The World’s First Trillionaire

I confess that until lately I’ve paid little attention to Elon Musk. I knew that he was the CEO of Tesla Motors, the company that had startled the automotive industry by being the first to create an all-electric luxury automobile and that he was involved with SpaceX, the company that had developed the ability to vertically land rocket booster engines so they could be re-used. Still, those accomplishments, while impressive, had not awakened me to just how extraordinary it was for a single individual to make such giant strides in two largely unrelated technology-laden industries.

  I was perhaps distracted by the fact that electric vehicles still represent only a minute portion of the new car market and that the advances in solar and battery technology that I had written about last December would completely revolutionize the market for electric vehicles within a few years. On top of that, rockets for space exploration seemed to represent a very limited market because the world doesn’t have enough individuals ready, willing and able to squander a hundred million dollars for a brief jaunt into space. Also, I wasn’t convinced that any planet within reach could sustain human life. Yes, both of Musk’s achievements were impressive, but they didn’t seem to be of world-changing importance or even likely to lead to significant economic returns.
Musk’s $44 billion purchase of Twitter also made me doubt how much of my attention he warranted. I’ve never been a user of social media and quite frankly I’ve always been puzzled by its attraction and what makes its business model work. It seemed to me that email and text messages were perfectly adequate and convenient means of communicating; so why would anyone want to buy a social media platform especially at a price that Musk, himself, acknowledged was almost twice that company’s market value. In short, this acquisition seemed less like a wise business investment and more like the act of an impulsive individual with too little to do and too much cash at his disposal. As it turns out, I was not completely wrong about Musk’s purchase of Twitter. At the time he was flush with cash and was in search for a new challenge to keep himself occupied.

  My curiosity about Musk, however, began to rise when news commentators began referring to him as “the world’s richest man.” Wait a minute, I thought. What about the Sultan of Brunei, Jeff Bezos, Bill Gates, Warren Buffett, Larry Ellison and Larry Page? A quick research on the Internet, however, confirmed that Musk was indeed the world’s richest individual with a reported net worth in the vicinity of $235 billion. Thus, when Walter Isaacson published his biography of Musk, I rushed to get a copy to find out just how Musk, still a relatively young man (age 53), could have accumulated so much wealth. Unlike the Sultan of Brunei, he had not inherited his wealth; and unlike Buffett, he was not an investment wizard. Nor had he developed a new technology like Gates, Ellison and Page. The main thing I gleaned from Isaacson’s book was that trying to emulate Musk’s path to building personal wealth is far too physically and mentally taxing for all but the fool-hardy to try. Musk had even admitted this when a reporter had asked him for advice for those who wanted to be like him.

  While Musk didn’t grow up in poverty, his childhood was anything but a happy one. He had an abusive father who attacked him both physically and verbally. His childhood was spent in South Africa where physical attacks (even among whites) were commonplace and the nerdy Musk was often the focus of bullying by his peers. The injuries he sustained taught him to endure physical pain and to persevere. This made him a very determined youngster. At age ten he even repeatedly demanded that his belligerent father buy him a computer until his father ultimately relented. Perhaps more importantly, Musk was something of a geek, spending inordinate amounts of time playing computer games and reading the family’s two sets of encyclopedias.

  Musk was particularly fascinated by science fiction novels, especially Douglas Adams’ “The Hitchhiker’s Guide to the Galaxy.” Those novels almost invariably placed a small band of humans in apocalyptic situations requiring inhuman efforts for them to find a way to save mankind. Such stories imbued in Musk with a desire to find ways to improve the human existence and to not be deterred by seemingly impossible tasks. They also planted the seed for his desire to establish human life on Mars.

  Despite his apparent thirst for knowledge and his proficiency in playing computer games, he did not do well in elementary school. He often sat in class with a vacant stare, oblivious to what was transpiring around him. He would later be diagnosed as being afflicted with Asperger Syndrome, a condition on the autism spectrum impairing the ability to socialize and communicate. Although he ultimately went on to attain bachelors’ degrees in physics and economics, his habit of occasionally tuning out the world around him would persist.

  The constant conflicts with his father deeply scarred Musk who couldn’t wait to escape life in South Africa. Thus, while still a teenager, Musk left his immediate family and moved to Canada where he stayed with his mother’s relatives. He attended a junior college in Canada before attending the University of Pennsylvania. Like his father, a moderately successful engineer, Musk embarked upon a career focused on building things. He was not particularly motivated by accumulating wealth; rather his primary impetus always seemed to be to create products that would advance the human condition.

