Make it ten times better. Make it ten times cheaper. That is part of what defines Elon Musk’s approach to the problems he aims to solve and resolve. Elon has created many successful businesses, taking on daring projects and trying to ameliorate the future of humankind. And he's given us more than blasting rockets and dancing videos. As a business magnate, he's the founder and CEO of SpaceX and the CEO of Tesla. At the age of 50, he has a net worth of about $263 billion, as of January 2022.
Elon was born in 1971 in Pretoria to parents of diverse and certainly adventurous roots (his grandfather faced off a tiger on a family jungle trip and flew an airplane halfway across the world). On several family trips, his mother and brother would look for the ‘lost member’ of the family and find him in his zone at the nearest bookstore. In his words, his childhood was tough at home and school alike. At 17, he moved with his mother and siblings to Canada and acquired citizenship through his mother’s ancestry.
After a year of doing odd jobs, once even shovelling sand in a boiling room in a lumber mill, Musk enrolled in Queen’s University studying Physics. Cold-calling Peter Nicholson, a top exec at the Bank of Nova Scotia, got him an internship there. Elon transferred to UPenn to pursue economics and a Bachelor of Science degree in physics in ’92. He identified the internet, renewable energy and space as the industries to be subject to a major transformation in the future.
Fresh off college, Elon and his brother Kimbal jumped on the dot-com wagon with the idea of an online directory. Working 100-hour weeks and showering at the YMCA, along with door-to-door salespersonship got their venture Zip2 to become the place for newspapers like The New York Times and Chicago Tribune to build their online presence of something like a primitive Google Maps-meets-Yelp. Musk put up really ambitious timelines for the company. An early Zip2 employee recalls, “According to Elon, no task could ever take more than an hour”. In February 1999, Compaq bought Zip2 for $307 million. Musk received $22 million.
With no intention of working for Compaq, Musk had already decided his next venture before Zip2’s sale went through. He invested $14 million of his cash and founded an online financial service and payment company called X.com. His payday bought him one of 62 McLaren’s F1s in the world for a million dollars. He even crashed it once, spun mid-air, and joked to his friend in the passenger seat “The funny thing is, it wasn’t insured.” X.com company merged with Confinity, a similar start-up, and were among few who avoided the crash in 2000. After several management changes, X.com was rebranded as PayPal and sold to eBay for $1.5 billion in October 2002.
Elon decided to finally do good with his childhood dreams of humans becoming a multi-planetary species. He assembled a team to take on Mars and gave birth to SpaceX. In February 2002, upon his second visit to Moscow to buy three ICBMs (Intercontinental Ballistic Missiles) from Russian aerospace companies, he concluded that SpaceX could undercut the costs ten times and still profit 70% by doing just what he did in bookstores. A SpaceX engineer Steve Davis, now president of The Boring Co., was asked to bring the manufacturing cost of a $120,000 actuator to less than $5000. In 9 acute months of deeming the task impossible, he turned in the design, reducing its manufacturing cost down to $3900.
Musk met JB Straubel in 2003, over lunch, aiming to raise money for his electric car venture. Musk, ever electric car savvy, bought in and the duo teamed up with Martin Eberhard and Marc Tarpenning at Tesla Motors. Cut to 2008, SpaceX had endured three consecutive failures from 2006 to 2008 and the company could only do away with one more launch before going bankrupt. On 28th September 2008, SpaceX’s Falcon 1 rocket reached orbit and SpaceX became the first private company in history to carry on the feat.
SpaceX is the largest private producer of rocket engines in the world. It regularly carries cargo for NASA and other contractors to orbit and the ISS. Musk believes that there is potential for a >100-fold reduction in the cost of access to space. What does that all mean in numbers? Calculations show the average cost per shuttle launch was over $400 million. In contrast, a Falcon 9’s launch costs an average of $57 million.
Tesla, too, was on a similar brink when Elon acquired a NASA approved loan from SpaceX, thanks to the successful launch and raised funds from early investors in December 2008, just days from insolvency. Musk poured in $12 million. He had reduced almost all of his reserves and amid financial woes, “A bunch of Tesla employees wrote checks to keep the company going”, said Diarmuid O’Connell, VP of Business Development.
Tesla's "master plan", as iterated by Musk in 2006 was: “Build a sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. While doing the above, also provide zero-emission electric power generation options.”
Tesla Motors went public in 2010. It rolled out its four-door all-electric sedan for orders in 2012. As Tesla struggled to keep up with the demand and shareholder pressure, it almost died as a company. Following the success of its initial vehicles, Tesla launched its new car Model 3 in June 2016. Musk has run into trouble for overpromising and missing serious deadlines on them, not to mention legal trouble with the SEC, due to his infamous tweet about taking Tesla private, which even cost him millions of dollars in settlement fees. In January 2020, Tesla Motors became the most valuable U.S. car company in history.
Other Ventures: Apart from his basket of the above-mentioned companies, Musk also happens to have an ownership stake in three other companies in four equally diverse fields. These companies have also gained much popularity. They are Neuralink, OpenAI, The Boring Company and Hyperloop.
The Musk Foundation has disbursed more than $54 million in 15 years of operations, as of 2019, much of which has gone to multiple charities in the fields of renewable energy research and advocacy, human space exploration research and advocacy, pediatric research and science and engineering education. In 2012, Musk also signed The Giving Pledge to donate the majority of his wealth.
Elon Musk has been a much-discussed figure in the entire world. His innovations and companies have propelled him to incredible success, and, in equal parts, have him involved in a number of controversies. Still, the one thing that cannot be debated is that Elon Musk has had and continues to have a massive influence on the world and the markets that he participates in.