SHAPING OUR FUTURE - ELON MUSK

Elon Musk had become a name that cropped up in a number of conversations over the last few years. I remember many months ago, one of the executives at the company I worked for showed me a picture of a Teslar floating around in space. I was intrigued by the audacity of the concept of advertising you vehicle in the Cosmos and this motivated me to study more about the Billionaire that took Silicon Valley, and the World by storm.

As I read a well detailed biography of Elon Musk written by Ashlee Vance, I was rather surprised to learn that in his young days resembled the television character 'Young Sheldon.' A well traveled young boy, Elon was curious and showed a great interest in physics and engineering. He concentrated on subjects that he considered as important in achieving his future ambitions which coincidentally revolved around interplanetary travel. Being a bright student, he was never the top of his class and this was mainly because he did not see the need of excelling in certain subjects which were not in line with his aspirations - a pass mark would be more than substantial in these areas.

His foundations were solid and made his first million dollars in 1999 by selling off a company that he and his brother formed (Zip-2). His entrepreneurial endeavors also paid off when he traded off his shares of a financial services company (which he founded) to eBay for USD 180 million. Today this company is referred to as 'PAYPAL' and provided the initial capital for his Corporate adventures.

We have all heard of his success stories at three of his biggest ventures.

1) SpaceX

2) Teslar

3) SolarCity

These ventures are very unique because they all focus on developing a sustainable future and although most businesses knew that this should be on their agenda, only a very few of them were able to actually create a road map that incorporated sustainability into their working model.

This was due to the fact that most corporate giants were driven by profit and making their shareholders happy; whereas Elon was propelled by passion and had a vision of making a change to humanity. His ambitions at times did not make economic sense but his inner circle had confidence in his potential to change the rules of the game - he was someone special.

Today Elon Musk is valued at approximately USD 20 billion and although it wasn't a smooth ride, I felt it was important to highlight some of the key learnings that got him to where he is today.

1) YOU DON'T WORK FOR MONEY, WORK FOR SOMETHING YOU ARE PASSIONATE ABOUT AND MONEY WILL FOLLOW

This concept is not unique to Elon Musk and I have heard a number of successful businessmen preach this sentiment. However, if I was to relate this to Elon, it must be stated that his passion was to create engineering marvels and eventually take humanity to the stars. What is perhaps more intriguing in this case when compared to a lot of other inventors is the fact that his vision was not literally 'down to earth'.

However, if you were to connect this theory to his venture with SPACEX, where he proposed to make space travel accessible to the masses, he managed to capture the market from governments and agencies such as NASA by simply creating rockets that were significantly cheaper than anything out there. The cost of developing a rocket to transport a payload to space at that time was ranging to about USD. 1 billion, where SPACEX could launch its Falcon rockets at approximately USD 90 million.

Elon poured a lot of capital into the SPACEX program and although it is paying back dividend today, it must be noted that it was a failure for most of its lifespan. There were constant set backs, failed launches and system issues that were so significant that any other CEO would have thrown in the towel. However, Elon continued to invest his time and money into the project because he know that if he was able to commercialize a USD.90 million rocket, he would change the whole landscape of space travel.

His intention was not simply to meet his bottom line, but his was driven by his desire to make an impact on the world.

2) HARD WORK AND SACRIFICE

It is easy for us to imagine the modern billionaire to be someone who conjured up new technology and milked up a fortune on patents. However, this was far from the truth when you consider Elon's journey.

He was naturally gifted and had a high IQ level. He was also driven by passion and has a clear vision of what he wanted to do with his businesses.

However, it must be noted that behind the fame and fortune Elon is a man who works 16 hours a day, 7 days a week. He was known to walk into office with bags under his eyes and in difficult times oversee all decision making processes of his companies. He had to play the role of micro-manager, while at times borrowing money from his friends and relatives just to make the payroll for the next month. Hard work normally generates results, but it took Elon almost a decade to see any returns on his investments.

It was natural to learn that he had two failed marriages and ran a contingent of nannies to look after his kids. He wasn't the perfect dad or husband for that matter but realized the sacrifice he was making in order to provide himself and humanity with a better future.

3) HIRE PEOPLE WHO SHARE YOUR PASSION

The main strategy for Musk in his SPACEX program was to manufacture the parts for this rockets in-house as opposed to sourcing them from different suppliers across the world. In order to do this, he needed to have the greatest minds working for him and this was not restricted to having the smartest talent as much as it was to have the most passionate resources in the market.

He was a tough boss and often described as 'unemphatic.' He set unrealistic goals at times for this teams and shares these deadlines with customers which added more pressure on his internal resources.

