“If you want to do something really innovative, you have to apply a First Principles analysis. Don’t reason by analogy. Analogies are referencing the past. First Principles mean you look at the fundamental truths in a particular arena—the things that are always indisputably correct, and you reason up from there to form a conclusion. If you see that the conclusion is at odds with what people generally believe, then you have an opportunity...When something is important enough, you do it even if the odds are not in your favor.” —Elon Musk
As of November 29, 2021, Elon Musk ( June 28, 1971 - ) is the richest person on Earth with a wealth of $282 billion. He didn't get there by accident. His father was an engineer from South Africa and his mother was a nutritionist and model from Canada. It was a long journey from Pretoria, South Africa to Canada, the USA, and the planet Mars if he has his way with SpaceX, the company he founded to explore space.
1981. Pretoria, South Africa, at 10 years old, Musk created a video game called Blastar and sold the source code for $500, which is roughly $1 520 in 2021. He also sold candies at 20 times their manufacturing cost door-to-door.
Tough times don't last, tough people do
Musk had some terrible years as a teenager. But tough times don't last, tough people do.
Musk has been open about his difficult childhood, discussing it most recently in last Sunday’s “60 Minutes” interview. While he attended grade school in Pretoria, South Africa, Musk was not only the youngest and smallest kid in his class, but he was nerdier and much more into books than many jocks at school. In Ashlee Vance’s 2015 book “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future,” Musk said gangs of boys would sometimes hunt him down, going so far as to push him down a flight of stairs in one instance and send him to the hospital. “I was almost beaten to death,” he added on “60 Minutes.” The bullying continued until he was 15 years old, when went through a growth spurt and learned how to defend himself by doing karate, judo, and wrestling. By 16, he said he was “dishing it out as hard as they’d give it to me." —Zameena Mejia, December 2018, CNBC
The physical bullying left Musk with a damaged nose that affected his breathing. He repaired it with corrective nose surgery around 2013—about two decades after the bullying. Proof that bullying leaves a mark. There's also the other perspective: What doesn't kill you makes you stronger.
What is the root cause of bullying? Let Zach Efron elucidate it for us in the movie 17 Again, "But people, Stan is a bully. Why? It'd be way too easy to say Stan preys on the weak simply because he's a dick. No, no. Stan here is much more complex than that. See, according to leading psychiatrists, Stan is a bully for one of three reasons. One, underneath all that male bravado, there's an insecure little girl banging on the closet door trying to get out. Two, like a caveman, Stan's brain is underdeveloped. Therefore, Stan is unable to use self-control. And so he acts out aggressively. Three, Stan has a small wiener."
Or the fourth reason for bullying is that the bully was bullied by friends and family and they're passing on what they know. It is how they cope according to their social conditioning. What became of those who bullied Musk? They aren't anywhere on the richest or most accomplished list, that's for sure. Lesson: Don't bully or disparage people when you can spend that time accomplishing your dreams.
1989. At 17 years old, Musk moved from Pretoria, South Africa to a second-cousin's farm in Waldeck, Saskatchewan, Canada, where he lived for one year and worked on the farm.
Odd jobs in Canada
Farm in Waldeck, Saskatchewan, Canada—tending to vegetables and shoveling grain bins, and other farming tasks.
Lumber mill in Vancouver, B.C—cutting logs, cleaning out the boiler room.
Elon Musk's Education
1989. Pretoria Boys High School.
1990 - 1992. Queen's University, Kingston, Ontario, Canada. Transferred to the University of Pennsylvania after two years.
1992 - 1995. Wharton School of the Unversity of Pennsylvania (Ivy League business school). Undergraduate degree in economics.
1992 - 1997. University of Pennsylvania (BS, BA). Physics major.
1995. Stanford University. Musk planned to get a PhD in energy physics. However, he dropped out after 2 days to start his first Internet company Zip2.
The serial entrepreneur
In 1995, at 24 years old, Musk wanted to work for an Internet company. At the time, the Internet was still in its infancy, so it was difficult to find a good Net company to work for. He applied at Netscape Communications and hung out in the company's lobby. He was too shy to approach anyone and never got a reply.
