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What’s the purpose of a company? According to Elon Musk, the visionary entrepreneur behind Tesla, SpaceX, and more, it’s simple: to create great products and services. Yet, Musk believes many companies lose sight of this core mission, getting bogged down in meetings, spreadsheets, and bureaucracy.
Photo: Al Drago/Bloomberg via Getty
In this article, we’ll explore Musk’s philosophy on why products should come first, uncover the dangers of losing focus, and share inspiring examples of companies that prioritize creating value over corporate fluff.
The Problem with Too Many MBAs
Musk has a bold take on corporate leadership:
“I think there might be too many MBAs running companies.”
He argues that many leaders focus too much on financial engineering, meetings, and presentations—and not enough on the product itself.
“Sometimes people lose sight of [the fact] that a company has no value in and of itself. It only has value to the degree that it is an effective allocator of resources to create goods and services that are of greater value than the cost of the inputs.”
In other words, a company’s worth is tied to the value it creates for its customers.
What’s the Point of a Company?
Musk’s perspective on the purpose of a company is refreshingly simple:
“A company is an assembly of people gathered together to create a product or service and deliver that product or service.”
He emphasizes that profit should reflect the value a company creates:
“This thing we call profit should just mean over time that the value of the output is worth more than the inputs.”
But too often, companies get distracted by internal processes and lose sight of their core mission.
The Danger of Losing Focus
Musk warns against the pitfalls of corporate bureaucracy:
“Spend less time in meeting rooms, less time on PowerPoint presentations, less time on a spreadsheet, and more time on the factory floor, more time with customers.”
When companies prioritize processes over products, they risk becoming irrelevant.
Example: Kodak, once a leader in photography, failed to adapt to the digital revolution. Despite inventing the first digital camera, the company was too focused on protecting its film business to capitalize on the new technology.
How to Prioritize Product Excellence
Musk’s advice for companies is straightforward:
“Step back a second and say, is your product as awesome as it could be? Probably not. What could you do to make it great?”
Here’s how you can apply this mindset to your own organization:
1. Focus on the Customer
Understand your customers’ needs and prioritize creating products or services that solve real problems.
2. Simplify Processes
Cut unnecessary meetings, presentations, and bureaucracy. Streamline decision-making to move faster.
3. Get Hands-On
Spend time on the factory floor, in the lab, or with your customers. Stay connected to the real work.
4. Iterate and Improve
Continuously refine your product based on feedback and changing market needs.
Real-World Examples of Product-First Companies
Let’s look at a few examples of companies that prioritize product excellence:
Example 1: Patagonia (Outdoor Gear)
Yvon Chouinard, the founder of Patagonia, is a great counter-example to MBA-driven business culture. A rock climber by passion, he started Patagonia not with a business plan, but with a love for making better climbing gear. His focus was always on the product first—not profits, spreadsheets, or shareholder value.
Patagonia’s commitment to high-quality, sustainable products made it one of the world’s most respected brands. Chouinard’s approach? He spent zero time on typical corporate rituals and instead prioritized customer needs, material innovation, and environmental impact. And the result? A thriving company that redefined the outdoor industry.
Example 2: Oatly (Plant-Based Foods)
Oatly revolutionized the plant-based food industry by creating a delicious, sustainable alternative to dairy milk. The company’s relentless focus on product quality and innovation has made it a favorite among consumers and a leader in its category.
Example 3: Duolingo (Language Learning)
Duolingo has transformed language learning by creating a fun, accessible, and effective app. Its focus on user experience and continuous improvement has helped it grow into one of the most popular language-learning platforms in the world.
Lessons from Musk’s Product-First Philosophy
Musk’s approach offers valuable lessons for leaders and entrepreneurs:
1. Value Creation is Key
A company’s success depends on its ability to create products or services that deliver real value to customers.
2. Avoid Bureaucracy
Don’t let meetings, presentations, and spreadsheets distract you from the real work.
3. Stay Connected to the Ground
Spend time where the action is—whether it’s the factory floor, the lab, or the customer’s world.
4. Never Stop Improving
Great products are the result of continuous iteration and refinement.
The Bigger Picture: Companies Exist to Create Value
Elon Musk’s philosophy reminds us that companies exist for one reason: to create products and services that improve people’s lives. When leaders lose sight of this mission, they risk becoming irrelevant.
As Musk puts it, “A company has no value in and of itself. It only has value to the degree that it is an effective allocator of resources to create goods and services that are of greater value than the cost of the inputs.”
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