Let’s say you’re looking at the vehicle market, trying to get in as a seller. You notice that trucks are by far the largest return on your investment – half the components of a traditional car after all. You say to yourself “that must be easy, I’ve driven a truck”. You run around piling up some investors. Let’s say you end up with $200 million, all with a pretty picture of a truck.
Next is the design phase. You go and buy a couple trucks, pull them apart to see the pieces. You copy as much as you can but change the overall aesthetic design. You start early production and testing. The people who are testing your truck are people you know and likely people who are willing to give you a break. Best-case sort of thing.
You know there are a few issues but your deadline is coming along and you decide that they are minor enough that you can fix them in the next release. Launch day is here, there are massive line ups. People think “wow, that looks cool” or “hey, I’m bored of my truck, let’s try this new one”. You put up adds with words like “revolutionary” or “cutting edge” – even though it’s a clear copy + paste from what’s already out there.
A couple weeks go by. Those minor defects that weren’t a huge problem now are a massive PR problem with 2 million people driving your truck. All of a sudden, once the truck hits 30,000 kms, the steering wheel locks up. The innovative wipers only wipe ¼ of the windshield. The engine has trouble pulling even a half load, since you didn’t understand the mechanics of it. You have a nice looking truck but once people start using it, they notice a lack of attention to detail and long term testing. Your innovative pillar is a set of fuzzy dice that people are continuously trying to get out of their sphere of vision.
What do you do to get your money back? Discounts. Massive discounts. Maybe even sell the truck at a loss then sell the parts they need (say seatbelts) for a premium. Maybe you break even, maybe you don’t.
Is that the end of the truck market? The end of you? The end of simple straight up sales?