Elon Musk’s journey from South African schoolboy to the world’s richest man, pushing the boundaries of space travel, has been one of the more extraordinary tales in the modern business world. Here’s how he got there.
Musk was born in 1971 in Pretoria, South Africa, to parents who divorced before he was 10. His mother was a model, his father an electromechanical engineer and property developer. Musk had an early interest in computing and taught himself computer programming. He was badly bullied at school and was even admitted to hospital for two weeks after a gang of boys threw him down some stairs. He became obsessed by moving to the US, which he saw as a land of opportunity.
He collected degrees from a host of universities, including the University of Pennsylvania, while holding down internships in Silicon Valley. Eventually he was accepted for the PhD programme at California’s prestigious Stanford University. He dropped out after two days in favour of the booming world of internet startups.
The first of his business ventures began in Palo Alto, California, famed for hosting tech companies such as Apple. His first venture, a software firm called Zip2 founded with his brother Kimbal, took time to succeed. They started it in 1995 and Musk has spoken of sleeping in the office because he couldn’t afford an apartment. He received $22m for his stake when the company was sold to the computing firm Compaq in 1999.
It was PayPal that really launched Musk’s career into the stratosphere. He had founded a digital financial services business called X.com in 1999, which merged with the company that owned the fledgling payments processing business. Despite disagreements over his role and strategic vision, the company became a world leader and eBay paid $1.5bn in stock for it in 2002, a deal that was worth $165m to Musk.
A fascination with space led Musk to invest about $100m of his rapidly expanding wealth in exploring the cosmos. He founded SpaceX in 2002 and has ambitions to build a colony on Mars within a few decades. In the meantime, he has focused on developing cheap and reusable spacecraft, enjoying considerable success. In 2020, SpaceX became the first private company to put a person into orbit. He has also explored subterranean travel, investing in the same “Hyperloop” concept that Sir Richard Branson is developing.
The undoubted business success story of his life, blowing PayPal out of the water, is Tesla. Musk wasn’t there in 2003, when the company was formed. But his funding and strategic vision has helped propel Tesla from a niche specialist in electric vehicles to a stock market giant valued at more than $600bn.
Much of that growth has been recent. It soared to the current valuation within a few months of becoming the world’s most valuable carmaker at $205bn. By contrast, Ford, which pioneered the modern motorcar, is worth just over $35bn. Tesla only overtook Ford in terms of stock market value in 2017. However, Tesla has never made a profit over a full financial year. It entered the S&P 500 late last year as one of Wall Street’s most valuable companies.
Musk’s share in Tesla – he owns about 20% – is what has propelled him to the top of the ranking of the world’s richest people. And he has yet to hit all the targets he needs to trigger a controversial incentive deal that could give him a controversial $55bn payday.
Alongside his business prowess, Musk has been a colourful character, never far from boardroom clashes or high-profile controversy. He smoked cannabis on film during a 2018 podcast, an unusual move that hit Tesla’s share price, which was already fragile after he floated the idea of taking the company private out of the blue.
He also attracted opprobrium over his reaction to a perceived snub from one of the cave divers who rescued a group of Thai schoolchildren from an underground cavern. When his offer was deemed surplus to requirements, Musk called the diver “paedo guy”. He won a defamation lawsuit over the slur.