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Elon Musk's Startups: The Hitchhiker's Guide to the Galaxy of an outstanding Entrepreneur

Monday, October 4, 2021

The most significant projects of Elon Musk: from the first company at the dawn of the “dotcom era” to technology that changes the human mind right before our eyes.

Startup Jedi

We talk to startups and investors, you get the value.

Who doesn’t know Elon Musk? I guess there are no such people.Over the years, he has become not only a successful entrepreneur, but also an inspiration to millions of young people.The Musk shows that technological startups are capable of changing the world, accelerating human progress and fulfilling humanity’s most daring dreams. Today’s review is devoted to the most significant projects of Elon Musk: from the first company at the dawn of the “dotcom era” to technology that changes the human mind right before our eyes in 2021. Careful, this article can cause a rush of enthusiasm and a desire to change the world!

Zip2: Millionaire at 28

Elon Musk began programming at the age of 10, when he was given his first computer, and at the age of 12 he went into business to create a Blast Star game and sell it for $500.The young businessman did not stop there - he wanted to start a company and mass-produce arcade games, but could not get a license.

The school was followed by a move from South Africa to Canada, followed in the United States by studies at the University of Queens and the University of Pennsylvania, but Elon did not put the dream of entrepreneurship on hold. In 1995, Musk left Stanford University, having studied there for only two days, to join his brother Kimball in the “dotcom boom” and launch his first startup.

The Zip2 service, developed by the brothers, allowed the print media to create their own web pages and offer paid services. The startup quickly became successful, and its clients included such landmark publications as The New York Times, Pulitzer Publishing. In 1999, the startup was sold to Compaq for $304M, and the Musks brothers received $37M for two. At the age of 28, Elon Musk became the creator of a successful startup and a millionaire, gaining financial independence and the opportunity to move on to his ambitious ideas.

PayPal: the history of a mafia

After the sale of Zip 2, Elon Musk again turned to the promising niche of Internet services and created  an application X.com, with which customers could make payment transactions via email. Elon Musk's startup has achieved significant success: his clients' accounts were insured at the state level, like ordinary deposits, and a few months after the launch of the services X.com more than 200 thousand people have already used it. 

At the same time, Peter Thiel and Max Levchin developed PayPal, which allowed purchases to be paid directly from a Palm Pilot pocket computer. The startups were short-lived competitors: in 2000, the two electronic systems merged to become a combined company, which became the world-famous PayPal.

The merger did not go well for Elon Musk, as multiple disagreements with X.com’s board of directors led to his dismissal from his own company in 2000. However, Musk’s share remained the largest of all X.com shareholders — 11.7% of the shares. After the purchase of PayPal by eBay for $1.5B, Elon Musk received $165M.

Former competitors' roads have not diverged: the creators of the unified PayPal system still communicate and interact with each other. There is even a term “Mafia PayPal”: every member of the team that worked on PayPal founded a successful project afterwards —  the CAPTCHA test (Max Levchin), YouTube (Javed Karim, Steve Chen, Chad Hurley), LinkedInn (Reed Hoffman). His next projects were SpaceX and Tesla, with Peter Thiel as one of the first SpaceX investors. 

“A very clever, charismatic and fascinating man is an extremely rare combination of character traits. Usually people who have at least one are deprived of the other two”, so Peter Thiel described his impression of working with the founder of X.com.

Space X  from an unsuccessful trip to Russia to the colonization of Mars

After the success of PayPal, Elon Musk moved on to truly scale innovation: his next goal was to conquer Mars. A problem that can only be solved by characters in fantasy books and blockbusters around 2200? Elon Musk thought differently.

The entrepreneur decided to begin his space expansion under the name Mars Oasis with the purchase of Russian ballistic missiles, for which he travelled twice to Russia in 2001 and 2002.Both negotiations ended with nothing, and Musk decided to create his own space company, and the first business plan was drawn up in a plane from Moscow. What’s so special about this decision? Up to now, space activities have been considered exclusively a State affair, with only a few countries around the world being able to “pull out” them. In fact, all space-related projects are extremely expensive, require advanced technologies, require better human resources and also involve risks to human lives. 

The creation of a private company that would suddenly take and conquer Mars seemed pointless and doomed to failure: With more than $100 million of his own money invested in SpaceX, Elon Musk faced ruthless criticism. Peter Thiel had no doubt about the success of the former competitor and invested his foundation’s investment in the newborn company. 

