Elon Musk is one of the largest names in business today. Musk is the founder of four unique companies including PayPal, Tesla Motors and the aptly named SpaceX. He is the current CEO of the latter two companies which are among the most innovative companies out there today. Musk has drawn comparisons to the likes of Steve Jobs and Henry Ford.
Being a part of four large businesses, a lot can be gleaned from Musk’s business philosophies and successes. Here are 6 business lessons you can learn from Elon Musk:
While Musk is the founder of two large companies, either one of which being a monumental task for any CEO, he was also the founder of two smaller, but no less successful companies. Starting with a software company called Zip2, which sold for $304 million, he then moved on to the well-known PayPal which eventually sold for $1.5 billion to eBay. From there Musk started his lifetime passion project of an Aerospace company, founding SpaceX in 2002.
Would he have been able to be as successful with Tesla and SpaceX were it not for the numerous lessons he learned? Through those experiences Musk learned what works for a company and what does not work. He learned how to grow, how to hire employees, how to gather investors, and how to deal with competitors.
At the same time, his relentless work ethic has captured the attention of millions around the world as an inspiration. In an interview when asked what advice he’d give to young entrepreneurs, Elon Musk said, “If other people are putting in 40 hours in a week, and you’re putting in 100, you will achieve in four months, what it takes them a year to achieve. […] That’s the type of work ethic an entrepreneur needs to have.”
It is great to dream big and think big, but sometimes it is better to start small. A company that was bought for over $300 million is nothing to shrug at, but it was small in comparison to Musk’s future intentions. He started relatively small, succeeded and grew. Along the way, he learned how to run a business.
Competition is a Good Thing
When Tesla Motors made all of their patents open source in June of 2014, it was a bit of a head scratcher. Why would a company want to give away all their secrets? More importantly, why would they do so for free?
It is because competition is not to be feared, but embraced. By opening up their patents to all manufacturers, Tesla Motors increased the number of potential competitors and also let their contemporaries in on their technology, like the company’s namesake, Nikola Tesla. Tesla and Thomas Edison had a famously competitive relationship in the 19th and early 20th century. Through this competition they pushed each other. Think of the space race of the 1950’s and 1960’s. Without Sputnik and the Cold War, perhaps the United States wouldn’t have gotten to the moon as quickly as they did. In each case they were motivated by those around them.
Musk understands this and knows that competition can breed innovation. He also believes his company can innovate better than anyone else. By bringing forth more competition and higher quality competition, Musk’s goal is to grow not only Tesla Motors, but the electric car industry as a whole.
No idea is Too Big
It is difficult to think of a bigger idea than building a rocket ship with the intention of one day going to Mars. NASA themselves have had the idea for years, but a manned mission is a long ways away, both in terms of feasibility and cost. This has not stopped Musk from building towards the goal for his company SpaceX. They are looking not only to visit Mars, but also to establish the first human colony on the red planet. This idea is not just a part of science fiction anymore; Musk and SpaceX are trying to make it a reality.
Musk didn’t start off by sending his first rocket to the moon, he built up in steps and he nearly failed on each of those steps numerous times.
If you feel you have a great idea but think it is too hard to follow through on, the chances are you are probably wrong. Big ideas need big plans, and great people behind them. Whether it’s a trip to space, to the moon, or to Mars, no idea is too big. Nothing is impossible.
Surround Yourself with the Best
There are very few types of businesses in the world that you build alone. Sure it can start that way, a lot of companies do, but eventually others will need to be brought in as the company grows. Maybe you will need to double your workforce or you will need to open a $5 billion factory to manufacture batteries for your electric cars. For Hustle & Grind, we found this to be true early on and as a result, Ross went from attempting to build this himself to surrounding himself with great people.
If you are Musk, it helps to be one of the greatest minds of your generation, but to have built and grown 4 uniquely different companies you must build and grow great teams. Much like seeking investors, you must seek the right people to work for your company.
If you are the best in your company at every possible task, you are doing something wrong. A company leader should know about each portion of their company, but should also show enough confidence and faith in his or her employees to get their work done. If you cannot trust your employees, they should not be working for you.
Time is more than Money
The terms life-hacking and corner-cutting do not seem to be in Elon Musk’s vocabulary. He built his companies by working long and hard. By his own estimation, he works upwards of 100 hours per week.
There is a lot more to putting hours in, but working beyond the traditional 9 to 5 from Monday to Friday is an inevitable part of growing and innovating. Even the 100 hours he puts in every week has to be very efficient considering he is CEO of two large companies that show no signs of ceasing to grow. To put this much time into work, personal time has to be equallyas efficient as time in the office. Working long days and hours does not mean family and personal times disappear. They just need to be handled differently.
Ideas are great, but they are nothing without the work and the willingness to make those ideas a reality. The better the idea, the more work it will take. If innovation was easy, everyone would do it. If running a successful business was a breeze, we would all be entrepreneurs.
Product Quality is Above All Else
Much like Steve Jobs and Apple did not invent the MP3 player, PayPal was not the first e-commerce site, and Musk did not invent the concept of the electric car. So why has Tesla succeeded where others have failed? It is because the most important concept to Musk and Tesla Motors was the quality of their products.
That seems simple enough, but it is so often drowned out by other factors. It does not always matter how well a company is run, or how much fun it is for employees to work there and how they rate their job satisfaction. It does not matter how much investors have put into a company or product. What matters first and foremost is the product the company is selling.
Elon Musk saw a market for the electric car and knew he could conquer it not by buying out competition, not through fancy advertising campaigns or IPOs. He built his company by building the best car he possibly could. Then the company designed another car and then another one. Tesla grew to the point where it struggled to keep up with demand. Next the focus is on affordability, to grow their market.
It is not about being first to market, being the best in the market is what will get you noticed.
Musk could have stopped working after selling Zip2. He definitely could have lived a great life of leisure after selling PayPal, but he kept working. Now Musk is worth an estimated $9 billion and can be considered the face of two completely different industries. Your goals may not be as high, but these lessons can be applied to any business in order to build success.