Factors of Elon Musk’s Entrepreneurship Success
According to a recent study, almost 75% of all startups fail overall and the largest contributing factor to their downfall is lack of capital and desperate market need. It is therefore hard to imagine that anyone today can become a successful entrepreneur given the small probability of success. Despite this, the media will constantly show many successful entrepreneurs who defied such odds and one such example is Elon Musk. The South African born entrepreneur has been in the entrepreneurial business for over 20 years and he is no exception when it comes to creating successful startups. The entrepreneur launched nine startups and sold two of them, Zip2 and X.com in 1999 and 2002 respectively. Elon Musk is a therefore a serial entrepreneur as his intention was to sell several startups so that future ones like SpaceX and Tesla could exist. Today, the entrepreneur’s interests are predominately in the automobile/transportation and aerospace industries which he wants to significantly change. His dream is to reduce global warming and the budgets required for space exploration. This ultimately was the direct motivation behind SpaceX and Tesla, two of his most successful companies. His largest accomplishment was indeed SpaceX since it was the first privately funded company to launch a rocket into space and its budget was 11 times less than any of NASA’s previous missions.
The other focus of the Elon Musk’s career was Tesla which is meant to revolutionize electric transportation and be the primary system to get around. This would fundamentally change modern day transportation and therefore have a creative destruction in the industry, but the outcome will greatly reduce pollution in the atmosphere. In general, Elon Musk’s entrepreneurialism is centered around changing the world and the betterment of mankind. Both SpaceX and Tesla are his two business opportunities that will be focused on. When we speak about modern day entrepreneurs we don’t witness many inventor entrepreneurs like Elon Musk. His earlier startup, SpaceX, demonstrates the entrepreneur’s innovation in terms of how he sets to make space exploration easier. The pressing issue for him “is the cost of access to space” which has been preventing humans from making frequent trips to space. The entrepreneur achieved this by seeking rocket engineers to build an orbital rocket that is capable of landing on the ground and be reused again in future missions. As a result, this will heavily impact the industry as rockets become more affordable cutting the cost “ultimately by a factor of ten”.
The company launched their first successful propulsive landing rocket Flacon 9 in 2015 and reused it two years later. This certainly is an incredible accomplishment as he achieved his dream but also because he didn’t give up after being told repeatedly that SpaceX will fail. This shows that his determination kept him pursuing despite the claims told by analysts from the aftermath of the Columbia disaster. In addition, the success of the Falcon 9 launch increased public interest in space exploration which was lacking in the industry for some time. The company thereafter launched Falcon heavy that had a much higher payload capacity and is aiming to reach far into space. Though it is without a doubt that the entrepreneur had to overcome many adversities to achieve this dream. The biggest one was the failed launch of a previous iteration of Flacon 9. According to a report by the company, one of the steel pieces broke off under the pressure when the rocket was accelerating causing an explosion in flight. This sent the company back since production was paused and the entrepreneur lost support from several investors. However, this didn’t stop Musk as he took ownership to solve the problem by investing necessary resources such as hiring senior level engineers and increased investments to fund better technology. He also shifted the company’s focus more on improving the infrastructure and durability of steel for the subsequent Flacon 9 rockets. SpaceX largest competitors are Blue Origin and Virgin Galactic. It is however not a huge setback for the company since SpaceX owns approximately 65% of the market share.
SpaceX is also the first to land a rocket on ocean platform, first private company to send satellite to orbit and first to reuse its rocket making it the current leader in innovation. It is for this reason that SpaceX demonstrates some of the entrepreneur’s new innovations and the achievement of reusing space rockets that so few have accomplished. Elon Musk also pursued other opportunities such as going into the automobile industry. Elon Musk saw the opportunity in electric vehicles because it was customer centric, helping people reduce pollution and go green. It was also a good opportunity because he already had access to needed resources such as previous employees from SpaceX and necessary funding from trusted investors. At the company, Elon Musk focused on the affordability of Tesla cars and their performance. The main selling point for him was that his electric cars can achieve just as much as standard vehicles yet have a positive impact on the environment. Some of the new technology behind Tesla cars are the powerful lithium-ion batteries that require no fuel to work. Newer Tesla cars also have autopilot which is the drive assistance technology that allows for cruise control, emergency brakes, auto parking, and sensors to warn nearby vehicles. The company released the Model S in 2012 and Model X in 2015 which was a small SUV. In addition, the Model 3 was a third-generation car released in 2016 that could drive 500 km on a single charge.
The fundamental connection between Elon Musk’s entrepreneurship and his business opportunities is the desire to reduce global warming and have cheaper accessibility to space. I believe that the key learning here is that your motivations should drive your entrepreneurial career as opposed to money. In addition, I believe that the certain strategies of the entrepreneur were effective but not always realistic. For example, it was effective for Elon Musk to sell Zip2 and X.com because they were profitable, however, it does not guarantee success to subsequent startups. There are factors other than profitability that are important such as market need and competition. I also believe that being an innovator in entrepreneurism is important but not the only means to success. Ultimately, I believe that a successful entrepreneur is someone who isn’t afraid to take risks for a larger outcome in what they desire.
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