The journey to the world's richest person began with one company.
Zip2: online directory
1995. Silicon Valley, California, Musk cofounded Zip2. The company provided online city guides, basically Yellow Pages online. When Zip2 was sold to Compaq Computer Corp. in 1999 for $307 million, Musk netted roughly $22 million.
X.com (PayPal): online payment
1999. Silicon Valley, California, Musk cofounded x.com, which later merged with Confinity Inc. to become PayPal. eBay bought PayPal for $1.5 billion in 2002, and Musk netted roughly $180 million.
SpaceX: Space Exploration
2002. Hawthorne, California, Musk founded SpaceX (Space Exploration) to build reusable rockets. When he founded SpaceX, Elon tried to buy ICBMs (Inter-Continental Ballistic Missiles) from the Russians, but was turned down several times. They mocked him and even spat on his shoes at the last meeting. This led Musk to create his own reusable rocket—the Falcon 9.
As of November 2021, SpaceX is still a private company and its estimated market valuation is $100 billion. Musk owns roughly 51% of SpaceX. SpaceX's mission is to "preserve the light of consciousness", "increase the scope and scale of consciousness", and "make humanity a multi-planetary species". SpaceX is bustling at its Starbase City in Boca Chica, Texas building the Starship that will eventually ferry cargos and humans to Mars.
Tesla: automobiles and sustainable energy
2003. Palo Alto (part of Silicon Valley), California, Musk cofounded Tesla, a sustainable energy and electric vehicle company. As of November 29, 2021, Tesla's stock market value was $ 1.13 Trillion. Musk owns roughly 20% of Tesla stock.
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SolarCity: energy from the Sun
2006. Musk cofounded SolarCity with his cousins.
Almost lost everything
2008. It was the worst financial crisis since the Great Depression. Tesla and SpaceX were on the brink of bankruptcy and Musk was almost forced to choose one or the other to keep afloat. Musk lamented that it was like he had to choose which child to keep alive. He chose to keep both companies afloat with his own money. It got so bad that he had to borrow money from his billionaire friends to pay his personal rent. He was literally broke. Fortunately, God (or the government) stepped in at the right time.
In 2008, NASA (National Aeronautics and Space Administration) awarded SpaceX a $1.6 billion contract to haul at least 20 metric tons of cargo to the international space station over 12 planned flights.
In 2010, Tesla received a government grant of $ 451.8 million from the Department of Energy. Tesla repaid the entire loan by 2013. To date, Tesla is the only automaker that has repaid the government bailout. GM, Ford, and Chrysler (now owned by Stellantis of the Netherlands) collectively received $23.4 billion in 2008 from the TARP (Troubled Assets Relief Program) program and have not repaid the taxpayers.
2013. Musk published his “alpha paper” which theorized that aerodynamic aluminum capsules filled with passengers or cargo could be propelled through a nearly airless (vacuum) tube at airliner speeds of up to 760 mph.
2016. Tesla bought SolarCity for $2.6 billion. At the time, Musk was the largest single shareholder of both companies.
Since 2016, Musk has founded The Boring Company (a subsidiary of SpaceX); cofounded OpenAI and Neuralink.
“Don’t confuse schooling with education. I didn’t go to Harvard but the people who work for me did.” —Elon Musk
Although OpenAI isn't in the spotlight and hasn't made money in 2021, it could be the sleeping giant in the next decade. Most businesses, even software engineering, are using algorithms to improve procedures and processes.
How many industries will Elon Musk pioneer, revolutionalize, or reinvent when he's done? Steve Jobs did it with computers (Apple, Next), music (iTunes and iPods), movies (Pixar), communications (iPhone).
"I operate on the physics approach to analysis. You boil things down to the First Principles or fundamental truths in a particular area and then you reason up from there." —Elon Musk
FIRST PRINCIPLE: A first principle is a basic proposition or assumption that cannot be deduced from any other proposition or assumption. In philosophy, first principles are from First Cause attitudes and taught by Aristotelians, and nuanced versions of first principles are referred to as postulates by Kantians...In layman's terms, first principles thinking is basically the practice of actively questioning every assumption you think you 'know' about a given problem or scenario—and then creating new knowledge and solutions from scratch.
