Step by Step: How Elon Musk Built His Empire (by Anna Vital)
In a hundred years, when most people reading this and the person writing this are long gone, Musk’s cars and rockets will still be circling the Earth and the skies. How can such a person get started against all odds is the question I ask here. And, more importantly, what can we learn from him?
“The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace. They will escape competition altogether, because their businesses will be unique.” – Peter Thiel in “Zero to One”
In the book Zero to One, prominent entrepreneur and investor Peter Thiel shares his vision on what it takes to create an extraordinary company.
Specifically, Thiel believes that instead of making incremental upgrades to an existing product or service, a company must aim to do something completely new to avoid ruthless competition. While Thiel has worked with many impressive people over the years, Thiel points to Elon Musk as a particularly successful member of the Paypal Mafia that has gone “zero to one” many times.
At only the age of 44, just “some” of Musk’s successes include building the world’s first global online payments company (Paypal) and landing re-usable rockets on ocean platforms (SpaceX). He also co-founded SolarCity, which just closed a $338 million round for providing commercial solar and energy storage, and his electric car company Tesla now has 325,000 pre-orders for the Tesla Model 3, which is good for $14 billion in future revenues.
That’s going from zero to one at least a few separate times, with many years in his career left to come. How does Elon do it?
THE LIFE OF ELON MUSK
In the infographic and article from Funders and Founders, Vital highlights key circumstances, decisions, and results in Elon Musk’s life. Here are some of the key inflection points that helped him to build his massive empire.
- Elon was born in South Africa to an engineer father and model mother on June 28, 1971.
- Elon read 10 hours a day as a kid, and even read the entire Encyclopedia Britannica.
- At age 12, Elon sold his first video game that he coded for $500.
- After being inspired by Hitchhiker’s Guide to the Galaxy, Elon decided that his new life mission would be to save humanity.
- Leaves Stanford PhD program after two days to help found Zip2, which he started with a $28,000 loan from his father.
- He later received proceeds of $22 million from the sale of Zip2 to Compaq, which he used to start X.com.
- X.com merges with another online bank (Confinity) to form Paypal.
- Elon gets ousted as CEO from Paypal while on his honeymoon, yet still invests more money in the company regardless.
- He discovers that space rockets are artificially overpriced, and starts SpaceX to build his own rockets.
- Elon gets $250 million from the sale of Paypal to Ebay.
- Meets Tesla founders Marc Tarpenning and Martin Eberhard, and introduces them to JB Straubel. Elon invests in Tesla.
- After having three SpaceX rockets explode while approaching bankruptcy with Tesla, Elon takes action. He takes over as CEO of Tesla and raises an emergency fifth round of financing. Meanwhile, his fourth rocket launch with SpaceX succeeds and a $1.6B contract with NASA is signed.
- Tesla goes public at $17 per share (it trades for ~$250/share today)
- Elon announces reusable rockets that could make space flight 100x cheaper, and promises to also send humans to Mars by 2021-2031.
- Elon publishes the Hyperloop design, starts building the Gigafactory, unveils the Powerwall, and eventually lands a rocket on an ocean platform.
Launching the Falcon Heavy rocket, starting Gigafactory production, selling the Model 3 electric car, and potentially landing on Mars are just some of the things on his future laundry list.
What Musk can actually accomplish in the future is anybody’s guess. We certainly won’t be betting against him.
Original graphic by: Funders and Founders
Learning From The Outlier
Learning from Musk might seem naive. After all he is an outlier even among billionaires. I think this is exactly why he is worth studying – you don’t get insight into the extraordinary by studying the ordinary. Even with a sample size of one Musk we may find something in the way he started out that is fundamentally borrowable.
Sure, we can’t recreate the exact circumstances of his life for ourselves – we all have different parents, live in different countries, and have different bodies. Despite all the differences, we have control over our mindset as much as he does over his. This part of Musk we can borrow. The ways he deals with uncertainty, the books he reads, the ways he makes promises, and patches up his own mistakes are all borrowable, for example.