However, for engineers in the field of space exploration, there was nowhere else they would rather be. Working for government firms or even NASA were their only other options and progress in those establishment was slow. Here was a man who was attempting to revolutionize space travel and he was doing so by changing the whole dynamics of rocket building.

Engineers were known to also work 16 hours shifts. Sometimes they even camped at the foot of the rockets until the next day. You can just imagine their triumph when the first Falcon Rocket successfully launched after over 6 years of trying. For most of them, they wanted to become a part of history and SPACEX offered just that. It was the first private company that competed against the world giants in aviation and space technology, and created a fully functioning rocket at a tiny percentage of the cost.

4) DON'T FEAR YOUR COMPETITION

Initially when Elon embarked on his mission with Teslar, there were a number of hybrid vehicles in the market including the Toyota Prius. Many people called Elon a fool to enter a market dominated by the big players because they were mature in their businesses and had enough funding to invest in R&D where as Elon's finances were dwindling.

Conceptualizing the Teslar was genius in itself. Elon wanted a car what was electric (environmentally friendly), one that could accelerate from 0 to 60 mph in just over 4 1/2 seconds and one that could position itself with the middle/upper class as a luxury vehicle. His whole model revolved around batteries which could be charged an one his many solar powered charging stations located country-wide for free. He also sold the fact that because his vehicles did not have an engines, they did not have to be taken into the garage for regular oil changes and servicing.

Most car manufacturers saw him as a new kid on the block and didn't take him too seriously, in fact they thought that Elon would fail until the likes of Mercedes placed an order for the batteries made by Teslar - to be used in their smart cars. This was a triumphant moment for Musk because finally one of the pioneers for automobile manufacturing was coming to him for help.

In a way Teslar revolutionized the whole manufacturing process as well. We've all studied about Lean manufacturing and Toyota Production systems that were deployed to eliminate waste in the process. This was all good, but these companies still outsourced a lot of their supply chain to external companies for brake pads, radios, software etc.

Teslar however hired some of the smartest minds and manufactured their own parts.

This was one of the reasons SPACEX became so successful too - because they no longer had to source expensive aviation parts from across the world - they would find a simplistic way of manufacturing it, testing it and commercializing it at a fraction of the cost.

One might say that by developing their parts in-house they were not enjoying the benefits of economies to scale (considering their volume) but you have to also remember the industry they were in. The Aeronautics and Electric Automobile sector was a niche market that demanded high investment, the type of funding that made ancillary suppliers rich and acted as a restraint to entrepreneurs entering the business. It costed a billion dollars for NASA to send a rocket into space. If Elon was to use the same suppliers, he would not be able to achieve his goal of sending up a rocket for under hundred million.

Elon simply had enough of paying exuberant prices and found a work-around.

5) DEFINE YOUR UNIQUE SELLING PROPOSITION

The difference between Teslar and its other automobile manufacturers was the fact that the traditional industrialists kept releasing new versions of their cars. Sometimes on an annual basis, companies like General Motors or Chrysler released new models into the market.

However, Teslar positioned itself to be the APPLE IPHONE of the car industry. They did not update their model annually, instead had routine software updates through their operating system. So when a driver parked his car at night, the automatic updates would sync itself through the system.

In Teslar you were not simply buying a car, but inheriting a lifestyle.

Apart from the aesthetic beauty of the Teslar, the car also was revolutionary in terms of technology. Musk had a vision of not only making it the world's best Electric Car but the World's Best Car!

6) MAKE QUICK DECISIONS

The difference between Musk's companies and the other big corporations was the fact that he was always on hand to make the important decisions fast. This is one of the reasons why he didn't want to go Public on Teslar because he feared losing control of the company.

If companies like General Motors wanted to make a decision, they would have to consult their board and go through a lot of bureaucratic red tape. However, this was not the case in SPACEX nor Teslar.

There was one incident where one of the engineers wrote a detailed email regarding the change of an auto part. He went into detail as to why it needed to be replaced, the benefits and costs. He went into the level of detail he knew Musk would expect; and spent hours drafting his idea - only to get a reply 10 minutes later saying "OK".

7) ATTENTION TO DETAIL

Elon was paranoid to the extent of being painful to his employees, but it was his eye for detail that help sculpture masterpieces. He was known to have hired some of the most creative minds to help sculpt the body of the 'Teslar Model-S'. Things needed to be perfect and Elon made sure his unique signature was stamped on the end product.

