$13 Billion Wasted Because They Didn’t Know Their Customer.
That’s not a typo.
A few weeks ago, Ford effectively admitted it burned roughly $13 billion trying to force electric vehicles into a market that did not want them. On top of that, they announced another $19.5 billion in write downs tied to their EV strategy.
The poster child of the whole effort was the electric F-150 Lightning. The most popular truck in America… electrified… and quietly pulled back after years of losses.
Social media immediately did what social media does best. Hot takes. Politics. Culture wars. EV evangelists yelling. Anti-EV folks cheering.
But if you are trying to start a business, all of that noise misses the point.
Here is the real lesson. And it has nothing to do with electric vehicles.
You can’t build a business if you don’t know who you’re building it for.
Let’s strip this down to the business fundamentals.
Ford saw Tesla’s success and tried to compete head-on. Same market. Same customer. Same narrative. The future is electric, so let’s electrify everything, including the best-selling vehicle in America.
Here’s the problem.
The person who buys a Tesla is not the same person who buys an F-150.
I know this because I live in the South. I drive trucks. My family drives trucks. My friends drive trucks. Many of them drive Ford trucks.
And I can tell you this with confidence. Plenty of those people paid extra to make sure their truck had a full combustion engine. Not electric. Not hybrid. Gas.
That is not ignorance. That is preference.
Ford’s core customer buys an F-150 because it works. It hauls. It tows. It fills up in five minutes. It does not care what the battery percentage says. That customer never asked Ford to become Tesla.
In fact, many people buy a car because of what it says about them to the world. “Ford truck guy” is a very different message than “Tesla EV person.”
Ford didn’t lose money because they innovated. They lost money because they speculated.
They followed trends. Political pressure. Headlines. Fear of being the next Blockbuster.
But they misunderstood the Blockbuster lesson.
Blockbuster did not fail because Netflix was digital. Blockbuster failed because it ignored customer pain. Late fees. Inconvenience. Hassle. Netflix solved those problems first. The technology came second.
Ford skipped that step.
They didn’t start with a clear pain point their customer was desperate to solve. They started with an assumption about the future and hoped the customer would come along for the ride.
Hope is not a business strategy.
I see this exact error constantly with new businesses.
It doesn’t matter how big you are. How long you’ve been around. Or how much money you can burn before the fire hits your bottom line.
You must know and listen to your customer. Then never forget it.
People often come to me excited about an idea for a variety of reasons.
Whether it is a service business, restaurant, or new tech, when I ask the most basic question, everything falls apart.
- Who is the customer?
- What problem are they actually trying to solve?
- What are they already paying to fix that problem today?
Silence.
The founder usually is doing 1 of 2 things.
- Designing/building something for themselves instead of a customer.
- Speculating based on a lot of assumptions instead of validating and testing.
I have done both and it didn’t work. I have seen hundreds of clients try both and it didn’t work.
Ford will survive this mistake. They have cash. You won’t.
If you “just start” without understanding who you are serving and why, you will be back at a 9-to-5 faster than the F-150 Lightning disappeared from Ford’s roadmap.
Weekend Exercise
Before you spend another dollar or another weekend building something, do this one thing.
Write this sentence on paper and finish it honestly:
“My customer buys this because __________.”
Not because it is innovative. Not because it is the future. Not because you think it’s a no-brainer.
Because it solves a real, specific problem they already feel.
If you cannot finish that sentence clearly, you are not ready to start yet. That is not discouraging. That is protective.
Starting smart beats starting fast. Every time.
And Ford just paid $13 billion to remind us why.