- With around 147 million Twitter followers, the face of Twitter, Tesla, SpaceX, and The Boring Company, Elon Musk is anything but boring.
- From controversial business decisions like buying Twitter for $44 billion in 2022 to inspiring leaps in tech like Neuralink and the resilience to push forward despite multiple launch failures with SpaceX, Musk’s business strategies demand closer attention and offer interesting learning points.
Love him, hate him, admire him, or condemn him, Elon Musk initiates some type of response in most people. Public opinion fluctuates along with his oscillating ventures, as many of the same people that praised him for his early commitment to electric vehicles now scorn him for his takeover of Twitter. Musk owns multiple companies, including an enterprise called The Boring Company. However, there isn’t anything boring about him. I would love to see him in a Texas hold ’em poker tournament as I envision him going ‘all in’ at times without even a pair in his hand.
Elon Musk’s Key Business Secrets and What To Learn From Them
Whatever your opinion of him, he probably doesn’t care much. After all, would you care if you were deemed the richest person in the world and had nearly 150 million Twitter followers? I don’t think Musk has business secrets he wants to hide from us, but his secrets to success are unique and may get lost in his mystique.
See more: The Secret Ingredients of Success: What Makes Innovative Companies Tick?
1. Musk has a history of failure
While some might perceive setbacks as disasters, Elon Musk views them as opportunities for learning and growth. His unconventional approach to failure, often seen as something to be avoided, has been tested throughout his career. He is reported to have once said, “If things are not failing, you are not innovating enough.â€
Musk’s ventures have certainly had their share of challenges. Numerous SpaceX rockets have exploded during their launch cycle, a rate of failure exceeding that of the space shuttle program. In 2008, the company was on the brink of collapse and was only saved by a timely contract from NASA. Similarly, Tesla has faced hurdles marred by manufacturing delays and a perpetually precarious financial position early on. At one point in 2013, the company was so strapped for cash that Musk was in talks to sell Tesla to Google for approximately $6 billion.
However, Musk’s story is also one of extraordinary resilience. Despite these obstacles, his ventures have achieved remarkable success as well. SpaceX became the first privately funded entity to launch a liquid-fueled rocket into orbit, and by 2030, the company will be credited for deploying 30,000 of the estimated 75,000 satellites orbiting Earth. Despite its challenges, Tesla has maintained its position as a dominant player in the U.S. electric vehicle market, holding more than a 50% market share and leading the global market for battery electric vehicles.
These triumphs bear testament to Musk’s audacious spirit. His journey underscores the value of confronting failure head-on and using it as a stepping stone to success, that has undeniably paid dividends for him.
2. Musk thinks big, real big
Companies such as Tesla and SpaceX are capital-intensive, and managing them would prove daunting for most. Both are characterized by substantial burn rates and require constant capital to maintain operations. For Musk, however, these two ventures are just part of his portfolio. His entrepreneurial reach also extends to SolarCity, The Boring Company, and Neuralink. While his spontaneous manner of creating startups may seem audacious to some, Musk is inspired by grand visions and a drive to tackle seemingly insurmountable problems.
SpaceX was born from Musk’s dream of colonizing Mars. Tesla is fueled by Musk’s long-standing interest in sustainable energy and his belief that electric vehicles are crucial for combating climate change, which he views as a significant threat to humanity.
Traffic congestion in Los Angeles, a personal frustration for Musk, led to the inception of The Boring Company, through which he wants to construct an intricate network of vacuum tunnels beneath cities to alleviate the problem. Neuralink presents the opportunity to create a symbiosis between artificial intelligence and the human brain and push the boundaries of human development to unprecedented levels. Each venture represents a piece of Musk’s bold puzzle: solving significant global challenges through innovation and audacious problem-solving.
3. Musk does not rely on marketing
Consider how many TV commercials you’ve seen recently for traditional car manufacturers such as Ford, Nissan, and Mercedes. Now think about how many Tesla ads you’ve seen on broadcast media. Can you think of even one? Probably not. Musk has not allocated any real advertising dollars to his EV products outside of social media advertising. Instead, he relies on word of mouth.
While some traditional car manufacturers spend thousands of advertising dollars per vehicle, Musk has mostly viewed advertising as a waste. He believes that a superior product that fills the need of a customer base will prevail over lesser products that rely heavily on marketing to garner interest. Musk has stated that the path to the CEO’s office should be through engineering and design, not finance or marketing.
4. Musk puts his money into what he believes
Whether you are gambling at a casino or funding a billion-dollar company, it is always easier and less stressful to utilize someone else’s money. That is the whole purpose of venture capitalists that fund startups and early-stage companies, after all. Companies such as Tesla and SpaceX are capital-intensive and can take years to create a return on investment.
While Musk borrowed significant amounts from banks and other sources to fund his Twitter acquisition, he has a history of funding his own startups. He spent $10 million of his earnings from an earlier company of his early company, Zip2, to fund PayPal, which he later sold to eBay for $1.5 billion. He funded the Tesla series A with $6.35 million of his personal wealth and had to funnel in another $40 million in 2008 to keep the company afloat as it was almost out of cash because of the financial crash at the time. Musk is estimated to have invested about $100 million of his own money into SpaceX.
5. Musk dedicates himself to learning
So, what is one of his secrets? Well, while many people are on social media, Musk is reading. He refers to social media platforms such as Instagram as ‘thirst traps’ that consume large blocks of time taking selfies and hunting for likes. From an early age, Musk was a voracious reader. According to a Rolling Stone interview, Musk’s brother said Elon would read up to two books a day from diverse disciplines. He also read the entire Encyclopedia Britannica as a child.
Musk credits his childhood reading with his understanding of rockets and space. While he holds a vicious work schedule that sometimes totals more than 100 hours a week, he still dedicates time to learn and self-educate himself. His ability to easily consume knowledge has certainly contributed to success in many industry sectors.
Against the Wave
Bill Gates and Steve Jobs made a name by being visionaries of the computer industry. Sam Walton reinvented the retail industry to create his billions, and Warren Buffet traded stocks. But Musk is different, as he has somehow duplicated his formula to achieve amazing achievements across multiple industries. Love him or hate him, you must admit he has a knack for business.
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