How does someone with no business acumen get to be the richest person in the world?

In My Humble Opinion
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The point a lot of us are making is that Musk’s arrogance, impulsiveness, and Dunning-Kruger dipshittery were already on full display in his leadership of those other businesses, and that the catastrophic failure of Twitter under his stewardship was predictable and inevitable.

A few weeks ago, when the news announced that the acquisition was effectively a done deal but before Musk walked through the lobby with that fucking sink, the religiously-capitalist CEO of the small fintech where I currently work stopped me in the corridor to ask my thoughts. He doesn’t really understand the ins and outs of the auto business or the space sector, but he was a casual Musk fanboy simply due to his having achieved wealth and fame. He’s compulsively competitive, so he likes to provoke friendly arguments with people; he finds disagreement stimulating.

I told him, flat-out, that Musk was going to destroy Twitter, and I laid out most of what’s already been discussed in the threads here. CEO wrinkles his brow and gives me one of his patronizing-skeptical expressions, and I shrug it off with an “I guess we’ll see” conclusion.

Two nights ago, at a company social event, we talk again, and I apologize for having gotten my prediction wrong: I gave Musk two years to destroy Twitter, but the way it’s going it won’t take two months. CEO, who has had a couple glasses of wine, leans in with an astonished expression, and says in a moment of rare concession, I can’t believe it, you were totally right about the guy.

The only people who are surprised at Musk’s total incompetence are the ones who haven’t been paying close attention, and who know only his self-promoting mythology as parroted by a fawning media.

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Let’s say this is true. How does that person become the richest person in the world? Are his other companies just flashes in the pan that will end up swirling down the vortex if we just wait long enough? Or did he just happen to find two industries where his particular approach just happened to work? Or is he just a figurehead who attracted enough top talent for the promise of possible untold wealth, and it’s that talent that is actually doing everything to achieve success? Or is he a true visionary?

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Well, he started off quite rich to begin with. I expect the rest was luck, which factors heavily in all of our successes and failures.

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He’s had many other ventures besides the two for which he’s become famously rich.

In 2014, he tried to buy The Onion, and got brushed off. He poached a couple of higher-level people and funded his own competing humor site. Then he got bored and pulled the plug and it folded. Then a few years later he offered to buy The Onion again, and was again brushed off.

This doesn’t make headline news because it’s just a multi-billionaire noodling around with what is, for him, pocket change, and it doesn’t go anywhere and make an interesting story. But it (a) reveals him as an impulsive, short-attention-span dilettante in a lot of his projects, and (b) puts some context around his online presence as a meme-sharing clown; he really, really wants to be popular and funny.

Dig deeper than the two obvious companies, and then dig deeper into those two as well.

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Steve Jobs was an asshole who wanted to create a perfect product/company/brand.

Musk is an asshole who who wants to make a big splash. I’m on-board with him so far. Killing Twitter was a net positive for humanity. We will see where he takes it all.

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Let’s just say I disagree strongly.

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How about “Power corrupts; Absolute power corrupts absolutely.”

Musk may well once have been a bright, impulsive, workaholic genius with some countervailing but not crippling bad habits. Who managed over the last 20+ years to be on top of PayPal, Tesla, and SpaceX, catalyzing them to great feats of growth and he himself to great piles of money.

Now, drunk on power, his self-sycophantic belief in his own infallibility, and perhaps too many controlled (or uncontrolled) recreational substances, he’s gone overboard; way overboard. And due to his wealth and his immediate circle of confidantes / employees / deputies faithfully doing his bidding for good or for ill, there’s nobody around to put the brakes on his ill-advised managerial bender with Twitter.

Will we next see an awakening and a chastening, or will we watch a spectacular self-immolation? Or just another failed idea on the dustbin of Muskly history, albeit his largest and best publicized to date? Only time will tell.

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I noticed Pay Pal comes up quite frequently as a Musk success, but keep in mind, he was removed from Pay Pal and replaced with (ugh) Peter Thiel because his (possibly very bad) ideas were rejected by the company’s board.

Musk biggest legitimate success for which he was more than likely responsible is Zip2. Compaq vastly overpaid for the company, as such was the nature of the tech bubble. And he got very VERY lucky, because the bubble popped the next year. If Compaq had not bought Zip2, then Musk would have faded off into obscurity.

