Elon Musk Leadership

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Born in South Africa, raised in Canada and America; Elon Musk now founder and co-founder of SpaceX, PayPal, SolarCity, and CEO of Tesla, Inc. respectively is one of the most interesting leaders in the modern business and tech world. Musk has an enormous influence on the future of tech and on how the global stock market performs as a whole among other things. Musk believes in a more energy efficient and sustainable world for us all. Musk gets compared to the great entrepreneurs before him such as Bill Gates, Steve Jobs, or even Howard Hughes. (Blystone, 2018)

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Early Life and Education

Elon Musk was born in Pretoria, South Africa in the year 1971. It was apparent that at a young age Musk had passion for technology and at just age 10 he got a computer from his parents and learned to program. At age 12 Musk developed a video game (titled “Blastar”) and sold it to a video game company called Spectravideo for $500. Musk then moved to Canada and became a citizen of Canada when he was 17. It was clear that this kid was a prodigy when it came to technology and his parents realized this. (Ross, 2018) Musk relocated to Queen’s University; Ontario then attended Wharton School of Business at Penn. After earning a bachelor’s degree in economics, Musk was accepted into the high-energy physics graduate program at Stanford University. But after just two days in the program, Musk decided to drop out and pursue an entrepreneurial career patch instead of an academic one. This decision would prove to be lucrative for Elon Musk’s future. (Ross, 2018)

Early Projects

Shortly after leaving Stanford, Elon Musk and his brother; Kimbal Musk started Zip2. Zip2 was a “provider of Internet platform solutions for media companies.” (Business Wire, 1999, p.1) Musk and his brother eventually sold Zip2 for $307 million in 1999. (Dow, 1999) In March of the year 2000 Musk started up X.com which would inevitably become PayPal. (Hull, 2014) Musk would serve as chairman and CEO of PayPal until eBay purchased it a year later lining Musk’s pockets with $165 million from the sale of PayPal. (Hull, 2014) PayPal would be Musk’s last foray in the internet business sector. (Ross, 2018) Musk had bigger dreams. Dreams like reaching Mars and making the planet a more energy efficient and sustainable place.

SpaceX

In 2002 Musk founded SpaceX a “space transportation company” and hired a few top rocket experts from aerospace giants like Boeing. (Swift, 2008) Musk hired a core of young engineers and technicians who were the brightest and best students of their classes. “Musk sought out bright young engineers like Brian Bjelde, who, at 28, heads the Falcon 1 program. As they prepared for the Sept. 28 launch on Kwajalein atoll in the Pacific Ocean, someone noted the age of the launch crew around Bjelde. Eight of the 12 were under 30.” (Swift, 2008, p.17) By 2017 SpaceX will be consistently sending rockets into space. Musk has an out of this world plan for SpaceX. Musk believes that humanity will eventually have the ability to colonize mars through the use of the technology his company has manufactured such as the Falcon 9 which will make space travel more cost effective and efficient. “I have no doubt that he will get man to Mars in his lifetime” claims Elon Musk’s 68-year-old father; Errol. (Hull, 2014)

Tesla

Around the same time Elon Musk started building rockets for Space X he invests 6.35 million dollars of his own money into Tesla. Following that investment Musk is appointed chairman of Tesla in 2004. (Greiner, 2019) So a little bit of background on Tesla. It was started in 2003 by two engineers Martin Eberhard and Marc Tarpenning who wanted to manufacture fully electric cars after GM stopped manufacturing them around this time. They named the company after the famous inventor Nikola Tesla. In 2006 Elon Musk reveals his “secret” plan for Tesla which in short goes as follows “Build sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. While doing above, also provide zero-emission electric power generation options.” (Greiner, 2019, p.6) The following year Musk is named entrepreneur of the year for 2007 by Inc. Magazine. (Chafkin, 2007) Then on February 1st, 2008 Elon Musk gets the very first Tesla Roadster. In March 2008 Tesla starts mass manufacturing Tesla’s first car The Roadster. Going into October Musk is appointed as CEO of Tesla and immediately lays of 25% of the work force. By 2010, the company had bought a factory that formerly housed an auto operated by GM and Toyota factory in Fremont, California. Tesla became a hit on Wall Street when its initial public offering of $17 per share stock price skyrocketed on the first day of trading. (Nakaso, 2013) The current price of Tesla stock in 2019 is roughly $272 per share but is always fluctuating.

