This person causes admiration, respect and envy. His success is natural: talent, charisma and business sense are complemented by hard work, the ability to correctly prioritize. Key milestones: computer company Zip2, PayPal, TeslaMotors, SolarCity, SpaceX.
The story of Elon Musk is interesting because, by the fact of birth, he was not a contender for becoming a famous billionaire. He was born in South Africa, in the family of an engineer and nutritionist. Despite the fact that the boy was smart and developed from childhood (he went to school a year earlier than his peers), even the parents recognized the fact that their son’s contacts with peers did not go well. Later, he himself will say: “I was a little nerd child, smart enough … so in school time I just read a lot of books and tried not to get in the way of people.”
Figure 1. Future billionaire as a child.
The guy compensated for the lack of friends by constantly reading everything that came into his hands: from comic books about Spider-Man to encyclopedias. At the age of 17, after graduating from high school in Pretoria, the future billionaire makes the bold decision to start an independent life in the United States.
In 1989, he boarded a plane to Canada, realizing that his parents would not be able to help financially, and he would have to rely on himself. For a whole year, Elon lived hard: he worked where he could, earning a living. The situation is changing admission to the University of Queens in Ontario. A talented student drew attention to himself, and in 1992 the dream of getting to the USA came true thanks to a scholarship to study in Pennsylvania. At the University of Pennsylvania, Elon becomes a bachelor of business in a year, devotes the second year to studying physics and also receives a bachelor’s degree.
The Story of Serial Businessman Elon Musk
The term is relatively recent, used to refer to entrepreneurs who apply their talent to start various, sometimes unrelated, projects.
Elon’s first project – computer game Blastar, the creation of which brought 500 in 12 years. Initially, Elon and his brother were going to rent the development in the game room. They have done almost everything for this:
- found a place to rent;
- agreed with the provider of vending machines, which could supply the equipment.
However, it was not possible to get the approval of the city: the parents did not know about the idea of the sons, and the young entrepreneurs were not 18 years old.
Second start-up more fortunate. Elon is dropping out of graduate school at Stanford University after only two days in order to start Zip2, an internet company! He explains the solution this way: “I realized that nothing was happening at Stanford, so I called the teachers, said that I wanted to start my own company and agreed that if nothing worked out, there would be an opportunity to go back.”
As part of the activities of Zip2:
- a platform was developed that allowed newspapers to provide commercial services to clients;
- there is a transition of many printed publications, including authoritative ones, into the digital era;
- the first city directory on-line is created.
The degree of success of the idea is easily measured in numbers: Zip2 was sold to Compaq for $307 million and 34 million in securities. Musk joined the Silicon Valley millionaires when he was only 28 years old, receiving $ 22 million.
This transaction went down in history as the largest financial transaction carried out for cash.
Figure 2. Elon Musk while working on the Zip2 project.
The third part of Elon Musk’s business story – PayPal electronic payment system. Initially, the startup was called X.com, after merging with a competitive company Confinity on a parity basis, it gets the name PayPal. Musk’s contribution to the development of the company is invaluable:
- development of a fundamentally new business model;
- competent, talented advertising, close to viral;
- bringing the payment system to the first positions.
All this has changed the principle of shopping: today we can no longer imagine how it is possible to carry out them without the help of the Internet. Previously, it took a week to make a purchase with a card, PayPal makes a payment in a few seconds. The value of the idea is evidenced by the purchase of the company by a competitor – Ebay – for $ 1.5 billion. Musk sold his stake in the company for $ 180 million.
Figure 3. The first successes of the PayPal payment system
The fourth project of the billionaire – TeslaMotors – can rightfully be considered one of the most brilliant. Starting with the fact that Musk invested all his savings in the project and ending with the fact that he personally participated in the development, proving that he is not only a businessman, but also an inventor. Everything went great at first:
- the release of the debut model of the Roadster sports car, in the development and design of which Musk personally took part (the development of the battery module was often carried out in his garage, the design of the headlights, as well as the body material, are the merits of the billionaire inventor);
- receiving the GlobalGreen award for contribution to environmentally friendly production;
- changing the image of the electric car: uncomfortable, small cars after the work on them by the Musk team turned into prestigious high-speed sports cars;
- attracting new investors, such as Larry Page, Sergey Brin, etc.
The situation escalated in 2007, when there was talk of opening a conveyor line. It turned out that miscalculations of management led to the fact that the cost of an electric car would be twice as high as that included in the estimate – 92 thousand dollars. Technical shortcomings were also identified (the transmission concept proposed by CEO Eberhard turned out to be erroneous and requires serious improvements).
