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Counter-positioning: why incumbents let Tesla and SpaceX run for years

The third of Hamilton Helmer's 7 Powers: a business model the incumbent can see working and still won't copy, and why the advantage wears off.

By Dan Lee · November 2026

Tesla delivered its first Roadster in 2008. General Motors didn't commit to an all-electric future until 2021, and Ford didn't set up a separate electric vehicle unit until 2022. They weren't asleep. Going all-in on electric meant undercutting the trucks and SUVs that paid for everything else. And selling direct, the way Tesla does, meant fighting their own dealers.

The same thing happened in rockets. SpaceX sold launches at fixed prices and landed its boosters to fly them again. Its main U.S. rival, paid largely on cost-plus government contracts, kept throwing its rockets away for years.

That is the third of Hamilton Helmer's 7 Powers: a newcomer adopts a better business model, and the incumbent doesn't copy it because copying would hurt its existing business more than it would help.

What the Power is

Helmer calls the incumbent's reason "collateral damage." Copying the challenger would cannibalize profits, upset the channel or threaten the people making the decision. So the incumbent waits, and to an outsider it looks like incompetence. Helmer's point is that it is usually a rational choice, which is what makes the barrier hold. The more profitable the old business, the longer the incumbent waits.

It is a partial Power. It protects the challenger from the incumbent, not from other challengers with the same model. And it wears off: as the old business shrinks and the new model proves itself, the incumbent's collateral damage falls and it finally moves.

The consumer case: Tesla

Tesla's counter-position had two parts.

Battery-electric only. Tesla bet everything on electric vehicles, from the Roadster through the Model S in 2012 and the Model 3 in 2017. For an incumbent, the same bet meant losing money on electric vehicles while its profitable combustion lineup paid the bills. Ford's numbers show the cost. Its electric unit, Model e, lost $4.8 billion in 2023, $5.1 billion in 2024 and $4.8 billion in 2025, while its combustion business earned $7.5 billion, $5.3 billion and $3.0 billion (Ford 10-K). The incumbents also paid Tesla directly: about $11.4 billion of regulatory credits from 2020 to 2025, bought by automakers that hadn't sold enough electric vehicles to meet emissions rules (Tesla 10-K).

Direct sales, no dealers. Tesla sells through its own stores. An incumbent with thousands of franchised dealers can't easily follow: state franchise laws protect those dealers, and they sue. Tesla argues in its 10-K that those laws weren't meant for a maker with no franchise dealers anywhere, an argument Ford or GM can't make. When Ford asked its dealers to invest in a Tesla-like electric vehicle program with fixed pricing, dealers sued, and Ford ended the program in 2024 (NBC News). When Volkswagen's new Scout brand planned to sell direct, California dealers sued it too (Insurance Journal).

The benefit showed up in Tesla's margins. Its automotive gross margin peaked at 29.3% in 2021 and 28.5% in 2022, according to its 10-Ks.

The B2B case: SpaceX

SpaceX's customers are NASA, the military and satellite operators. Its counter-position was to sell launches at fixed prices and drive cost down through reuse, against incumbents whose business was built on cost-plus contracts. NASA's own 2011 cost model estimated that developing Falcon 9 the way SpaceX did, under a firm fixed price, cost about $443 million. The same model put the traditional NASA approach at about $4 billion (NASA). A 2018 NASA inspector general audit found NASA paid about $95 million per cargo launch on Falcon 9 versus about $160 million on the incumbent's Atlas V, and that Atlas V's price fell about $20 million once SpaceX could compete (NASA OIG).

The incumbent, United Launch Alliance, owned by Boeing and Lockheed Martin, was paid partly for keeping launch capability ready, under a cost-plus contract (GAO). Under that model, a cheaper rocket that flies again means less revenue. ULA didn't bid on a 2016 GPS satellite launch, which SpaceX won for $82.7 million (Spaceflight Now). Its next rocket, Vulcan, targeted for 2019, first flew in January 2024.

By 2025, SpaceX says in its IPO prospectus, it flew 165 Falcon launches, more than half of all orbital launches worldwide, and 122 of them carried its own Starlink satellites (prospectus). Its own demand now fills the rockets that won the market.

Where it wears off

By 2025 Tesla's automotive gross margin was 17.8%, and its operating margin had fallen from 16.8% in 2022 to 4.6%. BYD outsold Tesla in battery-electric vehicles in 2025, about 2.26 million to 1.64 million (Reuters via USA Today). That is exactly Helmer's limit: counter-positioning protects you from incumbents, and BYD isn't one. It had no combustion business to protect.

SpaceX shows the same decay from the other side. In 2025 the Space Force awarded its next national-security launches on firm fixed prices to all three providers, with ULA still winning 19 of about 54 missions (Spaceflight Now). Blue Origin landed its own reusable booster in November 2025. Once the incumbents' model changes, the counter-position is gone, and SpaceX has been raising its list price, from $67 million to $74 million per Falcon 9 launch (Spaceflight Now). It is now competing on scale and process, not on a model the incumbent won't copy.

Two more cautions for Tesla. Part of the margin came from policy, not the model: regulatory credits exceeded Tesla's entire 2020 profit, and a 2025 federal law cut them back. And the durable half, direct sales, is a legal barrier. If state franchise law changes, it opens for everyone.

What it looks like in your business

In a consumer business, counter-positioning is selling direct against retailers, a subscription against one-time sales, or a low-price model against premium incumbents who can't cut price without hurting their existing customers' perception.

In a B2B or industrial business, it is selling direct against a dealer or distributor network, pricing per outcome against competitors who bill per hour or per machine, or a product that would cannibalize a rival's most profitable line. A family-owned company is more often the incumbent here. Helmer's advice applies in reverse: put the collateral-damage calculation on the table and decide. Responding through a separate brand, channel or region, where cannibalization is small, is often the way out.

Questions to ask

• Why hasn't the incumbent copied this? Is the reason economic, contractual or legal? Legal and contractual reasons last longer.
• What would matching it cost the incumbent's existing business in the first year?
• Who else is running the same model, with nothing to protect?
• What second Power are we building while the incumbent waits?

What to do on Monday

If you are the challenger, write down the year you expect the incumbent to respond and what will protect you after that. If you are the incumbent, put a number on what copying the challenger would cost you, and a number on what not copying costs you each year. The second number usually grows. Decide when they cross.

Tesla's and SpaceX's full cases are in our free download, 7 Powers in practice. Previous: network economies. Next: switching costs.

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