8) BUILD YOUR NETWORK

It is interesting to note that a number of Elon's friends rallied around him when he was at a crisis. He managed to persuade them to invest in his businesses and even loaned capital from them when times got tough. Once of his closest friends, Larry Page from GOOGLE said that if he died - instead of giving it to a philanthropic organization, he'd rather hand over his cash to Elon Musk, the founder of Tesla, SpaceX, and SolarCity.

He thinks Musk's vision for going to Mars "to back up humanity" is inspired. He said, "That's a company, and that's philanthropical."

Even before starting up his rocket company SPACEX, Elon approached some of the most influential minds in space exploration and made generous donations to societies that they chaired. He wanted to gain access to the industry leaders and he believed he would need their support if he was going to get his spaceship to mars. He spent a lot of time with President Obama and threw parties with the executives of Silicon Valley. The fact that the 'ValleyWag' (Gossip & Critic Blog in Silicon Valley) was roasting Elon was validation enough that he had made a mark among the elite. This help him secure investment from venture capitalists and opened a market for his electric cars. Everyone in Silicon Valley wanted to get their hands on a Model S. It was a status symbol in high society and Elon knew that cash cow was ready to be milked.

9) KNOW YOUR SUBJECT

Elon Musk was a very knowledgeable man however, he did not know everything. In the field of automobile manufacturing and rocket making, the learning curve was steep and he had to be on top of his game.

He spent hours with engineers and often questioned them on their projects in order to get a better understanding of the whole process. This was important to him because at the end of the day, it was him who was meeting the investors and stakeholders. If he was was not able to clearly articulate his ideas, then he would potentially lose their confidence.

He made it a point to understand the business as well as all the components that went into developing his end products.

10) KNOW HOW TO RUN A BUSINESS

A number of inventors and innovators came up with amazing ideas and many have a fair idea of how they want to commercialize their products. However, running a business is a different proposition altogether. In my opinion, this is where Elon struggled the most. He was playing dual roles and multiply that by the fact that he was involved in different industries make it a recipe for disaster.

His justification for being so involved was because he felt any top executive would only look at decision making from a numbers perspective and in turn trade his vision for profitability.

However, it was clear that he was overloaded and needed someone to take over the reins. Gwynne Shotwell is his COO and President of SPACEX and offers that stability the business deserves.

The point that I am trying to make that is is great to be the innovator and the engineer, but it is essential to have someone who is capable of running the operations of the company.

11) DREAM BIGGER THAN ANYONE ELSE

Elon started off his career believing that one day humanity would colonize Mars and conquer space. For any investor, this proposition would sound like a joke.

But who would have thought that an entrepreneur with limited capital would take on the giants of the space industry and eventually develop a model which made space travel affordable. Governments around the world have contracted with him to launch their satellites into orbit.

Most recently Elon has sent his own car into space to push the boundaries of advertising, and he has already made plans to send up the first lot of space tourists.

He may not have got to mars at yet - but he is certainly going closer than anyone else.

12) LUCK IS WHERE HARD WORK MEETS OPPORTUNITY

During Enlon's saga with his businesses, there were a number of times when he could have sold out and exited. However, there always seemed to be something that worked out for him when the going got too tough.

If I was to recall one incident - Elon was having discussions with Larry Page of Google to take over ownership of the Tesla as he was was drowning in debt. He felt Larry shared a similar vision and although this was a last resort, he felt that his company was in good hands. However, just at that juncture, his sales teams managed to miraculously surpass their targets and engineer more liquidity into the business. This help him retain ownership of his company and eventually did not have rely on his old friend to bail him out.

He was a workaholic, and encountered a number of problems during his career. The time when his second rocket exploded upon launch was traumatic and the cost of failure was immense. However, he kept refining his product and kept investing in his dream. Critics called him a fool, the big car manufacturers called his business 'child's play' but he was on a mission. His resilience eventually paid off, and at the time he needed luck the most - it never let him down.

13) NO - IS NOT THE RIGHT ANSWER

Elon was very specific when he recruited employees and demanded high standards from them. He wanted them to work with the same passion as him.

There was one incident where engineers were working tirelessly on a remote island for months in preparation for the launch of one of his rockets in the SPACEX Program. They had been working 16 hour days and needed a break. Some of them asked Elon if they could take the last few weeks of the year off so that they could spend time with their families.

He replied saying that they could spend all the Christmases in future with their families because if their mission failed, all of them would be without jobs and would be at home anyway.

On similar lines, he was very harsh with engineers who said something couldn't be done. He believed their business revolved around the concept of doing things that have never been done (Pushing limits and achieving the unthinkable), so if anyone told him that something was not possible he simply would relieve that person of their services and find someone who could do the job.