There were several weeks with zero bank accounts. I had a choice: take all the capital left from the PayPal sale and invest it in Tesla, or Tesla would die. (Quoted from the 2014 film Billionaire Elon Musk, How I Became the Real Iron Man.)
The entrepreneur takes matters into his own hands, saving the company from bankruptcy:
- fires Eberhard and top managers who make big mistakes;
- invests in Tesla all the money that he had at that time – $ 20 million;
- ruthlessly reduces the number of employees of the company, leaving only those who are needed;
- negotiates with suppliers, bargaining for every cent;
- attracts investors in traditional and non-traditional ways (fortunately, there are many of them, you just need to competently look for options);
- seeks any means, even sells his beloved car McLaren F1.
Soon the whole world was talking about a fundamentally new means of transportation, environmentally friendly, stylish and almost perfect. More details about the sources of investment are in Table 1. In 2016, it became known that in America there was a fatal accident involving an innovative Tesla sedan. This reduced the value of the shares by 3%, but everyone is sure that the development of the company cannot be stopped.
|
No. |
Investor |
Sum |
|---|---|---|
|
one |
Concern Daimler (Germany) |
$50 million |
|
2 |
US Department of Energy credit line |
500 million dollars. |
|
3 |
SpaceX is an additional source of investment |
as needed |
The company’s profits until 2015 inclusive had a negative trend, that is, the company operated at a loss. According to the billionaire, profitability will increase significantly when sales reach a million cars a year in 2024. So far, the increase in losses is associated with a decrease in prices in key regions for the company: Europe, China, and the USA. Model S and Model M electric vehicles are currently available for sale.
Figure 4. Tesla Model S serial electric car.
The logical continuation was the opening of gas stations for electric vehicles from TeslaSupercharger. We are talking about the fact that they will be available worldwide, which will make electric vehicles more affordable.
Figure 5. Profits and losses of TeslaMotors, million dollars (2011-2016).
Fifth project: SpaceX.
In the long term, I would really like to go to Mars. This is the primary goal of SpaceX. (Quoted from the 2014 film Billionaire Elon Musk, How I Became the Real Iron Man.)
The most ambitious project that is supported in the US at the state level. The company was founded in 2002, its goal is the possibility of traveling to other planets with the help of modern high-tech rockets. The starting point is Mars.
Achievements in this area are already colossal:
- cost reduction by 10 times;
- creation from scratch of a rocket and three types of liquid engines;
- changing the concept of space flights, from now on the goal is the colonization of space, and not episodic flights there.
Today, Musk’s “crazy” idea is not only universally recognized, but also supported at the state level. NASA has signed a contract with SpaceX for 12 missions to deliver cargo to the ISS.
How did Musk manage to reduce the cost of flights? When a theodolite was needed to level the surface of the rocket, Musk didn’t order one from government agencies, he bought it on eBay and saved $25,000.
|
date |
Event |
|---|---|
|
09/28/2008 |
The Falcon 1 rocket launched a payload into Earth orbit. |
|
05/25/2012 |
The Dragon spacecraft was not only launched into space, docked to the CMS, and successfully returned to Earth. |
|
3.12. 2013 |
The SES-8 satellite was launched into orbit. |
|
22.12.2015 |
For the first time, the first stage was landed on the ground following the results of launching into orbit. |
|
8.04.2016 |
First successful landing of the first stage on an offshore platform. |
|
03/31/2017 |
Launch and landing of an already used rocket stage. |
Figure 6. First landing on an offshore platform.
The delivery of a man to Mars is planned to be carried out in 2026.
“Personal style” Elon Musk and success story
Elon Musk never had a choice to do or not to do. The question was: what to do next? (Quoted from the 2014 film Billionaire Elon Musk, How I Became the Real Iron Man.)
Elon Musk is not a business savvy person. He is a dreamer working to make his projects, even the most fantastic ones, become a reality. However, in difficult situations, he acts like a tough businessman who does not look back at individuals. An incomplete list of situations where the actions of an entrepreneur, which seemed to the rest of madness, led to amazing success:
- investing money not just in innovative, but in revolutionary projects;
- the ability to see one step ahead where other prospects did not see;
- the desire not just to make money, but to change the world.
To make the idea of an electric car attractive, Musk changed people’s mindset. From now on, driving on electric vehicles is easy, convenient and prestigious! A whole network of gas stations serving this type of machine was also built.
In addition to being an inventor and a successful businessman, this man also became the prototype of the famous comic book and movie character Iron Man. By the way, he starred in Iron Man 2 as a friend of the protagonist. They talk and talk about his phenomenon!
The story of Elon Musk is impressive and instructive. It gives hope to those who dream of success and are ready to work for it day and night.