Tesla is a Software Company, Jeep Isn't


The recent hacks of Jeep and Tesla provide a shining example what it means for every company to be a software company.

Tesla Sightings

Marc Andreessen has famously said that "software is eating the world." Venkatesh Rao calls software, "only the third major soft technology to appear in human civilization."

"So what?" you say. "I'm not in software, what do I care?"

You care, or should, because the corollary to this is that your company is a software company, whether you like it or not. Software is so pervasive, so important that is has or will impact every human activity.

The recent hacks of a Jeep Cherokee and Tesla Model S provide an important example of what it means to be a software company—even if you sell cars. Compare these headlines:

After Jeep Hack, Chrysler Recalls 1.4M Vehicles for Bug Fix

Researchers Hacked a Model S, But Tesla’s Already Released a Patch

If you were CEO of a car manufacturer, which of these headlines would you rather were written about you? The first speaks of a tired, old manufacturing model where fixes take months and involve expense and inconvenience. The second speaks of a nimble model more reminiscent of a smart phone than a car.

You might be thinking you'd rather not have either and, of course, that's true. But failure is inevitable, you can't avoid it. So mean-time-to-recovery (MTTR) is more important than mean-time-between-failures (MTBF) in the modern world. Tesla demonstrated that by not just having a fix, but by being able to deliver it over the air without inconvenience to their owners. If you're a Tesla owner, you might have been concerned for a few hours, but right now you're feeling like the company was there for you. Meanwhile Jeep owners are still wondering how this will all roll out.

The difference? Tesla is a software company. Jeep isn't.

Tesla can do over-the-air updates because the ideas of continuous delivery and after-sale updates are part of their DNA.

No matter what business you're in, there's someone, somewhere figuring out how to use software to beat or disrupt you. We've seen this over and over again with things like Uber, Fedex, Walmart, and other companies that have used IT expertise to gain an advantage their competitors didn't take.

Being a software company requires a shift in your mindset. You have to stop seeing IT as the people who run the payroll system and make the PCs work. IT has to be part of the way you compete. In other words, software isn't just something you use to run your company. Software becomes something you use to beat the competition.