How Elon musk broke with convention to pursue purpose before profit

In 2014 Elon Musk wrote a letter outlining that the patents that Tesla owned “Belong to you”. The move broke every rule in the book but 8 years on it’s clear that it put Tesla in a very strong position.

Here are the lessons from such a bold move

1. The category was too small

When Tesla started the category of electric cars was tiny. None of the big manufacturers was making electric cars and there was no infrastructure to support them.

In many ways, Tesla was too early. Like Google Glass or the PC tablet that Microsoft launched in 2000 years before the iPad. This was a problem for Tesla, it needed the category to be bigger so it could grow. It’s pointless being the biggest fish in a tiny pond. The idea was to speed up the growth of the category by opening up their patents. By doing this Tesla could be the king of a larger category.

The legal wording has some interesting points. To use Tesla’s patents you have to sign up for their Patent Pledge. This meant you had to be truly open-source with your IP as well. If you use the Tesla IP they can use yours. This gives Tesla the upper hand against the traditional car giants that wouldn’t make this trade.

Think about where your brand fits into the category. Is it shaping a new category or joining an established one?

2. Purpose before profit

This is the most exciting element of the Tesla Patent Pledge. Their pursuit of purpose before profit. They exist to “Accelerate the world’s transition to sustainable energy”.

For Elon Musk it’s pointless to be successful if the climate is destroyed. This unwavering commitment to their mission is huge. Not only does it skyrocket their brand equity it positions Tesla as the market leader, a leader with a bigger goal in mind.

When brands define who they are, and what they stand for and put it into action customers unite behind them. They become loyal. Everybody wants to be part of something bigger. Customers want to play a role in shaping the future. This is exactly what Tesla lets them do.

This is why Tesla’s patent pledge is so smart. Grow the category and solidify your position as a market leader all in one. Win-Win.

Think about the purpose of your brand. How many of your customers know what you stand for?