According to Forbes magazine, Elon Musk became the second richest man in the world last month. Experts now predict he could jump Jeff Bezos to take the top spot this year. What is the secret of his success? A few years back, I talked for almost an hour about discussing exactly that with him. To mark his new milestone, we decided to dust off the interview and share with you. So here’s the guide to Elon Musk’s success in business.
1. It’s not about the money
This is absolutely important for Musk’s attitude towards matters.
When I interviewed him in 2014, he said he did not know how rich he was.
“It’s not like there’s a heap of cash somewhere,” he said. “It’s really just that I have a certain number of votes in Tesla and SpaceX and SolarCity, and the market has value for the votes.”
He has nothing against the pursuit of wealth ‘if it is done in an ethical and good way’, but said that it is just not what drives him.
The approach certainly seems to work.
The true inspiration for Tony Stark’s portrayal of Robert Downey Jr. was perhaps worth $ 10 billion ($ 7.3 billion) when we spoke in 2014. That’s now more than $ 150 billion.
Its electric car business, Tesla, has performed exceptionally well. Shares rose 700% in 2020 to increase their value to more than $ 600 billion. For that, you can buy Ford, General Motors, BMW, Volkswagen and Fiat Chrysler, and still have enough left over to buy Ferrari.
But Musk, who turns 50 this year, does not expect to die rich. He said he thinks most of his money will be spent on building a base on Mars, and he will not be surprised if the project consumes its entire fortune.
In fact, like Bill Gates, he would probably view his life with billions in the bank as a sign of failure because he did not use the money well.
2. Do your passions
The base of Mars is a clue to what Musk believes is the key to success.
“You want things to be better in the future,” he told me. “You want these exciting new things that make life better.”
Take SpaceX. He told me he had set up the company because he was frustrated that the US space program was no longer ambitious.
“I was constantly expecting us to progress beyond Earth, and to place a person on Mars and have a base on the moon, and, you know, fly to orbit very often,” he said. said.
When that did not happen, he came up with the idea for the “Mars Oasis Mission”, which aims to send a small greenhouse to the red planet. The idea was to get people excited about space again, and persuade the US government to increase NASA’s budget.
As he tries to get off the ground, he realizes that the problem is not “a lack of will, but a lack of way” – space technology was much more expensive than it should have been.
And voila! The world’s cheapest rocket launcher industry was born.
And here’s the important thing: its origin was not to make money, but to land someone on Mars.
Musk told me he considers himself an engineer rather than an investor, and says what gets him up in the morning is the desire to solve technical problems.
It is that, rather than dollars in the bank, it is his measure of progress. He knows that every obstacle that his businesses overcome helps everyone who tries to solve the same problem – and it does so forever.
Therefore, the entrepreneur announced shortly before our meeting that he was going to open all the Tesla patents to speed up the development of electric vehicles worldwide.
3. Do not be afraid to think big
One of the most striking things about Musk’s businesses is how daring they are.
He wants to revolutionize the automotive industry, colonize Mars, build super-fast trains in vacuum tunnels, integrate AI into human brains, and improve the solar and battery industries.
Here is a general thread. All of his projects are the kind of futuristic fantasies you would find in a children’s magazine in the early 1980s.
Put it this way, his tunnel industry is called The Boring Company.
Musk makes no secret of the fact that he was inspired by the books and films he consumed as a child in South Africa.
That brings us to Musk’s third business tip – do not hold back.
He believes low ambition is built into most companies’ incentive structures.
Too many companies are ‘incremental’, he said. “If you’re the CEO of a big company and you’re aiming for something that’s a modest improvement, and it’s taking longer than expected, and it’s not working so well, no one will blame you,” he said. he told me. You could say it was not my fault but the suppliers.
If you are bold and work for a real breakthrough, and it does not work, you will definitely be fired, says Mr. Musk on. He says this is why most companies focus on making small improvements to their existing products, rather than risking them completely new.
So, his advice is to make sure you are working on what he calls ‘things that are going to matter’.
Two things stand out in Musk’s personal hierarchy that matters.
First, he wants to speed up the transition from fossil fuels.
