By guest author Anne VanderMey
Elon Musk is featured in Zoom: Surprising Ways to Supercharge Your Career by Fortune writer Daniel Roberts. Roberts profiles some of today’s top entrepreneurs and business people who have made Fortune’s 40 under 40 list so that we can actually learn from their success. The excerpt focuses on how Musk’s habit of getting into ventures that seem overwhelmingly challenging and what we can take away from it.
To say that Elon Musk “dreams big” smacks of understatement. For most people a big dream might be a feat like co-founding the Internet payment company PayPal and then selling it to eBay for more than $1 billion. Or creating SpaceX, a rocket company that successfully docked a capsule at the International Space Station. Or heading up the groundbreaking electric-car maker Tesla Motors.
Musk has done all three. But his sights are set still higher—almost absurdly high. Musk’s stated goal is to extend the survival of the human race itself. He plans to do so by making man an “interplanetary species” in case Earth becomes uninhabitable. Specifically, he wants to colonize Mars. He has said SpaceX will have the technology to get to the Red Planet within the next 20 years.
With promises like that, it would be hard to argue that Musk isn’t in over his head. The 42-year-old multi-billionaire, said to be the model for Tony Stark in the Iron Man movies, has attracted devoted followers as well as a swath of critics who say he’s wasting billions (some of it taxpayer money) chasing down dreams that are too grandiose ever to be realized. Then again, so far, dreaming big has paid off pretty well for Elon Musk.
Born in South Africa in 1971, the first of three children, Musk did not have an easy childhood. As a boy, he was young for his grade. The combination of his small stature and his bookishness was “a recipe for disaster” in grade school, he said in a 2011 interview, making him an easy target for bullies. The last name “Musk” didn’t help.
So Musk retreated into the world of books. It was a habit that would serve him well later in life, when he would essentially teach himself rocket science from textbooks. As a boy he devoured all the comic books he could buy, and more that he didn’t pay for, until he got kicked out of the store. When he ran out of material one day, he literally began reading the encyclopedia.
Musk sold his first company at age 12 for $500. It was a video game called Blastar. Later he nearly created a second company—an arcade—but was thwarted when it turned out he needed an adult to sign the documents for the city permit. His parents, unaware of his plans until he presented them with the paperwork, declined to get into the arcade business. He got in trouble instead.
It didn’t take long for Musk to decide that America was where his talents would be truly appreciated. “It’s a cliché, but it’s true: America is the land of opportunity,” he said in a 2011 documentary. At 17, he went to Canada, which was as close as he could get to the States. His mother was born a Canadian citizen; using that connection, Musk and his brother applied for their own citizenship, ignoring their parents’ strong reservations.
Once he got to Canada, Musk enrolled in Queens University in Ontario, but wasn’t enthralled by his courses. He later transferred to the University of Pennsylvania, where he earned degrees in engineering and business. Throughout his schooling, he didn’t go to class much, just read the textbooks and showed up for exams.
Afterward he went to Stanford University for a doctorate in applied physics and materials science. Yet before he actually got to class, he took a considerable risk: He said goodbye to the useful security that a Stanford degree can provide and instead dropped out to start another business. It was called Zip2 and made online publishing software; he sold it to Compaq for $300 million. For some, a payday like that would have meant early retirement. For Musk, it was just the beginning, already a lifetime ago in his timeline of corporate creation.
Despite his poor attendance record, those years turned out to be a formative experience. It was around that time that Musk developed what would become his core philosophy. He came to the conclusion that three things would have the greatest impact on the future of humanity: the Internet, sustainable energy, and space exploration. Talk about follow-through—he would go on to create companies that tackled each of those arenas.
First, the Internet. With Zip2, Musk had essentially created a web-based version of the yellow pages, cataloging the contact information and location of businesses. In 1996, replacing the phone book was still a revolutionary idea. (In a recent documentary, his brother recalled that a skeptical client actually threw a phone book at the co-founders for having the audacity to think they could supplant it.) Immediately after Compaq bought Zip2 in 1999, Musk went to work creating an online finance company called X.com, focused on enabling payments via e-mail. It combined with competitor Confinity in 2000 and became PayPal. In 2002, eBay bought PayPal for $1.5 billion, leaving Musk a huge pot of cash. Today the payment business is instrumental in eBay’s success. In 2012 it saw a 250% surge in mobile payment volume, landing at a whopping $14 billion for the year.
