Elon Musk is not your ordinary Billionaire. Unlike most Billionaire’s Elon has made billions of dollars multiple times with entirely different businesses. That’s why today we’ll take a look at his rules of success.
Elon made his first fortune with a digital media company called Zip2 which sold to Compaq for $307 million in 1999 when Elon was just 27.
Not long after Zip2 was acquired Elon co-founded PayPal, which he ended up selling sold to eBay for $1.5 billion dollars in October of 2002.
Since then he has founded SpaceX, co-founded Tesla Motors, and become the chairman of SolarCity.
Currently Elon is worth $83,6 Billion dollars and that number is on the rise.
For the awesome impact on the world he is making Elon made the cover of Time magazine’s 100 most influential people in the world and his influence is only continuing to grow. Now let’s check his rules of success:
1. Work hard
Elon Musk has a fierce work ethic.
When Elon and his brother co-founded the company that became PayPal they lived and slept in a small office, and showered at the local YMCA.
Work like hell. I mean you just have to put in 80 to 100 hour weeks every week. [This] improves the odds of success. If other people are putting in 40 hour work weeks and you’re putting in 100 hour work weeks, then even if you’re doing the same thing you know that… you will achieve in 4 months what it takes them a year to achieve
Elon Musk
2. Don’t Just Follow The Trend
If you look at all of Elon’s businesses, they solve huge problems in emerging markets where there is little competition.
When he co-founded PayPal they were for a time the only email money transferring solution in the world.
SpaceX is the first private company to send a spacecraft (Dragon) to the ISS.
Tesla is the world’s leading electric car company.
In his USC commencement speech Elon recommends “Don’t just follow the trend” and his actions have certainly followed this advice.
To reap the greatest rewards, focus on innovation rather than competition.
Strive to innovate to such a degree that there are no competitors.
If you want to create and capture lasting value, look to innovate and create a monopoly.
Monopolies transcend competition and are how the greatest business profits can be achieved.
3. Love What You Do
When you really like what you do it enables you to find the energy persist through the challenges that a growing business will undoubtedly face.
4. Take Risks
Elon recommends taking risks when you are still young as obligations only increase over time.
“Once you have a family it gets much harder to do things that might not work out.”
It is worth keeping in mind that Elon started SpaceX and Tesla with a young family so his family obligations have certainly not slowed him down.
With greater risks, such as those needed to carve out a new niche, comes the potential for far greater rewards.
Musk poured so much of his money into SpaceX and Tesla that he had to borrow money from friends to cover his living expenses.
However, the risk of pouring his money into those companies paid off.
Today SpaceX, Tesla, and Solar City are thriving, and Elon is several billion dollars wealthier than he was before.
5. Don’t Fear Failure
In an interview Musk has stated that he originally thought Tesla would fail.
When asked why he would start a company that he didn’t think would be successful his answer was:
“If something is important enough you should try even if the probable outcome is failure.”
Elon wanted to get rid of the perception that electric cars are ugly and slow.
Although entirely changing the way the public perceives a product class is no easy task Musk has made it happen.
6. Do Something Important
Success and satisfaction with your work are not all about making money.
Elon had more money than he needed at the age of 27 but he has pressed on, working like a madman because he recognizes the importance of his work, and changing the world in the process.
Elon recommends being bold and choosing to do something important.
Not only can working on important projects give you great financial rewards it can also provide the satisfaction that comes with knowing you are changing the world for the better.
7. Focus on Signal Over Noise
Tesla has never spent any money on advertising.
They focus instead on investing in R&D and design since these will help make the car as good as possible.
“I ask myself: Will this activity result in a better product or service? If not, I stop those efforts.”
8. Create a Superior Product
Create an amazing product and that is the strongest type of marketing there is.
Apple is another example of this. Although Apple certainly does not shy away from advertising that marketing would fall flat if their products were not high quality.
When media outlets start talking about how your product is the best in the world you’re on the right track.
9. Be Ready to Learn New Skills
Don’t let what you don’t know stop you from tackling important endeavors.
Elon never owned a car company before, but that didn’t stop him from starting Tesla.
Elon was never a rocket scientist, but that didn’t stop him from starting SpaceX.
There are plenty of books out there and there is more information readily available than ever before so set your sights high because there is plenty of information online about how you can make it happen.
10. Seek Out Constructive Criticism
In my favorite interview with Elon Musk he touches on several of his success secrets that I share in this post.
One success tip that many people likely avoid is seeking out criticism.
Noone likes hearing what they are potentially doing wrong but by seeking out this information from people you trust you gain valuable insight that you may be able to use to make improvements.