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He did not. As BeepKillBeep noted, he did get lucky with Zip2, being in the right place and the right time. Musk’s father Errol invested around $20-30k into the company; hardly big bucks. The sale to Compaq netted Musk $22M. Musk invested more than half of that into X.com, which later merged with PayPal, which was then bought by eBay. That netted Musk a hundred million dollars or so.

Musk then reinvested that into SpaceX and Tesla. SpaceX he founded on his own. Tesla was basically a garage project when he came in (there were only three employees). He split all of his money between the two and barely kept them afloat (along with other VC funding). Now the companies are both >$100B behemoths.

There was luck, no doubt, but no one can do all that on just luck. Aside from talent, the other important aspect here is extreme risk tolerance. No one takes a >$100M fortune and invests all of it into a pair of highly speculative companies (competing against highly entrenched interests). The usual adage is that you get rich by speculating with other people’s money. But Musk retained control over his companies by investing as much as possible of his own money.

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Hardly big bucks, but your family has to be rather wealthy to spare it on your venture.

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I dunno. My fairly middle class grandfather put that much money into a startup that I was involved in (I did not become a billionaire).

It’s not chump change for a middle class family, but if you allow that Errol probably also had a heightened risk tolerance, it doesn’t imply they were rich.

For South Africa at the time, I suspect they were very much an upper middle-class family, but more like a 10%er territory than a 1%er. Regardless, no one has claimed that Elon had a poor upbringing. But tens, maybe hundreds of millions of people around the world have a family that well off and almost none wrangle it into billionaire money.

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Wu sees some possible plan while saying Twitter was in trouble well before Musk. He says executive turnover at Tesla is 44%, and Musk takes risks few would.

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Not long ago, Musk gave Tesla employees a similar ultimatum that he gave Twitter:

Somehow, they haven’t collapsed. Andy Wu does make the relevant point that imposing a certain culture after the company is already established is difficult, and those aren’t problems Musk faced with SpaceX or Tesla. But if they are already going to make deep cuts, then they can filter out those employees willing to go along with the “hardcore” work ethic. Obviously these people exist, or else Tesla and SpaceX would not. The question is whether there are enough of them remaining at Twitter to tide them over while they hire more people that are a better fit.

The idea that Twitter is just going to collapse in weeks or months is just ludicrous. They can survive, while accruing technical debt, for a very long time on a skeleton crew. And Musk himself is wealthy enough to keep the lights on even if some advertisers bail.

Wu is clearly right about Twitter’s engineering inefficiency. The platform finally became borderline reliable only fairly recently, IMO, but still has some amazingly stupid limitations. It may be that an engineering-first attitude is a mistake, but it probably won’t be because of missing features.

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…" extreme risk tolerance" isn’t the reason why this person with no business acumen got to be the richest person in the world.

To understand how Musk got to where he is, it could be helpful to look at another person who is inexplicably valued at more than he has ever been worth: Donald Trump.

Both Trump and Musk started out rich.

Both Trump and Musk are men.

Both Trump and Musk are white.

(The 10 richest people in the world right now are men. 8 out of 10 of them are white. The first woman on the billionaire list is number 14, then number 18, then number 20, those three inherited their wealth. )

Both Trump and Musk have no moral scruples, no sense of ethics.

Both Trump and Musk treat their workforce like shit.

Both Trump and Musk treat their contractors like shit.

Both Trump and Musk would not hesitate to exploit the people that work for them for everything they can, to the very last drop of blood, then callously discard them when they are no longer useful.

Both Trump and Musk are stupid.

Both Trump and Musk have reached cult-like status from their followers, meaning that businesses like Telsa are simply wildly over-valued for what they actually are and what they do.

A decent human being could never be the richest person in the world because in order to become the richest person in the world you need to be comfortable with lying, with double standards, with being a prick. The richest person in the world has never ever really had to work for a living. They’ve always had everything served up to them on a platter. And the richest people in the world will associate with the worst people in the world because the worst people in the world don’t care about anything else but making money.

