“When something is important enough, you do it even if the odds are not in your favour”
Born in 1971 in Pretoria, Elon Reeve Musk grew up amid the chaos of South African apartheid. As a child, Musk was quiet and had a tendency to drift off into a trance-like state – a habit doctors mistook for hearing problems. He was also an obsessive reader, reading up to 10 hours per day and consuming information at an astonishing rate.
Musk’s geeky, introverted persona contrasted starkly with the popular ‘jocks’ who dominated the adolescent social circles of Pretoria, making him the victim of brutal bullying throughout his childhood.
“He was tossed down a flight of stairs one time and then punched up after that – he spent about a week in hospital – that was fairly common in his younger days. He was sort of like the nerd in the corner in a very masculine, sports-oriented culture – obviously he didn’t really fit in”, said Ashlee Vance, author of Elon Musk: How the Billionaire CEO of SpaceX and Tesla is Shaping Our Future, the only biography of the tech titan that features exclusive interviews with the man himself.
After his parents divorced, Musk – the second of three children – moved in with his father, Errol. Musk has said very little about those years, but a quote from him in Vance’s book simply states: “It was not a happy childhood. It was like misery.” From a very young age, Musk began fantasising about escaping to the US, his oft-dreamt-about land of opportunity.
There are many individuals who are incredibly capable, intelligent and ambitious, but it is difficult to deny Musk is in a league of his own
Using his mother’s Canadian roots to obtain a visa, Musk left for Montreal aged 17 with nothing but $100 to his name, taking what would be the first of the many big risks he would become known for. He spent his first year in Canada working various low-paid jobs before enrolling at Queen’s University. After two years at the college, Musk transferred to the University of Pennsylvania in a bid to open new doors for himself.
Always striving to do better, Musk completed his studies at Penn and decided to pursue a PhD in materials science and physics at Stanford University. Despite the college’s prestige, he was lured away by the scent of the very recent internet boom, dropping out after just two days at Stanford in search of Silicon Valley success. Having interned at several tech companies in the area, Musk was convinced he could capitalise on the new phenomenon.
Together with his brother Kimbal, Musk started his first company, Global Link Information Network, which was later renamed Zip2. The idea behind the start-up was ingenious; many companies were still suspicious of the web and needed help to join this new realm. Zip2 was a map-linked, searchable business directory that helped them to make that leap.
By February 1996, venture capitalists had come calling. Mohr Davidow Ventures’ $3m enabled Musk to go national, while a new strategy helped the company to sell software packages to newspapers, including the Chicago Tribune and The New York Times. In February 1999, Compaq Computer made a surprise $307m cash bid – but by then Musk was already dreaming up his next grand plan.
Having earned $22m from the Compaq deal, Musk set his sights on an idea that had been brewing ever since he had been an intern at Scotiabank while living in Canada. A firm believer in the web’s potential, Musk was adamant that an internet-based bank could disrupt the global financial market and become wildly successful. And so, a month after Compaq’s announcement, Musk invested $12m of his own money to create X.com.
The move was highly unusual. “For most of the people in Silicon Valley who make it big, a big perk is that there are investors who are willing to give you a lot of money for your next venture – you don’t have to take as much personal risk”, Vance told World Finance. “But [Musk] always wanted to control his companies and really not have anyone to answer to, and so he gambled all of his own money, and the things that he went after were all things that people largely thought were impossible.”
Following much hesitation from investors and various internal issues, X.com secured an injection of cash from Sequoia Capital and finally went live on November 24, 1999. Musk was revolutionary in his strategy, gifting new customers cash rewards and creating peer-to-peer payment systems. In just a couple of months, X.com managed to secure some 200,000 customers – as well as a major rival. This competing firm was called Confinity, the creation of two young entrepreneurs, Max Levchin and Peter Thiel.
After an initial alliance, things soon turned nasty as the two start-ups began to compete ferociously. Having lost millions in a seemingly unwinnable battle, the pair merged in March 2000. With Confinity’s hot new product PayPal and X.com’s cash reserves and sophisticated products, it was a match made in heaven, and the merged company soon raised $100m from the likes of Goldman Sachs and Deutsche Bank. By July 2002, just over a year after the company had been rebranded as PayPal, the board accepted a $1.5bn offer from eBay. As PayPal’s biggest shareholder, Musk walked away with $180m after taxes.
But when Musk and his wife embarked on a long overdue honeymoon in September 2000, it not only gave the PayPal board its first chance to oust Musk as CEO, it also resulted in him contracting a near-fatal bout of malaria. Musk responded with a formative move to LA and the rediscovery of one of his favourite subjects: space.
Before eBay’s bid came into play, a series of seminal events saw Musk head down a historic path linked with his childhood passion. From a young age, Musk had dreamed about space, forever romanticised by his favourite book, The Hitchhiker’s Guide to the Galaxy. With a dream team of rocket engineers in place and a $100m investment of his own money, Musk turned his fantasy into reality, creating Space Exploration Technologies – also known as SpaceX – in June 2002. The company’s goal was to make spaceflight 10 times cheaper, and its ultimate vision was to one day colonise Mars.
The reaction was one of incredulity. “No private person had ever created a successful space company – many billionaires had lost huge chunks of money trying”, said Vance. But despite the hoards of naysayers, Musk proceeded, promising that the launch of SpaceX’s first rocket, Falcon 1, would cost $6.9m as opposed to the standard minimum of $30m. After three failed attempts, on September 28 2008, Falcon 1 reached orbit.
