When every expert in the car industry said that he would fail with Tesla, Elon Musk took to sleeping on the factory floor. What’s more, he has already defied the law of gravity with Space X and when it comes to startups, few people have more experience than the co-founder of Paypal.
On the face of it, you might think that Musk is a rebel of some kind but for those who pay attention. His motives are simple and honest to the very core. In other words, when he wants to go electric. The purpose is to produce safe cars that cause less damage to the environment. As for going into space, he is just as quick to say that space travel is challenging. And his wanting to explore this realm is really no different from a mountaineer wanting to climb Everest.
Anyway, let’s take a look at seven rules for startup founders and entrepreneurs from Elon Musk.
1. Prepare for Disappointment
As with every startup, Elon Musk has faced numerous challenges on the road to success. Nevertheless, he always cites a certain threshold for pain as being one of his major strengths. That is to say, Musk will often advise entrepreneurs and startups to expect pain and uncertainty at every turn.
In fact, Elon once described starting a company to “eating glass and staring into the abyss”. It may sound rather negative but the truth is, this open-minded approach is largely responsible for how he managed to pull through all the hard times.
Needless to say, this is now his advice to other startup founders. More specifically, he recommends that founders should balance or counter their initial optimism with a realistic expectation. What’s more, Musk says that entrepreneurs should forget about happiness entirely until they become successful. At which point they can try to regain some of the enjoyment they lost along the way!
Takeaway – Prepare for disappointment and expect a long climb to overcome the many challenges ahead.
2. Ask for Criticism
One of my favourite pieces of advice from Elon Musk is that every startup founder should ask for criticism. It seems so counter-intuitive but the reasoning makes perfect sense.
You see, there is such thing as constructive criticism and Musk compares articulated criticism to gold in the sense that this is the most meaningful feedback you can ever receive. He also goes on to compare this kind of feedback to the opinion of friends and family – it’s hard for them to criticize but when they do, it usually makes sense. Elon also sums this concept up in a very smart way by saying that entrepreneurs should think about they are always wrong and the objective is to be less wrong!
Takeaway – Ask for criticism and use this advice to be less wrong.
3. Never Aim to Be a Little Bit Better
When it comes to creating a new product, Musk believes that too many startups get bogged down in the minor details. More specifically, he feels that too many people get caught up in the detail of ideas and concepts without realizing that they are simply not good enough.
According to Elon, if you enter the market with a product that already exists, this product must be significantly more valuable than whatever is already out there. Furthermore, it cannot be just a little different or better. It must stand out to customers as being much better than the original. After all, if the concept is similar, customers will always go with the trusted brand.
Takeaway – Never aim to be a little better, aim to revolutionize the product.
4. Don’t Rely on Passion
Another gem from Musk is that startup founders should not base their will to continue on passion alone. For example, if an entrepreneur is in constant search of inspiration, it’s likely that the long-term outlook for the project is doomed. After all, businesses rely on much more than passion.
In fact, running a business involves more risks, failure, work and worry. When passion is the only foundation for a business, there is a clear weakness and reason for concern. The truth is, Elon is explaining here that many founders or entrepreneurs have the wrong mentality when they start a business and end up miserable when they grow frustrated and fail to achieve what they set out to do.
Takeaway – Start a business for practical reasons and leave emotions to one side.
5. Focus on Asking the Right Questions
Elon may be hugely successful now but his road to this point was anything but smooth. However, since a very young age, Musk was convinced that the hardest thing about life is deciding what questions he should ask. From experience, he believes that knowing these questions is the real secret to whatever comes next.
It’s quite an unorthodox piece of advice but if you look at any of the great leaders in technology over the past few decades. It’s clear that they have this way of thinking in common. In other words, the likes of Steve Jobs, Jeff Bezos or Elon Musk ask different questions than most people and hence they end up with different, more interesting ideas – like Space X or Tesla!
Although many startup founders might feel daunted about this prospect, it must be noted that Musk undertook some of the most complex tasks that the modern world has ever encountered and, against all odds, he still managed to succeed.
Takeaway – Think differently.
6. Learn something new every day
Being an entrepreneur requires you to be informed about your industry as well as the current trends. For this reason, startup founders must be intentional about keeping up with the changes in their business environment. This can be done by taking courses, attending conferences and networking events, keeping tabs on the news and reading widely.
The pandemic provides a valuable opportunity for entrepreneurs to pick up new knowledge and skills. Investing time in learning more about to grow one’s business will be worthwhile when the business is fully operational again.
Takeaway – Aim to learn something new every day
7. Focus on retaining your current customers
Many startup founders make the mistake of chasing new customers while neglecting their current customers. Doing this only leads to short-term returns. Entrepreneurs who don’t ensure their leads are happy once they turn into paying customers lose customers frequently.
Happy customers are the most valuable brand ambassadors. Before a startup founder starts looking for new customers, they need to address the needs of the customers they already have.
Takeaway – Retaining your current customers is more important than attaining new customers
As far as startups are concerned, few entrepreneurs have the same experience or knowledge as Elon Musk. From Paypal and Tesla to launching rockets into outer space. He has clearly used a winning formula to gain traction and turn his ideas into reality. Either way, one can only admire his achievements and listen to this sage advice, for these are not merely words but first-hand experiences.
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