If you’re a smart device user or an avid follower of IT news, you must be familiar with at least one of the above faces. Some are praised as iconic innovators who have brought the fervor for smart devices to humanity. Others are called revolutionaries in distribution, as I mentioned in my previous posting. Yet others are being challenged to resign from their CEO posts on the grounds that they have failed to address the demands of the mobile era. No matter where they stand at the moment, they deserve the title of leaders in this smart era, this era of information and communication technology convergence.
Apart from these global household names, there are many other great innovators in areas we do not pay quite so much attention to. One of them is Elon Musk, known to many moviegoers as the actual model for Iron Man. Today, I would like to talk about his innovative ideas and how he has turned them into reality.
A lesser known genuine innovator and genius in this day and age
Elon Musk, originally from South Africa, is familiar to many of us as the actual model for Iron Man. However, he has not entered the ranks of global celebrities just yet. Still, anyone who knows him would never dismiss anything that he says as baloney no matter how far his imagination seems to have carried him away. The reason for this is that he has succeeded in transforming what we might previously have called mere figments of the imagination into reality over and over again. Let me introduce to you some of the businesses he has created, some of his achievements to date, and a few of the new ideas he has recently presented to the world.
According to Forbes (www.forbes.com), Elon Musk’s net worth as of September 2013 was US$6.7 billion (roughly 7.26 trillion won). In 1999, he sold Zip2, an Internet software company that he founded with his brother, for US$340 million. He then co-founded X.com, an online financial services and e-mail payment company. One year later, he acquired Confinity and renamed the company PayPal, which became the world’s largest person-to-person payment platform. In 2002, PayPal was acquired by eBay for US$1.5 billion in stock. Elon owned 11.7% of PayPal’s shares. Elon Musk originally began his business career in the area of web software. He sold his first company Zip2 in 1999 for US$307 million in cash and US$34 million in stock options. An ordinary man would have stopped there and looked for ways to spend the money throughout the rest of his life. I would have done that. Elon Musk did not.
In June 2002, right before he sold his second company PayPal, he founded his third company, Space Exploration Technologies (Space X). He founded Tesla Motors, a manufacturer of electric vehicles, in 2003, and SolarCity, the largest provider of solar power systems in the United States, in 2006. Many industrialists thought that each of his corporate adventures was a reckless challenge that would most likely end in failure.
His latest adventures, such as space launch vehicles, electric cars and solar power systems, are all particularly challenging, not just technologically but financially, too. As no one had actually made any money in these areas, industry experts rated his ventures very negatively. However, he has proven them all wrong. He has met with amazing success in all of his business ventures. Let’s look at them one by one.
1) SpaceX, the first private company to launch a space rocket
Elon Musk founded SpaceX in 2002 and is both its CEO and CTO. The company currently has more than 3,000 employees.
Until 2008, the space industry was monopolized by just a small number of national governments. However, the U.S. government decided to commission rocket launches and cargo transport to private companies for reasons of economy. In December 2008, SpaceX was awarded a US$1.6 billion NASA contract to run twelve cargo flights using their rocket and spacecraft to the International Space Station.
In 2012, Falcon 9 (http://youtu.be/QjH3rYs1UA4), the world’s first private commercial rocket, safely transported the Dragon spacecraft into orbit, while Dragon (http://youtu.be/wsqeI2DXJAA became the first private spacecraft to visit the space station. SpaceX has so far successfully carried out five rocket launches (Falcon 9) and docked its spacecraft at the space station three times. The firm’s space missions have all been successful. In addition, SpaceX has been working hard on the development of reusable rockets, and has succeeded in the first of a series of tests of its reusability technology (http://youtu.be/eGimzB5QM1M).
2) Tesla Motors the leader in the electric vehicle market
Elon Musk founded Tesla Motors in 2003. It currently has more than 2,000 employees. Elon serves as its CEO and product architect. Unlike a number of global giant automobile manufacturers, Tesla has achieved remarkable business success with its electric vehicles. The difference comes from the company’s unique approach to electric cars.
The major automakers have focused on the ‘economy’ and ‘eco-friendliness’ of their electric vehicles, but have failed to motivate the general public to buy their expensive electric cars which have to be recharged too often. Tesla has adopted a very different strategy. It has developed a truly amazing car run on electricity. Its electric motor gives the vehicle unrivaled smooth performance and driving pleasure. Consumers agree that Tesla electric vehicles are a real game changer. All these results are attributable to the company’s strategy – building ordinary electric cars that perform better than sports cars run on gasoline.
