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Why Critics Love to Hate Elon Musk

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Elon Musk criticism is never far away. But why?

In Citizen Kane, the newspaper tycoon protagonist evaluates the worth of his enterprise, wearily telling an interrogator, “It’s no trick to make a lot of money. If all you want to do is make a lot of money.” Elon Musk criticism, which seems to be growing, must be thought of in these parameters.

It’s been a long time since we’ve seen a public figure examine the real worth of his enterprise in more than strictly financial terms, and challenge the notion that success via wealth was self-explanatory and an end in itself.

Elon Musk captures the zeitgesit; he’s the first superstar CEO of the post “Occupy Wall Street” era.

It would be understating the case to say that he has made a lot of money. Forbes estimates Elon Musk’s net worth at $6.7-billion. The South Africa-born American is the CEO of three companies that would be attracting attention even if each company was helmed by a different person.

That he alone is leading all three (Tesla, Solar City, SpaceX) and also proposing a new form of ultra-high speed travel referred to only as the “Hyperloop” puts him into a new category of CEO. CEOs are referred to as visionaries so often, the word has almost become as degraded as “awesome”.

So it’s to be expected that when the real deal comes along, maximum skepticism follows, otherwise known as haters.

Musk’s companies experienced a near-failure in 2008-2009, accompanied by a public divorce and various lawsuits directed at him by disgruntled former colleagues and employees. So the dynamic of many articles about Musk tend to mention his mating habits as well as his accomplishments and ambitions.

We want a hero, but we love to hate a hero before he puts on the suit in the phone booth, it seems.

However, even the most negative articles that present a laundry list of petty annoyances typically finish, “What America needs right now are visionaries, and this guy is a visionary.”

So the question is, can the vision be borne out in reality? Especially since so many of Musk’s goals border on science fiction for many people? We want a hero, but we love to hate a hero before he puts on the suit in the phone booth, it seems.

The narrative around Musk runs that he made a stupendous amount of money from the sale of PayPal (he is one of the famed “PayPal mafia”) and then used that money to found a rocket company with the eventual aim of making humanity “a spacefaring civilization”. This would quite rightly set off most people’s flake alert. Except that Musk is no flake. The only possible knock against him would be if he truly had more money than brains. But he appears to have ample reserves of both.

After selling his first company, Zip2, to Compaq for $307 million in cash and $34 million in stock options in 1999, he faced the option of cashing out at an early age and enjoying his money. But the mere fact of slightly disrupting classified ads with the success of Zip2 didn’t go far enough for someone who saw the transformative possibilities of “the internet, sustainable energy and expanding life beyond Earth”, and that he might personally be in a position to affect the outcomes of all three.

 

The only possible knock against Elon Musk would be if he truly had more money than brains. But he appears to have ample reserves of both.

 

Developing and selling PayPal to eBay for $1.5 billion in 2002 would seem as great an exit as one could reasonably hope for. But Musk immediately began pondering another magnitude of exit: to Mars.

At the lowest moment of Musk’s fortunes at that time, though, the spectacle of the somehow still employable Jim Cramer screaming about Tesla’s IPO on his infotainment TV show “Mad Money”, “You don’t want to own this stock! You don’t want to own this car! Heck, you don’t even want to rent the thing!” should have been enough to persuade anyone that Musk was bound to succeed, and succeed massively.
At the lowest moment of Musk’s fortunes at that time, though, the spectacle of the somehow still employable Jim Cramer screaming about Tesla’s IPO on his infotainment TV show “Mad Money”, “You don’t want to own this stock! You don’t want to own this car! Heck, you don’t even want to rent the thing!” should have been enough to persuade anyone that Musk was bound to succeed, and succeed massively.

Before coming back relatively spectacularly in 2013, Musk’s ventures experienced some extremely bad publicity and barely avoided spectacular failure. In his Ted interview, Musk says about SpaceX, “It was a close call. Things almost didn’t work out. We came close to failure. But we managed to get past that point in 2008.” Things looked very dark until the moment of Tesla’s IPO in 2009.

At the lowest moment of Musk’s fortunes at that time, though, the spectacle of the somehow still employable Jim Cramer screaming about Tesla’s IPO on his infotainment TV show “Mad Money”, “You don’t want to own this stock! You don’t want to own this car! Heck, you don’t even want to rent the thing!” should have been enough to persuade anyone that Musk was bound to succeed, and succeed massively.

After achieving a 99/100 score from Consumer Reports for the Tesla Model S, Musk pointed out at Tesla’s most recent shareholder meeting that not only was Tesla the best selling electric car in the United States in Q1 2013, but sales were more than all other electric cars combined. Part of that total revenue has to do with the Model S’ high cost. Musk intends to bring a lower-cost car to market to capitalize on the success of the Model S. Also, the Model S will become available in Europe in Q3 and Asia at the end of the year.

Journalists aren’t the only professionals whose feathers Musk has ruffled. The National Auto Dealers Association (NADA) has also voiced opposition to Tesla’s plans for direct sales to consumers, thereby cutting them out of the process. Musk points to studies that indicate that consumers want the opportunity to buy directly, and also to the viral marketing model Tesla currently relies upon, in which Tesla’s best salespeople tend to be Tesla owners.

