Elon Musk’s 3 Strategic Principles

These days, any article with ”Elon Musk” in the title feels like it’s just trying to get attention (this article won’t).

Photo by SpaceX on Unsplash

But there’s a reason for that - he has been one of the top 10 richest people in the world for a while now. Clearly, he’s doing something right. So, why not try to learn from him to boost your own chances of success?

Recently I’ve read The Year in Tech 2024 from Harvard Business Review and stumbled upon such an article.

However, it wasn’t clickbaity.

It was very interesting.

The authors analyzed the strategic principles Elon Musk follows in his different ventures - they boil down to three main principles.

(1) Scaling & dealing with complexity

This is the core of his ventures. If you look at SpaceX’s mission statement, it is quite bold:

[…] to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.

This is by no means an easy task! Think of what NASA did in their mission to the moon and how much money it had cost to put a man on the moon. SpaceX is doing something similar with a fraction of the cost.

But the complexity doesn’t end here. To cut costs, Elon decided that they had to reuse the rockets - yet another bold goal.

But they succeeded and made spaceflight scaleable.

(2) Vertical integration

Many successful businesses are using vertical integration to increase their profitability.

The essential moves?

Using proprietary technologies and in-sourcing the development and production of these solutions.

Think of Apple for example: If the EU had not intervened, the harmonization of USB-C would never have happened and we would still have the proprietary standard called Lightning for a long time to come.

(3) Convincing investors

Every business needs money to thrive. Elon Musk’s ventures have plenty of it because he never lacked investors.

How did he convince them?

By investing his own money. After selling PayPal, he reinvested most of his fortune into SpaceX.

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Thank you for reading! I hope you didn’t find my article clickbaity and could learn something. What do you think of Elon Musk’s strategy?