Elon Musk is a master of overcoming challenges and turning them into opportunities. In one of his first successful ventures, Elon Musk brought together several brilliant minds to create PayPal, a Fintech company that provides seamless payment solutions for companies and individuals.
In the next major venture, as the founder and CEO of Tesla, Elon Musk worked tirelessly to bring his company from infancy to maturity in only few years as Tesla raised capital – like a lot! His drive and passion for entrepreneurship are visible in every step he took towards making his dreams a reality.
With the help of like-minded people, Elon was able to overcome numerous challenges and turn them into opportunities.
This article will give you some insights on the secret techniques that enabled him to raise millions of dollars when starting out as an entrepreneur and grow one of the largest space companies in the world with just a few thousand dollars.
How Tesla Started
Tesla was started in 2003 by two Silicon Valley engineers who had the following vision “electric vehicles can be better, quicker and more fun to drive than gasoline cars.” JB Straubel— Tesla’s chief technology officer (CTO) until 2019—and Ian Wright, who left Tesla in 2004, were the company’s other co-founders. Wrightspeed, Wright’s electric vehicle powertrain company, was later founded.
In 2004, the company’s co-founders secured venture capital backing for the initial rounds of investment. Musk served as the company’s head of board soon after the initial round of funding.
Musk became Tesla’s CEO and product architect in 2008, positions he still holds as of December 2022. Tesla released its first automobile, the Roadster sports car, that same year.
Tesla Current Market Position
Tesla has made outstanding profit in 2021 (more than $5 billion) and has made more than 3 million cars until August 2022 according to Musk.
As an automaker, Tesla is valued on the basis of its future profits. And the future looks exciting. Tesla has a growing fleet of Model 3 cars that are selling at a decent pace and represent another step in the company’s journey toward profitability. The Model 3 has been the world’s best selling electric car since March 2020, and cumulative global sales passed the 1 million milestone in June 2021.
In addition to the Model 3, Tesla has a growing lineup of higher-end cars like the Model S, X and the Model Y that was introduced in early 2022.
All of these help Tesla diversify its revenue sources beyond just sales of electric cars and give it something to sell to existing customers who aren’t necessarily interested in a new car.
What can we learn from Telsa’s journey so far for startup growth and fundraising? We present 4 key learnings here.
Key Learning 1: Focus on Product Quality
One of the main priority for Tesla and Musk is the product quality. This sounds simple and obvious but many entrepreneurs forget it when they face many different types of challenges and daily responsibilities.
It doesn’t matter how well a company is run, or how much fun it is for employees to work there and how satisfied they are with their job. Investors may have invested a lot in a company or product, for example. What is most important is the product that the company sells.
Tesla built the best car it could, and then worked on another model and then another model. Thanks to its obsession with the product quality and because of the surge in demand, Tesla was unable to keep up with it later.
As Musk himself has said, Tesla needs to focus on building high-quality cars that customers enjoy using. It’s easy to get distracted by flashy features like Autopilot that aren’t essential to safe operation of your car and put off an important repair.
Still, a lot of the problems Tesla has had in the past have come from the fact that Musk wants Tesla to be the best-performing car on the road. If it isn’t, he’ll want to know why — and he’ll make it clear that he expects it to get fixed as quickly as possible.
Key Learning 2: Surround Yourself with the Best Talent You Can Find
The talent that has made Tesla the company it is today is incredibly valuable. And the fact that Tesla has managed to maintain an extremely high retention rate shows how important it is to keep them happy and motivated.
The core team at Tesla has been together for a long time. Musk himself has been with Tesla since the beginning (2004). His co-founder, Martin Tripp, was with him at Zip2. And as Tesla has grown, it has kept its senior management team consistent as well.
These members of the executive team at Tesla were already successful entrepreneurs when they joined the company. They know how to build and run companies because they’ve done it before and have the experience to boost each other’s confidence.
And they know each other well. This is important because it means that the company knows how to handle a number of issues that crop up. Any one of them could cause the company to fail if handled poorly.
Key Learning 3: Convince Investors with Your Commitment
This is an important lesson for any entrepreneur or company trying to raise money from investors. Elon Musk has said that Tesla has raised more than $7 billion in equity funding from investors and taken advantage of various government incentives to help pay for it. That’s not a small amount of money, and it’s certainly not something that any company can do lightly.
Before starting with Tesla, Musk risked everything to build X.com, which would eventually lead to PayPal. He invested everything into it, and it eventually turned into PayPal. After the sale, he would have netted $180 million, which he would have used to fund his other three companies, SpaceX, Tesla and SolarCity.
It shows that Musk and Tesla are willing to make the tough choices necessary to bring their business to a successful close. But it also shows that Musk has a certain level of commitment to Tesla that extends beyond his personal ego.
It is clear from Musk’s track record that he is the type of entrepreneur who is invested in the long term. When he is involved with a company, he puts all of his energy into it.
It is difficult for a venture capitalist to turn down an entrepreneur with such a hardworking spirit. This is particularly true when investors see you are willing to do anything to achieve your vision.
Key Learning 4: Build Relationships with Customers
As a result of this Tweet, it gained more than 137,000 likes and many suggestions by customers. Elon individually responded to each of the comments with details about the technology and any forthcoming announcements. Because of Elon’s commitment, users have been impressed as this is a novel way to build direct contact with your customer-base.
Tesla has a strong relationship with its customers. This is something that has been building for a long time. The company does long-term leases and gives customers the option of purchasing their cars at the end of the lease.
This concept is a good deal for both the customers and Tesla. Customers get a new car on a good deal. And Tesla gets to keep a customer for the long (or short) term. This relationship is important because Tesla has had a difficult time convincing current owners to trade their older cars in for new ones.
But the fact that the Model 3 has been such a success and that Tesla has a large customer base with more than 90 percent satisfaction ratings shows that Tesla is making some progress on this front.
Conclusion
Tesla is one of the most valuable companies in the world, and it’s doing it with a business model that no one else has successfully duplicated. Elon Musk and Tesla have created a company that is changing the world.
And they have done it all on their own. As an entrepreneur, you have to be willing to learn from your mistakes, your customers and show commitment to your investors with product quality obsession. Tesla proves that you can do all these and much more.
