Elon Musk on Profit: It’s Proof You’re Adding Real Value
In his Kahn academy interview with Sal Kahn Elon said:
“There’s nothing fundamentally wrong with profit, in fact profit just means that people are paying you more for whatever you are doing than you are spending to create it…
And that’s a good thing. If that’s not the case then you would be out of business and rightfully so because you’re not adding enough value.”
So add more value. Stack on bonuses. Strengthen your offer by finding ways to improve your product.
Elon explains by investing in his own companies it becomes easier to ask others to do the same.
In a Milken Institute Interview Elon was asked: “You put a lot of your eggs in one basket. Would you advise entrepreneurs to roll the bones quite the way you did?”
Elon: “Yeah absolutely! I think it’s worth investing your own capital in what you do. I don’t believe in the sort of other people’s money thing…
I think if you’re not willing to put your own assets at stake then you shouldn’t ask other people to do that.”
Elon is all in with having skin in the game.
By investing more of his own money into growing his businesses Elon has more invested, and more reasons to stay focused on fully optimizing the businesses he is invested in.
When you are willing to invest everything into your businesses you have every reason to make it work.
Find a noble reason beyond profit to make your business work – and this will likely boost your profitability.
SpaceX is currently the most profitable rocket company but at one point they had never sent a rocket to orbit and were running deep in the red.
But they pulled through and made it to orbit with the fourth launch!
So why take the risk? Elon explains his bigger than money motive:
“Now is the first time in the history of Earth the windows has opened where it is possible for us to extend life to another planet…the wise move is to make life multiplanetary while we can.” (AGU)
It’s not about the odds of success as much as it is about the importance of the mission: “If something is important enough, then you should do it anyway.”
Having a super human mission is the superhuman effort realized to help achieve it.
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