Thinking From First Principles (And Not Just By Analogy)
You might be skeptical about how studying another person’s life can help. His circumstances are not like yours. Musk would be the first to remind us here to think from first principles, as scientists do, rather than by analogy. Why should you think like Musk? You might know better than him after all. It’s true that thinking from first principles gives a truer result. But it also takes time which is limited for all of us. Yes, it’s best to think about your situation from scratch. But reasoning by analogy makes sense given that life is finite. To minimize our own mistakes we don’t need to borrow the exact decisions Musk made but study the way he makes them. Then we can apply his thinking method to what we know to be true for sure.
It’s Easy to Explain Greatness in Hindsight – The Narrative Fallacy
One psychological barrier to learning from other people’s lives is the narrative fallacy – making a neat story out of facts that at the time of their happening made little sense. As the classic book on improbability The Black Swan explains, we do it to deal with the randomness of life – we explain it away because we know how the story ended. We’d rather not figure out why we didn’t know what we didn’t know.
The media often write this way. Articles about Musk call him a “genius”, which he is. But labels like this make his accomplishments sound like a foregone conclusion. They aren’t. For example, he still has to deal with big oil companies that want to see Tesla go down .
We might assume he knows what to do with this because he is a “genius.” But genius is not a strategy. And his victory is far from certain. As you are reading this, he is doing something to deal with the uncertainty of his situation. What sort of a mindset is he in?
In this article and visualization I want to transport us inside Musk’s mind to understand how he started from the absolute beginning. How did he figure out what to do with his life? How did he come up with the first money to start a business? How many businesses did he try before?
Life = Decisions + Circumstances + Results
Life is a combination of decisions – things you do; circumstances – things that others do to you, including people you’ve never met, like politicians; and results – your decisions + the circumstances.
Labeling each significant event in Musk’s life on a timeline produced a lot of decisions, unsurprisingly. It’s fair to say he is a product of his decisions more than his circumstances. Musk seems to have been decisive and deliberate from the start. A quick glance at the timeline shows that his decisions by far outnumber his circumstances.
When we complain about life we mostly complain about our circumstances, not our decisions. We seem to be fixated on circumstances. When I first meet a person they tend to ask about my circumstances first – where am I from? where do I live? how long have I been in San Francisco? This is also true in other countries I’ve been. It’s only when people get to know me that they ask why I decided to be an information designer, for example. Why do circumstnces interest us more than decisions? Sure circumstances happen to us before we can even make decisions – even before we are born. But decisions are by far more interesting because that’s how you change circumstances, possibly to the point that the circumstances disappear or stop mattering. Musk was born in South Africa. Is that good or bad? I think it’s neither. What’s more interesting is that while still a kid he decided to move to the U.S. Why did he choose the U.S.? How did he decide to make it happen? That is the interesting part.
How Can I Use This?
Here’s an experiment to try – put the major events of your life on a timeline from birth through today – then mark each event as either a decision, a circumstance or a result. Is there a pattern? Are decisions and circumstances about even? Do circumstances pile up before there is a decision? Or decisions outnumber circumstances?
Choosing The Tough Father
Musk did not disclose much to his authorized biographer about living with his father other than calling it ”misery” and that he experienced emotional torture. The biography also reveals that Musk decided to never let his children meet his father – which suggests that his childhood memories are more painful than most people’s. 
Ironically and unlike most kids, Musk had the option to live away from his father but instead he decided to live with his father and not his mother after their divorce. Most children age 9, or any age for that matter, would not choose to live with a parent who is tough on them given the choice. Musk often cites his difficult childhood as the reason he is able to cope with the stress of his job. So why did he choose it? He did not explain. But I think it’s worth pondering.
“Non Stop Horrible” is how Musk himself described this period in his life when on top of enduring emotional torture from his father at home he was bullied at school. Musk himself believes that this adversity is what made him stronger. Still, as a father of 5 boys today he is ambivalent on whether adversity is a parenting strategy. Bothered that his kids have it much easier than he did, he wonders how one could create arficial adversity. 