  His first venture, which he formed with his brother, Kimbal, was to develop an online system (which he called “Zip2”) to replace “Yellow Page” directories. This system was quickly sold to Compaq Computer for $307 million making Musk a multi-millionaire before he had even reached the age of 30. He then started another company (X.com) with a friend to create a software system for electronically processing monetary transactions. This entity grew quickly and in less than two years was merged into PayPal which had developed a similar technology. Two years later PayPal was acquired by eBay for $1.5 billion. At this point Musk could have retired to a comfortable existence. . . but, like wealth, relaxation was also not one of his driving  forces.

  From the time he had been a young lad, Musk had been fascinated by space travel and concluded that man would soon need to inhabit other planets. Therefore, following the successful sale of PayPal, it was not surprising that he would employ his recently-acquired wealth to form a company to build rockets for space exploration. To do this, he hooked up with a friend to start SpaceX, a company whose declared mission was to deliver humans to Mars. Until then, space exploration was limited to governments’ employing the resources and talents of large aerospace companies like Boeing, Lockheed Martin, General Dynamics and Northrop Grumman. All of these industrial giants performed their services under “cost-plus contracts” and Musk was convinced that those arrangements were not only wasteful, but also produced inferior results and actually extenuated production times. While he was convinced that he could do better, proving that would likely require even more funds than he could personally provide.

  Musk, however, was addicted to challenges and taking big risks and he never shied-away from pouring everything he had into a new venture. In a sense he needed the pressure of placing himself in precarious positions just to dispel the mental demons that had invaded his mind during his tumultuous childhood. For example, to make Space-X‘s success even more unlikely, Musk concurrently became involved with another acquaintance to form Tesla Motors. Even though Musk had not initiated the creation of these two companies, he quickly became the moving force in both of them. It wasn’t so much because he had become friendly with other millionaires looking for new ventures in which to invest. Musk was and is an obsessive-compulsive who makes even the most ambitious work-a-holics look like slackers.

  In all of his endeavors Musk was a man on a mission and would take on challenges that few individuals would even consider. Although he possessed an encyclopedic knowledge of many technical fields, he excelled at being an industrial engineer and his principal quality was his maniacal determination to develop new and better ways of building things. He would set seemingly unrealistic (no, impossible) goals and timetables and demand that his workers achieve them. As someone with little in the way of interpersonal skills, he was also very quick to terminate those unwilling to carry out his directives. As one senior Tesla’ executive explained upon resigning, “Tesla was not conducive to a work-life balance.”

  It wasn’t that he would just make seemingly impossible demands on his workers, he would work himself even harder. Like Napoléon, he recognized that his subordinates would exert themselves to the fullest if he worked alongside of them. He also was convinced that a small group of highly motivated workers could accomplish more than a large workforce that was primarily interested in putting in 40 hours and collecting their paychecks at the end of the week. He put this philosophy to work when he later acquired Twitter and reduced that company’s staff from 8,000 to 2,000 workers. His instructions were that only those who excelled in performing their jobs and who were also trustworthy and driven should be retained. As a means of keeping his workers motivated he would often work well into the night occasionally sleeping under his desk or even on the floors of his factories.

  Another of his operating principles was to find ways to cut costs and speed production by simplifying the products he was producing. To that end he would spend countless hours patrolling production lines, looking for ways to eliminate unnecessary parts and processes. In fact, it was not unusual for him to make scores of production changes in a single week. If he didn’t have to restore at least ten percent of the parts and processes he had eliminated, he felt that he had not gone far enough.

  One of his pet peeves was the practice of major corporations to hold large meetings to discuss design and production issues. He saw these gatherings as not only being majors wastes of time, but also resulting of delayed decisions as no decisions would be made until all of the issues raised at the meeting (or, in many cases, meetings) had been addressed. By contrast, Musk was prone to making quick decisions and proceed with production and later addressing overlooked problems as they arose. Working under this philosophy he was not deterred by early failures of his products. Instead, he would simply analyze the reasons causing the failures, correct them and proceed.