I think it’s important for people to pay close attention to negative feedback and rather than ignore negative feedback, you have to listen to it carefully. Ignore it if the underlying reason for the negative feedback doesn’t make sense but otherwise, people should adjust their behavior. I’m not perfect at it, for sure, but I do think it’s really important to solicit negative feedback, particularly from people who have your best interest in mind.
11. Be Unrelentingly Optimistic
Elon is known for setting impossible deadlines and making requests of his employees to cut costs by up to 90%.
A lot of the time these deadlines fail, but often they succeed.
With the optimism to tackle massive goals you can often achieve success eve if you fall a bit short of your original target.
Challenge yourself to think big and this will often yield big returns.
Seeking unreasonable levels of success is a strategy that can lead you to exceptional success.
12. Attract Great People
All a company is, is a group of people working together to create a product or service.
In his commencement speech at USC Elon Musk explained that if you are creating or joining a company the most important thing is to attract great people.
He recommends you either
“Join a group that is amazing that you really respect or if you are building a company you’ve got to gather great people.”
13. Strive to Be Significantly Better Than The Competition
Put yourself in the shoes of the consumer, Elon says.
“They are going to buy the trusted brand unless there is a big difference.”
So if you want to set yourself apart from the competition don’t just try to be a bit better. Strive to be significantly better.
14. Start From First Principles
In his interview with Kevin Rose, Elon explains his thoughts about reasoning up from first principles.
“Boil things down to the most fundamental truths. Then reason up from there.”
15. Be Extremely Tenacious
Here is a definition Google gave me for the word Tenacious: Adjective Not readily relinquishing a position, principle, or course of action; determined.
The determination to keep going when the going gets tough is what saved SpaceX and Tesla when both were on the verge of bankruptcy.
Elon poured all of his money from the sale of PayPal into these companies so they could survive and his tenacity in doing so saved them from insolvency.
The perseverance and hard work Elon has shown in making every company he has worked with a success reminds me of this quote from Steve Jobs:
I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.
Steve Jobs
16. Focus on a High Value Pursuit
Focusing on building a business that you are confident will have a high value for others is a strategy Elon recommends.
Being rigorous and real in your self-analysis will help keep you grounded and on the path to success.
17. Consider The Worst Case Scenario
When Elon decided he wanted to be an entrepreneur at 17 years old he forced himself to live off $1 per day.
At that time, he lived mainly off hot dogs and oranges.
“I figured if I could live off a dollar a day then, at least from a food stand point, it’s pretty easy to earn $30 a month.”
Elon didn’t do it because he was poor. He did it to see if he had what it takes to lead the life as an entrepreneur.
Since he was successful with this experiment, he knew that money would not be an issue.
By experimenting with what it felt to be poor he realized he could do it if he had to.
18. Read More
Elon, like many highly successful people, is a voracious reader.
He reads and reads and reads.
“You don’t know what you don’t know. You realize there are all these things out there.”
Musk spent his childhood with his nose in a book. He read the Encyclopedia Britannica from cover to cover.
If you want to know what you don’t know it’s a good idea to read up.
Personally, I keep an active “Books To Read” check boxed list in my Google Keep app and order the books with those I believe to be the most valuable at the top.
19. Sex Sells
Elon knows that sex sells and uses this to his advantage.
Every Tesla car has sexual undertones.
Currently Tesla manufactures the model S, the next vehicle they will be releasing will be the model X, and in 2017 they will be releasing the model The Model 3 (stylized as three horizontal lines “Ξ“), which was initially named the model E.
Once all three models are in production the letters representing the three vehicles will spell SEX.
Earlier this year Tesla unveiled the D dual motor.
20. Invest Profits Into New Businesses
Both times Musk cashed in a company for millions of dollars, he invested at least 45% of his earnings back into a brand new business within the calendar year.
- $10 million of the $22 million Musk made from the sale of Zip2 went to founding X.com (later PayPal).
- $100 million of the $165 million he made from the sale of PayPal went to founding SpaceX.
Musk also invested heavily in Tesla Motors (33,076,212 shares) and SolarCity (20,724,991 shares).
It’s the ownership of these three companies that constitutes the vast majority of Musk’s $13.6 billion dollars of wealth.
21. Innovate
Elon has innovated with Tesla to the point where multiple sources are saying they have created the best car ever.
That’s the game changing level of innovation you need to have a position in the marketplace where you are in a category of your own.
Here are some of Elon’s quotes on innovation:
“Failure is an option here. If things are not failing, you are not innovating enough.”
“Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”
“Great companies are built on great products.”
22. Never Give Up
The SpaceX Falcon 1 launch vehicle made it through the first and most most dangerous stage – the one where it actually breaks away from Earth’s gravitational pull.
But the rocket faltered soon after and they lost communication. That was it: the mission failed.
