IncomeDiary.com

How Pros Make Money Online

Income Diary

Elon Musk’s 15 Lessons for Your Startup Business

By:     Topics: Entrepreneurship     More posts about: ,

I used to think that Elon Musk was just another billionaire entrepreneur.

Now I realize Musk is a super hero. I’m not just saying that because Robert Downey, Jr. used Musk as real-life inspiration for Iron Man’s Tony Stark. I really think Elon has super powers:

  • Musk can predict the future
  • Musk has a super-human intellect
  • Musk has the ability to work forever without stopping

He also has lots of high-tech gadgets, like his own rocket ships and a device with a holographic 3d interface. Elon Musk is a utility belt away from being able to take on super villains.

In all seriousness, Musk is one of the most influential entrepreneurs of the 21st century. If he keeps succeeding at this unprecedented rate, history will know him as the man who ushered in the age of electric cars, solar paneled homes, and private space travel. Below I’ve carefully compiled 15 lessons for business and startups from Elon Musk.

Who is Elon Musk?

elon musk

  • Elon Musk was born on June 28th, 1971 in South Africa.
  • Musk moved to Canada in 1988 at the age of 17 to avoid service in the South African military.
  • Musk earned undergraduate degrees in business and physics from The University of Pennsylvania.
  • In 1995, Musk dropped out of Stanford University to found his first company.
  • Musk is a twice-divorced father of five.
  • Musk’s job is the CEO of Tesla Motors, the CEO and CTO of SpaceX, and the chairman of SolarCity. His 2013 salary is over $78 million.
  • Musk’s net worth was estimated in September 2013 at $6.7 billion.
  • Like Warren Buffett and Bill Gates, Elon Musk has pledged to give all of his money to charity.

 Photo by Brian Solis, via Wikimedia Commons

Companies Started by Elon Musk:

Musk is one of only two people ever to found three billion dollar companies.

15 Business & Startup Lessons from Elon Musk

#1 Think Out of this World

elon musk think big

“[Elon Musk] is very much the person who, when someone says it’s impossible, shrugs and says, ‘I think I can do it.”

Max Levchin, PayPal Co-Founder

Elon Musk isn’t here just to make companies; he’s here to make history.

His innovations in the auto industry have him being compared to Henry Ford and Jon Favreau famously interpreted Tony Stark (a.k.a. Iron Man) on Musk. The grandiosity of his goals haven’t escaped Elon:

“There was the advent of single-celled life, multicelled life, the development of plants, then animals. On this time scale, I’d put the extension of life to another planet slightly above the transition from life in the oceans to life on land.”

Elon Musk to Inc.

That’s right. Musk just put one of the items on his to-do list on the same scale as the development of sentient life. It’s plausible. SpaceX is seriously planning to be build a greenhouse and eventually a colony on Mars.

#2 Look for Opportunities in Emerging Industries

Musk only starts companies in emerging fields

In 1998, that emerging field was the Internet. Zip2 (and later PayPal) both succeeded thanks in large part to getting in on the ground floor of Internet boom.

Next, Musk identified three more emerging industries and got in on the ground floor on all three. SpaceX (space transportation), Tesla Motors (electric cars), and SolarCity (solar power) have all benefited from the high growth potential and low-competition that comes with being a pioneer.

# 3 The Quality of the Product Comes FirstTESLA SAFEST

“I’d say stay very focused on the quality of the product.   People get really  wrapped up in all sorts of esoteric notions of how to manage etc., [but]  I think people should get much more focused on the product itself – how do you make the product incredibly compelling to a customer – just become maniacally focused on building it better.  I think people get distracted from that.”

Elon Musk, from Rock Solid Finance pioneer new territory.

#4 Be Prepared to Pivot

To pivot in business is to change direction while keeping one foot grounded where you started.

That’s exactly what Elon Musk did when he turned X.com (online bank) into PayPal (a global payment transfer provider). The change rendered X.com totally unrecognizable, but Musk was able to use much of its resources. Those resources included an innovative method of securely transferring money online through the recipients email address, which Musk had developed himself.

The pivot was a gargantuan success:  once PayPal became featured on Ebay, its use exploded.

#5 Embrace an Exit Plan

Can you imagine if Musk had stayed running PayPal? He’d still be rich and successful – but there would be no electric sports cars or rocket ships to his name. Thankfully, Musk long ago learned how to extricate himself from his own startups.