In brief, First Principle isn't about how things have been done, but finding the best way to do them. The adage, "If it isn't broken, don't fix it" doesn't apply. Incremental improvement concepts such as CANI (Constant And Never Ending Improvement) also don't apply. In order to apply First Principle, history has to be forsaken, and we start with a clean paper. The best idea wins, not the idea that has been around the longest, or the idea that is widely used.
“Always go beyond memorizing formulas, passing tests; to always go deep into the underlying principles of a subject, to track any problem down to the ROOT CAUSE buried in the dirt, in the dark.” —Elon Musk
If knowledge is power, then knowledgeable people, such as librarians and the well-read, would run the world. However, knowledge is power only when it's applied. To apply knowledge correctly, it has to be analyzed.
"I could watch it happen or I could be a part of it." —Elon Musk
You can go through life watching the world change or you can be the person who is the change. You can have your way with the world or the world will have its way with you.
"There's a tremendous bias against taking risks. Everyone is trying to optimize their ass-covering...Failure is an option at SpaceX. If things are not failing, you are not innovating enough." —Elon Musk
"I don't spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems...The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design." —Elon Musk
The vehicles and energy storage packs are not Tesla's products. Tesla's products are its factories: The machines that build the machines. Tesla is the largest robotics company in the world.
"My biggest mistake is probably weighing too much on someone's talent and not someone's personality. I think it matters whether someone has a good heart...Some people don't like change, but you need to embrace change if the alternative is disaster." —Elon Musk
Charles Darwin noted that, "Intelligence is the ability to adapt...It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change."
The only constant in the Cosmos is change. Adapt to change at home, the workplace, and the world, or fall behind. Or become extinct like the dinosaurs.
"It is a mistake to hire huge numbers of people to get a complicated job done. Numbers will never compensate for talent in getting the right answer (two people who don't know something are no better than one), will tend to slow down progress, and will make the task incredibly expensive...People work better when they know what the goal is and why. It is important that people look forward to coming to work in the morning and enjoy working.." —Elon Musk
"I don't believe in process. In fact, when I interview a potential employee and he or she says that 'it's all about the process,' I see that as a bad sign. The problem is that at a lot of big companies, process becomes a substitute for thinking. You're encouraged to behave like a little gear in a complex machine. Frankly, it allows you to keep people who aren't that smart, who aren't that creative." —Elon Musk
"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 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." —Elon Musk
"Due to inflation, 420 went up 69...Drug dealers know more about running a business than 95% of college professors." —Elon Musk
“In order to have your voice be heard in Washingon, you have to make some little contribution.” —Elon Musk
Records are made to be broken
Elon Musk is the first person to start two companies worth over $100 billion: Tesla and SpaceX.
Musk has the opportunity to surpass Steve Jobs in reinventing more than 4 industries. Steve Jobs did it with,
- personal computer (Apple, Next),
- music (iTunes and iPods),
- movie (Pixar),
- communication (iPhone).
Musk has or will reinvent several industries:
- automobile (Tesla)
- aerospace (SpaceX)
- transportation (The Boring Company, a subsidiary of SpaceX)
- artificial intelligence (OpenAI)
- biomechanic (Neuralink)
- space exploration (SpaceX)
- energy (Tesla Energy (formerly SolarCity), a subsidiary of Tesla)
- robotic (Tesla—Tesla Bot)
OpenAI may be the sleeping giant but gets little press compared to his other companies. OpenAI is working to make software engineering autonomous, or as close to it as possible. Everything, from vehicles to toasters, is reliant on software nowadays.
Musk could also become the first person to start four companies with a market valuation of over $1 billion. Jim Clark did it in the 2000 Internet heydays with Silicon Graphics, Netscape Communications, and Healtheon. Although Musk cofounded SolarCity and seeded the company with $10 million, he wasn't active enough in the company to be considered a true "cofounder". When SolarCity was sold to Tesla for $2.6 billion in 2016, Musk did not get credit for having cofounded a company with over a $1 billion market valuation.