How Can I Use This?
Does adversity always make one stronger? Or does it break some people? It’s easy to image a chart tracking the hard times and the achievements of a person and then look for possible coorelations. And if there is not enough adversity to chart it’s pretty easy to create some even in a non-artificial way. Just migrating to another country, starting a startup, promising more than you can deliver together will create enough stress that you can experience your own “non stop horrible.”
Learning Faster Than You Are “Supposed To”
A pivotal moment in Musk’s life came when he got his computer. It came along with a BASIC programming language workbook. The workbook was supposed to take 6 months, but he decided to stay up for 3 nights in a row and finished the whole thing. Within 3 days he basically was a programmer by the 1984 standards. His new skill brought his first success – he wrote a video game called Blastar and sold it for $500.
I think the idea of people learning things faster than others stirs some deep emotions inside us. Even today in most countries universities don’t encourage you to graduate faster even if you learn faster. Lawyers and doctors are required to be in school for a certain period of time regardless of their learning speed. I remember in law school learning 80% of everything in the first year. The sentiment was common among law students. Still there was no way to speed up the remaining two years. This, of course, doesn’t matter in areas where people are commonly self-taught like art, music, and programming. And Musk took full advantage of self-teaching.
How Can I Use This?
There are some proven ways to learn a skill fast. One that I have learned myself is realistic drawing. I used to think drawing requires talent. Now I think talent is just a code name for skill we don’t understand. I read Drawing on The Right Side of Brain by Betty Edwards and did the exercizes it offered. I started drawing realistically after 5 days. Try it.
The Immigrant Mindset
Do you need to move far away to bring out the best in you? Musk plotted his escape from South Africa ever since he had access to information about America. His idea of America was cliché – he didn’t overthink it. He wasn’t interested in criticizing the system – he wanted to move to the land of yes-men, and he was one himself.
How Can I Use This?
Have you ever felt what it’s like to come to a new land where you are just another upstart?
Getting His Hands Physically Dirty
Musk doesn’t seem to think that physical work is beneath him. He embraces it. When he moved to Canada at 17 on his own, he sought out a job that required him shoveling dirt in a boiler room wearing a hazmat suit. Even today, with his designer clothes on, Musk walks the floor of his rocket factory and sometimes gets physically involved in the process – his clothes ruined with epoxy.
How Can I Use This?
This might be the easiest of them all – get your hands literally dirty and see if it helps you get started.
Sharing Wildly Ambitious Plans
Compared to other people and companies, Musk has an unusually futuristic outlook. He has made and shared his plans for as far away as his death on Mars after he helps a million people move there on his rockets at $500,000 per ticket. It’s easy to dismiss this as marketing hype – and people did dismiss a younger Musk . By now it’s clear though that he lives up to his ambitions.
How Can I Use This?
Create some stress for yourself by sharing your plans and see how it feels. Of course, others like Jeff Bezos and Steve Jobs did the opposite. It probably makes sense to reveal your plans if you know that they are so far fetched that no one could copy them.
Not Looking Back
Musk is known for not hanging on to things or people. He looks forward. Ironically he might have a lot more to look back at and be sorry about than many. His first child died at 10 months old, he divorced his first wife, the first 3 times he launched his rockets they blew up – one of them destroying an expensive NASA payload. He has blown promises, missed deadlines, miscalculated costs and had to charge customers extra after they had already paid (Musk had to ask 400 customers who already prepaid to add extra $17,000 for each Roadster).  This list alone is enough, I believe, to make most people look back and infer that maybe it’s time to reign in the ambition, to mend relationships, etc. But that is not the point – for all his failings, Musk is capable of greatness. His products justify his mistakes. At the age of 44 he still has more to gain than he has lost – more rockets to launch, more cars to manufacture, and even more children to have.
How Can I Use This?