In 1995, Musk founded Zip2 (an online city guide) and in 1998 he sold it to Compaq for $307 million. Musk’s portion was $22 million. He was 28-years-old and free to do whatever he wanted.

That meant founding X.com. Again, Musk jumped ship after a couple of years, selling PayPal for to Ebay in 2002 for a cool $1.5 billion. For his trouble, Musk got $165 million in Ebay stock. Now Musk had enough personal capital to start the pair of truly extraordinary businesses that he still runs today.

When you start a business, you should have an end in mind. Michael Dunlop recently wrote about how to make your website your millionaire exit plan.

#6 Invest Earnings into New Businesses

Both times Musk cashed in a company for millions of dollars, he invested at least 45% of his earnings back into a brand new business within the calendar year.

  • $10 million of the $22 million Musk made from the sale of Zip2 went to founding X.com (later PayPal).
  • $100 million of the $165 million made from the sale of PayPal went to founding SpaceX.

Musk also invested heavily in Tesla Motors (33,076,212 shares) and SolarCity (20,724,991 shares). It’s the ownership of these three companies that constitutes the vast majority of Musk’s $6.7 estimated wealth.

#7 Hire Carefully, Fire Fast

Musk is known to be meticulous about building his staff:

“I think you definitely don’t want to grow too fast.   Make sure that every person you hire you really need to hire that person.”

Elon Musk

Elon has called hiring people his “biggest single challenge”:

“I have an exceptionally high standard for people that get hired, and especially for SpaceX.  We really aspire to hire quite literally the best people in the world at their job. Finding such people is so hard…  When we find them, we are generally able to attract them to the company… But the number one issue for me is finding superlatively talented people.  I think we’ve been fortunate to find some very, very talented people at SpaceX, but that is always the governor on growth.”

Elon Musk

He’s quick and unsentimental when it’s time to correct a hiring mistake:

“One lesson I learned [at PayPal] is to fire people faster.  That sounds awful, but I think if somebody is not working out, it’s best to part ways sooner rather than later.  It’s a mistake to try too hard to make something work that really couldn’t work.”

Elon Musk

#8 Be Your Own Happiest Customer

tesla happiest customerMusk loves the Tesla Model 6 so much, he’s going to drive in it across the USA next year with his five young sons. On September 5th, 2013, Musk announced via his Twitter:  “Just finalized the LA to NY family road trip route in Model S. 6 day, 3200 mile journey with only 9 hrs spent charging.”

This is more than just a great PR campaign to highlight all of Tesla’s new charging stations across the country. By putting himself behind the wheel of his company’s product for weeks on end, Musk will gain first-hand insight into how to improve Tesla’s premiere electric car.

In the case of SpaceX, Musk gets extra motivation for the company to succeed from his desire to one day be a SpaceX customer. The sooner the better:  “I don’t want to be doddering around up there, needing a quadruple bypass,” he says. His plan is to be a on a rocket to Mars by 2030, when he’ll be 61 years old.

Many great inventions and businesses start because their creator wanted the product for his/her own use. Income Diary founder Michael Dunlop’s PopUp Domination was originally developed for Michael’s own websites before he turned it into a public product.

#9 Make Failure an Option

“Failure is an option here. If things are not failing, you are not innovating enough.”

Elon Musk

Good business decisions are often very safe. But great business decisions are almost always risky.

All of Musk’s business successes have come in emerging industries with a dubious history of turning a profit:  the Internet (in 1995), electric vehicles, space travel, and solar panels. Musk knew going in that there was a high risk of failure, but while he never planned on failing, he always had a contingency plan to allow for failure.

For instance, when Musk set about sending rockets into space, he knew that the first rocket likely wasn’t going to succeed. That’s why he invested enough money into SpaceX ($100 million) to “make failure an option” and allow for up to three launches.

Musk also sees failure as an important part of the creative process:  “If every time somebody comes up with an idea it has to be successful, you’re not gonna get people coming up with ideas.”

