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The Good, The Bad and The Ugly
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Elon Musk — The Good, The Bad and the Ugly
Personal disclaimer — My track record on covering Elon Musk could fall under two of these categories. His performance has not only been “The Good”, but pretty much outstanding. In other words, and it pains me to state this, but there is no other description other than I’ve missed by a country mile. That said, his approach to success may better be captured by “The Ugly”. He continually exaggerates his performance in such a way as to turn failure into a win. How he does this, I have no freakin’ idea…but he does and has done it continually. The point here is partly to document his track record, but more to go beyond “Elon Musk” and talk about the role of the “Crazy” People.
Let’s start with Musk’s accomplishments…which are really, really impressive. While he didn’t exactly start with nothing, his ability to generate wealth from multiple fronts has been mind-boggling (or mind bottling…your call). 🤣🤣
From some of his early creations:
Sold his first video game at the age of 12 (Blastar) for $500.
Created Zip2 with his brother Kimbal Musk and friend Gregory Kouri as a teenager and into his early 20’s (1995-1999). In February 1999, he and investors (Elon owned about 7% of the company) for $307 million in cash to Compaq. During this time, “he could not afford an apartment and instead rented an office and slept on the couch and showered at the YMCA, and shared one computer with his brother. When he and Kimbal could not agree on business decisions, they settled their differences through wrestling. According to Musk, "The website was up during the day and I was coding it at night, seven days a week, all the time." In other words, he probably didn’t always smell the nicest, but his work ethic was pretty damned impressive. He ended up with $22 million as well (which would have been the moment I retired and went to live on a beach somewhere — well, maybe not a beach due to the sand and sun — but you get the idea).
From there, in 1999, he created X.com and got involved with Peter Theil, Max Levchin, Bill Harris, and others to create PayPal. In 2001, PayPal was sold to eBay for a measly little $1.5 billion (with a “b”) and Musk walked away with $175.8 million. You can read the full story in “The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley” by Jimmy Soni. So, to recap, he now has $175.8 million…again, I’d never have gotten this far as I’d be comfortably retired.
Space X was his next venture, which had a bit of an inauspicious start as he was apparently spit on by a Russian designer. With $100 million of his early fortune, Musk founded Space Exploration Technologies Corp., traded as SpaceX, in May 2002. As of 2021, he remains the company's CEO and also holds the title of Chief Engineer. Space X is currently estimated (as of October 2021) at $100 billion.
Shortly after launching Space X, he launched Tesla. I won’t go into the details here other than that it is a hotly debated topic including battles regarding who the founders were (Musk joined in a bit late) and his current title is “Technoking” (oh…and CEO). Tesla is now worth about $820 billion and Musk unloaded a small portion of his holdings ($16.4 billion) in a bit of a controversial sale (he had filed already that he was going to liquidate shares and then posted a poll asking shareholders if it was a good idea).
He also has founded The Boring Company, Neuralink, and acquired SolarCity (later renamed Tesla Energy).
The key here is that Elon has the proverbial “Midas Touch” in that everything he touches has a large bit of shiny gold. That deserves some credit and a tip of the hat.
What you are seeing here is a traditional standard normal table. It is important to look not at the mean itself, but out at the tails. If we look at the area within 3 standard deviations, we are capturing 99.7% of the population, which means that there are 3 out of 1000 who are OUTSIDE of that range. 3 out of 1000 is pretty small, but keep in mind that in the US alone, there are 330 million people (and that ignores the rest of the world…probably not a great solution given the billions of people in that pool). So, let’s focus just on the US. If we consider 0.3% to be small, multiply that by 330 million and we’re down to 990,000. That’s a LOT of people (and again, we’re still just in the US). Now some of these are negative outliers and some are positive outliers. Let’s go back to Morgan Housel’s “How People Think” piece.
Some variation of that phrase can be used on most of your role models – people who have extreme, outlying success. You like them because they do things other people would never consider, or can’t even comprehend.