A shocking thing happens at approximately the 52-minute mark of Tesla’s shareholder meeting video. The seemingly unflappable, permanently in-control Musk begins to cry in response to a shareholder’s question regarding opposition from NADA.

Musk stakes out the parameters of a future battle, pointing out that NADA, which is very influential at the state level, makes most of its profit on automobile service.

“Our philosophy with service is not to make a profit on service. I think it’s terrible to make a profit on service.” Choking back tears, Musk portrays NADA’s recent crowing over its victory against the sale of Tesla in freedom-loving Texas as “perverting democracy”. “I think they’re making a big mistake,” he says, recovering from his tearful episode, before taking the next audience question.

What also drives up the cost of the Tesla is that the fuelling stations and the development of so-called superchargers are being built in to the current purchase price of the car. This is a cost that most auto manufacturers don’t have to consider. It would be like GM paying to construct its own gas stations. But the development of the supercharger infrastructure is key to the future success of the Tesla when the next more affordable iteration of the car becomes available.

No doubt, when gas stations and their various associations and lobby groups realize that an affordable Tesla and other brands of electric cars will be able to plug in to Tesla’s supercharger grid, they will also fight.

On the supercharger network and other manufacturers’ possible usage, Musk is refreshingly open.

“We always want it to be the case that the supercharger is free once you’ve bought the car. So we don’t want to have this kind of pay every time you arrive thing. I think it’s just so much easier for you to just build it into the cost and you arrive and you just never have to deal with anything. So as long as other manufacturers are willing to take that same approach, at Tesla we’re more than happy to share the network. I’ve seen some articles like, ‘Is it Tesla’s intention to create a walled garden or something like that?’ And that is not at all the case. This is not some nefarious marketing ploy. It is simply that we need to have high-speed charging in order to have convenient long-distance travel. And if we were to wait around for everyone to agree on the right approach, it would never happen. So we have to just go out there and do it, and then other manufacturers can join us, or they can copy us, or they can maybe think of something better.”

He shrugs, as if to suggest that whether other auto manufacturers do or don’t go along with his plan makes no difference to him, and takes the next question.

Asked about promoting the Tesla brand, Musk responds with what has become his typical anti-CEO candor.

“You know, I’m not actually the hugest believer in brand, or in marketing for that matter. Like, there was some recent article about how I’m such a great marketer. And I say the stupidest things. That can’t possibly be true. I think the real way that brand happens is if you make good products.”

Last week, Musk quashed speculation via Twitter that SpaceX would be pursuing an IPO any time soon: “Mars requires developing complex technology over a decade+, but market cares about next 3 months. Result would be conflicting priorities.”

Asked about what makes him tick, Musk has responded, “To get through life, most people are reasoning by analogy, which is basically copying what other people do, but with slight variations. And you have to do that, otherwise you wouldn’t be able to get through the day. But when you want to do something new, you have to apply the physics approach.”

It should strike anyone employing off-the-shelf critical faculties that the actual solutions to humanity’s problems (global warming to name but one) are going to involve the acceptance of responsibility, to step out in front of the pack and think beyond the next election or news cycle. Various people, such as industry lobby groups and perhaps even government, will stand in the way of such people. Elon Musk appears to be one of very few willing to accept that challenge who has the means to affect outcomes. You would have to be beholden to one of the self-interested stakeholder groups that oppose him to wish him failure.

Compare the stakes of the failure or success of Musk’s enterprise to, say, Sean Parker’s recent and truly frivolous Game of Thrones-themed wedding. We’ve set the bar pretty low for visionaries. Elon Musk may not be Galileo, or Da Vinci, or Nikola Tesla, for that matter. But I’d bet you a fully-loaded Model S that those men would be met with exactly the same callow skepticism that Musk is now receiving if they were alive and in America today.

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  1. I liked this article Terry, but at no point did it explain to me the psychology of persons who could wilfully oppose the work this man does.

  2. i think it is implied that he is sort of an enemy of outright capitalism. Critics dont like him because his ideologies conflict with the almighty profit. As the article said, you could only not like this man if he had more money then brains. That apparently is not the case. Any critic of what this man has done,must suffer from extreme delusion and selfishness. In other words they are psychotic…or paid for.

  3. Jealousy and fear. Both breed hatred and illogical, selfish decisions. Nobody at the top of a game likes someone who changes the rules. The current establishment of oligarchs don’t like one of their “own” going against them. It embarasses them and weakens their grip on the world. It’s safer to stay with the status quo, and that’s exactly what Musk is trying to destroy, in more ways than one.

  4. It’s not that he’s an enemy of capitalism, it’s that he’s an enemy of many other powerful men. He’s a lion, and his actions are hurting other lions, so now we have a war amongst them. It’s not that they hate his ideology for philosophical reasons, it’s that his ideologies are getting in the way of their profits. Oil companies, car manufacturers, even governments (NASA) are all hurt by Musks actions. And these are the kings of our world, so they’re gonna try all they can to squash this uprising. Let’s see if Musk has what it takes to win this fight. I really hope he does, but there is only so much one man can do…

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