In 2014 Tesla is the first car company to introduce semi-autonomous driving to the public. This is basically autopilot for your car and it drives for you, but you should always stay aware while in autopilot mode and it will warn you if there is likely to be a collision ahead of you before the collision actually happens which is honestly pretty cool. By October of 2015 Tesla’s Model X crossover officially hits the road with autopilot driving features that have never been featured in an automobile till now. By May of 2016 Tesla sells $1.46 Billion worth of stock to reach production goals for their new Model 3 car. In June 2013 Tesla’s Model X is given a perfect safety rating by the National Highway Safety Traffic Administration. (Greiner, 2019) Tesla currently has 5 different types of vehicles for sale. The first and most expensive is the Tesla Roadster starting at roughly $200,000. The second is the Model X which goes for around $88,000. The third is the Model S which is about $86,000. The fourth to come out and the cheapest is the Tesla Model 3 which goes for $36,000. Finally, the newest Tesla to come out is the Tesla Model Y which is going for about $46,000. But Tesla doesn’t only specialize in cars. Tesla has sold everything from solarpanels to surfboards, at one-point Tesla even sold a limited number of flamethrowers. Elon Musk recently posted on Twitter “Teslaquila coming soon …” with a photo of what the Tesla branded tequila would look like. Musk also started a tunnel building company called “Boring, Co.” that builds reinforced tunnels around California for transportation or storage. (Deagon, 2018) In 2016 Tesla acquired SolarCity for about $2.6 billion. “As one company, Tesla (storage) and SolarCity (solar) can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored and consumed.”(Carson, 2016, p.2)

Solar City

So, in 2012 Elon Musk went public with another company called “SolarCity” which is now a subsidiary of Tesla, Inc. after Tesla purchased it in 2016 for $2.6 billion. SolarCity specializes in providing solar energy to homes all around the United States with a goal of making America a more energy sufficient and sustainable place to live. (Greiner, 2019) Elon Musk thought everything through when coming up for the business model for SolarCity. “He got SolarCity out of the business of just selling and installing solar panels, and into the business of selling long-term lease contracts.” (Basulto, 2014, p.6) Musk essentially “flipped the business model upside down” for the way that usual solar panel companies operated. The solar panel market was essentially dominated by Chinese companies before Elon Musk came along with SolarCity because the Chinese have cheap labor and could sell solar panels cheaper than most companies. With SolarCity people are more likely to buy solar panels because they don’t have to pay any money up front for the panels but instead can make smaller monthly payments and not having to pay as much for a clean source of energy is a win-win. (Basulto, 2014) After checking out Tesla’s website for solar panels it gives you the statistics on the amount per year you could be saving by using solar energy. 1 solar panel roof system generates roughly $18,340 in value after 20 years. But the panels themselves and the Powerwall system can be pretty pricey. Starting at $7,200 for a single system which produces an average of 13 kilowatt hours per day for a home that has an average monthly electric bill of $70 a month and it goes up from there. There are also tax incentives provided by the US government for buying a solar panel system which covers roughly 30% of the cost of the system. (Tesla, 2019)

Musk and Twitter

Many different business leaders use many different platforms to convey their ideas and philosophies of business or technology to the public. For Elon Musk that platform is Twitter. Musk a frequent user of Twitter is constantly keeping the public up to date with his life, businesses, business decisions, and occasionally information on the performance of Tesla that have gotten him in hot water with the law. “On Aug. 7, Mr. Musk surprised investors when he tweeted that he was considering taking Tesla private at $420 a share, about 20% above the stock’s trading price earlier that day. In his tweet, Mr. Musk said the buyout had “funding secured,” without providing any details. Days later it was revealed that Mr. Musk was still lining up investors and funding for a proposed deal.” (Higgins, 2018, p.2) This resulted in Tesla having to pay a $20 million dollar fine to the SEC. “As part of the SEC settlement, Musk also agreed to give up his position as chairman of Tesla, although he will remain CEO. The company will add new independent board members and have greater oversight of Musk’s communications with the public.” (Isidore, 2018, p.3) This isn’t the first time Musk has been in hot water with the SEC over tweets misleading investors and it is probably smart on Tesla’s part to have a board overseeing Musk’s communication with the public, so he doesn’t rack up anymore fines. Musk did buy $20 million dollars’ worth of Tesla stock from his own pocket to repay the company for the fine from the SEC so he probably isn’t in the dog house so to say anymore. (Isidore, 2018)

Bibliography

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Blystone, D. (2018, June 12) Investopedia stock analysis: How Elon Musk became Elon Musk. Chatham: Newstex. Retrieved from https://ezproxy.alfredstate.edu/login?url=https://ezproxy.alfredstate.edu:2059/docview/2054233709?accountid=39053
Carson, E. (2016, Aug 01). Tesla will buy cousin firm SolarCity for $2.6 billion. Investor’s
Business Daily Retrieved from https://ezproxy.alfredstate.edu/login?url=https://ezproxy.alfredstate.edu:2059/docview/1807960290?accountid=39053
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