Some of those traits are awesome and you should look up to them. Others aren’t.
Kanye West once put it:
If you want these crazy ideas and these crazy stages, this crazy music, and this crazy way of thinking, there’s a chance it might come from a crazy person.
I’ve always thought that people who are abnormally good at one thing tend to be abnormally bad at something else. Or maybe not bad, but something you wouldn’t necessarily want in your own life. They’re natural maniacs, extreme in every way, good and bad.
So, Elon is one of the “crazy” people. That is not a bad thing (nor is it a good thing). However, it is a “thing” that deserves some acknowledgement. Maybe it has to do his recent announcement that he has Asperger’s syndrome (which can lead to some pretty “crazy” behavior…some of which may be beneficial for becoming extremely wealthy even if it is not something you or I would “want”). From the article on Asperger’s some of the traits are listed (warning, this may hit a bit TOO close to home as I noticed a few items on the list, which may be coincidence…not that into machines).
People with Asperger's are known to have interests that become obsessions (check). They are often fascinated by machines (triple check). They often are socially awkward (yup). They lack empathy and may not understand conventional social rules, which might explain Musk's bizarre decision to call a leader of the Thai cave rescue "pedo guy" in a tweet, which got him sued. And, according to the Autism Society, most people with Asperger's have average-to-above-average intelligence.
While it is relevant to reflect on how successful Elon has been, it is also important to point out that a lot of it has come from…how shall I put this…lying? Granted entrepreneurs occasionally do this (see Elizabeth Holmes and Adam Neumann). However, it is not really a great idea because sometimes it catches up to us. It hasn’t caught up to Elon yet, but the jury is still deliberating (figuratively). Let’s take a look at Tesla and Elon’s history of stretching the truth. According to Wikipedia, here is a list of times that Elon has said something that he probably should have known was not true.
Musk has made numerous promises about Tesla that have failed to come true and been recorded as including:
In 2015, Musk said he did not think making fully autonomous cars was very difficult, and predicted "complete autonomy" by 2018.
As of March 2020, Tesla was ranked last by Navigant Research for both strategy and execution in the autonomous driving sector.
Musk has claimed that Tesla vehicles are capable of "full self-driving", but Tesla's Autopilot is only a Level 2 advanced driver-assistance system, requiring drivers to maintain full attention and be prepared to take control of the vehicle at a moment's notice.
In 2019, Musk said that Tesla would have more than 1 million robotaxis on the road in 2020, and sold a "Full Self-Driving" package, despite the technology not yet being available. Experts stated the prediction was unrealistic and Tesla had no chance of achieving it.
In April 2020, Musk admitted that "punctuality is not my strong suit" and robotaxis in some form could be in operation sometime in 2021. In 2021, Musk opened the Las Vegas Convention Center loop which only uses a fully human-operated Tesla Model 3 fleet in a single lane tunnel with a capacity lower than any transit.
In 2022, Jalopnik noted that Musk has promised full self-driving "Next Year" for nine consecutive years.
Musk claimed in 2016 that the Nevada Gigafactory would be a net zero-emissions facility, running on 100% renewable energy from solar panels covering the factory's roof. The Gigafactory has been operational since July 2016, but as of December 2019, only a small portion of the solar panels necessary to power the factory have been installed.
In 2018, Musk eventually conceded that his plan for "excessive automation at Tesla was a mistake." Tesla ended up building some of its Model 3 cars in a tent using mostly manual labor who used shortcuts.
Musk said that 2019 would be the "year of the solar roof," and was hoping Tesla would manufacture 1,000 roofs a week by the end of the year. Publications estimated that solar roofs were installed on less than 100 homes and challenged his prediction. Then, in June 2020, Tesla cancelled many customers' orders for solar roof installations, saying they were outside of their service area. Customers complained about being upset with this decision since they had placed $1,000 deposits for pre-orders as early as 2017.