Think about it: if you believe there are more opportunities ahead it doesn’t make sense to be sad about lost opportunities. It makes sense to regret only if you lost more than you might gain. Here the key is probably in what you believe is still possible. We have to assume that the window of opportunity has not closed yet. In think on this point our intuitions are often mistaken – there is no proven critical period for learning, for example. This is even true for learning a foreign language. Yes, most adult immigrants speak with an accent but not because of their age. It turns out that when you learn your first language your parents speak to you in “parentese” a version of language that emphasizes exactly the sounds that are more difficult to distinguish. Plus they are patient with you. I guess as we grow older we do become impatient with ourselves. But that is a choice. Maybe no one is these to anticipate our mistakes, at any age we could find a willing teacher.
So does it ever makes sense to look back and regret? Yes, but only if you can find conclusive evidence that what you want to do is no longer possible at your age.
Starting Really Small
Compared to what Musk is doing now – electric cars, rockets, and solar panels his first businesses were ridiculously straightforward – selling computer parts from his dorm room, running a glorified speakeasy from his house in college. Would he do this if he saw a straight path to making electric cars back in college? I think not. It looks like he took incremental steps towards a goal he had no idea how to reach at the beginning.
How Can I Use This?
If you want to start, start literally anywhere. In the long run, it won’t matter where exactly you started.
Just Enough Money To Start
Most people would say that it’s the lack of money that prevents them from starting a startup. Musk’s biographer helpfully tells the amount he had when he started. Between him and his brother Kimbal they had $28,000 that came from their father plus $6,000 from their friend Greg Kouri, who joined as a co-founder of Zip2 . Today the $34,000 adjusted for inflation would be $53,000. This amount was enough to set up an office in Palo Alto. Musk and his brother slept in the office, showered at the YMCA, and subsisted on a diet of fast food.
How Can I Use This?
Would Musk make it without the $53,000? He’d probably have to work from a coffee shop for a little bit and sleep on someone’s couch. But it seems improbable that not having this money would have stopped Musk in the long run. Does $53,000 [or insert your amount] make the difference between starting and not starting for you? Figure out your minimum.
Teaching Himself From Books
When Musk decided to do something with space he apparently realized that he needed to learn about space himself. He correctly estimated that money alone, which he didn’t have enough of to start a rocket company either, does not solve the space problem. Wealthy people have done this before – threw some money at a space project and watched it fizzle out helpless without the engineering knowledge. Not Musk. Jim Cantrell, an aerospace engineer that Musk cold called back in 2001 said this about how Musk learns, “He literally sucks the knowledge and experience out of people that he is around. He borrowed all of my college texts on rocket propulsion when we first started working together in 2001. ”
How Can I Use This?
Knowledge is free. It’s easy to carry around – it doesn’t weigh anything. Books are free at the library. Don’t underestimate how much you can learn just straight out of books.
Over-Optimism, Over-Promising, and Over-Delivering
With both SpaceX and Tesla there is a pattern: make a wildly ambitious promise, delay the reveal several times, finally unveil the product, promise to deliver it soon, delay the delivery date, deliver a product that surpasses expectations.
In design I’ve learned that you can have only 2 out of the three things: amazing, fast, or cheap. Musk doesn’t seem to compromise on amazing. He is definitely striving for cheap (100 times cheaper rockets than now, Model 3 at $25,000 after tax incentives). So you don’t get fast. The Model X, for example, came 3 years late.
How Can I Use This?
Don’t be too hard on yourself. It’s going to take some time to do anything worthwhile. Yes, people hack prototypes in a weekend but it takes much longer to make that thing amazing.
Here in a nutshell you can see the story of Tesla through the eyes of the stock market. The stock was flat for a couple years because Tesla had yet to show profit. People weren’t yet buying into Musk’s optimism. When in April of 2013 Musk announced profit for the first time, the stock shot up. You can also see the incremental steps Musk took and how the stock grew accordingly.
How Many Tries Does It Take?
