Much to the concern of Tesla’s shareholders and board members, Elon Musk somehow manages to top headlines nearly every week for both the big risks he takes, and for his epic failures.
Whether it’s due to the 120 hour work weeks, or the chronic lack of sleep that he has admitted to, it seems like the billionaire entrepreneur keeps making reckless moves and having fun at everyone else’s expense.
If that’s the case, then how does he always seem to end up on top?
A high risk tolerance and an embracing attitude toward failure are key personality traits for any aspiring entrepreneur, so let’s examine a few of the many seemingly career ending failures that this eccentric entrepreneur was able to overcome against all odds by focusing on what’s next, instead of dwelling on the failure itself.
Nearly Going Bankrupt
After selling PayPal to eBay in 2002 for a reported $1.5B, which netted Elon Musk about $165 million as one of the company’s co-founders, he began searching for new business ideas and decided that he wanted his next business to solve more important issues than simply how we make payments online.
That’s why he focused his efforts on clean energy and space travel. In a bet that most people would find astonishing, he took $100 million of his own money and started the rocket company SpaceX.
Within just 2 years, he had also invested another $70 million into a little known electric car company, Tesla, eventually buying it outright. Four years after his sale of PayPal, he used some of his own money as well as assets from Tesla to invest another $90 million into the solar company started by one of his cousins, SolarCity.
Along the way he nearly went bankrupt and went hundreds of millions into debt, borrowing money from billionaire friends and taking loans from banks, just to cover expenses while working tirelessly to keep the value of his companies from collapsing to zero.
All three companies are now household names because of the years of big bets, hard work, and relentless focus that the entrepreneur has maintained. In the end, it was his unwavering belief in his bigger mission, and his willingness to give up everything else, including his personal life, that ended up ensuring the success of these ventures.
Negotiating With Russians
Musk’s interest in space started when he was just a child, so to those who knew him well, the idea of starting a rocket company wasn’t all that crazy. But to everyone else, it seemed he had lost his mind. When he couldn’t find affordable rocket suppliers in the United States, he decided to go to Russia and negotiate a deal to purchase cheaper, refurbished rockets from the government.
After negotiating with the Russians over three trips to the country, he and his team were literally laughed out of the room when he brought $21 million in cash to pay for 3 rockets, only to find out that the Russians were taunting him and actually planned to sell him only one for this price.
Many people would throw in the towel after such a defeat, but on the flight back to the United States Elon said to his partners, “screw it, how hard can it be to build a rocket?”
After reading every book he could find to become an expert in rocketry, spending many millions more on failed launch after failed launch, in September of 2008 SpaceX successfully launched its first reusable rocket, forever changing the industry.
Elon himself has said: “when something is important enough, it’s worth trying even if the risk of failure is really high.”
As long as you keep learning from every mistake, if you keep trying, you’re bound to get it right at least once.
Getting Sued By The SEC
In August, Musk made headlines when he announced his plans to take Tesla private saying that “funding is secured.” It’s difficult to guess why he would make such a statement so publicly on Twitter, perhaps he really believed that taking the company private was the best option, or maybe he wanted to encourage the investors he was courting to make their decision faster, but now we know that the bet he made did not pay off.
The SEC, the regulating body that’s charged with protecting public investor interests, took his statement as an attempt to manipulate Tesla’s stock price and began proceedings for a lawsuit that would have been detrimental to the business and to Musk’s future as the company’s head. But just a few weeks later, after what was likely a series of negotiations, the SEC settled with Elon Musk and Tesla, and he got away with paying a fee and Tesla made the symbolic move of removing Musk as a Chairman of Tesla. In the settlement he still got to keep his job as CEO.
Was this recent move and the many huge risks that Musk has taken throughout his life worth it? Most of us would never consider taking on giants like the Russian government or the Securities and Exchange commission. But for leaders like Elon Musk who are attempting to reinvent entire industries and create technologies that our world has never seen, constant failure is just a part of the game. It’s something they’ve accepted as their reality a long time ago.
There’s a valuable lesson here for the rest of us. If you’re someone who has big ambitions and wants to leave a mark on this world, the faster you get comfortable with the inevitable failures that you’ll face along the way, the easier it will be to get back up and keep moving forward.