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Rocket-Man: Elon Musk’s Secret of the Pivot

by David Worrell

I had a rare opportunity to speak with Elon Musk.  In case that name is not familiar, you certainly know him by what he has done in the last decade: Musk revolutionized online payments with PayPal, re-imagined space travel with SpaceX, and created one of the hottest (and all-electric) cars ever made atTesla Motors.

Musk, now just 40, has accomplished more in the last 10 years than most people dream of in a lifetime.  Spending an hour on the phone with him is a wild rocket-ride through the lessons of technology and entrepreneurship.

PART I: The Art of the Pivot

These days there’s a favorite word in Silicon Valley: “Pivot” means to change up your business model quickly in order to adapt to the market.  If your first idea is not working, switch it around until you find something that does.

Musk takes the art of the pivot to a whole new level.

After selling PayPal to eBay in 2002 for $1.5 Billion, Elon was “curious” about why humans had not yet established a space-base on Mars.  That lead to a business plan to send a “low cost robotic mission to Mars, hoping to get the public excited about Mars.”

Research on the idea made it seem feasible … except for the cost of the rockets to get there.  In his words:

“In the US only Boeing and Lockheed make rockets that are big enough to go to Mars, and they are very expensive.  We’re talking on the order of $60 to $70 million per launch.  And that seemed like an extraordinary amount of money for a rocket.”

Facing that kind of roadblock, most entrepreneurs would have thrown up their hands and gone surfing.  But then, with his next breath, Elon makes a pivot that proves he is an amazing entrepreneur:

“And I went from there and said maybe there’s an opportunity there to do a much better job.  And so I put together a group of people that have been involved with most of the recent launch vehicle developments in recent memory, and said ‘Well, what do you think of the possibility of building a low cost launch vehicle.  Do you think it is possible, first of all, and if so, then what approach, what design, what approach would you take?’  That study positively concluded in May and then I started the company in June 2002.”

This guy thinks big and moves fast.

Fast forward to 2010, and SpaceX announces a $500 million contract to use their rockets to launch communication satellites. And now he’s suggesting that he will be launching people into space by 2015… and finally, in a dozen years or so, taking people to Mars.

His bold decision to “pivot” from robotic missions to Mars to building affordable rocket engines has now come full circle as he contemplates how to use his engines to accomplish his original goal of getting to Mars.

Next time the market throws you a curve-ball, stare defeat in the eyes and think of Elon Musk.  Take a deep breath, imagine conquering the problem ahead of you, and PIVOT!

Dedicated to your (Rocket-Powered) Profits,
David

 

David Worrell is a business owner just like you. To get his free e-book on funding your small business, or to hire him as a fractional CFO, visit his website for small business owners at www.insideguy.biz.


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