In ‘The Entrepreneur on the Heroic Journey’ (1997), Dwight Lee and Candace Allen write that entrepreneurs are heroic figures of society whose accomplishments are worth celebrating. Taking this perspective, I believe that Elon Musk is certainly an entrepreneur who should be considered a “Modern Hero” due to his ingenuity and drive to realize a fantastic future. His greatest contribution, I think, is that he has given people hope and renewed faith in what technology can do for mankind.
In our current times when it seems fashionable to castigate entrepreneurs and those who have earned a fortune, it is nonetheless hard to read Ashlee Vance’s biography of Elon Musk and not to be in awe of his accomplishments. Elon Musk perfectly matches Lee and Allen’s description of our modern day heroes: individuals who shape society by serving the people and adding value to society through their entrepreneurial activities.
According to Lee and Allen, a hero travels through three stages.
1. The first stage of the modern entrepreneurial hero is a venturing away from the world of accepted norms.
The hero asserts “There is a better way, and I will find it!” Deviating from familiar social norms and customs, he travels into unknown territory while risking failure and loss for some greater purpose or idea. That is exactly what Elon Musk did several times in his life. First, as a teenager when he dropped out of the University of Pretoria to leave South Africa for Canada. For someone who has an early inclination toward computers and technology – Musk had taught himself the BASIC programming language at the age of 9-10 and created homemade explosives and rockets – South Africa was like a prison. Although he did not know back then what exactly he wanted to achieve in Canada, his curiosity and intrinsic desire to leave an everlasting impact on the world led him to the United States. His daydreams at Queen’s University and the University of Pennsylvania usually led him to the conclusion that the Internet, the Renewable Energy, and the Space industries were the areas where he could make a huge impact. Back then, Musk already vowed to pursue projects in all three. This was in 1994 when few could’ve predicted the many ways in which the Internet would change people’s lives, when the last successful American automobile startup (Chrysler) dates back to 1925, and when the American aerospace industry was dominated by only Boeing and Lockheed Martin. A vow like this was surely considered super-crazy. Musk pushed himself, characterized by energy, vision and bold determination into the unknown.
2. In the second stage, the entrepreneurial hero sacrifices himself for a vision or dream he has, putting his own comfort at stake.
The two Internet companies he founded were Zip2, the Web’s first yellow pages, and X.com that would eventually merge with Confinity to form PayPal. The second stage of the entrepreneurial hero is his overcoming of hardships and challenges.
With just $28,000 invested in Zip2, Musk seemed to never leave the office and slept on a beanbag next to his desk. He would take showers at the YMCA and when Heilman, an early Zip2 employee, would come into the office at 7:30 or 8:00 AM he would give him a kick so Musk would wake up and get back to work. Musk’s slavish devotion to the success of his startups is best expressed when he told a VC investor,
“My mentality is that of a samurai. I would rather commit seppuku than fail.”
Zip2 would eventually be taken over by Compaq Computer for $307 million and would earn Musk $22 million for his 7% stake in the company.
Musk’s second start-up was X.com which was an initial attempt to create an online bank. During his internship at the Bank of Nova Scotia, he found out that “bankers are rich and dumb” and that this provided a massive opportunity to disrupt the industry. Realizing that money is nothing but an entry in a database, Musk thought that he could enter the industry with relatively little investment. This could however not be any further from the truth. The regulatory issues they were facing seemed insurmountable and several of the early employees of X.com soon left the company after believing that Musk’s vision to disrupt the banking industry is unrealistic. One other X.com employee said,
“There were a million laws in place to block something like X.com from happening, but Musk didn’t care.”
Despite such issues, Musk held on and secured a banking license, FDIC insurance and formed a partnership with Barclays.
Musk had also faced many other misfortunes in the two companies that he founded soon after he left X.com: Tesla and SpaceX. In 2008, he was almost broke while divorcing his first wife – fearing he had been wasting almost all of his $180 million he earned from the sales of PayPal to eBay. SpaceX had just enough money for its fourth Falcon 1 launch, and possibly the last launch of SpaceX. Tesla had still not delivered on its promise to produce its Roadster and needed a government loan at a time when other automobile and financial corporations were also struggling. In Musk’s words:
“I remember waking up the Sunday before Christmas in 2008, and thinking to myself, ‘Man, I never thought I was someone who could be capable of a nervous breakdown.’ I felt this is the closest I’ve ever come, because it seemed… pretty dark.”
3. In the third stage, the heroic entrepreneur returns to the community with his product, service, or new process.
Having been just days or weeks away from bankruptcy for both Tesla and SpaceX, Musk had eventually survived and created the first successful car company since Chrysler in 1925 and was now competing with Boeing, Lockheed Martin, the Russians and the Chinese in the aerospace industry. Tesla has since delivered the Roadster, the Model S, X and is planning to deliver the Model E which will have a starting price of $35,000 by late 2017. Tesla is on its way to alter the automobile industry. SpaceX had produced rockets that can return back safely on earth which significantly lowers the costs of sending rockets into space. Elon Musk’s reward for increasing benefits to society are his profits and his wealth that he could only have accumulated when people value his products enough that they are willing buy them.