Already 4 years later, SpaceX presented the first results: with the help of the Falcon 1 launch vehicle, it was possible to launch a Malaysian satellite into orbit. A private space company has ceased to be something from the world of fiction, becoming an effective and very fast player in the market. Already in 2008, NASA signed a contract with SpaceX for 12 flights to the ISS worth $1.6B. 

In 2012, Elon Musk announced SpaceX’s plans to colonize Mars: The company plans to use Falcon rockets to send people to Mars in small groups: few people (up to 15 people) and many cargo (up to 100 tons) on their first expeditions.It will be necessary to build transparent domes on the planet, under which a human-friendly atmosphere will be created. In addition to the ships themselves, SpaceX is developing a special interplanetary cargo transportation system for the Mars Colonial Transporter, its own space suit and space engine for flights to Mars. The chief engineer of the company and all these projects is Elon himself.

I think it would be great to be born on Earth and die on Mars. I just hope not when a rocket falls.

“In SpaceX we strive for a great philosophical goal, even though we are engaged in business.If we succeed in building a company that will help mankind become an interplanetary species, it will be equal to finding the Holy Grail”, explained the entrepreneur. Perhaps it is such a global and crucial goal for all humanity that helps the company to move forward so quickly, overcoming many difficulties. For example, the company suffered a number of setbacks with the two-stage Falcon 9R missile: in the first tests in 2014, the missile exploded and in 2015, the first stage failed to land fully.

Last year, in 2020, SpaceX triumphantly launched the first private manned launch into space: the Falcon 9 rocket with Crew Dragon delivered two American astronauts to the ISS.Previously they flew only with the help of Russian “Alliances”.

The private company managed to significantly reduce the cost of flights: now the launch of one Falcon 9 costs from $56 to $77M, while the launch of the Russian “Union” is more than $100M, and the European Ariane 5 — $200M. At the same time, the carrying capacity of Falcon is still inferior to the “Union”: in the context of conquering Mars, this is a significant issue. But most importantly, space is no longer out of the reach of private companies. After Elon Musk, a number of startups have flown into this niche, and their competition and joint efforts make it more likely that Elon’s dream of colonizing Mars and other planets will be fulfilled.

Tesla: race for a competitive electric car in the name of ecology

Elon Musk has plans not only for Mars, but also for Earth: an innovator worries about the pollution of the atmosphere by exhaust gases and oil products, he advocates the transition to electric vehicles and the development of alternative energy. In February 2004, Musk invested $70M in Tesla’s electric car startup and headed the company’s board of directors. 

With the first Tesla Roadster, problems arose: the cost of the electric car far exceeded the declared market value. Musk had to take drastic measures: massive layoffs (including the dismissal of one of the company’s founders), an increase in the price of pre-ordered cars, which caused anger among buyers and a barrage of criticism in the press. As a result, Tesla Roadster’s first release on the market in 2008 cost $140M instead of $25M.

In 2009, a new Model S car was announced, and the company attracted $50M in additional investment; however, this was not enough to turn the company into a profit. Heavy losses resulted from a factory marriage in the second instalment of Roadster, which led to the recall of the entire shipment. The company rescued a timely IPO launch in 2010: despite ominous forecasts by analysts, stock prices rose by 41% on the first day of the stock market. The company raised $226M. 

The Model S motor car was popular in the United States, and in 2013 it was recognized as the world’s safest vehicle by the NHTSA. In 2014, the company announced a new electric car, the four-wheel drive Model S P85D, which accelerates to 100 km/h in 3.2 seconds.

The determination and perseverance of the Musk is an excellent engine that gradually moves the company to its destination

Tesla now sells electric cars not only in the United States, but also in Europe and China. Sales growth allowed the year 2020 to end for the first time with a profit: in the fourth quarter, the company’s net profit was $270M. The company was short of the goal of half a million electric cars sold, with 499,550 vehicles sold in 2020. In 2021, Tesla overtook Toyota and became the world’s first car company to be capitalized.

“Tesla Motors is named after Nikola Tesla because we use some of his inventions.This guy is definitely worthy of more public recognition. However, to be honest, I always liked Thomas Edison better, because unlike Tesla he was able to bring his inventions to the mass market and make them available to all mankind”, — once said Elon Musk.

This statement reflects the main difficulty of the Tesla project: it is not enough to design a great electric car and bring it to the market — it is necessary to make sure that the mass consumer chooses it instead of the usual car. After all, only consumers will be able to change the situation with emissions into the atmosphere by massively switching to electric cars. Therefore, the goal of Tesla is no less complex than the SpaceX project to conquer Mars.

