Elon Musk, the South Africa-born billionaire behind the likes of SpaceX and Paypal, may be in the news for the wrong reasons at the moment following his divorce from his second wife, but he is the quintessential example of the self-made African operating with great success in the diaspora. He joined the list of billionaires following a 25 percent stock value gain in Tesla, his publicly traded electric car company, while he is preparing his companies SolarCity and SpaceX for IPOs, with the former expected to achieve a $1.5 billion valuation. Ventures Africa looks at five lessons that can be learned from Musk’s great and varied success.
Stick to what your good at
Musk bought his first computer at the tender age of ten and had taught himself how to program by the age of 12. He sold his first commercial software for about $500, a space game called Blastar. He has focused in part on the software and the internet ever since, while never varying from the three fields where he initially felt he had most to offer. He considered three areas he wanted to get into that were “important problems that would most affect the future of humanity”. As he said later, “One was the internet, one was clean energy, and one was space”.
Be ahead of the game
He has always retained a connection with the internet and clean energy, and the two underpin many of his business decisions. He created the first electric car of the modern era, called the Tesla Roadster. He co-founded X.com, an online financial services and e-mail payment company, in March 1999. A year later X.com acquired Confinity, which operated an auction payment system, PayPal. Musk was a principal architect behind the purchase, which hinged on his belief in the emerging P2P technology, and instrumental in PayPal’s focus on a global payment system. His beliefs and commitment have been proved right by the success of PayPal and P2P technology in general.
Nobody could ever accuse Elon Musk of setting his sights low. Despite his great success, he shows no sign of letting up and his latest projects are ambitious in the extreme. He is currently working on a project with fellow billionaire Paul Allen on a project that will launch unmanned rockets from what will be the world’s biggest plane. “Elon thinks bigger than just about anyone else I’ve ever met,” said David Sacks, former chief operating officer at PayPal and now head of an independent film company in L.A. “He sets lofty goals and sets out to achieve them with great speed.”
Go for growth
Musk developed a viral marketing campaign at PayPal, where the firm paid $10 to every new customer as well as anyone who referred a new user to the system. The campaign fuelled exponential growth. Despite the tech-sector implosion, PayPal went public in February 2002 with a market capitalisation of $1.2 billion. Just five months later, EBay snapped it up for $1.5 billion. Musk’s EBay shares now are worth about $200 million, thanks to the growth of the stock.
Bring down the competition
Not one to mince his words, Musk has recently attacked electric car maker Fisker, and its founder Henrik Fisker, for the poor quality of their product. In an interview with Automobile Magazine, Musk said “it’s a mediocre product at a high price. The car looks very big, and yet it has no trunk space and is very cramped inside, particularly in the rear seats.”
He went on to add: “The fundamental problem with Henrik Fisker — he is a designer or stylist…he thinks the reason we don’t have electric cars is for lack of styling. This is not the reason. It’s fundamentally a technology problem. At the same time, you need to make it look good and feel good, because otherwise you’re going to have an impaired product. But just making something look like an electric car does not make it an electric car.”
He may not have made himself many friends at Fisker, but he certainly took the challenge to the competition.