By Mark Stone, Contributor
Elon Musk may be one of the world’s hottest CEOs for one of the coolest companies, but the Tesla CEO’s résumé is overflowing with setbacks. Very few people could bounce back from being ousted as CEO of their own company and then getting fired from another of their companies while on honeymoon, and survive both a major car crash and cerebral malaria.
Yet here is Musk, sitting at the top of many entrepreneurs’ “I want to be like that guy when I hit it big” lists. And even with all the accolades bestowed upon the SpaceX CEO, he still faces failures today. As much as his hits inspire, his misses offer valuable lessons to executives everywhere.
Turning Each Failure into Success
Before his rise to pioneer status, Musk’s failures were legendary. In 1995, Musk, armed with prestigious degrees in physics and business, applied to the then-popular web company Netscape. Not only did his application go unanswered, but he was ignored during his in-person visit to the company. No matter. Musk turned around and founded Zip2, a web software company that eventually sold to Compaq for $220 million.
Musk built Zip2, a web-based yellow pages-type service, by selling the service the old-school way (door to door) to companies in Silicon Valley. He was able to attract enough investors, but the board didn’t have faith in him as a CEO; Musk was thus demoted by the company he founded.
While at Zip2, he met Greg Kouri, who would co-found PayPal with him.
PayPal was founded so people with PalmPilots (remember those?) could transfer money to each other. But in 1999, the company was named one of the 10 worst business ideas of the year. You know how it turned out for PayPal in the end.
As PayPal flourished, Musk’s role at the company declined. The sole board member to prefer PayPal run on a Microsoft platform as opposed to Unix, Musk was outvoted and eventually ousted from his own company—again.
Then in 2000, he took a vacation to recover. But Musk’s streak of bad luck continued, and he contracted a lethal form of cerebral malaria during his visit to Brazil and South Africa.
Despite these setbacks—and numerous others over the years—Musk counts 2008 as the worst year of his life, as his two companies, SpaceX and Tesla, were on the verge of bankruptcy. Musk went bankrupt himself to prevent the companies from imploding. And it paid off: Today, SpaceX is pushing space exploration to new heights, and there is an unprecedented number of reservations (more than 500,000) for Tesla’s affordable Model 3, with demand expected to surpass 700,000 units annually.
When Too Much Self-confidence is a Good Thing
Musk’s hurdles only represent a fraction of the epic failures he’s endured, so how did he turn things around?
Firstly, Musk understood his goals were dubiously lofty, but he kept them simple and stuck to them faithfully. To travel down a road where almost everyone else has failed, he designed a superior business plan, outlined in an August 2006 Tesla blog post.
Over and above his perseverance/stubbornness, he turns to books to learn quickly (he mastered rocket science by “reading books and asking questions”) and surrounds himself with smart, talented people who have the expertise he is missing.
The common threads Musk weaves as he delivers both his companies to their current levels of success are his tenacity, his uncommonly high acceptance for risk, and his hardcore confidence in his ability to transform ideas into reality.
What we can take away from Musk’s evolving story is to keep believing in ourselves and our ideas, and if need be, put our money where our mouth is. Even today, Tesla and SpaceX are works in progress and will have detractors.
Musk still has a lot to prove, and it will be fascinating to learn from how he deals with the setbacks ahead. But one thing we know for certain: His intense work ethic will remain. “Work like hell. I mean, you just have to put in 80 to 100 hour weeks every week,” he said in a Vator TV interview. “If other people are putting in 40 hour workweeks and you’re putting in 100 hour workweeks, then even if you’re doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.”