You’ve probably heard of Elon Musk. The CEO of Tesla, the electric-automobile manufacturer, Musk is probably the one of only two people on this planet to found three billion-dollar companies—PayPal, Tesla and SpaceX. During a 2013 interview for TED Talks, this serial entrepreneur says, “Did you hear the joke about the man who made a small fortune in the space industry?”
He pauses for effect before delivering the punchline:
“He started with a large one.”
For an entrepreneur who made his millions when he was just 27, Musk understands the enormous risks and upsides involved in high-risk tech ventures, like a perfect poker player. Both Tesla and SpaceX were close to dying, and he barely had the resources for both companies.
Today, he is worth a record $14.8 billion, according to Forbes real-time rankings of the world’s billionaires, making him America’s 29th richest person. Musk has been dominating headlines since the past year or so, and it is only prudent that his business mantras and philosophies are worth looking at in detail.
Here are the top five lessons that young entrepreneurs can gain from Musk:
Lesson 1: Good companies execute and innovate faster
Companies understand that innovation is the bedrock of growth. Without that, businesses won’t be able to scale or expand in a profitable manner. Musk believes that if a company is relying on patents, then it means they are not innovating or not doing it fast enough. “You want to be innovating so fast [that] you invalidate your prior patents…” In fact, he advocates for open innovation and collaboration as he believes that they are cost effective in the long run.
Lesson 2: Focus on first things first
Musk was not always the successful man that he is now. He had to go through many lows, failures and problems, but he did not let that deter him from the primary goal of trying out new areas. “If something is important enough you should try, even if the probable outcome is failure.” He’s a very opinionated leader and has the ability to make people believe his vision.
He will push people hard to stretch what’s possible. About 70% of his time is focused on research and development. Tesla has a zero dollar marketing budget and Musk’s explanation for that is his relentless focus on making the highest quality cars possible. Currently, he does not entertain any idea beyond product development.
Lesson 3: Be responsive to customers
Recently, a user complained to Musk on Twitter about the lack of charging stations. Musk responded to the user saying that he will look into it. Six days later, Tesla initiated a policy change, which took a big leap forward toward solving this issue.
Customer responsiveness coupled with follow through are one of the most important tasks facing businesses today. The way you interact with your customers can truly make or break your business these days and a few bad UX can ruin your business’s reputation.
Lesson 4: Make failure an option
Elon Musk was no stranger to failure. He had ploughed in enough money into SpaceX for its first three launches. However, each of them failed. They just managed to scrape through enough money for a fourth launch.
This successful launch won a $1.6 billion contract from NASA for 12 resupply flights to the station. He was definitely afraid of failure, however, he created a plan to address possible failure. “People should certainly ignore fear if it’s irrational. Even if it’s rational and the stake is worth it, it’s still worth proceeding,” he said. Create a contingency plan for each problem you can control.
Elon Musk is not just spearheading two very successful companies; he is also fostering an ecosystem where innovation along with collaboration can function. And that is the true hallmark of an entrepreneur.