Its a rigged game. It always has been, it always will be. Musk doesn’t need to have an extreme risk tolerance because he will never be in danger of ever not being rich. Trump had six business bankruptcies and is still rich, and is still very powerful. Musk could lose SpaceX, Tesla and Twitter and would still land on his feet. Because that’s just the way it works.

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No, Musk did not start out rich. Why do people keep posting this easily researched falsehood? All of this information is public–the sale of all of Musk’s companies, how much money was invested in them in the first place, and so on. You could learn something by reading Ashee Vance’s biography, which was started in spite of Musk’s requests, and pulls no punches when it comes to portraying him in a bad light (and there are many events that do so).

Trump got over $400 million from his father. Musk’s dad invested $28 thousand into his first startup. Trump would have been wealthier had he just dumped his money in the stock market. Musk outpaced the market by a ludicrous amount, sustained over decades.

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Keep in mind, that SpaceX would almost certainly have failed if not for 5 billion in government money. And even with that Musk (who granted is a known liar) has said that SpaceX is near bankruptcy again. Tesla also nearly went bankrupt in 2008 (although this probably wasn’t Musk’s fault) and was saved by Daimler.

Obviously, governments give welfare to lots of different companies all the time (Musk opposes government subsidies … now), but the idea that Musk has been singularly responsible for his success is not very accurate. Musk did not build himself up from nothing, he got lucky. Repeatedly. And he’s never really demonstrated any kind of good, let’s say, classical business skills. He’s a self promoter. Kind of like a P.T. Barnum, and people are buying into it without any real cause.

Let’s not forget the Hyperloop lie. The submarine design too big for the hole. The Boring Company is a really bad idea, and is going to kill people. Starlink is cool and all, but Musk (and Muskrats) acts like he invented satellite internet.

As you say, he had the guts to invest into Tesla, and I’ll give him some credit for that. But overall, in my opinion, his vision, ability, etc. accounts for maybe 10% of his success.

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…of course he did.

You think $28,000 is chump change? That he couldn’t have gone back for more if he needed it? This isn’t “extreme risk tolerance.”

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SpaceX provides a valuable service to NASA, and is a much better deal than their competitors. If you want me to go over the economics of the Commercial Crew program vs. what Boeing has provided, I’m happy to. But in short, SpaceX is now providing flights at a per-astronaut cost less than what the Russians were charging us, even including development costs. Boeing has taken in near $5B for that program alone and has flown zero people.

It the same deal for several other programs. Yes, NASA pays SpaceX good money for services. And in return they have a very reliable provider.

The subsidy, such as it is, is not in the raw dollars that SpaceX has received–they’ve gotten more than their money’s worth back. Instead, it’s the fact that NASA took a bet on SpaceX at all. It was, in retrospect, pretty unwarranted given the poor history of other private parties. But the bet paid off and now NASA is reaping the benefits.

What lie? Hyperloop was never anything more than a whitepaper and a university outreach program. They never sought out investors for it. They built a few prototype tubes and had some contests between university groups, for which they provided some funding.

You seem to think there was actually a problem there–what is it?

No one claimed that they did. But Starlink is the first high-speed, low-latency service. There were high-latency services before (in geostationary orbit), which physically cannot have lower than about 500 ms latency. And some low-latency, low-bandwidth services like Iridium (basically old dial-up modem speeds). No one else has both, because no one else has been able to cost reduce the hardware and the flights enough.

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Compared to $400M? Of course. Like I said, my grandparents invested that much (actually significantly more, once they got their friends involved) in my startup and they’re just a little above middle class. And yeah, if I somehow lose all my money, I’ll always have a warm bed and meals at my parent’s place. I’m certainly thankful for all that, but “I won’t end up homeless” is not remotely enough motivation to bet all of my (limited) wealth on a very risky bet.

Again: no one ever said he grew up poor. Not-poor is not synonymous with rich. $28k is just not that much money for a middle-class person in the west.

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…I didn’t say “compared to $400m.” 28,000 isn’t chump change. And that was never all the money Musk had access too. It’s disingenuous to claim that Musk “didn’t start out rich.” And $28k is a fuck-ton of money for a middle-class person in the west.

Elon Musk is a rich entitled brat. He didn’t start from nothing. Nobody rich ever does.