Tesla was not the first to try to build a successful EV vehicle.
In the mid-late 1990s, General Motors built a car called EV1.
Source: RightBrainPhotography (Rick Rowen) derivative work
The car was supposed to target a more significant segment of the car market.
This made sense for General Motors because, as an established automaker, it made sense to investigate the development of an electric vehicle only if this would target a large market.
Yet, this turned out to be a complete failure.
That's the core difference between a startup and an incumbent.
When launching new products, an incumbent like General Motors tries to go after large market segments right on (targeting the late majority).
A startup with constrained resources must do the opposite.
A company like Tesla, with limited funding, had to figure out how to niche down the market as much as possible to showcase the technology without going bankrupt.
To Tesla in the early days, it didn't matter how small it was the niche it was going to tackle.
What mattered was the ability to showcase the technology at first.
This is a core difference, as whereas new entrants develop markets by starting from tiny niches, incumbents try to launch markets by starting from the masses!
The former approach creates options to scale, where failure is cheap and bearable.
That’s the essence of market expansion theory, which is critical to developing any tech business model.
The latter creates a scenario where failure gets so expensive that if the product doesn't reach the masses, it will be withdrawn, and progress will be stopped for years!
Therefore, Tesla used the Roadster as a gateway to the car industry, targeting a tiny market segment of innovators who supported Tesla's mission.
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