NASA promptly signed a $1.6bn contract with SpaceX, marking the first private deal in its history. Musk made history again and again after that point; through SpaceX, he had actually succeeded in making space travel more affordable, opening up a universe of new discoveries and possibilities.
Making boring sexy
For the incredibly driven Musk, one seemingly impossible achievement was not enough. In 2004, the entrepreneur turned his hand to another outlandish project, becoming Chairman of electric car company Tesla Motors. “The electric car had been tried and died several times before”, said Vance. Once again, Musk had set out to achieve what so many others before him had failed to do.
Elon Musk in numbers:
The amount of his own money Elon Musk invested to create X.com
Tesla’s market capitalisation. In comparison, 114-year-old Ford’s cap is $45bn
The value of NASA’s contract with Musk’s space exploration company, SpaceX
The year Musk’s rocket Falcon 1, constructed by SpaceX, launched successfully
In October 2008, Musk became Tesla’s CEO and invested $70m into the company. Against all odds, this astonishing gamble paid off. Before Musk introduced Tesla’s first vehicle, the Roadster, all electric cars had focused solely on being green. “The cars ended up being boring, and they were slow – they were mediocre”, said Vance. “[Musk] flipped it on its head and said, ‘Let’s make a really sexy car that goes incredibly fast, and make an electric car that’s an object of desire instead of a compromise’.” This approach sparked public interest; suddenly electric cars were cool.
Then came Tesla’s second car, the Model S sedan. Vance explained: “He turned all these things that had been disadvantages for electric cars into advantages.” For example, Musk placed heavy battery packs at the bottom of the car, giving it a very low centre of gravity so it handled well. “They got rid of the engine, because they didn’t need one, and so you have storage in both the front and the back, [creating] what they call the ‘frunk’.” With much less machinery and a lot more space, “you end up with a sedan that goes incredibly fast – as fast as a race car”. Musk also added a large touch screen monitor, essentially turning the car into a computer.
Musk’s ingenuity transformed how electric cars were perceived. “I think that was how he succeeded where other people had failed”, Vance added. Following a string of Car of the Year awards, by April 2017, Tesla had overtaken General Motors as the most valuable car manufacturer in the US – a stunning feat for a technology that up until recently was considered so unappealing.
Incredibly, Musk’s ambitions didn’t stop there. In August 2016, Tesla bought SolarCity, a solar energy services provider that Musk had invested $10m in back in 2003. Today, SolarCity is the largest solar provider in the US. Musk’s other grandiose plans for the coming years include a hyperloop transportation system and underground tunnels that will make traffic jams a thing of the past. Essentially, Musk seems intent upon solving the world’s problems, one (or, indeed, a few) at a time.
Naturally, there are many individuals who are incredibly capable, intelligent and ambitious, but it is difficult to deny Musk is in a league of his own. This is best exemplified by the fact he simultaneously heads not one, but two groundbreaking and diverse mega-companies. And while there may be a few others who can – or already have – done this, none have succeeded to quite the same degree as Musk.
Vance explained: “He’s running two giant companies at the same time and he knows everything that is going on with the products; he helps design them, he helps figure out inventions, he is essentially the entire marketing arm for all of his companies. They don’t spend any money on advertising, which is – especially in the automotive industry – very unusual, and then he does the business side too. He does it all, and that’s at two companies… He treats business more as almost a life and death situation, or like war, than a job. And so he is competing on a different level than most people”.
Making a success of two global enterprises, both in markets that were previously considered impossible to conquer, is nothing short of extraordinary. To achieve this astonishing feat, Musk maintains a gruelling schedule. He is strict and stern with his employees, demanding they work as hard and are as razor-sharp as he. Musk sets himself targets and timelines that are laughed at by others, but help push him even harder. But while these factors help forge his incredible success, there is one other that drives him to achieve the impossible: Earth’s Plan B.
“I think he likes money as much as the next person and it certainly allows him to live this very larger-than-life existence that I think he revels in”, noted Vance. “But I think there’s just no question for me that it’s not money that drives him. He [has] a very strange goal: his goal is to create a human colony on Mars, and that really is his overarching life purpose. I think it’s probably silly to a lot of people, [but] pretty much anything that he does fits in line with that. He wants to create this escape plan for the human species in case something goes wrong on Earth. And then you can see Tesla and SolarCity as attempts to fix the Earth in case that doesn’t work out.”
Born: 1971 | Education: University of Pennsylvania
1971: Musk was born in the South African city of Pretoria, a sprawling city an hour away from Johannesburg. A studious, quiet child, Musk was badly bullied for years and had an unhappy upbringing.
1989: After years of imagining his escape, Musk set off for Montreal, Canada with only $100. Unsuccessful in tracking down long-lost relatives, Musk worked odd jobs to make ends meet.
1995: Having completed degrees in business and physics at Pennsylvania University, Musk abandoned a PhD at Stanford to head for Silicon Valley and create internet start-up Zip2.
2000: An internal coup saw Musk ousted as CEO of PayPal and replaced by co-founder Peter Thiel. Musk continued losing control of the company, but made $180m when it was sold to eBay in 2002.
2010: Two years after Musk succeeded Ze’ev Drori as CEO of Tesla Motors, the company raised $226m in its IPO, making Tesla the first US car firm to go public since Ford in 1956.
2012: SpaceX became the first private company to send spacecraft to the International Space Station. Falcon 9 successfully delivered 1,000lbs of supplies to stationed astronauts.