How Small Companies Topple Name Brands in 3 Easy Steps

It’s hard to believe, but Apple Inc. (NASDAQ: AAPL) turned 40 this year. 

Hard to believe or just plain sad, the company that was founded by hippies, for hippies and adopted the ’60s ideal that “you can’t trust anybody over 30” is now itself a retirement-aged geezer by tech company standards, wearing socks and sandals, swinging lazily in its poolside hammock, dreaming of red convertibles and bikini-clad cheerleaders. 

A far cry from what was, to those who recall the early days.

When Apple was young, its main competitor was IBM (NYSE: IBM). Big Blue, as it was known in the Cupertino boardroom, was then the standard for the computing industry and the name to beat when it came to Apple’s target market: the personal computer. 

Founded in 1911, IBM was already an old man when Apple came on the scene, and its machines were big, boring, and extremely popular in a variety of tech sectors. 

And it was boring from the very start. International Business Machines, which today sounds about as exciting as a mud-wrestling match between Hillary Clinton and Stephen Hawking, was actually a vast improvement over the post–Victorian era handle the company took at inception: the Computing-Tabulating-Recording Company.

Not just boring but downright uncool. How uncool? IBM supplied the Nazis with data-tabulating devices used to assign numerical values to physical traits of humans in deciding who would qualify as a member of the master race and who couldn’t. 

Definitely not what members of the bell-bottomed, free-loving Woodstock generation thought was appealing in the late ’70s.

Business, Technology, and Style

Apple, by comparison, was a breath of fresh air, not to mention one of the first-ever successful tech companies named something completely unrelated to its actual business model. 

It was small, it was exciting, and it produced devices designed for users (not businesses), by users. 

Apple’s rise to cultural prominence didn’t take long, and its enemy, IBM, was in the crosshairs from the very beginning. 

Steve Jobs’s famous 1984 commercial, teasing the release of the Macintosh, painted IBM as a gray, nameless, soulless giant, built around the subjugation of the masses. 

Big Brother, in other words, which the Mac was created to smash, thus liberating the masses. 

The company’s actual rise to industry dominance, however, took decades and much product diversification. 

In the end, Apple, the small upstart, beat IBM and the rest of the field by reinventing the personal electronic device market in the early 2000s. 

Close to bankruptcy, Apple did it by making smaller, better, more usable products and integrating them with existing technologies and services while closely adhering to emerging cultural and technological trends. 

It was a victory that turned Apple into the biggest tech brand in the world, a victory that Steve Jobs probably thought was going to come the moment the first Macintosh hit the sales floors. 

Though it took far longer, the basic mechanism behind the proverbial David’s defeat of Goliath can be boiled down to three steps. 

Disruption is as Easy as One… Two… Three

1. Build a product around the desires of the consumer, not just their bare needs and expectations: Jobs famously said that he spends zero dollars on market research. He was, after all, Steve Jobs, so instead of asking the consumers what they needed, he showed them what they wanted.

2. Build a product that dovetails with currently emerging technological trends, not currently dominant trends: The iPod came on the market four years after the first MP3 player, but rose to dominance with the help of the iTunes media library.

3. Instead of competing directly, build a product that redefines and leapfrogs the competition: Before the iPhone, the market was swamped with dozens of cell phone designs. After the iPhone, all smartphones followed the same basic design philosophy.

Steve Jobs was often criticized for being non-technical, for not knowing how to code, for not being an engineer. 

His genius transcended those shortcomings, however. He could see the future and how things should be, and his personality allowed him to steer technical talent in the right direction. 

I’ve written on Apple’s inevitable decline on many occasions in the past, but this article isn’t going to pursue that topic any further. 

I only bring up Apple to set the stage for another such story of meteoric success, exponential growth, and then an inevitable slide from global dominance. 

Today, the heir apparent in the game of global technological dominance might just be another huge, widely diverse American brand headed up by an iconic, youthful, exciting industrialist.

Personal Devices of a Larger Magnitude

Tesla came on the scene in the first decade of the 21st century with a novel idea: it would build electric cars that broke the boring, stodgy mold traditionally used to cast that class of products. 

It would build cars that people wanted to have for their style as much as function. 

At the time, the EV/hybrid market was scarred with memories of flops like the GM EV1 and Honda’s EV Plus and saturated by successful but downright uninspiring hybrids like the early generation Toyota Prius. 

For a while, the company’s founder, Elon Musk, looked like he was following those three steps to dominate a market that already appeared to be saturated by limp, boring offerings from the biggest carmakers in the world. 

He was building products that consumers would want, not just products that addressed market demand for certain criteria. 

He was building products that worked with currently emerging technologies, like automated drivability and heavy reliance on net-based applications. 

He wasn’t bothering competing against the still-dominant Prius. He was leapfrogging it in terms of style and performance. 

And if that wasn’t enough, just as the cars were becoming the new standard of electric vehicles, he then threw the world a curveball by introducing something completely unrelated to cars. 

The Powerwall home power storage system was basically just a huge battery, designed to allow homeowners to store and manage electricity they bought from the power company, as well as produced on site with domestic solar and wind power generation systems. 

It was new, it was cool looking, and, most importantly, it showed the consumers what they wanted. 

Musk didn’t battle for the market. He invented it. 

And, like Jobs before him, everything he did was high profile. 

The world’s fastest, sexiest electric cars, the world’s biggest, coolest-looking batteries, now turned into home appliances, and the world’s biggest battery company to feed both product lines. 

Who knew what would come next. He already owned his own space-transport company, SpaceX, so Musk’s future plans appeared to be without limit. 

When the New Boss Becomes the Same as the Old Boss

But then, suddenly, just as it usually does for champions in all arenas, reality came fast and hard one day in the summer of 2016. 

Tesla, which was already the most successful electric car company in the world, and the biggest and most powerful large lithium-ion battery producer, found itself in the ring with an opponent no Goliath ever wants to face. 

Few people know of this company yet, but the important thing is that the industry does. 

It’s already caused Tesla to lose one major business partner — one of the biggest automakers in the world. 

And yet it’s still basically just a startup… just like Apple was in the early 1980s. 

I’ve been following the progress this company has been making for months, and I really think we could have a future global brand on our hands here. 

Some basic stats on this company:

It employs just a few-dozen highly skilled engineers and technicians.

Its market capitalization is less than $75 million — making it a true early-stage tech firm. 

Its products are already disrupting the industry.

Right there, those three factors already set the company up for a very bright future. 

I saw this coming and decided to go in for a deeper look. What I learned shocked me even more. 

For an exclusive look at my full report, just click here and see for yourself. 

Everything you’ll learn (and there will be at least a few major surprises), you’ll be able to confirm on your own. 

Fortune favors the bold,

Alex Koyfman

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