Elon Musk, a Fringe Figurehead
Among the most ubiquitously recognized archetypes in America- a capitalist, free market society since its inception- is the entrepreneurial, focused, and sometimes eccentric column of the business world. They may be a founder, a CEO perhaps. But whatever they do exactly, they typify capitalist principles. Such figures as Bill Gates or Henry Ford bring very specific characteristics to the table; they are innovative, intelligent, driven. Moreover, though, the most celebrated of these figures usher in a new era. Mark Zuckerberg does not command the same attention or garner the same respect today if Facebook arrives in 2007 instead of 2004, even though his skills as an individual are unchanged.
In the case of Elon Musk, it is difficult to argue that anything has driven him to success more than his ingenuity and creativity. Musk perpetually resides on the cutting edge. He may not consciously chase this fringe, but anyone who has seen his résumé can attest that staying put does not satisfy him. But in order for the fringe capitalist to exploit the benefits of their position, certain characteristics are necessary.
Obviously, as an entrepreneur, positioning oneself on the cutting edge and monitoring trends which others do not garners numerous benefits. You have a headstart on a field of competitors who, after seeing your success, will no doubt attempt to copy you. So, as a leader fields such as these, say Elon Musk in the electric vehicle and space travel industries, getting off the ground fast and staying stable is essential for the success of the company. However, the public invests just as much in the success of these businesses. The world was set back by Apple’s 1985-1995 slump. How much better would technology be if those setbacks and the lack of competitiveness in that era had not been so prominent? Apple, of course, has no issues nowadays; those implications are private. But the betterment of the world via innovation relies heavily on how these fringe figureheads maintain their platforms. Don't use plagiarised sources.Get your custom essay just from $11/page
This paper delves into the acts of Musk and its implications for Tesla and SpaceX, and by extension, the future of the two burgeoning industries which they represent. By analyzing Musk’s behavior, specifically his controversies and numerous issues, and comparing these occurrences with the timelines of other leaders, we conclude that Musk simply does not have the characteristics to consistently represent one, much less two industries. Musk prioritizes the “next new thing”, which means his skills are always spread too thin. Furthermore, his controversial and stream of consciousness personality, although it may be attractive to younger generations, actively turns older, mainstream persons (notably, those with capital) away from his ventures. Obviously Musk still has hugely valuable characteristics, as an entrepreneur, innovator, and financier, but not as a figurehead.
The Industries which Musk Represents
Elon Musk has represented a lot of industries and companies in the field of business. They range from PayPal to Neuralink to The Boring Company. The two primary companies that that Elon Musk holds great representation is Tesla and SpaceX. These companies explore the future technologies of transportation.
Tesla is a car company thats primary goal is to transition the current generation of gas powered cars to a more energy efficient and sustainable generation of cars. Tesla stands out from it competition in a variety of ways that appeal to the eyes of the consumer and the first difference is the fuel. Unlike regular cars that require gas to power the vehicle, Teslas use a special battery that can be plugged to recharge the device both saving the consumer money from gas station and also reducing the amount of CO2 emitted into the atmosphere. Tesla’s take on the process of purchasing a car is a custom and convenient experience, offering the option of going to a traditional Tesla dealership or allowing the consumer to craft a custom model S car from the ease of the internet. The custom car can be shipped to a location nearest to the consumer or if no location is close enough, the car can be shipped directly to the consumer. Tesla certainly has its fair share of competitors in the pool of electric cars, including hybrid cars that provide the choice of gasoline or electric to the consumer. Key companies that have its eyes set on are Chevy, Hyundai, Volkswagen and Nissan. Infact, the “2018 Chevrolet Volt EV” was named the number one electric vehicle according to the US news whereas Tesla took spots two and four with the model S and 3. The future of Tesla is starting to take a turn for the better now. Prior to Q3 of 2018, Tesla not making any profit at all. That changed in Q3, “Tesla made its first quarterly profit in two years between July and September 2018”(Stewart, 2019) With the model 3 paving way to its first profits in sometime,the future of Tesla is looking bright. On March 14th, Tesla will unveil the 4th line of Tesla models: The Model Y. This will certainly have to be a headturner if Tesla want to retake the number one spot of best electric car. Tesla is valued at 2.2 billion dollars (Dennison, 2018) and Elon Musk is going to try to make that net value go up this year in 2019.