#10 Leadership Requires Putting Yourself Forward

Musk’s leadership was tested like never before on August 2, 2008. It was the day of SpaceX’s third launch attempt and the future of the company was on the line.

falcon 1 launch (USAKA)

The Falcon 1 launch vehicle made it through the first and most most dangerous stage – the one where it actually breaks away from Earth’s gravitational pull. But the rocket faltered soon after and they lost communication. That was it:  mission failed

The 300+ SpaceX employees in attendance were heartbroken – and fearing for their very livelihoods – when Musk stepped up to speak to the crowd. Elon revealed that he had already secured further investment in SpaceX so they would be able to continue their mission in case of complications (again, making “failure an option”). At the climax of his speech, he told his employees not what they should do, but what he was going to do:  “For my part, I will never give up,” Musk said, “and I mean never.”

Dolly Singh recalls the crowd’s response:

“I think most of us would have followed him into the gates of hell carrying suntan oil after that. It was the most impressive display of leadership that I have ever witnessed. Within moments, the energy of the building went from despair and defeat to a massive buzz of determination as people began to focus on moving forward instead of looking back. This shift happened collectively, across all 300-plus people in a matter of not more than five seconds.”

SpaceX’s very next launch was a complete success. On September 28th, 2008 the Falcon 1 became the first privately built rocket to achieve earth orbit.

Photo by U.S. Army Kwajalein Atoll (USAKA) [Public domain], via Wikimedia Commons

#11  Be Driven to Work Hard

elon musk work ethic

“If you don’t mind things being really hard and high risk, then starting a company is a good idea. Otherwise, it’s probably unwise. It will certainly stress you out. So I think you have to be pretty driven to make it happen. Otherwise, you will just make yourself miserable.”

– Elon Musk

Musk’s work ethic is legendary. “He is a machine,” says Dolly Singh, who worked under Musk as the head of talent acquisition at SpaceX.

Elon is said to regularly put in 100 hours of work week between Tesla and Space X – and he considers this the bedrock of his business success. When asked to give advice to entrepreneurs, Musk offered, “Just work like hell. If other people are putting 40 hour work weeks and you’re putting in 100 hour work weeks, even if you’re doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.”

To aspiring entrepreneurs, Musk doesn’t mince words:  if you’re lazy, don’t waste your time starting a business.

Photo by marcella bona via Compfight cc

#13 Know Your Limits

Musk may be the smartest and hardest working entrepreneur of the 21st century, but even has limits.

Back in 2006, Elon had an idea for a solar panel company. But he knew that if he started it, he would be overextended and unable to give everything necessary to SpaceX and Tesla. So he shared his idea with Peter and Lyndon Rive, who founded SolarCity in July of that year. Musk was the principle investor in the company and has served as chairman of the board since its inception – but he’s kept a safe enough distance so that it doesn’t eat up too much of his time and energy.

Solar isn’t the only industry he sees huge opportunity. Supersonic jets, hyperloops, and virtual reality interfaces have all earned his attention. He’s skimming the surface in these fields, but not diving in headfirst.

#14 Find Your Higher Purpose

Colonizing Mars is much more than a business decision. It’s about the future of the human species:

“I think it’s important that humanity become a multi-planet species. I think most people would agree that a future where we are a spacefaring civilization is inspiring and exciting compared with one where we are forever confined to Earth until some eventual extinction event. That’s really why I started SpaceX.

Elon Musk

Musk used to struggle with his purpose until he found out what really mattered for him. He described the realization:

“I always had an existential crisis, trying to figure out ‘what does it all mean?’ I came to the conclusion that if we can advance the knowledge of the world, if we can expand the scope and scale of consciousness, then, we’re better able to ask the right questions and become more enlightened. That’s the only way to move forward.”

Elon Musk

#15 Start Businesses that Align with Your Higher Purpose

Musk’s mission to “expand the scope and scale of consciousness” has had him looking beyond simple profit benchmarks to found businesses that are making a global impact for good. Every day when Musk goes to work, he knows he’s helping to reduce carbon emissions, produce renewable energy, and help save the human race in case of collision with an asteroid.

How’s that for motivation?

The first step to leaving a legacy is to answer Musk’s existential question for yourself:  “What does it all mean?” When your business is aligned with your purpose, you will work harder, smarter, and better to achieve your goals.

Inspired Yet?

If you want more lessons from legendary entrepreneurs, check out our articles on Richard Branson and Steve Jobs.

"Do Not Write Another Blog Post Until You Watch This Free Video..."

Traffic Domination

Watch this free video to learn...

