Sterling Terrell

smart ideas from books (mostly)

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The High-Priced, Low-Volume Strategy

The High-Priced, Low-Volume Strategy

I wonder in what cases this high-priced, low-volume strategy is the best way to go.

Honestly, I think it works best in the majority of cases.

Two reasons.

#1
It is hard to find a low-priced, high-volume product that makes everyone happy.

#2
A high-priced, low-volume product creates for a niche. This low volume and high price combo also creates a natural scarcity and exclusivity.

I mean, if you charge $200,000 per customer, you only need a few customers, right?

Tesla’s strategy of starting with a high-priced, low-volume product and moving down to more affordable products over time, as underlying technology and manufacturing capabilities advanced. Musk and Eberhard were big believers in this strategy, having seen it play out with a number of electronic devices. “Cellphones, refrigerators, color TV’s, they didn’t start off by making a low-end product for masses,” Eberhard told the paper. “They were relatively expensive, for people who could afford it.”

-Ashley Vance, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Amazon)

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Filed Under: PotpourriTagged With: #Economics, #Price

On Having The Vision and Drive To Execute

On Having The Vision and Drive To Execute

The crux of what you want in a leader/manager is for them to have the vision and drive to get things done.

I feel like I have this on a small level, at least part of it.

Not on some Elon Musk level. 🤣

But outside of persistence, I think one of the things I am good at is cutting out the B.S. of a business and getting down to the root of the problem.

What is the fundamental issue that is keeping us from success?

In the day-to-day, issues that need attention often involve improving processes or automating repetitive tasks.

But the mainstay of turning a flailing business back upright involves a systematic examination of these two imperatives:

Do more things that put cash in your pocket.
Do fewer things that take cash out of your pocket.

Honestly, I am constantly flabbergasted by how many people are such poor managers and are unable to guide their companies in a way that improves on both of these pillars while increasing owners’ equity.

Maybe because what is best for managers is not always what is best for the company? 🤷‍♂️

I know, I know.

I’m just back here throwing stones today…

Like so many people privy to these performances, Lyons came away with no illusions about Musk’s personality but with the utmost respect for his vision and drive to execute. “Working at Tesla back then was like being Kurtz in Apocalypse Now,” Lyons said. “Don’t worry about the methods or if they’re unsound. Just get the job done. It comes from Elon. He listens, asks good questions, is fast on his feet, and gets to the bottom of things.”

-Ashley Vance, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Amazon)

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Filed Under: PotpourriTagged With: #Leadership, #Management

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