It took 4 tries for Musk to successfully launch his first rocket. This number is low compared to his competitors who blew up a lot more hardware before it would fly.
There is one key difference, though – Musk only had enough money to launch 4 times. If the 4th time didn’t fly that would have been it.
How Can I Use This?
It’s hard to call Musk lucky considering the rocky start of SpaceX. You could be luckier or less lucky. The way you’ll compensate for the missing luck is just more tries.
Here you can compare the number of successful launches to the number of failures. The rocket size seems to grow with the increasing confidence. Still three failures at the very start is not ideal.
“I’d rather commit seppuku than fail,” Musk tells an investor to explain why he should get the investment . This is a theme with Musk in negotiations, physical activities, and relationships. He might move on but he doesn’t fail. He might be late on his promises, he might come across as too pushy, or get kicked out of the company he started, but he doesn’t let things fail.
How Can I Use This?
You can’t fail unless you give up. Why would you give up? Find your reasons and fix them.
Most of the facts in the timeline are based on Ashlee Vance’s Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future.
Written with participation but not the final approval from Musk, this biography by Musk’s compatriot Ashlee Vance details the events of Musk’s life starting with his grandparents and all the way into 2015 when the book was released. Vance lets us see the world the way Musk sees it: employees grow complacent too soon, aerospace industry is incompetent and conniving, VC’s are short-sighted, co-founders run out of gas, engineers are too pessimistic about their own abilities. Throughout all this Musk doesn’t spare himself working 100-hour weeks. It is easy to adopt his ultralogical perspective of the world because it is inherently optimistic. By the end of the book I feel the comparisons between Musk, Steve Jobs, Bill Gates and Mark Zuckerberg miss the point. Musk is the only one so far to build a future instead of just building products.
3. ^ On the subject of his father Elon Musk dodged the more straightforward questions from his biographer Ashlee Vance. What he does say, in Chapter 2 of Vance’s book, sounds little more than ambivalent:
“It would certainly be accurate to say that I did not have a good childhood,” he said. “It may sound good. It was not absent of good, but it was not a happy childhood. It was like misery. He’s good at making life miserable—that’s for sure. He can take any situation no matter how good it is and make it bad. “He’s not a happy man. I don’t know . . . fuck . . . I don’t know how someone becomes like he is. It would just cause too much trouble to tell you any more.” Elon and Justine have vowed that their children will not be allowed to meet Errol.”
4. ^ It’s not lost on Musk that his kids won’t suffer like he did. And it bothers him. He’s not sure what he can do though. “What do I do? Create artificial adversity? How do you do that?” he asks in the last chapter of his biography.
6. ^ When Musk first said he would start a rocket company people didn’t take him seriously. In Chapter 6 of the book, Robert Zubrin, the Mars Society president recalls, “With Elon, everyone gave a sigh and said, ‘Oh well… he’ll spend hundreds of millions and probably fail like all the others that proceeded him.’”
7. ^ Vance notes in Chapter 10 that Musk personally sent an e-mail to customers who already paid $92,000 for the Roadster declaring a price hike. The cost would now start at $109,000.”
9. ^ “Errol Musk gave his sons $28,000 to help them through this period, but they were more or less broke after getting the office space, licensing software, and buying some equipment. ” – from chapter 4 of Elon Musk by A.Vance.
This visualization came to life thanks to Ahrefs who have diligently crawled and analyzed trillions of links on the web which helped me find the most relevant articles about Musk through their content explorer to cross check the facts in the biography. I also used Ahrefs to make sure that the Vance biography is the most cited book on Musk’s life today.
Here are some of the best articles that explore his life and his future suggested by Content Explorer:
- Elon Musk: The World’s Raddest Man – Wait But Why
- Elon Musk’s Space Dream Almost Killed Tesla – Bloomberg
- How Elon Musk Plans on Reinventing the World (and Mars) – GQ
Mark Vital was at the helm of data visualization behind the graphics. Alex Unak created the face illustration and the Dragon space capsule standing on Mars.