  • How I got over 10,000,000 people to visit my websites.
  • The types of blog post that got me all that traffic.
  • How to get someone else to do it for you!

Where should I send your video?

How We Get Over 64.73% Of New Email Subscribers

We first added a popup opt-in box to IncomeDiary back in 2010. Today, it gets us more subscribers than our homepage opt-in, footer opt-in, sidebar opt-in and squeeze pages combined. After seeing how well it worked for us, we decided to develop it into a plugin our readers could use. It's been so popular that over 60,000 websites now use it!
Click Here To Get Instant Access

Comments

  1. I’ve personally used relationship building to get my last 4 jobs: When I left college, I had no idea what HTML was… 6 months later I was working for a Peter Thiel backed startup… 14 months later I was being incubated to run my own startup.

    • Wow – congrats Gary. Sounds like you’re on track to be the next Elon Musk. You’re right that your network is of huge importance to business success, especially when on the job hunt.

  2. Deji R Yusuf says:

    Wow! This is one blog post I have been dying to see online, and i’m so happy to see that you have posed it here 🙂
    Elon is one BIG inspiration, he is “super Human” and I think anybody who want to be a Top Entrepreneur should study his attitude because it can make you a great entrepreneur just like him.
    His is one of My hero’s 🙂

    • Yes, after researching Musk for this article he has become one of my personal heroes as well. What a life well led – and at 42 years old, she’s just getting started.

  3. Jotpreet Singh says:

    Yep. Well, I think that he is a great person. Starting some awesome companies like PayPal, man ! he is awesome

    • What’s most amazing about him starting PayPal is that it’s probably only his 3rd most impressive business.

  4. Brendon Held says:

    Wow, great article Nick, and definitely inspiring!

    I also can’t help feeling a little proud that a South African has done so well… even if he has moved to Canada… I’m definitely motivated now! Thanks mate…

    • Musk moved to Canada initially but soon moved to the United States to go to college and has lived there ever since. He’s said about the USA, that “it is where great things are possible.”

      • Well, “soon moved to the United States (from Canada)” is a relative term…

        Musk moved to Canada because his mother is Canadian. After briefly working at a couple of jobs, attended the highly ranked Queen’s University in Kingston, Ontario for two years – where he met his first wife – before being snatched up by The University of Pennsylvania to complete his undergrad.

  5. Marcus - Control Alt Elite says:

    Lesson #12 – Always proof read and double check your calculations, to make sure no important points are missed, such as the 12th lesson of this article.

    • Haha — good point. Elon Musk does have a very meticulous mind and I’m sure he would have double-checked his article and made sure there were no missing lessons!

  6. This is a great post. Sometimes I do imagine if this people are human with all this extraordinary success. One thing I will to use in this post is to learn to reinvest.

    • Re-investing is one of the big takeaways from Musk’s entrepreneurial life. He has achieved almost super-human success and honestly it just drives me to want to set my sights higher.

  7. I couldn’t add any Musk! 🙂 Great article I must say, because all the tips/guide you shared to us are no doubt helpful and encouraging.
    I agree with “#11 Be Driven to Work Hard”, Follow your passion and believe in your vision! And My favorites here are, numbers 10, 8, 7, 13, 14, and 11. Thanks for this article! 🙂

    I found this post shared on Kingged.com, the Internet marketing social site, and I “kingged” it and left this comment.

    • Thanks Metz. I’m glad you found so many of the lessons valuable. I think you’re right to single out Musk’s work ethic: nothing else has been so important to his success.

  8. Elon is one of the most inspirational guys on this planet.

  9. Thank You Nick. Some people leaves remarkable foot steps so that people follows them and get maximum from it. Again a wonderful page, Regards, Umar

  10. Master Scott says:

    Thanks for such a detailed article Nick! I had heard of Elon Musk but I wasn’t aware of all of the industries that he has his entrepreneurial hands in! Amazing individual!

  11. What an inspiring article. Loads of people wait for things to happen for them where as Elon put in the hard work and made his path. I will be adding him to my list of mentors as well.

  12. Who is the other person who has founded two billion dollar companies? Elon is one , the other…?

  13. Marc Baldwin says:

    I reread this article often. Brilliant.

  14. What a remarkable story! It’s inspiring to read such success stories and the business lessons are topnotch!