Elon Musk

CEO of Tesla (TSLA) and SpaceX

‘Iron Man’ IRL: Elon Musk

Forbes hails Elon Musk as the ‘Greatest Leader on Earth.’

As the second wealthiest person in the world, Musk’s $210 billion empire spans Tesla, SpaceX, X (formerly Twitter), OpenAI, and many others.

Musk intensely seeks knowledge, one of the key factors behind his success. At a young age, he read Benjamin Franklin: An American Life, The Lord of the Rings, and The Hitchhiker's Guide to the Galaxy. Musk was quickly interested in computers—by age 11, he could already program.

Books and knowledge were Musk’s refuge from reality. His father was his harshest critic, often calling him an “idiot.” Musk says that living with his father was “mental torture. He knew how to make anything terrible.”

Today, Musk is often the subject of harsh criticism, but critics are nothing new to him. Besides his father, bullies singled out Musk for his small size and sharp intelligence. Once, they even followed him home, throwing cans at his head.

Musk learned to dust off criticism early on—he was destined for brighter things.

He was admitted to the University of Pennsylvania in 1992. There, Musk developed his entrepreneurial skills, hosting large house parties and selling tickets to help him pay his tuition.

Musk attributes some of his success to internships with Rocket Science Games and Pinnacle Research Institute. These instilled in him his core philosophy: “Working hard to make useful products & services for your fellow humans is deeply morally good.”

This philosophy painted Musk’s career bright green. Musk helped found Zip2 in 1996. Funded by investors and family, the B2B firm created online city guides and obtained contracts with the NYT and Chicago Tribune.

Ever-frugal Musk “rented a small office and slept on the couch” during this time. When they sold the firm in 1999, Musk received $22 million for his small share.

In 1999, he quickly reinvested his earnings in X.com, an online bank. Later, PayPal, X.com was among the first federally insured online banks, boasting over 200,000 members within its first few months.

After about six months, Musk was replaced by Intuit CEO Bill Harris. He wasn’t too shaken by the loss, saying, “Nobody's going to try anything bold for fear of getting fired or punished in some way. The risk/reward must be balanced in favor of making bold moves.”

In 2002, eBay purchased PayPal for $1.5 billion in stock. Musk’s 11.72% of shares made him $175.8 million from the deal.

Following the deal, Musk literally and figuratively set his sights on the cosmos. He wanted to build affordable rockets to outer space, saying, “When something is important enough, you do it even if the odds are not in your favor.” Using $100 million from his PayPal venture, he founded SpaceX in 2002, serving as CEO and Chief Engineer.

Over the coming years, SpaceX successfully launched its Falcon 1 rocket into orbit, secured contracts with NASA, and created the Dragon, the first vehicle to dock with the ISS.

In 2004, Musk led the Series A investment round for Tesla, investing $6.5 million. As the majority shareholder, he became the chairman of Tesla’s board of directors.

Musk wasn’t involved in the company’s day-to-day until 2007, when economic turmoil left founders ousted. Musk became the CEO in 2008 and began delivery of the Roadster, an all-electric sports car.

Musk saw an opportunity for consumers to buy all-electric cars and seized it. Tesla launched its four-door Model S sedan in 2012 and a cross-over model in 2015. In 2017, Musk launched Model 3, Tesla’s mass-market sedan. Today, it’s the bestselling plug-in electric car of all time.

In 2021, Tesla was the sixth company in U.S. history to reach a market capitalization of $1 trillion.

Musk went on to fund and found other companies, including SolarCity (2006), which later became Tesla Energy, Neuralink (2016), Open AI (2015), and The Boring Company (2017).

Musk’s genius lies in his desire to solve tough problems. He says, “You get paid in direct proportion to the difficulty of problems you solve.”

His strong foresight and focus allow him to do so. His former roommate and close friend said, “When Elon gets into something, he develops just this different level of interest in it than other people…This is what differentiates Elon from the rest of humanity.”

In 2022, Musk began rapidly purchasing Twitter shares, reaching a 9.2% stake in only four months. In April of that year, after much debate, Musk bought Twitter for $44 billion and quickly became its CEO.

Musk’s top five companies, Tesla, SpaceX, The Boring Company, Neuralink, and PayPal, are worth over $845 billion combined. He’s widely considered a genius and savant in the tech industry.

Here’s what we can learn from Musk about fundamentalism, user-experience, and reinvestment.