SolarCity: The Sun’s Future and the Troubled Present

In 2006, Elon Musk, along with his cousins, founded SolarCity, a company dedicated to developing low-cost and affordable solar panels.The entrepreneur is confident that by 2040, solar energy could occupy up to 40 percent of the world’s total energy. Now the SolarCity solar panel can be bought by anyone, including on credit. In the plans of the company — waste-free production with the help of Tesla: for solar batteries worn car batteries will be used. A 30% worn-out battery is no longer suitable for an electric car, but the solar panel can run for many years.

Although SolarCity is one of the largest solar cell operators in the United States, the company remains unprofitable. In 2016, it was purchased by Tesla to save the startup from ruin, but so far SolarCity has failed to make a profit.

Another nuisance is Tesla’s shareholders' lawsuit against Elon Musk, who consider the $2.6B value of the startup to have been purchased to be unreasonably high and in keeping with Musk’s personal financial interests. If the entrepreneur loses, he will have to repay a large part of the funds.

Hyperloop: transport of the future

In 2013, Elon Musk announced the creation of Hyperloop, a high-speed underground passenger transport project.Inside the dilute air tunnel is a passenger capsule that accelerates to a speed of 1 200 km/h. Such a transport will make it possible to travel 500 km in half an hour.

Hyperloop was originally intended to be an open-source project open to all interested businesses and organizations.On the one hand, it increases the chances of implementation of the project itself, and on the other hand, one-day startups and obvious fraudsters quickly emerged around the project.

In 2016, Musk created The Boring Company, which plans to build tunnels for super-speed transport. Also about its creation the entrepreneur informed the original: complained on Twitter about the nightmarish traffic in Los Angeles and announced that “just start digging his tunnel”. The company was initially a subsidiary of SpaceX, but gained independence in 2018. The company’s director was Steve Davis, who had two master’s degrees in particle physics and aerospace engineering. The Boring Company is currently constructing the Loop High Speed Tunnel under Las Vegas, which will carry more than 1,200 people per hour.

Neuralink: human brain upgrade

Another area of interest for Elon Musk is the safety of artificial intelligence. At conferences and in the interview the entrepreneur recalled the plot “Terminator” and recalled that the task of mankind is to prevent similar development of events. As usual, Elon moved quickly from rhetoric to decisive action: in 2014, he invested $40M in the Vicarious FPC startup dedicated to artificial intelligence development.A further $10 million has been sent by the Visionist to the Institute for Human Future Security Studies, providing detailed instructions on how to spend this money.

His passion for AI security led him to an ambitious new project. In 2016, Musk introduced Neuralink, a company that creates microscopic implants for the human brain. With such implants, people with various diseases that restrict brain function will be able to return to normal life. But of course, the potential for using such implants is much greater: it can increase the ability of a normal person to use their brain several times over.

"The most complicated thing is to come up with the right questions. Once you've managed it, everything else turns out to be very simple"

So far, all Neuralink experiments have been conducted on animals: in 2020, a presentation showed a pig, Gertrude, who has been living with an implant for a long time without any side effects. Another guinea pig, Dorothy, had the chip installed and then removed, also without consequences. Another famous presentation of Neuralink — Elon Musk's startup has taught monkeys to play in the console “by the power of thought”. In 2021, the company obtained permission to conduct human trials.

Elon Musk, like millions (if not billions) of people, is concerned and alarmed at the growing impact of artificial intelligence on human life. But he not only thinks about it and enters the discussion — he “plays ahead of the curve”, creating a startup that works on combining the capabilities of the computer and the brain. What the long-term results of Neuralink implants would be if they were tested successfully in humans, we can’t even guess.But it is possible that the Elon Musk's startup Neuralink will be the most significant contribution of an entrepreneur from South Africa to civilization.

“I came to the conclusion that we should strive to expand the limits of human consciousness to learn to ask the right questions”, says Elon Musk.

Elon Musk: One of humanity’s favorite projects

However  hard the path of every Elon Musk project is — they are still insanely interesting to watch, because each one of them is “sharpened” not so much for profit as for solving global human problems. Even unsuccessful startups attract attention and inspire dozens of followers, and the innovator’s calm determination helps him overcome local defeats on the road to great victories.

Without Elon, our world would definitely be different. Some wonder what the phenomenon of an entrepreneur is and consider it a once-in-a-century genius;others analyze its projects and learn to ask the right questions to follow it, to make history; others are inspired by the way of life and principles, The fourth — they take each failure apart and call it a charlatan, the fifth — silently wait for mistakes... But not indifferent — that’s for sure!

4 Oct 2021

 

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