  It would be a mistake to simply view SpaceX as an extra-terrestrial rocket manufacturer and Tesla as an automobile manufacturer. Musk felt that these two companies could only succeed by also establishing facilities to manufacture important component parts. Thus, an integral part of Tesla’s operations was a manufacturing operation that could produce batteries capable of powering its cars to travel 300 miles on a single charge and be recharged in less than 30 minutes. They also had to be of minimal size and weight. Batteries meeting Tesla’s requirements were simply not being produced by other manufacturers and certainly not in the quantities and time frames required by Tesla.

  Tesla’s battery operations quickly became a business unto itself, producing large home electrical storage systems that would enable homeowners to store electricity generated by rooftop photoelectric panels. Tesla also went into the business of installing solar panels that could replace conventional roofing materials. This was as much a finance company as a technology and construction company. That’s because its business model called for Tesla to provide the installation of the panels at no cost to the homeowner who would rent them over the course of the next 20 years. This would be a win-win proposition for the homeowners who would pay that rent with the savings they would derive by using the electricity that the panels generated. Like so many of Musk’s ventures, its profitability depended on driving down the costs and accelerating the pace of panel installations.

  Musk was always something of an electronics geek dating back to his creation of a couple of computer games and the Zip2 and X.com software. This led him to have a keen interest in the development of artificial intelligence. Part of Musk’s interest in AI was fueled by his determination to have Tesla develop self-driving vehicles. He figured that the automotive industry could be revolutionized by driverless cars which could save lives and unnecessary costs arising out of car accidents. Driverless cars could also go a long way to curbing traffic congestion in large cities, another of Musk’s goals for improving the human condition. Although Tesla has been able to develop systems capable of operating cars in most situations, the goal of being able to avoid all auto accidents has proven elusive and Musk has repeatedly had to postpone the date when Tesla will meet that goal.

  While Musk has long been intrigued by AI, he has also been concerned about the need for AI to be controlled, lest robots (which can learn more and faster than humans) would ultimately control humans, rather than the other way around. The notion of placing controls on a new technology was an uncomfortable prospect for a devout libertarian, like Musk, who eschews governmental regulation. He, therefore, believed that such controls could and should be imposed by a compact among the companies developing AI systems. This led him to suggest that idea with the CEO’s of other major high tech companies. Musk, however, soon discovered that they (principally, Larry Page of Google) did not share his concern for restricting the uses of AI.

  This prompted Musk to start x.AI, a multi-faceted artificial intelligence company, the principal subsidiary of which is Neuralink. That entity has embarked on developing an electronic brain interface system that would enable humans to control the actions of robotic devices. That technology could enable individuals to manipulate artificial limbs, hands and other prosthetic devices simply through their own mental impulses. Another subsidiary of x.AI is in the process of developing “Optimus”, a robot that looks and acts like a human and which can replace humans in performing a wide variety of tasks.

  SpaceX has also spawned an ancillary business (Starlink) which manufactures communication satellites. Starlink was SpaceX’s first commercial success and has gone on to fund SpaceX’s development of propulsion systems that could accommodate large payloads. Starlink’s success was the result of Musk’s insistence and hands-on oversight that the satellite communications pods be reduced in both size and complexity so that over 50 of them could be deployed by a single rocket. The Starlink system was recently in the news when it proved to be the only satellite communications system servicing Ukraine that could not be electronically jammed. Starlink now provides satellite communications services in 60 countries and is on its way to becoming the backbone of the internet. As for SpaceX, itself, it is now the principal contractor for NASA, shuttling humans and cargo to and from the international space station.

  As noted above, another of Musk’s concerns is the level of automobile congestion that exists on the streets of all major cities. His answer was to develop a way to speed the creation of underground transportation systems. This led him to found the Boring Company. According its website, the mission of this entity is to solve traffic congestion by enabling the rapid development of underground point-to-point transportation. It does this by creating “safe, fast-to-dig, and low cost transportation, utility and freight tunnels.” It’s first project was to create an underground tunnel system connecting various parts of downtown Las Vegas to the Las Vegas Convention Center.