Multiple CEOs of major automotive manufacturers have reportedly approached Tesla for electric vehicle technology that it was supposedly open to sharing and were instead offered the opportunity to purchase regulatory credits by Musk, thus suggesting that the company and Musk "may not be not as eager for the electric revolution to occur as [they claim]".
How about his infamous “funding secured” quote in 2018? Again, according to coverage of the case by the SEC, this was false. Remember the cybertruck introduction in where they broke the “unbreakable” glass?
That was late November 2019. Apparently the release date is now 2023…sometime…maybe. I think there is ample evidence that what Elon says has little connection with reality. Granted, eventually some things happen, but it is often years after promised, underdelivered, and in some cases just false. I’m placing this in “The Bad” arena as he clearly doesn’t care about telling the truth. That said, I’m not sure it has a negative impact. I prefer executives that have some connection to reality so that when they announce something, we have some basis of expectation that they aren’t just making stuff up.
It is important to go back to my “Tips To Being a Better Human” and recognize that I think doing the “right” things is important. This is especially important in how you live your life which includes how you run your business, but goes well beyond it. It is the infamous “Don’t Be a Jerk” rule of life. Of course, I could be full of crap, but it won’t be the first time (or the last).
Elon Musk fails tremendously in this role as he often chooses (and has some good company) to be a jerk simply because he can be. Consider his role in the “pedo man” lawsuit. Elon is well-known for imposing his will on employees. Apparently, it is so successful that he tried it in a real-life rescue mission.
A quick recap: In July 2018, Musk tweeted that a British cave explorer was a “pedo guy,” faced a wave of criticism, kind of apologized, received a legal threat, doubled down on the accusation, sent a reporter (me) an email suggesting the Brit was a “child rapist,” hired a phony private investigator to prove it, got sued, and, after more than a year of legal wrangling, ended up in court. Never mind that some legal experts thought the case was a clear example of defamation, that his advisers told him to settle, and that he had far better things to do with his time. Musk was going to fight.
In doing so, the billionaire entrepreneur brought the same drive that pushed electric cars into the mainstream to a legal dispute over his own bad behavior. And in typical fashion, Musk defied the odds. He won.
“Elon has an uncanny ability to tell a story he wants to be true, convince himself that it has to be true, and then convince others,” one former Tesla executive told me after the trial.
Read the full story and you’ll uncover a lot of Musk’s behavior pattern. When he senses an attack, he is not going to back down and will often entangle himself in a feud to distract from other issues. We see it with Jeff Bezos. We see it with his take on the pharmaceutical companies who sell Wellbutrin. We see it with his Twitter bid of $54.20 (get it…$4.20…oh, he just kills it). The point here is that a lot of the behavior that falls under “the ugly” is probably connected to the same behavior that creates the genius. You don’t get the obsessive, crazy behavior that is going to create tremendous wealth without being obsessive and crazy.
When we look at Elon, we see the full gamut. And that is LIKELY a big part of his success. There is a level of tenaciousness that is necessary for anyone to be able to rise to that level.
If you go back to the normal distribution with the “Crazy” People segments, realize that leaves about 1 million people that are outliers (just in the US). These are the people that are going to be insanely wealthy or people that dress up as the QAnon Shaman.
They are going to be the people who create the next MRNA vaccine or the next Richard Sackler. The point is that the outliers of the distribution are going to be
among the “crazy” people. As mentioned earlier, there is no way that I would end up in this position, because I would retire early. World domination is not on my radar screen, BUT we need people that are willing to push beyond reason or common sense. Sometimes they will be Elon Musk, Jeff Bezos, or Mark Zuckerberg (none of whom are going to win the “Man of the Year” award). Sometimes they are going to be the QAnon Shaman or Richard Sackler.
Does this mean that Twitter is in good hands or that Tesla, Space X, etc. are destined for success? Who knows. Check out the story on the Vanderbilt fortune by Morgan Housel. People can create AND destroy wealth incredibly fast. Instead, the point is to recognize that the people who are essential to breaking the mold for good or bad are both NECESSARY and probably NOT normal.