There is an art to creating a multi-billion dollar US manufacturing firm. Elon Musk has created one in Tesla already and it won’t be long before SpaceX is there as well (if they aren’t already). Money systems (Paypal), cars and rockets are where he spent his time. Huge, established industries. Yes somehow he is rewriting the rulebooks successfully in each case.
I think there is a strong case for Elon Musk to be put on the list of greatest businesspeople of the 21st century. It’s not because he’s wealthy or famous. It’s because he takes on big challenges with the goal of big results – and he gets the job done. But more interestingly, it’s how he goes about creating these transformative businesses.
His companies focus on the intrinsic weaknesses of entrenched industries.
- Banks were/are terrible online – they fundamentally don’t trust web technologies. I don’t know a single user that enjoys online banking. Sure, Paypal hasn’t solved the problem but they sure did make fundamental and significant improvements over where the industry was.
- Cars are completely internal combustion, gasoline based – there has never been a real effort to challenge the status quo by any legacy player. Tesla is looking to produce 100% electric cars with the goal of having them be in general consumer price ranges in 3 years (sub $35k). This isn’t some half-hearted electric car either – 300+ mile range that can out accelerate a Porsche with technology that feels straight out of Apple’s R&D labs.
- Rockets were a government business that focused on outcomes and not on finance. NASA was exiting the business leaving a huge opportunity wide open to leverage government contracts to create a viable, cost based business that can jump start (create) private investment into ventures beyond the atmosphere.
These aren’t just experiments, these are viable businesses focused on generating profits. Each one of them started with the idea of addressing fundamental market weaknesses of existing players. This wasn’t the case of the iPhone which created an all new market category, this was entering holy ground of existing players and slapping them across the face with their flaws and failures.
That’s Ingenious Design – looking at the world and saying “This could be better” and then doing it. Improving on what is here and leaving something better behind.
I hope to one day be able to do the same. But even still I focus on the “this could be better” and then I deliver. If you aren’t doing that much, what are you doing?