SpaceX is also one company that Elon has a great deal of representation towards. SpaceX is a company that not too many people know about since the primary space exploration program that most people recognize is NASA. “SpaceX is a private company that designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.”(SpaceX) Elon Musk is the founder of SpaceX and also the CEO. SpaceX is working towards a the goal of making life multiplanetary. SpaceX is attempting to colonize Mars in order to make this plan succeed. Unlike Tesla, SpaceX is a private company, so can just waltz into a SpaceX office and come out with a brand new rocket. Likewise, The competitors of SpaceX arent after sales, but after achievements. Think of it as a space race between companies to see who can do what first. Some of the companies that rival SpaceX are Vector, Blue Origin and NASA. The company is valued at around 30 billion dollars. (Wattles, 2019) Overall, SpaceX promises a star filled future to get to and live on different planets.
Musk’s Controversies
Elon Musk has been no stranger to various controversies in the past few years, some more damaging than others. One of the prime examples of this was Musk’s claim that he wanted to make the Tesla company private. In an email sent to staff which was also posted to the Tesla blog, he stated “I announced that I’m considering taking Tesla private at a price of $420/share.” His rationale is essentially that SpaceX is privately held, and in his eyes, it is doing better than Tesla. (Musk, 2018)
Controversy about this situation erupted immediately, mostly with questions such as how he would finance this proposal (it would take 82 billion dollars to do this) and also whether the proposal was even real in the first place. (Chafkin, Hull, 2018) Long story short, Musk paid a 20 million dollar fine and stepped down as chairman after his claims were found to be untruthful, one month after he originally made the claims. (Merie, 2018)
Musk also came under fire for his donations to a committee named Protect the House, which is a Political Action Committee (PAC) that works to keep a Republican majority house. He took to twitter to explain his reasoning, responding to an angry user saying “So that they [Republican politicians] are willing to listen when I call to object about issues that negatively affect humanity” (Morris, 2018) The reason people have such a problem with Musk supporting Republican politicians is that he prides himself on caring about the environment, and people often criticize Republicans for not doing enough about climate change.
Possibly the most publicized of Musk’s controversies are his instances with drug usage. His most popular moment is a clip of him smoking a cannabis and tobacco cigar on the Joe Rogan podcast. The episode has 20 million views on YouTube as of today (March 2nd, 2019) so many people have seen him doing this. This came only a month after the situation involving taking Tesla private, so it was already a tense time for Tesla and Musk. Not only was the privatizing situation happening, but two executives in Tesla also announced their resignation the same day the podcast episode came out. (Shaban, 2018) The day after the episode came out, Tesla’s stock had dropped by almost twenty points. (Yahoo Finance)
Does Musk Represent These Industries Well?
Comparisons With Other Figure Heads
Space travel was once an industry exclusive to global superpowers, but billionaire entrepreneurs and thousands of talented engineers may be taking paying customers to the final frontier within our lifetime. Elon Musk’s SpaceX, as previously mentioned in this report, is at the forefront of interplanetary space travel technology. The iconic Falcon 9, named after the Millenium Falcon and its nine boosters, has revolutionized orbital travel as it can launch a satellite and then return to the ground intact and ready for refueling. SpaceX has made its billions sending satellites into orbit for private and government operations, but the true goal of the company lies significantly further away. Musk has been very open about his dream of leading a human colony to Mars, and being the first pioneer of an interplanetary humankind. As he puts it himself “I want to die on Mars, just not on impact”(Musk, 2013). Fortunately, Musk is not alone in the endeavor of publically available space travel.