Next came space exploration. In 2002, Musk founded SpaceX with the goal of someday reaching Mars. Originally he planned to buy refurbished intercontinental ballistic missiles from Russia. But after his three fruitless trips to the country (the Russian rocket owners were generous with vodka but not much else), the business relationship went south. Seeing the antiquated technology there, Musk came to the conclusion that he would need to make the spacecraft himself. It was a high-risk move that took incredible audacity and a substantial chunk of his personal fortune. But so far, the returns have been big. In 2010, SpaceX launched a spacecraft into low Earth orbit and returned it safely. It was a feat that, as comedian Jon Stewart pointed out, had been accomplished by only seven parties: the U.S., China, Russia, Japan, India, the European Space Agency, and Elon Musk. SpaceX went a step further in 2012 and successfully docked its Dragon capsule at the International Space Station. It has since carried cargo to and from the station three times.
Finally, there was sustainable energy. In 2003, Musk co-founded the electric-car company Tesla. The startup set out to make battery-powered cars that didn’t compromise on speed or style. By creating an all-electric vehicle that was actually cool, Musk took aim at the entire auto industry. The Model S sedan, released in 2012, looks as sexy as any gasoline-powered sports car, and can go from zero to 60 mph in a blistering 4.2 seconds. The car has earned rave reviews for performance. Skeptics still fret over range anxiety—fear that the battery will die mid-drive—but that didn’t stop Consumer Reports from giving it the highest rating in the magazine’s history (a nearly perfect 99 out of 100).
Musk got into his next renewable energy project in 2006. While he and his family were at the Burning Man Festival, he gave his cousins Lyndon and Peter Rive the idea to create a solar company. If they did it, Musk told them, he would fund it and serve as chairman of the board. The result was SolarCity, now one of the leading providers of residential solar power in the country. Thanks to the encouragement of cousin Musk, Lyndon Rive has become a guru on energy issues in his own right.
Musk has had his brushes with doom. In 2007 it all seemed to be going well; Inc. magazine named Musk its entrepreneur of the year, gushing, “Finally, an entrepreneur who’s not afraid to think really, really big.” Then the 2008 financial crisis rocked the world financial system, and with it, all of Musk’s businesses. Suddenly he was facing the very real possibility of financial ruin. Tesla encountered big delays and mounting expenses, SolarCity was flailing, and SpaceX had three failed launches. Musk went into crisis mode. He invested what was left of his fortune, and then some. He worked around the clock. Possibly as a result, his eight-year marriage to Justine Musk, the mother of his five sons, fell apart.
But Musk leveraged his maniacal work ethic to stage a comeback. The next SpaceX launch was a success, and it went on to bigger and more significant launches. Tesla, thanks in large part to an investment from Daimler, pulled through and had its IPO in 2010. So far it has handily outperformed the market. SolarCity, too, successfully went public in 2012.
Even with a long track record of impossible successes, Musk has doubters. But he doesn’t have much time for them. Critics rail that Musk has grown dependent on Uncle Sam’s largesse. Tesla benefits from green tax credits, and SpaceX inked a $1.6 billion contract with NASA. Former Alaska governor Sarah Palin attacked Tesla as “Obama-subsidized” in early 2013. Musk scoffed in return, via Twitter, that he was “deeply wounded.” Detractors of the Model S, who say its battery doesn’t last the full 265 miles advertised, get even testier retorts. In February 2013 he lashed out at the New York Times, also via Twitter, saying its story about the Model S under-performing on a road trip was inaccurate. He also lobbed a playful but unprintable insult (plus a lawsuit, later dismissed) at a British reviewer for making similar claims.
So far he’s proving them wrong. Tesla has paid back some $450 million in government loans ahead of schedule, and announced its first quarter of profitability in May 2013, trouncing analyst estimates.
At 42, Musk may be settling into his skin, or he may be headed toward a spectacular flameout. It’s still impossible to say whether Tesla will usher in an era of clean-burning automobiles, if SolarCity will make sustainable energy a reality, or if SpaceX will one day extend the survival of the human race by putting men on Mars. What is clear is that thinking big is paying off big for Musk. He is taking risks with his wealth, his personal life, and his reputation, and so far a great many of them have returned huge dividends not just for him, but also for science and society. Will his ideas save the world? Maybe not, but the real risk might be not trying at all.
Excerpted from Zoom: Surprising Ways to Supercharge Your Career by Daniel Roberts and Fortune contributors. Reprinted with permission of Time Home Entertainment Inc.