The Innovator's Dilemma doesn't say you have to start at a "low end" and work up. That's just how it was for the computer storage industry (the example in the b

The Innovator's Dilemma doesn't say you have to start at a "low end" and work up. That's just how it was for the computer storage industry (the example in the book) in the second half of the twentieth century. It says that you have to start with a new market - i.e a set of people who want to buy your product who are different fundamentally from the existing market. Plenty of innovations are rolled out starting at the high end. An obvious example is the iPhone (which changed the smartphone market from business/hobbiest to consumer, and which began doing that with rich consumers). Another way of looking at it... New things can be relatively expensive within their new market - the first PCs were very expensive, they just happened to be cheap compared to Minicomputers. From a product side, they looked like cheap, crap computers. From the market side, they had a totally different market (e.g. individual finance professionals, rather than large corporations). It's natural as a geek to look just at products. You have to look at both products and markets - they are not just both important, they are the same thing (http://www.flourish.org/blog/?p=371 http://www.flourish.org/blog/?p=371). Tesla's product is electric cars. It's market is people who want: a) To not have to recharge every day on their commute. b) To have more accessible storage space. c) To have cheap power when gas finally gets more expensive than electricity/batteries Short term they have been bootstrapping that using a market of people who have longer term motivations (concern about climate change or an energy crisis) which will later go mainstream in the form of c). It's very very smart.