The 300+ SpaceX employees in attendance were heartbroken – and fearing for their very livelihoods – when Musk stepped up to speak to the crowd.
Elon revealed that he had already secured further investment in SpaceX so they would be able to continue their mission in case of complications.
At the climax of his speech, he told his employees not what they should do, but what he was going to do: “For my part, I will never give up,” Musk said, “and I mean never.”
SpaceX’s very next launch was a complete success.
On September 28th, 2008 the Falcon 1 became the first privately built rocket to achieve earth orbit.
“Persistence is very important. You should not give up unless you are forced to give up.”
Elon Musk
23. Know Your Limits
Musk may be the smartest and hardest working entrepreneur of the 21st century – but he still only has 24 hours in a day.
Elon also has a wife and five boys who undoubtedly want time with him as well.
Although Elon is ambitious enough to take on the challenge of SpaceX and Tesla at the same time he realized that another major project would be to much to manage.
Back in 2006, Elon had an idea for a solar panel company. But he knew that if he started it he would have too much on the go.
So he shared his idea with his cousins Peter and Lyndon Rive, who founded SolarCity with Musk as the principle investor.
Musk has served as chairman of the board since its inception but he’s kept enough distance so that it doesn’t eat up too much of his time and energy.
24. Have Out of This World Ambition
Elon’s ambition is to colonize Mars to backup the human race.
Colonizing Mars is much more than a business decision for Musk.
It’s about the future of the human species:
“I think it’s important that humanity become a multi-planet species. I think most people would agree that a future where we are a spacefaring civilization is inspiring and exciting compared with one where we are forever confined to Earth until some eventual extinction event. That’s really why I started SpaceX.”
In Ashlee Vance’s biography on Musk, Elon reveals that he wishes to establish a Mars colony by 2040, with a population of 80,000.
25. Improvise
When SpaceX was told to wait to launch rockets in the U.S. he went and found a Pacific island he could use straight away.
Elon once jumped on his private jet and flew to England to take a needed machine tool to a factory in France and speed up production.
When Tesla needed to test a prototype in the cold he hired an ice-cream truck with a big refrigerated trailer.
When there is a will there is often a way when you are willing to improvise and make things work.
26. Create a World Class Work Environment
Most car factories are dark and gloomy. Tesla takes a different approach.
The Tesla factory features pedal bikes that employees can use to get around faster. They also use almost 100% of regenerable energy.
27. Start With a Premium Product
Start by creating desire by offering a premium product to the affluent.
This is the strategy Musk developed with Tesla when they decided to create the high end luxury Tesla roadster.
Below the strategy is explained with a diagram from the post How Tesla Will Change The World.
It seems to me that this is a solid strategy for someone who is considering starting a coaching, consulting, and or membership site business as well.
Personally I offered a low priced social media marketing solution the Social Media Income Lab for $49 a month only to find that most of my time then became spent helping members with extensive answers to emails.
In retrospect I would have been better off selling high priced coaching and consulting to a handful of clients and using the revenues to hire more staff to help me handle the large number of clients of a lower priced membership site solution.
28. Let Your Imagination Soar
With awe-inspiring ideas which aim to transform today into future, this innovator has enjoyed first mover advantage in all his business ventures.
Elon has generated a massive amount of press for himself with his highly imaginative idea the Hyperloop.
The Hyperloop is Musks proposal for a faster new form of transportation between the Greater Los Angeles Area and the San Francisco Bay Area.
The system is proposed to use a partial vacuum to reduce aerodynamic drag, which it is theorized would allow for high speed travel with relatively low power.
SpaceX has announcing an open competition, geared towards university students and independent engineering teams, to design and build the best Hyperloop pod.
29. Focus
Although any investor will tell you that diversity in a portfolio is key Elon has created Billions of dollars in growth by focusing his investments and then exercising control to accelerate growth.
Here’s a quote from Elon on the subject:
“It’s OK to have your eggs in one basket as long as you control what happens to that basket.”
30. Constantly Improve
Elon said that the single best piece of advice he can give is to:
“Constantly think about how you can be doing things better”
He finishes the quote above by saying that you should be “questioning yourself” and I think what he meant by this could be confused from his intended meaning.
I doubt if Elon would advocate questioning yourself if it afflicts you with analysis paralysis that stops you from taking action to make progress the direction of your goals.
Many words could describe Elon Musk: Genius, Determined, Successful…but perhaps the word that describes him most of all is: driven.
If you want to emulate Elon’s success find the drive in yourself to work hard and execute on making your dreams a reality.
The only thing better than a perfectly executed plan is perfect execution of a better plan.
So start by finding your drive and refining your execution: Then think about how you can do things better and question how you can improve your plan.
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