Giving Away Stuff Can Make Sense

Tesla is in the news today. Its founder, Elon Musk announced that Tesla would not seek to enforce its patents on electric car design. In essence, Tesla is giving away its intellectual property. Does this make sense?

Of course it does. Musk knows that the strategic issue is whether electric transport becomes mainstream. If it does not, no matter how clever Tesla cars may be, they will be in a niche market. For Tesla to be successful, he has to grow that market. One way to do that is to persuade folks to build more electric cars.

But won’t he risk that competitors will get an advantage? Well, Musk is betting that they will still not be able to compete against Tesla. Why not? Because Tesla is going to move faster than they can. The sum of the Tesla design will remain far more valuable than the components that can be copied from patented information.

So, do you have this kind of vision and confidence? Hmmm … unfair question, right? We are not Elon Musk. But it is something to think about. Musk believes in what he and his firm are doing. And he has translated that into an amazing agenda.


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