Here’s what the entrepreneur had to say about it: “We draw from deep gas fields and deep oil fields that have not seen the light of day since the Cambrian era. When the last time we saw something, the most complex organism was a sponge, you really have to ask if this is a wise move. ‘
Second, he wants to ensure the long-term survival of mankind by colonizing Mars and ‘making life multiplanetary’.
Like I say, think big.
4. Be ready to take risks
This one is obvious.
You have to have skin in the game to do well, but Musk took more risks than most.
In 2002, he sold his stake in his first two businesses, an Internet directory called Zip2, and the online payment company PayPal. He had just entered his thirties and had nearly $ 200 million in the bank.
He says his plan was to put half of his fortune in the businesses and keep the other half.
Things did not work out that way. When I met him, he had just come out of the darkest period of his business life.
His new companies faced all sorts of problems with teeth. The first three launches of Space X failed, and Tesla had all sorts of production issues, supply chain issues and design issues.
Then the financial crisis hit.
Mr Musk said he was faced with a stark choice. “I can keep the money, then the companies are definitely going to die, or invest what I have left, and maybe there’s a chance.”
He kept pouring in money.
At one point he was so guilty that he had to borrow money from friends just to pay his living expenses, he told me.
So did the prospect of bankruptcy scare him?
He says that was not the case: “My children may have to go to some kind of government school, I mean a big thing. I went to a public school.”
5. Ignore the critics
What really shocked him – and it was clear in 2014 that he was still very upset about it – was the joy that many experts and commentators had in his work.
“The liberal shadow joy was really surprising,” Musk said. “There have been several blog sites that maintain a Tesla death watch.”
I suggest people wanted him to fail because there is a kind of arrogance about his ambition.
He rejects it. “I think it would be arrogant if we said we were definitely going to do it, as opposed to our striving to do it, and we would give it the best chance.”
This brings us to Musk’s next lesson in business success – do not listen to the critics.
He told me that he did not believe that SpaceX or Tesla would ever make money if he set it up – and the truth is no one else.
But he ignores the speakers and continues anyway.
Why? Remember, this is a man who judges success based on the important problems he has solved, not how much money he has earned.
Think of how liberating it is. He’s not worried about looking stupid, because his big financial bet has not paid off, and he likes important ideas.
It makes decision making much simpler because he can stay focused on what he says really matters.
And the market seems to like what it does.
In October, US investment bank Morgan Stanley valued SpaceX at $ 100 billion.
The company has transformed the spaceflight economy, but what will make Musk most proud is how his company revived the US space program.
This summer, one of his Crew Dragon rockets launched six astronauts to the International Space Station, the first such mission from U.S. soil since the spacecraft retired in 2011.
6. Enjoy yourself
Follow this guide and with a little luck you will also become impossibly rich and famous. Then you can start getting out of your shell.
Mr. Musk is known as a workaholic – he boasts of working 120 hours to keep the production of the Tesla Model 3 on track – but since we met, he seems to have enjoyed it a lot.
He sparked controversy with libel drugs, smoke in the air and wild outbursts on social media.
In 2018, he got into trouble with the U.S. financial regulator when he tweeted that he intended to take Tesla private, and when the Covid-19 pandemic forced Tesla to stop production at the San Francisco Bay Area factory to strike, he became a staunch opponent of restrictions on the closure of coronavirus.
He calls panic over the virus ‘dumb’ on Twitter and describes stay-at-home orders as a prison sentence, saying it is ‘fascist’ and a violation of constitutional rights.
In the summer, he announced plans to sell off his physical possessions by saying it ‘weighs you’.
Days later, he took to Twitter to tell the world that his newborn son was named X Æ A-12 Musk.
Yet his unpredictable behavior does not seem to have affected his businesses, and the entrepreneur remains as ambitious as ever.
In September, Musk claimed that Tesla would have a “compelling” $ 25,000 car within three years, and said all of the company’s new cars would be completely self-driving.
And his year ends with a real bang in December, when SpaceX tested its Starship launch vehicle, which he hopes will take the first humans to Mars.
The giant rocket exploded when it crashed six minutes after takeoff.
Mr. Musk saw the test as a “tremendous” success.
You can follow Justin on Twitter: @BBCJustinR