Elon
Musk is the world’s most controversial business manager, following the example
of Steve Jobs. Both their lives are detailed in biographies by Walter Isaacson,
full of information on how they interacted with people, built their networks,
and succeeded by iconoclastic behavior. I will summarize this information,
together with research by Michel Villette on the ruthless tactics of making the
big fortunes in the late (pre-Internet) 20th century. The sociology of
micro-interaction will help explain how Musk generates emotional energy and
spreads it to his hard-core followers. Clarity about the past can shed light on
the turmoil of the present.

Growing up in the Wild West– South
Africa

Part
of Musk’s iconoclasm is that he is not a modern person at all; more of a
Huckleberry Finn translated into the world of the digital revolution. His
father was an engineer with a string of business ventures, a bush pilot in the
borderlands of decolonizing Africa, trading off-the-books and running an
unregistered emerald mine to avoid shakedowns by local authorities. Growing up,
Elon rotated among living with his divorced mother (a fashion model with a
career of her own), his father, and other relatives where he played with his
brother and cousins and adventured together into the night life of dangerous
cities. The opposite of the helicopter parents of contemporary America, the
boys grew up unsupervised. Working with his father on construction projects in
the wild, he carried a gun, learned about dangers the hard way, and got a head
start on the adult world before his early teens.

Elon
went to school but was essentially self-educated. In elementary school he liked
to work out problems in his head, tuning out from the others while following
his own thoughts. This made him unpopular for a while, but he grew up to six
foot two inches, and did a lot of no-holds-barred fighting with his gang of
cousins.  Like his father, he followed
his own interests; reading through encyclopedias, collecting technical manuals,
taking apart old equipment to see how it works.

One
might say Elon Musk was an unusually intelligent child. But that is hardly an
adequate explanation of his success. There are many millions of people in the
world who are in the top 1% of IQ, but only a handful who are pathbreaking
innovators and build vast business fortunes. What else does it take? One
ingredient is emotional energy– a sociological concept that means not only
passion for hard work, but also self-confidence and taking the initiative. A
second ingredient is spreading emotional energy to other people— getting
other people enthusiastic about your project, and creating a self-propagating
network of enthusiasts. A third ingredient is pointed out by Michel Villette:
of the entrepreneurs who made great fortunes from the 1950s onwards (the
creators of IKEA, Walmart, LVMH, etc.), none came from families of bureaucratic
employees; their parents ran businesses (small or large), and encouraged their
children to start their own money-making enterprises from an early age. They
are less concerned about credentials than seizing opportunities. They acquire
an entrepreneurial ethos that is aggressive and even predatory, with little
respect for rules and traditions that get in the way of success.

Science-fiction and the window of
opportunity

Like
many other children, Elon grew up reading science fiction. It had a special
appeal to him because it is about adventures in the world of future
technology– and technology was what his father made him familiar with. Elon
tried to envision what the technology of space travel would be like, as a
practical matter— going beyond the fiction writers who assume future
technology as a premise of the plot. So far this is little different from
millions of kids who make model rockets. Elon took seriously the possibility
that the earth might become uninhabitable– from nuclear war, from climate
change– and reasoned that the solution would have to be living on another
planet. Already endowed with an entrepreneurial mentality, Elon recognized that
the first step must be to create a business that would make it financially
feasible to build interplanetary rockets. He took it for granted that it had to
be done by private initiative– his own– since governments are bureaucratic,
embroiled in politics, and not to be trusted to do it right.

So
his first problem was to make money. Having left South Africa just at the time
when civil war was being fought in the transition from apartheid, he found
himself in the dot-com explosion of the 1990s. While still an undergraduate at
University of Pennsylvania, he started a company to compile an on-line version
of the Yellow Pages– the old unwieldy phone book of business addresses. Elon
gained experience with Internet-based business, acquired some like-minded
collaborators, and got to know– and distrust– financial investors. Venture
capitalists sold the company and Elon ended up in 1999 with $22 million. 

His
next venture was to create an on-line alternative to the stodgy process of
getting bank loans, depositing income and clearing checks. He quickly
recognized that the banking industry was hopelessly old-fashioned– a window of
opportunity to exploit someone else’s weakness.*

*Villette’s
research found this was the chief strategy of fortune-making entrepreneurs. For
instance, IKEA’s founder recognized that old-fashioned downtown furniture
stores were expensive and inconvenient, stealing their market with
do-it-yourself assembly furniture sold from a warehouse.

Elon
pivoted to an on-line version of newspaper Want Ads and For Sale Ads with
payments by email. But rivals had spotted the same opportunity. Musk found
himself in a race with Peter Thiel, for essentially the same universe of users.
Recognizing that whoever came in second would be squeezed out, they negotiated
a merger. Negotiations were tricky and hostility continued during their
partnerships as PayPal. Thiel suspected Musk was overstating his number of
accounts, and tried to keep him from contacting his executives for fear of Elon
overwhelming them with his energy and persistence. Within three years, Musk was
pushed out. Soon after, PayPal was acquired by E-bay and Musk got $250 million.

The
pattern on Musk’s dealings was established. He would leverage one business venture
to start the next, generating money to invest and establishing financial
contacts who recognized the prospects of his technological vision and his
contagious enthusiasm. And he was willing to make enemies, yet come back to
them later when they could work together for mutual advantage. To cite one
example: Musk sized up Donald Trump as a con man and opposed him in 2016
[Isaacson: 262]. By the time of the Twitter acquisition and its aftermath, Musk
was open to an alliance.

Targeting Pentagon contracting practices
and building Space X

Now
Musk was ready to start sending rockets into outer space. He located another
big window of opportunity, actually two w