yes. Impossible? Apparently not. And they’ve only just begun.
Can Tesla crack the market through desirability alone, or are market forces poised to hold them back for good?
Market forces change with scale, especially when a product is forced to reconcile receptiveness in its early adopters and greater resistance in the mass market. When this happens, desirability can only go so far. That said, time and time again, Musk and Tesla have proven its critics wrong, as if he thrives off the satisfaction of doing so. I remain bullish on Tesla because of their ability to create a profoundly aspirational and desirable product.
In the Harvard Business Review article Why Tesla Won’t Be Able to Scale, the author highlighted some important barriers to scale in Tesla’s future. I fundamentally disagree with the author’s argument that starting the product in the upper echelon of the market was a bad choice. It’s worked incredibly well for Impossible Foods. Only by attacking their market through this approach were they successfully able to tap into a customer base that could afford their product and create this element of desire. I think it would have never been possible to build an aspirational product through a bottom-up market approach. Perhaps this does not align with the original theory of market disruption from Clayton Christensen’s Innovator’s Dilemma, but does that make Impossible Food’s impact and success any less valid and powerful? That seems pretty ridiculous to me.
Impossible Foods is achieving the impossible in front of our eyes, and this strategy of creating desirable, environmentally-beneficial, premium products is key to shifting society towards sustainable consumption. With the need to dramatically shift our consumption patterns to create a more sustainable and just world, Impossible Foods and Tesla are only scratching the surface of opportunities to disrupt our own consumption.