Elon Musk And His Must Read Advice For Entrepreneurs

So what is an entrepreneur? Put simply the definition reads “a person who sets up a business or businesses, taking on financial risks in the hope of profit”.

In fact, it’s the last part of that definition that is the most interesting because when you unpack the profile of an individual you get an insight into the fact that they share a trait that many successful people have – the desire to take a risk, of throwing caution to the wind and going all in. Sometimes they bet against the odds and win while in other cases they lose everything; but what makes entrepreneurs different is that invariably they learn lessons from the loss and start again, renewed, refreshed and much wiser.

Early Life

Elon Musk, one of the founders of PayPal is one such example. Musk was born on June 28th 1971 in what was then Apartheid era South Africa. Musk was fortunate enough to have been born into the right tribe with his grandfather being a British explorer and his mother of Canadian ancestry. When his parents divorced in 1980 Musk spent most of his time moving around South Africa with his father, Errol, who was an electromechanical engineer. When he was 10 years old he discovered the wonders of computing thanks to a Commodore VIC-20 and started to teach himself about programming. By age 12 he sold a BASIC listing for q video game he had developed called Blaster to a magazine for $500. After graduating high school he moved to Canada in 1989 just before he turned 18 and some have suggested that he did so to avoid having to serve in the South African Military. After transferring to the University of Pennsylvania he obtained a degree in physics before moving on to Stanford to being a PH.D in applied physics. Like many successful entrepreneurs he soon dropped out and began to work on some of his business ideas.

On the connection between physics and entrepreneurship Musk once said that: “[Physics is] a good framework for thinking … Boil things down to their fundamental truths and reason up from there.”

The First Business Zip2

By 1995 Musk and his brother Kimbal started a web software company thanks to a $28,000 investment from their father. They developed a relatively straight forward product that acted as an online city guide for the newspaper sector. Musk proved to be a great salesman having secured contracts with the New York Times and the Chicago Tribune but soon had a falling out with the Board over the CEO’s role. Compaq eventually bought the company (Zip2) for US$ 307 million of which Musk received $22 million.

PayPal

In March of 1999 he went onto found a new online financial services and email payment company called X.com with $10 million of the money he had received from the sale of Zip2 and a year later the company merged with Confinity which had a product called PayPal; a money transfer service. By 2001 the companies merged and focussed on the Pay Pal brand. Like his time at Zip2 Musk was eventually forced out of the company after disagreements about the platform and architecture of the product and service. When PayPal was acquired by eBay for $1.5 billion in Stock Musk received $165 million.

Space X

By 2001 Musk already had plans for space and was also looking to Mars to establish a habitable human outpost. So committed was he to space travel he committed $100 million to the formation of SpaceX that, 14 years later, now manufactures launch vehicles that are being tested and used by organizations such as NASA.

As Musk’s mother once said “He goes into his brain, and then you just see he is in another world. He still does that. Now I just leave him be because I know he is designing a new rocket or something.”

Musk once said on space travel: “There’s a fundamental difference, if you look into the future, between a humanity that is a space-faring civilization, that’s out there exploring the stars … compared with one where we are forever confined to Earth until some eventual extinction event.”

Tesla

But, it was in 2003 that Musk took a big gamble on the future of the car industry and decided it was ripe for disruption. Tesla Motors was born and while it has taken a while to get off the ground and the broader car industry poured scorn on him in the early years the things about entrepreneurs is they know how to play the long game. Today the company has laid out plans to expand its electric car charge stations across North America and Musk’s 32% share of the business is estimated to be worth about $18 billion.

On Tesla he once said: “If something is important enough, even if the odds are against you, you should still do it.”

What Advice Does Elon Musk Have For Entrepreneurs?

#1 Building Something That Has Value For Someone Else

‘’Focus on something that has high value to someone else, be really rigorous in making that assessment, because natural human tendency is wishful thinking, so the challenge to entrepreneurs is telling what’s the difference between really believing in your ideals and sticking to them as opposed to pursuing some unrealistic dream that doesn’t actually have merit.’’

#2 Work Like Hell

‘’Be very rigorous in your self-analysis, certainly be extremely tenacious, and just work like hell. Put in 80-100 hours every week. All these things improves the odds of success.’’

#3 Ask For Feedback

‘’I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.’’

#4 Try

‘’Frankly, though, I think most people can learn a lot more than they think they can. They sell themselves short without trying.’’

#5 Keep The Bigger Picture In Mind

‘’One bit of advice: it is important to view knowledge as sort of a semantic tree – make sure you understand the fundamental principles like the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.’’

#6 Think About Yourself Critically

“Accurate self analysis. It’s difficult to do so, since you’re too close to yourself by definition. People do not think critically enough. People assume too many things to be true without sufficient basis in that belief, so it’s very important that people closely analyze what is supposed to be true, and build it up, analyze things by the first principles, not by analogy or convention, which is actually what most people do, that makes it difficult to gain insight as to how things can be bettered. In any argument or train of thinking, you want to make sure that the underlying premises are valid and applicable, and how the conclusion reached is necessarily driven by the underlying premises and the interconnection between those premises. It’s the foundation of rational thought. “

#7 Don’t Fear Taking Risks

‘’People tend to over-weigh risks on a personal level. It’s one thing if you’ve got a mortgage to pay and kids to support, so that if you were to deviate from your job, well, how are you going to feed your family and pay the rent? That’s understandable, but let’s say you’re young and you’re just coming out of college, what are your risks? You’re not going to starve, certainly not in any kind of modern economy. It’s so easy to earn enough money just to live somewhere and eat food. Very easy to do. So I don’t know what they’re afraid of. Mostly afraid of failure, I think, but people should be less risk averse, when there’s not much at risk.’’

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