Elon Musk’s Formula to Grow Your Business, Business tips that really work!

Elon Reeve Musk is the founder, CEO, and chief engineer of SpaceX; angel investor, CEO, and product architect of Tesla, Inc.; founder of The Boring Company; and co-founder of Neuralink and OpenAI. With an estimated net worth of around $263.6 billion as of September 26, 2022, Elon Musk is the wealthiest person in the world according to both the Bloomberg Billionaires Index and Forbes’ real-time billionaires list.

Does Elon have a strategy?

Indeed, Elon Musk‘s strategy can be characterized by common themes across three areas, says Harvard Business Review.

Vision

Musk has a different approach to envisioning, they say. His vision is always problem-focused, addressing a bold problem to be solved. In each of his companies, answering a broad problem has become the backbone they grow upon. From Tesla’s “to accelerate the world’s transition to sustainable energy” and SpaceX’s “make humanity interplanetary” one can clearly see his boldness and clarity in vision.

How he designs a company to solve these problems

The Harvard Business Review identifies “organization” as Musk’s most identifiable and consistent characteristic. The two big words in this regard remain; vertical integration and closed technology. As long as the company’s value chain is vertically aligned within the company there is an opportunity to own and operate each stage of the value chain within the company. SpaceX manufactures about 70% of its Falcon 9 rocket in-house. In comparison, United Launch Alliance, which launches NASA spacecraft, relies on 1,200 subcontractors for all other operations. Now that is a loss of possible additional profit.

Closed technology

Closed technology, on the other hand, does not enable interoperability with other firms. For example, SpaceX’s Starlink satellites use a highly proprietary technology that makes them effectively inoperable with other satellite dishes, says Harvard Business Review. This calls for a solo ride in the market and if successful with total control. This enables the technology giant to capture more value although in the long term there may seem risks.

Why Elon can so effectively mobilize resources toward solutions

Musk has access to capital. Across eight of his companies, he has raised over $34 billion dollars. Neuralink alone has raised more than triple the amount of capital raised by Amazon. How does he manage to do this? How can he alone persuade investors better than others ask Wall Street Analysts? Where everything and everyone fails to explain Musk’s art of persuasion, the Harvard Business Review turns to Aristotle. Three words: Ethos, Pathos, and Logos seem to explain the way. The three words respectively, meaning appeal to the honesty of the speaker, appeal to the audience’s emotions, appeal to logic, seem to explain Elon’s bold strategies in persuasion.
This relationship between Musk and his investors is the core factor that enables his strategy.

Elon’s Marketing Strategies

One could say that Elon Musk is the Michael Jordan of CEO-led marketing, says Forbes. From Musk’s social media engagements to bold and confident interviews, he positions alongside himself the bold vision he stands for. Every time he poses a big problem in the process of being solved, he creates the hype, the dream, the collective drive towards solving the problem at hand gathering enough interest around the company. This is way different from marketing a single product.

The Secret Operational Formula

Here in this section, let us find key learnings derived from Musk’s strategy:

Create a working prototype

Presentations often look wonderful. But there is a clear difference between a presentation and a working prototype, says Elon Musk. An investor may be convinced by seeing a working prototype than a presentation. Also, it is by going for the working prototype you can learn the actual success rates of your idea compared to a mere proposal/calculation.

Start a company that needs low capital to start up

Musk started with little capital, and he started with software where he could write the software without having to depend on high-cost programmers. Start where you are, with what you have.

Don’t be afraid to think big

Know which problem you are contributing to solve, and go all out for it.

Take risks

Make sure the reward is worth the risk. It’s easier to be bold when you are young. But make sure your risk-taking is a calculated decision giving you a sound reward for your time, effort, and investment. It is OK to have rational fear. Failure is not a big stigma. If you try hard and it doesn’t work out. It’s OK. You can learn from that. But having a fear of failure can be a good drive. It’s important that you like what you are doing. Follow your passion. Life is too short to do anything else.

Constantly seek criticism

Depend on your friends and family to seek criticism at first. More often than not, they are correct. Face the criticism and shape up the products during the early stages itself. Be focused enough to discard the wrong criticism and identify what matters.

Be ultra product focused

Go into every little detail. Make the product compelling. Produce a product that customers look forward to buying. If you succeed at this you will definitely succeed in your business

Companies are amazingly skilled people joining together to make a team

Focus talent on required areas. Most companies fail at the intermediate stage, not at the start. That’s when a good team can be useful.

Have a high pain tolerance

Things don’t go as planned. At least not always. The market might not respond, and the technology might not be working the way expected. And on top of that might come to a recession. So it can be very painful for several years.

Hire on capabilities but also on personalities

Never hire for talent alone. Always hire for talent plus the ability to work with a team.

Work super hard

If you put in double the hours like your competition, you will make it in half the time. Put in all you’ve got.