5 Entrepreneurial Lessons from Elon Musk, the Real Life Iron Man
The man who inspired Robert Downey Jr. and Iron Man didn’t start out that way. Yet again, neither did Tony Stark. Both Elon Musk and Tony Stark forged their superhero status in the crucible of engineering know-how and literal shoot-for-the-stars ambition. The path Elon took from his birth home in Pretoria, South Africa in 1971 to a SpaceX hangar in Cape Canaveral in 2013 is dotted with informative lessons. We examined Elon Musk’s incredible journey and identified five takeaways that other entrepreneurs can follow.
Initially, young Elon Musk focused on physics and economics in his undergraduate years at Wharton and post-graduate studies at Stanford. But he left his applied physics PhD program at Stanford to start an internet company, Zip2, in 1995. When asked what prompted him to leave Stanford, Elon replied: “the Internet came along, and I wanted a piece of the action.”
The crazy ones have to be willing to shake things up, even if it’s not part of the plan. There are a number of ways to pivot your life. If you’re interested in learning how to code or other skills, you can consider the following sites:
Elon founded his next company, X.com, an email payment company in 1999. The company merged with Confinity, which owned an online property called PayPal. Initially, the plan was to merge the two products together, with X.com being a product of the PayPal brand. But Elon knew the PayPal brand had a bigger opportunity so he agreed to let the X.com brand go.
This isn’t to say Elon Musk or entrepreneurs should operate without ego. If you believe in your idea, you should fight for it. However, the lesson from the X.com merger with Confinity is to focus on the big picture. Elon understood that his 11.7% stake in the new PayPal was worth more than his much larger stake in X.com. When you are part of a team, it’s important to acknowledge your team member’s contributions. That is why Elon still supports his PayPal co-founders Peter Thiel (who became CEO after Elon) and Max Levchin in their endeavors.
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After selling PayPal to eBay for $1.5 billion (of which Elon received $165 million) in 2002, Elon didn’t sit idle. Shortly after, he went on to found SpaceX (2002) and Tesla Motors (2003), and become an active investor in companies like Solar City (2006). As a two-time successful entrepreneur with $165 million in the bank, Elon had little incentive to go for broke again. Yet that’s exactly what he did with Tesla Motors and SpaceX. Both companies required additional injections of capital from Elon Musk’s personal fortune to survive, to the point where he was cash-broke and taking personal loans from friends.
There’s no hard and fast rule that every entrepreneur needs to max out credit cards on his or her way to success. In fact, many entrepreneurs build businesses that generate a profit on day one. The takeaway is that entrepreneurship is difficult and failures are bound to happen. In fact, about 75 percent of startups fail, according to this study by Harvard Business School. The best we can do is learn from the lessons of other startup founders and their trials and tribulations. For great failed startup lessons, check out this list compiled by CB Insights.
One critical trait that separates entrepreneurs like Elon Musk and the crazy ones is their rejection of the status quo. Elon boldly took on two industries not known for disruptive startups—the aerospace and automotive industries. In fact, naysayers were quick to point out how both Tesla and SpaceX were doomed from the start.
The reason why entrepreneurs are successful is not because they do things that are easy, but precisely because they do things that are hard. Of course, not every startup fits the “Palo Alto garage entrepreneur” stereotype. Father of the Customer Development methodology and famed entrepreneur Steve Blank derived some key takeaway lessons for corporations so they don’t suffer from innovator’s dilemma. Here are two posts on this topic:
- Solving the Innovator’s Dilemma – Customer Development in a Big Company
- Why Companies are Not Startups.
Elon may be an inventive visionary that only comes along once in a generation. But like Jobs before him, Elon is quick to credit the pioneers who inspired him. In a recent interview, Elon highlighted NASA’s contributions to SpaceX: “We would not be where we are today without the help of NASA.”
The Crazy Ones see open highway where others see roadblocks. But they all travel on the same worn roads as other crazy ones before them. Leverage the existing technology, infrastructure, and incentives so you don’t have to start from scratch. Depending on your industry, there’s likely already a wealth of best practices out there. Here are some general small business resources to get you started quickly:
- Gusto’s Crash Course to Hiring Your First Employee
- Orrick’s Start-Up Forms Library
- The Small Business Association
Whether or not Elon Musk is Iron Man is a moot point. What he’s done over four decades is an inspiration to all of us. We may not be as “crazy” as Elon Musk or Tony Stark, but if you take the risk of becoming an entrepreneur, you probably have a little bit of crazy in you too.