  When Musk and his partner created X.com in 1997, they conceived it as being a new form of banking system, not simply a system for effecting financial transactions. This goal became a source of conflict when X.com was merged to form PayPal as Musk’s new partners felt that his ideas were too ambitious. The conflict was ultimately resolved by the decision to sell PayPal to eBay. Musk, however, remained convinced that banking systems in the U.S. and around the world were operating with an antiquated business model. His vision was to create a data-driven banking business and he viewed Twitter with it 229 million users as a vehicle for establishing a new banking platform. This led to his April 2022 decision to pursue the purchase of Twitter. Since acquiring Twitter in October 2022 (which Musk rebranded as “X”), he has instituted a number of organizational, business and personnel changes and has concentrated on expanding the company’s user base. Just where and how he plans to take this company remains to be seen.

  Musk is currently serving as the CEO of at least six major business enterprises. You may, therefore, be wondering how he has any time for a personal life since he’s constantly traveling between his production facilities in Florida, Michigan, New York, Texas, Illinois, Nevada, and California and numerous other cities located in such distant places such as Shanghai, Ontario, Germany and the Netherlands. The answer is that he doesn’t; and $325 billion is probably not enough for you to want to live the way he does, spending countless nights away from his home and occasionally sleeping under his desk or on a factory floor. He is now on his third wife (one of whom he divorced and remarried) and that number is relatively low only because he is still young and each of his wives have had their own independent careers, mitigating the problems associated with Musk’s frequent and sometimes prolonged absences and occasional extra-marital affairs.

  Musk’s predominant love seems to be creating new and better ways to improve the human existence. Everything else in his life seems to be subordinated to that quest. Although he is unquestionably an extraordinary individual and the world’s most successful industrialist, he suffers from a plethora of mental infirmities. Those issues go far beyond his Asperger’s Syndrome which impairs his ability to empathize and communicate. He also suffers from bouts of depression and periods of uncontrollable anger as well as prolonged periods of manic activity. In fact, there is considerable reason to believe that Musk intentionally takes on huge projects simply to keep his mind from returning to the thoughts that haunt him.

  Besides lacking empathy for the concerns of others, Musk has other unattractive personality traits. Like his father, he can be cruel and abusive. He also frequently makes racist and antisemitic remarks and seems to have no problem with disseminating the messages of white nationalist who advocate the use violence to achieve their goals. While he seeks to justify the dissemination of offensive posts on Twitter as his simply being in favor of freedom of speech, most Americans do not consider messages of hate and threats of violence to enhance the human experience or to be exercises of Constitutionally guaranteed free speech. The reality is that Musk seems to care little about whether he offends the sensitivities of others. He believes that everyone should be able to voice their opinions and in the end, the more productive views will prevail. That may be true, but only if the algorithms that control the dissemination of ideas are not designed to amplify the more destructive ones.

  Musk clearly has supreme confidence in himself and he believes that the vast majority of people fear venturing into the unknown and that inhibits progress. He suggests that everyone suffer defeat at least 50 times in order to immunize themselves against their fear of taking risks. He simply assumes that everyone possesses his innate ability to move forward after suffering a defeat. His own willingness to take risks is likely traceable to his having had to endure many setbacks as a child as well as his uncanny ability to identify and assess the risks. In his mind, he is able to identify and quantify most potential risks. While he fully recognizes that occasionally he will be wrong, he consoles himself with the thought that if nothing bad happens, he has probably been too cautious. In many cases, however, the risks that he has taken could have resulted in his total financial collapse. Thus, he can be thought of as a modern-day river boat gambler continuously risking all of his remaining chips on a single roll of the dice.

  His proclivity for taking risks, however, is not limited to financial matters. He also has a propensity to take actions which pose a danger to his physical health. In South Africa where physical violence was commonplace Musk became accustomed to physical altercations. This not only led to his confidence in his ability to persevere, but also to his combative nature. Those aspects of his personality continue today and have been a feature of his some of his familial and business relationships. In this connection it should be noted that he currently suffers from a back injury which he sustained when, in a moment of exuberance, he chose to engage in a wrestling match with a professional sumo wrestler.

  Assuming that Musk stays physically healthy, there is a good chance that he may become the world’s first trillionaire. That’s because he’s still a relatively young man and his business career is likely to last at least another twenty years. Equally important, both Tesla and SpaceX have become the leading companies in their respective industries; and, considering their current cost advantages and their revolutionary operating philosophies, they are likely to remain dominant for at least another generation. In addition, Neuralink, the Boring Company, xAI and Twitter could each prove to be equally successful. Thus, quadrupling his current wealth over a span of 20 years is very likely to be a conservative estimate.