Elon Musk’s biography was on my summer reading list and it’s been one of my more interesting reads so far. I’ve always admired the achievements of entrepreneurs who take on tough businesses and I don’t think there’s any other industry with such entrenched business models as those found in banking, car manufacturing, electricity or space travel. With an estimated net worth of US $12.5 billion, Elon Musk has not only succeeded at making waves within all these behemoths, he’s made progress. The real human progress that not only challenged the business models of four industries but also exponentially pushed the world forward.
There are three key lessons from Elon’s life that I feel can be applied to our lives.
1. Use your passion and strengths in a growth area.
Elon graduated with dual degrees from Penn State in physics but did not go into full-time work with his internship at Pinnacle Research Institute. Instead, he started Zip2 with his brother, Kimbal, in Silicon Valley in 1995 after he heard a terrible sales pitch from a Yellow Pages salesman on how businesses could use the internet. It was at that moment he realized they had no clue. Elon’s passion for electronics, self-taught programming, and video games led him to think that they could do better. And they did. Compaq would later buy Zip2 for $307 million. Elon personally realized $22 million from that deal. From there, he would go on to co-found an online financial service and payment company that would become known as PayPal. What are your passions and strengths and how can you use them in a growth industry?
2. Possess a relentless focus and work ethic and be prepared to make sacrifices.
Thomas Edison once said that “most people miss opportunities because they’re dressed in overalls and look like work”. Everyone likes the idea of being successful but very few people realize that success – especially the kind people like Elon experience – comes with a price. In addition to the hard work, intense focus and uncompromising drive that’s required, it often means sacrificing other things as a trade-off, like family, friends and leisure time. Elon’s capacity for hard work and intense focus was developed through his South African upbringing and he carried that forward into his businesses. While that relentless focus and drive for perfection were great at getting results, it also hurt his employees in the process (similar to what Steve Jobs did at Apple) and wreaked havoc on his personal life. I like to think of this as the ugly side of progress, the success “whiplash”. It’s why the boards at both Zip2 and PayPal didn’t want him to be CEO. That kind of work ethic is great for up-front, short-term bursts and start-ups but is not well-suited for long-term, sustainable business operations. Do you have the work ethic and focus in your own life to accomplish your goals? Can you have this work ethic but still maintain a healthy balance with family and friends? Are you willing to possibly risk losing something that you place great value on?
3. Create capacity to take greater and greater risks.
At a recent entrepreneurs’ conference that I attended, one of the speakers who had sold his business for about $10 million said: “the vast majority of people don’t want to get rich twice”. Elon Musk has done it five times in five different ventures. Zip2 was the first. He took that money and started X.com which later bought PayPal. Then PayPal was sold to eBay for $1.5 billion with $250 million of that going to Elon. He used the money from the PayPal sale to start SpaceX. From there, he began investing in a start-up called Tesla, where he was the largest independent investor in the business and later took over as CEO. See the pattern here? Elon used his own money to get into ventures that many people felt were far too risky. He could have parked his money from the first venture in low risk/low return investments and retired, but he didn’t. He did the exact opposite. I’m not sure I – let alone my wife – personally have the risk tolerance for something like that. But I know if a cause and a purpose are important enough, then the risks are small – especially if you know you can earn more money should those investments not work out. Are you building enough funds to invest in areas that are important to you? Are you prepared to take on good risks or do you prefer to play it safe?
We may never be dot-com multi-millionaires like Elon Musk, but we can all apply these lessons in our lives and in our businesses. Success is all in context even when our decisions have fewer zeros in them.
Make the most of it.