Today, Elon Musk is one of the wealthiest and most innovative creators the world has ever known.
He is the genius behind Tesla, an automobile company that is changing the face of the world and turning the auto industry on its collective head. His innovations in clean energy have paved the way for countries and regions from the United States to South Australia to live cleaner, more resourceful, and more sustainable lives that are less dependent on fossil fuels, better for the environment and operate more efficiently.
The man is also responsible for some of the largest solar farms in the entire world. And of course, his company, SpaceX, is redefining the way people look at space exploration. In fact, his goal is to colonize Mars sometime in the next couple decades in order to prevent human extinction (you know, just in case his efforts on this planet fail and it all goes to shit).
Elon Musk is the one man who seems to have his shit completely together, and the grand majority of his detractors over the last few years have fallen completely silent in the wake of all his successes. If you say he can’t, Elon Musk will.
But who is Elon Musk, really? He couldn’t have always been so successful. Like, he didn’t just come out the womb all like, “OK, SO HERE’S WHAT WE GONNA DO”. As it happens, Elon Musk isn’t the world’s most perfect and intelligent human. He has been too eager, too young and too ambitious before. His eyes have been too big for his stomach. He has lacked the confident of his investors and partners. Hell, he has even been ousted from his own damn company.
So, in case any of you aspiring entrepreneurs out there need a healthy dose of reliability and “Try, try again” motivation, here are five of Elon Musk’s greatest business failures:
Before Google emerged with the internet browser of the free world (Chrome), there were several competitors. One of them, Netscape, proved a worthy adversary.
As legend has it, according to an alleged former VP, during an explosive growth period where Netscape was hiring up to 50 engineers per month, Musk had submitted his resume for some kind of employment opportunity. Unfortunately, he was overlooked: either his resume fell in between the cracks, or he just wasn’t deemed worthy.
For whatever reason he didn’t hear back, Musk decided that he’d take the bull by the horns… kind of. According to Musk himself, he marched right down to the Netscape offices and literally hung out in the lobby. Unfortunately – or fortunately? – he was too shy to talk to anyone, and eventually wound up walking away.
His walking away from the Netscape gig, however, did eventually result in him really spearheading his first company, Zip2, which he eventually walked away from with $22 million in profit. Even when this guy sucks, he doesn’t really suck. Ugh.
The Zip2 CEO Debacle
Speaking of Zip2, it too was not without its failures. Musk founded the local business internet service software company with his brother, Kimbal, after taking a $28k loan from their father. Elon wanted very badly to be CEO of the company, but the board of directors simply wouldn’t allow it.
Looking at the long term, the board essentially decided Elon was too young and inexperienced, and instead gave the job to Rich Sorkin, who is a serial entrepreneur with over $1 billion in net profits today.
Despite the ego blow, Elon would eventually leave the company with over $22 million in his pockets when it was sold to Compaq in 1999, right on the cusp of the dot-com bubble. Not bad for a $28k investment.
Ousting From PayPal
Perhaps Musk’s most storied failure was his ousting from PayPal, a company he essentially purchased and built from the ground up.
Following the sale of Zip2, Musk took roughly half of his profits and invested them into a financial services website he called X.com – a name that, in hindsight, is seriously the most laugh-worthy Y2K millennium shit of all time. Shortly after X.com became a thing, Musk started looking to purchase smaller innovative financial firms that were suffering from the popped dot-com bubble.
One of those companies was former financial services giant Confinity, which had been working on a revolutionary new payment system called PayPal.
Musk and his investors, seeing the obvious revolutionary benefits of PayPal’s money transfer service (and perhaps the silliness of naming a company “X.com”), merged, re-branded and took the PayPal name in 2001, and things only got crazier from there.
While PayPal took off like a rocket, technical issues and disagreements plagued the company. Musk wanted PayPal to ditch its Unix platform and adapt to Windows (which, may or may not have ruined the company, actually), but the Board of Directors vehemently disagreed. Unfortunately, they disagreed so much that the board decided to remove Musk as CEO of his own company, replacing him with co-founder Peter Thiel, who ran the company until its 2002 sale to eBay.
Yet, even then, Musk walked away from the deal with $165 million. Un-fucking-believable.
The Russian Missile Crisis
In the pre-Tesla, post-dot-com days, before Musk decided to embark on SpaceX, he had been trying to figure out a way to space. After conducting his due diligence, Musk surmised that the best way to do it would be to purchase a missile that could be retrofitted for the job.
The only issue was finding and purchasing a rocket – as you can imagine, intercontinental missiles aren’t exactly plentiful on the open market. Musk, with a small team of fiends and aerospace engineers in tow, traveled to Russia, where they’d arranged meetings with several companies who either dealt openly in Russia’s commercial rocket programs, or had done contracted work for Russia’s space program.
The only problem was that when they got there and started trying to have conversations with people, they were passed over – over and over and over again. The Russians were unenthused by Musk’s “bravado,” and they viewed him as a novice in the space game (and, to be fair, he was).
Musk and co. left Russia rocketless, only to return a few months later with a former CIA guy, and despite being taken a little more seriously, Musk was convinced they were just trying to take advantage of his deep pockets. For all intents and purposes, the meetings were failures. But, then again, they’re also what inspired Musk to start SpaceX, so it wasn’t all bad.
Tesla’s Near-Fatal Roadster
We know, we know. You’re sitting there right now, thinking to yourself, “How in the hell can these people even remotely claim that Tesla was one of Elon Musk’s failures?” The truth is, in its infancy, Tesla was nothing short of a fucking mess.
The year is 2008. Tesla is claiming the world’s first all-electric car can be taken to the track and doesn’t look like a rolling potato (the Tesla Roadster), but literally everyone, including Jeremy Clarkson, said it was essentially little more than a barely running impractical science experiment.
At the end of the day, the car was nearly twice the cost at which it was first marketed, it overheated and broke down all the time, and it was essentially a pile of shit in a stretched Lotus Elise body. Musk very clearly had no idea what he was doing and it was an absolute disaster – and he’s not bashful about admitting it.
That, coupled with the fact that SpaceX’s Falcon 1 rocket was 0-3 on the launchpad – meaning they loved to blow up everywhere – meant that things were looking incredibly bleak not just for Tesla, but both of Musk’s brainchildren.
In fact, in a 2015 interview with Bloomberg, Musk admitted that both companies were within weeks of having to shutter their doors, but thanks only to a last-minute contract from NASA for SpaceX and an emergency investment round of $40 million for Tesla – on Christmas Eve, no less! – Musk was able to keep it all together.
Speaking of business, here’s our guide to running your own food truck business.
- Lead image: theverge.com