elon-musk

What Elon Musk Can Teach You About Unconventional PR

 

If you say "visionary entrepreneur" chances are you'll think about Elon Musk. Even though he is a visionary, someone with unconventional ideas. Strangely he's also very popular. Not kidding when I say that Elon Musk is a rock star!

 

In fact, just to give you an idea of his popularity, I compared Mick Jagger to Elon Musk, and not surprisingly, Elon Musk is way more popular:

One week ago Elon Musk announced on Twitter that one of his ventures - The Boring Company - was producing flamethrowers for 500 bucks.

One week after The Boring Company has made $10 million in revenue. That means in less than a week the company sold at least twenty thousand pieces! (by the way, they had finished all the supply they had in less than a week. Had they not set up a limit I wonder how much more they would have sold). 

That is a tremendous result for something you don't even know what to do with.

In fact, don't ask Elon Musk what to do with that he might come up with some other crazy idea (he said to use that for the next Zombie invasion). 

Elon Musk is the same person that can sell us Hyperloops, underground tunnels for cars, and houses on Mars. All those things don't exist and most probably will not exist in the next ten-fifty years (or might never existence).

Yet he's already sold them! In short, Elon Musk is the most exceptional salesperson of our time!  He could sell ice to Eskimos and then help them to melt it with the flamethrowers he had sold them a moment before. 

In fact, you might think what happened with the flamethrowers was by chance or accident. That is not the case. Just a few weeks before Elon Musk announced the sales of a "boring company" hat. He also came up with crazy giveaways:

Not long after, they had run out:

boring-company-cup

We all have crazy ideas. But when we express them aloud we get "you're crazy!" When Elon Musk does, he gets "you're a genius!" 

That is the difference between an average person and the most exceptional salesman in the world. 

Peter Thiel, former PayPal CEO and author of Zero to One defined Elon Musk as a "sales grandmaster."

What's the secret of this man that can sell anything to anyone?

Elon Musk has a crazy successful track record

Like any great company, a great product is a baseline. The same applies to personal branding. But rather than a product you need a track record!

Before founding Tesla and SpaceX, Elon Musk was the co-founder of a financial service company called X.com. The company merged with Confinity to become later PayPal. When eBay acquired PayPal in 2001 Elon Musk was the largest shareholder. After PayPal, he founded SpaceX, Tesla, SolarCity and a few other ventures. Until in December 2016, he founded The Boring Company. The main aim of the last enterprise is to excavate and build tunnels way cheaper than it's done today. In this way, alternative transportation systems can be developed.

The ventures that Elon Musk has been creating in the last years have all been wildly successful.

Tesla at the time of this writing is worth more than fifty billion:

tesla-stock

PayPal today is a company that has changed the payments system worldwide. SpaceX, which seemed an impossible venture is now worth over 300mln dollar from an initial investment from Elon Musk of about 100 million dollars.

Those are just the last ventures. In fact, as a teenager, Elon Musk seemed to have mastered the art of starting up successful businesses.

That is also why Elon Musk's brand is as strong as ever. That leads us to the next point.

A flamethrower from Musk? That's like a limited album edition from Mick Jagger

Rather than companies, Elon Musk has been able to build cults. When you buy a Testa, you're not buying an electric car you're buying a credo that says "I'm just like a Hollywood Star or a Silicon Valley tycoon."

A Tesla car is as much about the unbeatable lithium-ion battery that it is about its coolness!

Elon Musk has achieved such wild success. Like King Midas has a golden touch. People expect that something that Elon Musk has put his eyes on will be worth at least 10x, if not 40x more!

In fact, when people rushed to buy flamethrowers from Elon Musk's "The Boring Company" they weren't just a bunch of idiots, fooled by a scammer. Instead, they were smart speculators, purchasing a Picasso.

In fact, in less than a week, after buying a flamethrower for $500, they were getting sold on eBay for $20,000!

40x isn't bad at all for a four-week investment that carried no risk (besides that of burning your own house).

But if people purchasing these merchandising are speculating, what about Elon Musk. What's the meaning of it all? Is he freaking out?

Is Elon Musk freaking out or there's more to it?

Thinking that Elon Musk is just having fun selling this stuff. Saying that he's capitalizing on his brand; Or that he's freaking out. It's quite limiting. I believe there is more to it.

No doubt, he's having fun,

No doubt he's capitalizing on his brand. With the flamethrowers stunt, he's made $10 million in revenues. But what's that for?

I argue that Elon Musk is tapping into his brand to raise money for his new startup! What a better way to do that than using unconventional PR?

Elon Musk isn't Iron Man but the king of Unconventional PR

When you create a startup, the most significant roadblock is about having enough funds to be able to make your ideas come true. Elon Musk knows that. With his new company, instead of bootstrapping it as he did in the past, I believe Elon Musk is using Unconventional PR to get it founded. Why not?

In fact, he had risked many times in the past to go out of business. Even if we take Tesla, which is worth over fifty billion dollars, the company still loses money.

tesla-financial-statements

As Jim Chanos of Kynikos Associates put it:

Obviously, this is not being valued as a car company, it's being valued on Musk ... he's the reason people own the stock

That is why he has taken a short position on the company, betting that soon Elon Musk will step out as a CEO.

If that is not enough Jim Chanos also continues:

If you wouldn't be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short? It sort of ticks all the boxes.

Sourcecnbc.com

This is one side of the story. Also, this is coming from a person that put his on money betting on the failure of Tesla. In short, if Tesla stock goes to zero Jim Chanos will make a lot of money. It is also true that his opinion isn't coming out of the blue. By looking at Tesla's balance sheet, it's clear that financially speaking things aren't looking good. 

However, this also raises another interesting point, how the heck is Tesla still alive?

Two reasons I believe.

First Tesla is as much of a company that of a non-profit organization. How? Tesla has pledged to let anyone use its patents:

Should Tesla ever transfer a Tesla patent to a third party, it will do so to a party that agrees, by means of a public declaration intended to be made on the subject, to provide the same protection place the same requirement on any subsequent transferee.

Source: tesla.com

That means, in theory, that all the patents Tesla is putting out there will be available to other companies to use. The bet of Elon Musk is that by having automakers come together, this will also lower up the cost of electric components of many times over, which in turn would make Tesla's business model sustainable over time.

Therefore, besides the financials that is quite an unconventional choice, which makes Tesla different from any other car company. Where another corporation at this stage would have filed for bankruptcy that didn't happen for Tesla. In some way, it's hard to judge an unconventional company with conventional metrics.

It is also true that as CEO Musk has to be able to create a sustainable business model for the future. Will he be able to do that? Time will tell. With a company burning cash at the speed of light, for how cool that is; when the debt will be due, if none will be backing that up bankruptcy will be inevitable.

What's the other reason for Tesla being alive? Of course, the answer is Elon Musk!

Will it last forever?

This is the question that looms in many heads when thinking about Elon Musk. In reality, I believe that is the wrong one. In fact, even if Elon Musk's ventures would go bust, his legacy would stay. In addition, he has skin in the game. In fact, he's always put his money into any venture he's created.

Thus, defining Elon Musk as a rock-star is also limiting. Popularity comes and goes. But when that is backed up by genius, unconventional thinking, and a natural ability to sales that is when no matter what happens your mark will be left to generations to come!

Published by

Gennaro Cuofano

Creator of FourWeekMBA.com | Head of Business Development at WordLift.io | International MBA

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