Written By Keshav Mohta (Grade 9)
Elon Musk is one of the most well-known entrepreneurs in the world. He has been the CEO of 5 companies, and to this day, he is the CEO of 3 of them. One of the most eccentric individuals to walk this planet, Musk’s vision to change the world through his companies is coming alive as they all work on revolutionary, cutting-edge technologies to make human life better, in multiple ways.
Elon was born in Pretoria, South Africa in 1971. He came from a middle-class family -his father worked as an engineer and his Canadian mother worked as a model/nutritionist. Musk was the eldest of three kids. His parents divorced in 1980 and after the divorce, he continued to live with his father.
According to Musk, he had a terrible upbringing. His father was a “terrible human being” and had done almost every “evil” thing one could imagine. He was abusive and very harsh to his children. While old-man Musk was a fantastic engineer, he has been accused of murder. Elon believes he has committed multiple other crimes too.
As a child, Musk was quiet and bookish, often secluded in a room. In South Africa, the convention was for boys to be burly and tough, and Musk was neither. Being the smart aleck that he was, he often got on the wrong side of his classmates. He was often harassed and bullied by the other kids around him. Once, he was pushed down a concrete stairwell, and other times, he had to go to the hospital for various injuries.
With a very difficult home life and an equally challenging life at school, Musk found his shelter in computers. His father had bought for him a low cost, versatile personal computer when he was 10. Elon taught himself programming using this machine. As time passed, Elon continued to tinker with it, and got better at using computers. He first ventured into entrepreneurship in 1983, when he was 12 years old. PC and Office Technology Magazine bought his first computer game, “Blaster” for $500. As he grew older, he was able to develop more sophisticated applications which we now know him for.
At the time, it was mandatory for the youth to serve in the South African military. Musk didn’t want to serve. Combined with the racial violence prevalent in South Africa at that time, life there was dangerous. Hence, Musk decided to move out. His eventual goal was to reach the United States. In June 1989, a 17-year-old Musk moved to Canada. Through his mother, he also got Canadian citizenship. In 1990, Elon got enrolled at Queen’s University in Kingston, Ontario. It would be easier to go to the US from there. He also met his first wife, Justine while at Queen’s. He incessantly called her until she agreed to go out with him. His inability to back-off is a trait that has mostly served him well and is in full display in whatever he does.
Two years after joining Queen’s University, Elon transferred to the University of Pennsylvania, where he continued his undergraduate education.
Musk rarely ever attended his lectures in college. For him, college was more about fun than learning. He was obsessed with this game called Civilisation, a strategy-based game where one takes on the role of running a human civilization over the course of several millennia. Possessing an innate and unmatched ability to focus and filter out everything else, Musk quickly excelled at the game. He and his friends spent hours playing this game.
Because of his eccentricities, Musk was often the one in the corner at parties, by himself. Yet, he wasn’t socially awkward. Instead, he was very much in his own world, thinking about whatever Elon Musk thought about. In 1995, he finally graduated college with a dual degree – a BSc in Physics and a BA in Economics. Eventually, his knowledge in these two fields would also be vital to the companies he would go on to build.
Musk was also accepted into a PhD program in Material Sciences at Stanford, but like many well-known entrepreneurs, he dropped out very early to start his own company, Global Link Information Network.
Global Link was founded by Elon, his younger brother, Kimbal and a friend, Gregory Kouri in 1995 with the $28,000 they borrowed from old-man Musk. Musk made it possible for anyone with a computer to search for a small business/shop near them and get directions too. Musk used free mapping software from a company called Navteq, using which he identified these small businesses, what they did, and their location. His idea was for people to find something as simple as the closest pizza place and get there as quickly as possible. At the time when computers weren’t as ubiquitous, this product was like a digitization of Yellow Pages combined with minimalistic Google Maps functionality.
As most of the initial funding was put into R&D, the team had to find other ways to generate revenues and survive. To save costs, the three founders started living in the office. They also managed to convince the small businesses to pay, to be listed on their map, thereby starting to generate revenues. One full year after starting, the company was offered a $3 million investment from Mohr Davidow Ventures. The money would be given on the condition that Musk gave a large portion of his shares and CEO status to Richard Sorkin, a more experienced businessman. Elon knew that he needed cash to grow the business and so he took the deal. He was demoted to Executive Vice President and CTO, while the company was rebranded to Zip2. Like most self-taught coders Musk had hairballs (unwieldy and long pieces of code that were too tough to unravel) in his applications. To help streamline the entire code, the new leadership brought in more qualified software engineers, further destabilising Musk’s position in the company. Musk, being the strong personality that he was, was however able to stand his ground and continued to play an albeit smaller role in the company.
With more cash, the company started putting more money behind marketing its platform. Sorkin believed that the best way to take the business further was to partner with the media. So Zip2 purchased a trademark for “We Power the Press” and made it their brand slogan. Soon enough, Zip2 began licensing its platform to newspapers, helping them create location databases of their online subscribers. They struck deals with some of the largest names in journalism, including The New York Times, with whom they started work on a city guide called New York Today. In just 2 years, they had partnered with 160 newspapers. They further expanded to make separate guides and tools for arts, entertainment and other business niches.
In the first week of April 1998, Zip2 announced a merger with CitySearch, one of Zip2’s key competitors. The companies believed that the merger would help them move to the #1 spot in the market, in the process also beating Microsoft’s city guide product, Sidewalk. Despite the merged company being called CitySearch, both sides publicly maintained that it was a merger of equals. CitySearch was more focused on local arts and entertainment coverage while Zip2 was oriented towards cinemas, restaurants, etc. CitySearch was also better than Zip2 at branding and marketing, but Zip2 has better technology, with their ability to give the user directions to the place they wanted to go to. The partnership was clearly a win-win for both sides. CitySearch and Zip2 undoubtedly scared competitors to the point where the merger was said to “shake up the space of online city and community guides”.
The combined company could offer comprehensive guides to 175 cities, including the top 27 US cities. Eventually, headquarters of the merged company would be at Zip2’s current office, with Rich Sorkin holding the CEO position for the company. Charles Conn, the CEO of CitySearch would become Chairman. Elon, meanwhile, had to remain content with being the Vice Chairman and Executive VP of Products and Technology. The deal would be worth more than $300 million.
At the last minute, the merger was called off. They told the public that “differences in their technologies, product strategies, and business models” could prove to be challenging and the merger wasn’t in the best interest of either company. In reality, Musk had slyly orchestrated a coup behind Sorkin’s back to oust him and take over as CEO. While Sorkin was indeed removed, the plan backfired and the Zip2’s Board ended up selling the company to Compaq in 1999. Zip2 was valued at $307 million and Musk himself got $22 million from the same. Zip2’s tech was incorporated into AltaVista, the search engine acquired by Compaq in 1998.
This was Musk’s first experience of building a business and running it. One of Elon’s biggest learnings from Zip2 was the importance of working with people. He was never a people-pleaser or a good communicator. His hostile nature and unearthly expectations pained most of his employees and colleagues. Despite not turning out the way Musk wanted it to, Zip2 gave Musk almost everything he needed to succeed – experience, capital and a newfound drive to make his mark on the world.
“Failure is an option here. If things are not failing, you are not innovating enough” – Elon Musk.
Featured Image Courtesy – Inventho
Part 2 Coming Soon!