The Tesla Model 3 means many things to many people: an affordable electric car; an overpriced and overhyped tech product; a somewhat ergonomically awkward people mover; the beginning of the self-driving future; a key link in a sustainable-energy model that extends far beyond cars.
There's another thing that Elon Musk's electric-car company represents to experts who study innovative businesses and breakthrough technology: an approach to manufacturing, called an S-curve.
Last week during a glitzy launch event, Musk unveiled a warning alongside the first 30 production cars of the new Model 3. "The major challenge for us over the six to nine months is how do we build a huge number of cars," the Tesla founder and CEO said.
His next words quickly became famous: "Frankly, we're going to be in production hell."
But the S-curve that underpins the Model S production ramp isn't known to most people. Last week Tesla tweeted a visual explanation:
An S-curve like the one Musk has invoked compares what a company gets against the amount of effort or money spent to achieve it. Melissa Schilling, professor of management and organizations at NYU's Stern School of Business, said the curve starts low and slow because "at first you don't know what the hell you're doing." Companies experiment with designs, manufacturing methods, cope with failures and learn what works and what doesn't. "You're pumping a lot of money in, and you're getting very little return," Schilling said.
As processes and technologies improve and become standardized, performance improves relative to every dollar spent. This is where the dramatic breakthroughs happen — cellphones became incredibly light and small once batteries shrank in size and increased in power.