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How do you position yourself to disrupt an industry?

Elon Musk: When you’re looking for an opportunity, I think it’s important not so much to focus on just disruption for the sake of it, but rather where is an industry either stagnant or in decline, where the product or service has stayed pretty much the same or maybe even gotten worse over time?  And I think it’s worth looking at industries which a lot of people think are impossible or think you can’t succeed at - that’s usually where there’s opportunity.  If everyone thinks you can succeed in an industry, they’re probably diving in. 

In the space industry, things have gotten worse over time.  They’ve not gotten better.  When you consider the fact that we were able to go to the moon in ’69, with Saturn V, and then with the space shuttle we were able to go only to low-earth orbit, and now the space shuttle’s retired and the United States cannot get a single person into orbit without the help of the Russians.  That is a terrible trajectory, so I started Space X with the goal of reversing that. 

On the face it, it appears to be somewhat daunting.  How can a start-up prevail in an industry dominated by giants who receive huge subsidies?  But, on the other side, what those subsidies have done, they've made those companies very inefficient and somewhat reliant on those subsidies.  And they’re not very good at innovation, and they're unwilling to take risks.  So, provided you can get through that initial start-up phase, once you exceed them in capability and technology, they have no real ability to catch up. 

And that’s what we’re finding with Space X.  In the last couple of years Space X has won more launch contracts than any other country, let alone company, in the launch business.

The world is going to change so dramatically in the 21st century.  I think the important thing is to identify something, try to aim for a big problem rather than a small problem.   Just look for industries that are functioning poorly and that have been stagnant for some period of time or even in decline, and then it's worth trying to start a company to change the way that industry behaves.

Identify disruption space.
Think big.
Isolate stagnant, failing, poorly functioning industries.


Directed / Produced by
Jonathan Fowler & Elizabeth Rodd

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