The Genesis Coupe 3.8 from Hyundai, the fastest domestically-produced car, reaches 100kph in 5.9 seconds. The Model S launched by Tesla in 2012 can reach 97kph (60mph) in 5.4 seconds. With ‘sports tuning,’ it can hit that speed in a mere 4.2 seconds. (The company’s first sports car model, the Roadster, can reach 60mph in 3.7 seconds.) Another crucial factor is how long you can drive an EV on a single charge. Renault Samsung launched an all-electric version of the SM 3, which can travel up to 150km on a single charge, in September 2013. By comparison, Tesla’s Model S can drive up to 420km on one charge depending on the battery capacity.
If a car performs that well while making virtually no noise and pollution, it is no wonder that it is extremely popular on the market. Currently, Tesla sells 2,000 EVs a month. Its EV market share in the US is bigger than that of any giant automaker in the world. In the first quarter of 2013, Tesla began to turn a profit. Its stock price has skyrocketed five times during the past six months. To maintain this momentum, Elon recently revealed his plan to take his family on a cross-continent road trip (5,150 km) from LA to NYC in his Model S at the end of the year. He wants to show that drivers do not have to worry about charging their EVs in the United States any longer. Tesla is going to launch the Model X, an electric SUV, in 2014. The company is taking preorders now.
Against the experts’ most pessimistic predictions, the two companies run by Elon Musk are continuing to build on their success, both technologically and financially.
If you are interested in learning more about Tesla’s differentiated marketing skills, visit the website of the LG Economic Research Institute (www.lgeri.com) and read The Tesla sensation in the EV market: This is the real high-tech marketing.
3) Solar City leading the USA into the solar era
The last of Elon Musk’s innovative companies that I would like to introduce to you today is SolarCity, which was founded in 2006. Elon is the chairman of the firm and is also involved in setting its future strategic directions. SolarCity offers eco-friendly solar energy solutions to homes, businesses and government agencies. For instance, for a household customer, the company designs a customized solar energy system, installs panels on the roofs, gets the system working, and monitors the system to make sure that it always runs perfectly. The household pays for the solar power by the month just as it would pay any other utility bill. Due to the characteristics of the business, the results are not yet as dramatic as the other two businesses we’ve looked at. However, these innovative services are already being provided to a large number of households and more than 100 businesses and government institutions including Stanford University, the US Air Force, eBay, Walmart and Intel. SolarCity is widely recognized as the leading clean energy service company in the United States. In 2012, it was ranked 10th among ‘the world’s 50 most innovative companies’ by Fast Company, the publisher of a major US business magazine. SolarCity’s stock price has risen three times during the past year.
Well, what do think of Elon Musk? So far, we have briefly looked at the chronology of his business career. Don’t you think he’s rather incredible? He has succeeded in three businesses, each of which ordinary great business people would have hardly succeeded in. He is a real genius. He is also an innovator and a maverick. However, Elon’s challenges do not stop here. He continues to catch the world off guard with his revolutionary ideas. Let’s look at just one of them.
4) Elon’s revolutionary idea for the fifth form of transport
Just a couple of months ago, Elon Musk unveiled a proposal for the next-generation means of transportation, known as ‘Hyperloop.’ The news was covered by the local media in Korea, too. What was disclosed on this occasion was an Alpha level design, the basic concept having already been introduced in July 2012. Theoretically, this subsonic mode of high-speed transportation would travel at 1,220 kph between Los Angeles and San Francisco. What’s more, Elon has guaranteed that the system will be safer, faster, cheaper and more comfortable than any other form of transport on the market. He also said that the system would be weatherproof, self-powering, earthquake-resistant and free from any disturbances on its route. It will be designed to rely completely on solar energy for all its power requirements. His idea of Hyperloop seems to be very close to the perfect mode of transport for this century.
In terms of speed, Hyperloop will be three to four times faster than the KTX, Korea’s high-speed rail system. It takes the KTX about 58 minutes to travel from Seoul to Daejeon. Hyperloop would cover the distance in just 15 minutes. The historic lesson that we have learned from the retired supersonic passenger airliners of France and Russia – namely, Concorde and the Tu-144, both of which could fly at over 2,000 km/h – is that the aviation industry can be plunged into crisis if it fails to address ever-changing reality.
We have talked about Elon Musk, a lesser known but truly great genius who never hesitates to put his great ideas into practice. What do you think of him? Personally, I admire him for his boldness and diligence. He has described himself as a workaholic. I think his passion to come up with so many great ideas and implement them with an astonishing degree of conviction and courage deserves a lot of credit. We can all learn from him, don’t you think?
If you want to listen to Elon Musk on his thoughts about his great brainchildren, click the following TED Talk entitled Elon Musk: The mind behind Tesla, SpaceX, SolarCity
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Written by YOUNG JOO KIM firstname.lastname@example.org