Sir Richard Branson’s Virgin Galactic has also strived towards getting people in space for over a decade, and he’s getting startlingly close to commercial success. On December 18th, 2018 the VSS Unity achieved suborbital flight with crew and landed successfully. Just two months later on February 22nd of this year, there was another successful flight test with the spaceship carrying a passenger as well as its crew. Virgin Galactic’s achievements have also been framed by a figurehead with next to zero public controversies. The biggest marks on Sir Branson’s public record are his controversial moving to the British Virgin Isles to avoid taxes, his promotion of SeaWorld, and supposedly sexually assaulting the backup singer of band he invited to his island by “putting his head between her cleavage and making boat engine noises”(Sawer, 2017). Of course accusations of sexual assault should be taken seriously, but nothing ever came of these allegations and the story quickly went cold. In short, Sir Branson and Virgin Galactic have been consistently striving towards and achieving the goal of public space travel while avoiding any public relations disasters. As the face of Virgin Galactic, Sir Branson has remained a class act and has not brought any controversy to the table. Though he is only the founder, he is not the CEO of Virgin Galactic nor is he involved in the day to day operations of the company. Musk built SpaceX from the ground up and serves as both CEO and CTO and it is because of his deep involvement in the company that his poor personal conduct reflects so poorly on these industries.
Entrepreneurship and Ingenuity
Despite Elon Musk having a swarm of controversies surrounding him and his companies, he has proven his entrepreneurial prowess time and time again. Musk and his brother founded Zip2 in 1995 and sold the company for $307 million in 1999. Only a few years later he arose as CEO of PayPal and took home $165 million in 2002 when the company was bought out by eBay. His more recent ventures, Tesla, SpaceX, and SolarCity, have received an estimated $4.9 billion dollars in investment and subsidiaries from the U.S. Government alone(Hirsch, 2015).
There is absolutely no doubt that Musk is an extremely proficient entrepreneur. Within 20 years he, a boy from South Africa who ran away from home to Canada before he was 18, has secured his spot as one of the most influential men in the world. Everything he has was built from the ground up on his own merits. Unfortunately for Musk, the public’s opinion of Musk as his companies are often overshadowed by his constant stream of controversy and public blunders.
SEC Controversy and Aftereffects
Recently, Musk’s run in the SEC nearly resulted in him being ousted as the CEO of Tesla. On August 7th of last year, Musk tweeted “Am considering taking Tesla private at $420. Funding secured” which caused Tesla stock spike in the following hours, but quickly started controversy and he had no consulted anyone at Tesla and could not state where the secured funding was coming from. This behavior which sparked a lawsuit from the SEC drastically damaged public opinion of Tesla and its stock fell 30% below its 52-week high within a week, a drop that the company still has not recovered from. Stephanie Avakian, co-director of the SEC’s division of enforcement accused Musk of securities fraud, calling him “recklessly misleading” and stated to Musk, “neither celebrity status nor reputation as a technological innovator provide an exemption from the federal securities laws”(Salinas, 2018). The lawsuit resulted in Musk stepping down as chairman of Tesla and must “seek pre-approval of any written communications, including social media posts, that contained or reasonably could contain information material to Tesla or its shareholders”, though he still operates as CEO(Tobin, 2019).
Though this controversy should have been enough to get Musk to think before he tweets, his is once again in hot water with the SEC over a tweet. On February 19th, Musk tweeted “Tesla made 0 cars in 2011, but will make around 500k in 2019” which quickly gained the attention of Tesla stockholders. The following Monday, the SEC filed another court case against Musk as he almost immediately violated the terms of their previous agreement because he did not seek or receive pre-approval for a false message(Tobin, 2019). Following the court case filing, Tesla stock dropped 5%. Clearly, Musk is incapable of controlling his twitter and twice within six months his actions have directly causes Tesla stock to lose value. The SEC’s lawsuit is still ongoing and it is not known if Musk will face legal repercussions for his foolhardy tweets.
Consistently, Musk has displayed a complete disregard of the law and business ethics when using social media such as twitter. His actions have damaged his, his companies’, and the industry’s reputation by association. If no further legal action is taken against Musk by the SEC, then it is only a matter of time before Musk once again tweets something that sends the value of Tesla stock on a rollercoaster. Reckless behavior such as this is inappropriate for a man who represents thousands of employees and is at the forefront of cutting edge technology. If Musk was a social media management intern, then his behavior would be understandable. For the sake of his companies and the industries they lead, Musk’s access to social media should be closely monitored.
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