Elon Musk, currently the richest man in the world, is a serial entrepreneur who has managed to start and scale several businesses in different industries. His most valuable companies, Tesla and SpaceX, are currently worth $773 billion and $74 billion, respectively.
Musk also founded other industry-leading companies such as Zip2, PayPal, Neuralink, SolarCity, Starlink, The Boring Company, Hyperloop and OpenAI. While this may seem like tremendous success for a 49-year-old man (which it actually is), the multi-billionaire also learned a lot during his entrepreneurship journey.
Here are six important business lessons you can learn from the multi-billionaire.
READ: Battle of Titans: Elon Musk, Jeff Bezos share world’s richest title
1. Read vigorously
As a business owner, you can become a leader in your field if you read enough books about it.
Whenever people ask Elon Musk how he learnt to build rockets, his answer is: “I read books.”
In a documentary by Bloomberg Quicktake, we learnt that Musk read the entire Encyclopedia Britannica when he was 9-years-old. He also read science fiction novels for more than 10 hours daily. While you may be unable to spend that amount of time reading books daily, strive to assign a realistic amount of time to read every day.
READ: Meet the 39 years old Chinese billionaire electric car maker
2. Constantly seek and accept criticism
As the billionaire will always say, “a well thought out critique of whatever you’re doing is as valuable as gold.”
When you start your business, rather than assuming you have created a perfect product/service, constantly seek honest criticism from your customers/users. Don’t get it from your friends. They may keep it from you, as they won’t want you to feel inadequate or discouraged.
Elon Musk, last December, advised top business leaders in the US to ditch spreadsheets and instead use the time and energy to seek criticism of their product. According to him, it’s a massive requirement for running a successful business. Don’t just sit in your office, get as much customer feedback as you can and act on them.
READ: How to fund your business without a debt sentence (Part 1)
3. Hire the very best, but fire when necessary
Elon Musk is known to hire the very best but while he hires the most brilliant and innovative people who are not just skilled but also extremely good at what they do, he is also known to fire non-collaborative employees.
In growing a successful company, do not rely too much on an employee. Get a pool of skilled employees who can easily be called upon to fill up vacancies. Use headhunters (professional recruiters) to find these employees if you must.
4. Have a high pain threshold
“A lot of times, people think creating companies is gonna be fun. I would say it’s not. It’s really not that fun. I mean, there are periods of fun. And there are periods where it’s just awful. And particularly if you’re CEO of the company. You actually have a distillation of all the worst problems in a company.” – Elon Musk.
When starting a company, you must have a high pain threshold. The first few months may be exhilarating, but what happens when things don’t go as planned?
You imagined having many customers, but suddenly you don’t have any. You find it difficult to manage your team. You are unable to raise funds. What do you do?
Are you going to give up or are you going to keep pushing relentlessly?
Do you think Tesla and SpaceX would be where they are today if Musk did not have a high pain threshold? In 2008, Tesla was a few days from bankruptcy. The first three launches of SpaceX failed. If the fourth one had failed, that would have been the end of SpaceX and even Tesla. In Musk’s most challenging times, he got divorced. But he remained committed to his goal and never gave up. That’s a high pain threshold.
READ: Successful Entrepreneurs Say These 9 Tips Are Critical To Starting A Great Business
5. Work Like Hell
“Work like hell. I mean, you just have to put in 80 to 100 hours every week. [This] improves the odds of success. If other people are putting in 40 hour work weeks and you’re putting in 100 hour work weeks, then even if you’re doing the same thing, you know that you will achieve in 4 months what it takes them a year to achieve.” – Elon Musk.
As an entrepreneur, you are to put your all into growing your business. That is why it is crucial to only start a business you’re passionate about.
If you read up to this point, congratulations! Here is a bonus for you.
READ: How Elon Musk lost $8 billion this week
6. Reason from first principles
From Musk’s perspective, first principles thinking requires you to boil things down to “the most fundamental truths” and then reason up from there. Musk made us understand what led him to start building rockets. While his main goal was to explore beyond earth, the rockets he would have used to do such were too expensive. As a result, he decided to build his rockets from scratch.
If you want to start and scale a successful business, do NOT reason by analogy. This is what many entrepreneurs do. They see a product or service, then they emulate it but make it slightly better.
With first principles thinking, you have to reason from the ground up. When you want to start a business, ask yourself these critical questions:
‘What problem am I trying to solve?’
‘Why should I solve this problem?’
‘Who has solved this problem and how?’
‘How does my proposed solution solve this problem effectively?’
What can I do that’s completely different and better?’
‘What impact will my proposed solution have in years to come?’
READ: Elon Musk gains $25 billion in a day, as Tesla surges by 20%
Reasoning from first principles is about providing a solution to an existing problem in a completely different and better way. Cars were in existence long before Musk was born. However, what Tesla did was completely different from what other car makers were doing. Tesla harnessed the power of sustainable energy to build electric cars, while others relied on fossil fuels.
Will you like to become the next Elon Musk?
Take note of these business lessons in your entrepreneurial journey and the sky will be the starting point of your success.