Forbes’ top billionaire on its list, Elon Musk, is currently embroiled in a bitter feud with Twitter over a $44B deal gone south.
It’s another of many headlines from the person once described as “the richest person in history.” Musk owns, has invested in or founded a litany of billion-dollar enterprises like SpaceX, Tesla, and Paypal, among others. And by the way, for a little ego boost, he’s also TIME’s 2021 Person of the Year.
I'm still flabbergasted Twitter hasn't done the 1 thing that would ensure Elon Musk buys the company: disable Musk's twitter account.
— Elon Go Musk Yourself (@2ndlast2rise) July 20, 2022
For the bemused folks who want to replicate this level of financial success, what sort of thinking might be involved? In short, how does Elon Musk’s mind work?
As it turns out, we’re in luck. Because the man, Elon, isn’t too shy or afraid to let us know what’s on his mind. Here are 5 secrets to building and running multi-billion-dollar businesses.
The Mind of Elon Musk: 5 Ways to Wealth
1) First Principles Thinking
In multiple interviews, Musk has always paid homage to his use of First Principles Thinking when confronted with problems and decisions. “First Principles Thinking” requires you to break down a complex problem into its most basic elements. With the foundational concepts identified, you can then begin questioning all assumptions and from there come up with creative solutions.
Said Elon, “Boil things down to their fundamental truths and reason up from there, as opposed to reasoning by analogy.”
For example, with SpaceX, the first problem that dogs the industry is the high cost of building rockets...up to $65 million a pop.
So you ask, “What is a rocket made of?”
You have space-grade aluminium alloy, titanium, copper and carbon fibre.
Okay. So then you wonder, “How much can I get these materials in the open market?”
As it turns out, very cheaply. So much so that SpaceX makes their rockets a 10th of the old prices, suddenly making space travel economically feasible.
Like in SpaceX, “First Principles Thinking” can be employed to come up with game-changing solutions to the old problems plaguing your industry. By disassembling a complex problem into its constituent parts, you can come up with solutions to high costs, high churn rate, low sales, and low productivity.
2) Productivity Over Protocols
For Elon Musk, yes, people need to work like there’s no tomorrow, (he puts in ungodly hours every week). But folks have to make sure that they are actually doing productive work, engaging in things with real impact, and not just going through the motions and looking busy.
Musk has practically come out against all manner of productivity-killing corporate bureaucracy. For example, he advises CEOs to stop wasting time on meetings. He thinks they are a waste of energy...energy that could have been spent in deep work. He’s not a big fan of PowerPoint either.
He even advises people to ditch acronyms or jargons that only obscure communication:
“Don’t use acronyms or nonsense words for objects, software or processes...anything that requires an explanation inhibits communication. We don’t want people to have to memorize a glossary just to function...”
He doesn’t want information silos, preferring an organization where information freely flows through all levels. Communication should follow the shortest, most direct line between people. So no to “chain of command” nonsense that slows down problem-solving and decision-making opportunities.
You would do well to heed these exhortations and have an organization light on the red tape.
You asked, “How is he running both SpaceX and Tesla at the same time?” This is part of that secret sauce.
3) Crave Negative Feedback
Whether in war or business, feedback is key to success. And people love getting positive feedback, often thriving on it:
“Nice job on the presentation!”
“You did us proud this quarter. Congratulations!”
But negative feedback is a different animal altogether. It jabs at the ego and highlights what you did wrong. It doesn’t feel very good, and no matter what anybody tells you, it hurts. But in a practical sense, negative feedback is more important and more useful than accolades and cheers. Why? Because of its potential to impart insights on how you can do better.
And this is exactly what Elon Musk was talking about when he said, “Pay attention to negative feedback and solicit it, particularly from friends.”
In short, ask for the jab, ask for an honest poke.
When you’re already as motivated and full of self-belief as Musk (more on that later), positive feedback has little use for you. It’s the negative ones that give precious little gems of course correction.
And perhaps the biggest negative feedback for a young billionaire is outright failure—like when the spaceship you’ve spent millions and years on fails, spectacularly...three times!
But you learn after each crash, after every explosion, until finally, on the fourth one, you make history.
4) Billion-dollar Determination
One of the most popular quotes attributed to Elon Musk is when he said (about SpaceX), “We're going to make it happen. As God is my bloody witness, I'm hell-bent on making it work." (There might have been some missing expletives somewhere there.)
Starting and running a billion-dollar enterprise requires a billion dollars worth of self-belief and self-determination. Look at the enterprises he’s wedded himself to, you’ll notice that many of them are “out there.” Space exploration, electric vehicles, chips planted in the brain? These are propositions that not many have taken...for good reason.
So imagine the criticisms or cold water thrown his way. “That will never work!” “The costs are too high!” “There are a dozen other things you can do with your money.” “This project will do you in.”
He’s been called an idiot, stupid and a charlatan.
But after listening to all that, at the end of the day, he makes the launch decision.
The man who said, “Your will is the most accurate way to predict the future,” was also the same who said, "No I don’t ever give up. I’d have to be dead or completely incapacitated.”
So, are you dogged and as ready to swim against the tide (in frigid waters) for something you believe in?
5) Read...and Learn
Musk’s brother, Errol, once said that Elon reads two books a day. This was echoed by the man himself when, in a Rolling Stones interview, he quipped, “I was raised by books. Books, and then my parents.”
They say “Leaders are readers.” There may be truth to this. Dan Gilbert owner of the Cleveland Cavaliers reads 1-2 hours a day. Mark Cuban of Dallas Mavericks fame reads 3 hours a day. Warren Buffet reads 5 hours a day.
Reading is a game-changing habit.
I mean quality reading, not just scanning the top 10 articles and bits from a Google Search, but reading books. Real books. There are thousands of articles on a topic online, but none of them can delve into a topic as deeply, richly and, nuanced as books. Digital or print is a matter of personal preference.
Bills Gates devours 50 books a year. Zuckerberg, 2 in a month. Billionaire David Rubenstein reads 6 books a week. And you don’t do it so that you become a billionaire. It’s more basic than that. Oprah said, “Books were my pass to personal freedom.”
In today’s world where you need to continually learn something new just to keep up, all the more reason when want to get ahead and lead.
When Elon Musk was forming his SpaceX team and looking for a chief engineer/designer, none of the good ones wanted to join his outfit. (As for the bad ones, we’ll, he didn’t want anything to do with them.) Eyeing no interested parties on the horizon, he took personal responsibility and became chief engineer/designer, studying up on “the subject” as much as he can.
This guy read his way to making reusable space rockets!
A billion props to this guy.
And that, friends, is the mind of Elon Musk.
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