Entrepreneurship with Elon Musk

2006: Invested in SolarCity, one of the world’s largest designers and installers of solar-powered clean-energy systems.

2007: SpaceX wins $1.6 billion contract with NASA.

2008: Becomes Tesla’s CEO.

2010: Invested in online-payment company Stripe, competitors to PayPal.

2012: SpaceX’s Dragon spacecraft is the first commercial spacecraft to shuttle between the International Space Station and Earth. Tesla begins deliveries of all-electric Model S.

2013: Releases concept of Hyperloop, a rail system to ferry people in capsules through tubes at speeds over 800 kph.

Interestingly, despite his future-focused vision, Musk doesn’t trust artificial intelligence (AI) and has even likened it to “summoning the devil”. He has, however, invested in a number of leading AI companies that are researching how to make future smart bots friendlier.

What can businesses learn from Elon Musk?

As one of the world’s most successful and wealthiest entrepreneurs, what can business owners learn from him and how can these principles be applied to improve your own business?

Seek and embrace criticism

Musk advises entrepreneurs to create a feedback loop and listen to the negative comments. “I think it’s very important to have a feedback loop. Like where you’re constantly thinking about what you’ve done and how you could be doing it better.” This philosophy will lead to continuous improvement and the drive to improve.

Practically, this could include setting up processes for honest feedback in your workplace, where everyone has the opportunity to speak out about one thing they would like to improve upon, even as regularly as every day.

Set clear goals

According to Musk, it’s important to work on something that will have high value to someone else and be rigorous in that assessment. He explains: “Natural human tendency is wishful thinking. A challenge for entrepreneurs is to say ‘well what’s the difference between really believing in your ideals and sticking to them versus pursuing some unrealistic dream that doesn’t actually have merit?’”

Business owners are often guilty of not being serious about goals or ambitions. We’ve all had ideas that we thought could change the world, but without an action plan, they all tend to fall by the wayside.

One way to set and hold yourself to goals is to apply the SMART model to them:

• Specific. It’s easier to make a plan for a goal that’s very specific.

• Measurable. Measuring goals against a yardstick can tell you how you’re progressing. It also creates accountability.

• Actionable. Use verbs such as ‘start’, ‘eliminate’, ‘create’ and ‘record’ when establishing your goals to bring them to life.

• Realistic. This involves understanding your specific strengths and weaknesses.

• Time bound. Goals need a defined timeline – and particularly an end date – to give you a hard deadline to aim for and measure progress against.

According to innovation and entrepreneurship writer Rich Winley, “Goals are definitely something you need in business, but I believe it all starts with you first and what you want for your future. You then build your personal future into your business future.” He uses a highly rated app called Wunderlist to manage personal and professional to-dos and keep on track with his goals.

Hire talent, not numbers

Musk often describes a company simply as a group of people getting together to build a product. Three companies under Musk’s leadership and influence – Tesla Motors, SpaceX and SolarCity – already have a combined headcount of over 32,000 employees and the total is set to increase significantly. His philosophy when hiring is simple: Don’t just thrown warm bodies at the problem; and take the time to find the right talent for the job.

“It is a mistake to hire huge numbers of people to get a complicated job done. Numbers will never compensate for talent in getting the right answer (two people who don't know something are no better than one), will tend to slow down progress, and will make the task incredibly expensive,” he says.

He looks for two things when hiring – a positive attitude and being easy to work with. “My biggest mistake is probably weighing too much on someone's talent and not someone's personality. I think it matters whether someone has a good heart,” says Musk.

He also maintains that you should ask job applicants how they’ve solved a problem. The depth at which they can describe the details reveals how close they were to creating the actual solution. “When I interview someone to work at one of the companies [I ask them to] tell me the problems they’ve worked on and how they solved them. If someone was really the person that solved it they’d be able to answer multiple levels.”

Develop a persistent and ambitious attitude

One way to do this is to make failure an option, by having a clear vision and defining a contingency plan. Musk says “Failure is an option here. If things are not failing, you are not innovating enough.” When he started SpaceX, he anticipated failure and created a contingency – that if they didn’t get the first rocket to succeed by the time they’d spent $100 million, the company would be closed down.

He also insists that tenacity is key for entrepreneurs. He states: “Persistence is very important. You should not give up unless you are forced to give up.” He later qualified this: “You have to be cautious in always saying one should always persist and never give up because there actually are times when you should give up, because you’re doing something in error. But if you’re convinced that what you’re doing is correct then you should never give up.”

They key takeout is to not be afraid of failure, but instead prepare for it. This will help your business face challenges and also allows for growth, ambition and achievement. It also fosters entrepreneurial tenacity in the business and its leaders.

Think beyond money

You would think that financial success would be a big driver for Elon Musk, given the fact that he’s so good at it. However, high profile blogger James Altucher has interviewed over 100 high profile personalities and concluded that no one does amazing things for the money.

This includes Musk, whom Altucher quotes as saying: “Going from PayPal, I thought: ‘Well, what are some of the other problems that are likely to most affect the future of humanity?’ Not from the perspective, ‘What's the best way to make money?’”

Maybe, like Altucher, your initial reaction to this principle is to worry that your particular dreams might just be impossible. But, as Altucher reminds readers, this advice is coming from a man who wants to colonise Mars. Are you dreams really more of a long shot than that?

The key is to focus on the impact of your dreams, not the odds. If you want to do great things, focus on the difference you’ll make in the world (or to yourself), not the financial rewards or the glory. Keeping your eye on the ball is key. Remaining true to your passions and the change that you would like to see in the world is how leaders separate themselves from the herd.