Elon Reeve Musk an Ordinary Extraordinary Entrepreneur

It’s a story about Elon Reeve Musk most of you  might not have heard about him.  Just to give you some idea about who he was and what he has done, let me share what maverick businessman entrepreneur adventurer Richard Branson has to say about him – “Whatever skeptics have said can’t be done, Elon has gone out and made real. Remember in the 1990s when we’d call strangers, and give them our credit card numbers? Elon dreamed of little things like PayPal. His Tesla motors and SolarCity companies are making a clean renewable energy future a reality… His SpaceX (is) reopening space for exploration… it’s a paradox that Elon is working to improve our planet at the same time he is building a spacecraft to help us leave it.”

Elon is one of the most imaginative entrepreneurs of the 21^st Century – as living legend Richard Branson has mentioned his virtues, he has been compared to visionary American industrialists like Henry Ford and John. D. Rockefeller.  He is considered most dynamic of world’s self-made billionaires. This extraordinary person had an ordinary childhood. Born on June 28, 1971 in South Africa from a father of British Pennsylvania Dutch origin and Canadian mother, he is eldest of 3 siblings. He received private education and in school was bullied most of time, once he was even thrown down a flight of stairs, and beaten unconscious.

He was an academic child; he was not very fascinated with conventional system of school education which he considered simply “downloading data and algorithms into your brain” he found it exceptionally slow and frustrating. Almost everything he did learn was from his own reading, not from classroom.  He taught himself computer programming when he got his first computer at the age of nine. The book “How to Program Guide” generally takes six months to complete for any regular user, Musk mastered it in three days, it’s no fairy tale no film story, it happened for real.  He even developed a video game “Blaster” using BASIC.   He sold his game to PC and Office Technology magazine for $500 (INR 34,000) equivalent to around $1200 (INR 82000) today.  The lesson we can derive from this story that “You are never too young to start being an entrepreneur. Have faith in your ideas, and encourage others.”  Also conventional education is not the only way to give us knowledge sometimes most important lessons are those we can teach ourselves.

Musk moved to Canada when he was 17, his mom’s Canadian roots helped him get the citizenship rights there. In Canada he enrolled in Queen’s university and graduated with a B.Sc. in Physics and a B.A.  in Economics. From here he moved across to the US to take up Ph.D. course from Stanford University but he did not last long there, in fact he lasted there just for 3 days.  Even as a student, there was a pressing question on his mind: What will most affect the future of humanity? Five answers that he came up with, the internet, sustainable energy, space exploration, in particular the permanent extension of life beyond earth, artificial intelligence and reprogramming human genetic code, would determine his future direction as an entrepreneur. He was so right and clear in his mind that the later successful ventures of his life are from these domains only.  So, as an entrepreneur, you have to know what is important to you, once you have established this, it will dictate the direction you and your business would follow.

Fresh out of college, Musk knew he had to get on to the Internet bandwagon, to try his luck he went into the office of Netscape (one of the prime movers in internet business in the initial years of internet and desktop computing, died a quiet death on February 1, 2008) But Musk was too nervous to speak to any one or ask for a job, and quietly walked out of the office.  He started his first venture with his brother Kimbal, with a capital of $28,000 borrowed from his father. This venture was a software company called Zip2. Zip2 has been described as a primitive combination of Google Map and Yelp (A local city guide software), far before anything like either of those existed. Musk worked round the clock, sleeping in the office and showering at the local YMCA. He narrates his philosophy – “Work like hell. I mean you just have to put in 80 to 100 hours week every week. This improves odds of success, If other people are putting in 40 hours workweek and you are putting in 100 hour workweeks, then even if you are doing the same thing, you know that you will achieve in four months, what it takes them a year to achieve.”

Zip2 developed, hosted and maintained consumer websites for media companies, and enabled those companies to target their services at specific groups of online customers. Gradually, as recognition of the potential of internet increased, so too did the appeal of Zip2’s offerings. His software become popular and bought by over 200 media clients, including New York Times, and Chicago Tribune. Later Compaq (now a division of HP) acquired Zip2 from Musk brothers for a cash payment of   $307 million and another $34 million in stock options. Musk took $10 million of his earnings from this sell out and invested in a venture called x.com, an online banking and email payment company. Musk anticipated that online banking business and money transfer is there to stay and explode to maddening proportions. He was so right in his prophecy.   

His actions prove that if you have a gut hunch about the potential of an emerging market, be prepared, to put your money where your mouth is. Only then you can test the waters and benefit from the upswing. X.com was not the only company operating in the field at that time, there was another company Confinity trading as PayPal had been launched as payment platform for handheld device, The two companies were operating from the same building and synergize the efforts, they merged in 2000. Though Musk wanted to keep the name as x.com, but his associates wanted PayPal to be made the brand, Musk had to agree to the ideas of his associates. The company went public in 2002, and Musk the largest shareholder netted $165 million in eBay stock. The total value of PayPal at the time of acquisition was $1.2 billion.  

PayPal is just one venture, of Musk. His activities in other areas like renewable energy as Tesla Motors, and in Rocket technology are equally interesting and inspiring. His net worth is now $ 18.9 Billion, Forbes magazine profiles him as  -

·   Elon Musk is revolutionizing transportation both on earth and in space.

·   Tesla Motors, his auto manufacturer, is bringing fully-electric vehicles to the mass market. Its Model 3 car retails for a starting price of $35,000.

·   SpaceX, Musk's rocket company, is now valued at more than $20 billion.

·   Musk was a cofounder of Paypal; he scored a huge payday when the business was acquired by eBay for $1.4 billion in 2002.

I shall share some more stories in my future post about him. Keep getting inspired and acquiring knowledge and work.