Lessons

Use a fundamentalist approach to conception and design. “When something is important enough, you do it even if the odds are not in your favour.” Musk’s goal was never to change the world. Instead, he visualized a world where fundamental things—driving, buying things online, and space travel—operate more accessibly. Musk’s genius lies in his fundamentalism. His college friend Navaid Farooq told Musk’s biographer, “When Elon gets into something, he develops just this different level of interest in it than other people. This is what differentiates Elon from the rest of humanity.” Musk believes in “from the first principles.” He says, “You have to build up the reasoning from the ground up... You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn't work, and it may or may not be different from what people have done in the past.” This is one of the keys to Musk’s success. He identifies core principles, boils them down to their barest components, and identifies changes he can make per the current landscape. This is his core product design process. And, as a rule, “Great companies are built on great products.”

Ask for feedback constantly. “I think it's very important to have a feedback loop, where you're constantly thinking about what you've done and how you could be doing it better. I think that's the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.” Feedback is critical to an organization’s success. It drives meaningful change and creates a culture of understanding and growth. Executive coach Robin Pou said, “Sadly, most leaders won't ask these types of questions either because they don't think to do it or because they are fearful of what the answer might be.” Musk isn’t like most leaders. He takes feedback seriously and asks for it constantly. Musk urges other startup founders to probe for negative feedback—that’s where real insights lie. He says, “You should take the approach that you’re wrong. Your goal is to be less wrong.”

Strive for accessibility and usability. Musk says, “Possibly the most common error of a smart engineer is to optimize a thing that should not exist.” Other CEOs spend much of their time focusing on financials and marketing. Musk dives right into product development and testing, spending little, if any, time on financials. At both SpaceX and Tesla, Musk put engineers in charge of production. He told both, “You are responsible for the production process. You can’t hand it off to someone else.” Musk uses an ‘idiot index’ for usability and accessibility. To that end, he employs a 5-step design process to ensure positive UX. The first step? “Make the requirements less dumb,” he says. This is one of the keys to his success: Musk understands the value of decomplication, a key focus in his B2C businesses. One of Musk’s most famous quotes is, “Any product that needs a manual to work is broken.” He applies that logic constantly despite the complicated nature of many of his products. Musk knows that there’s no value in complication. Value comes from usability and accessibility. He says, “You get paid in direct proportion to the difficulty of problems you solve.”

Find a mentor, dead or alive. Musk says, “I don't have a mentor, though I do try to get feedback from as many people as possible.” Though Musk doesn’t have a living mentor, there are many he looks up to. Without a mentor, Musk began reading at a young age, finding mentorship in authors and book characters. He looked to history and found inspiration in Benjamin Franklin, Albert Einstein, Isaac Newton, and, most obviously, Nikolas Tesla. Similar to these men, Musk believes in engineering, not business. He focuses on product design with a “tolerance for failures.” His leadership style is both praised and criticized. Like his mentors, when he’s in a groove, Musk works “Seven days a week, sleeping at the factory.” He says his hardworking ethos “hurts my brain and my heart,” yet it’s crucial to his success.  

Leverage profits and reinvest in new opportunities. “I always invest my own money in the companies that I create. I don't believe in the whole thing of just using other people's money. I don't think that's right. I'm not going to ask other people to invest in something if I'm not prepared to do so myself.” Following PayPal’s acquisition, Musk put “$100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.” This strategy has made Musk the primary owner of each of his firms, all of which yield him vast profits. Musk doesn’t “create companies for the sake of creating companies, but to get things done.” Reinvestment allows him to continue doing what he does best: Engineer, and optimize. Musk doesn’t waste time on business decisions or “pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.

Elon Musk Quotes

On fundamentalism: “It is important to view knowledge as sort of a semantic tree -- make sure you understand the fundamental principles, ie the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.”

On feedback: “Constantly seek criticism. A well thought out critique of whatever you’re doing is as valuable as gold.”

On perseverance: “No, I don't ever give up. I'd have to be dead or completely incapacitated.”

On inspiration: “I'm not trying to be anyone's savior. I'm just trying to think about the future and not be sad.”

On questions: “One of the really tough things is figuring out what questions to ask. Once you figure out the question, then the answer is relatively easy.”

On employees: “Every person in your company is a vector. Your progress is determined by the sum of all vectors.  ”

On passion: “Never chase the next hot thing. Stop trying to chase the wave. You will never catch it. You always for the most part find out about that stuff too late. Instead, do what you are really passionate about, what you really love. That will position you before the wave even hits, and you will find out about whatever it is before the wave starts, before it gets hot, and that is how you take advantage.”

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