Elon Musk is a man with a few stories to tell. Like the one about how both his tech firms – Space X and Tesla – almost went to the wall at once.
Of course, he’s a billionaire now with a mission to Mars on the horizon. But that’s another story. And I reckon his mastery of technology marketing, of spinning yarns, is one reason his firms survived.
The American made millions founding PayPal then selling it to eBay in 2002.
He invested his cash in passion projects: SpaceX – his commercial space flight company – and electric vehicles firm Tesla (named after another hero of tech blogs, the inventor Nikola Tesla).
By 2008, he was down to the last $40 million of the $180 million eBay paid him. Both his schemes were in trouble. SpaceX’s rocket had failed at launch for the third time. Tesla was close to bankruptcy while its product marketing campaign was in its infancy.
Musk revealed last week: "I could put it all into one company, and the other company would definitely die, or if I split it into both SpaceX and Tesla, then they both might die.
"And when you put your energy into building something, it's your baby, so I couldn't choose. I put the money into both, and thank goodness they both came through."
The road to the top of the tech industry is paved with abandoned projects and failed products. Marketing technology, particularly mould-breaking tech, is a fraught business. At the cutting edge, the risks seem higher than in traditional industries. But the strength of Musk’s product ideas, the force of his storytelling, kept them on track.
Think about it. Musk was clear from the start that SpaceX is about forcing NASA to spend on space exploration again. Without setting up colonies on other planets, the human race is doomed, he says. Is there a bigger story than the end of the world? It certainly stirred up the tech blogs.
And Musk puts his money where his technology marketing mouth is. He is planning a colony on the red planet – with a test flight next year. He tried sending his own Tesla Roadster to Mars this year to show off his intentions.
Musk realises the power of such a stunt for his tech brands, and has the ability to almost pull it off in such a stylish manner that no one cared when the Tesla shot off in the wrong direction, still blaring Space Oddity.
He has also managed to make space travel – which uses up fuel like nobody’s business – seem sustainable by reusing his rocket boosters, touching them down gently on remote-controlled platforms out at sea. How Bond villain is that? It’s technology that does its own product marketing.
SpaceX is already making money from launching commercial satellites into orbit and its delivery runs to the International Space Station. Even 10 years ago, the prospect of making money from space flight seemed outlandish.
Tesla’s orders have rolled in but the profits have not to date. People are hooked on his idea of clean, green electric travel. And he had the audacity to launch the company with the Tesla Roadster – a sleek, sporty number, not some safe SUV.
Again, he sold a story, a lifestyle, an idea. People are willing to endure the wait for their Tesla to arrive because it’s cool because the product marketing says so.
Late last year, Musk underlined his confidence in the brand with a surprise product– the fastest production car ever, the 277.9mph model 3. With typical flair, he rolled it out of the back of the vehicle he was there to launch, the all-electric Tesla Semi truck.
On sales, Tesla is a niche product but its tech gives it the potential to be huge. Some insiders reckon it will make its first profit by 2020.
Musk follows in a long line of entrepreneurs and companies who told good stories to save their business.
Apple was on the edges of the tech industry until Steve Jobs employed his marketing masterclass to revive it with first the iMac and then the iPod.
Or what about the British taxi builders LEVC? It was originally Manganese Bronze, whose only product was diesel taxis. After that went to the wall in 2012, Chinese investors reinvented it as environmentally friendly LEVC, building electric taxis that don’t put out those damaging particulates. Again, a good story turned a firm around.
But not all tech entrepreneurs have Musk’s Midas touch.
Sir Clive Sinclair became a tech tycoon on the back of the first wave of home computing in the 1980s with his ZX81 and Spectrum computers.
When he tried to change transport with his C5 buggy, things went wrong. The three-wheeler looked ridiculous, struggled uphill and became the butt of jokes. There was no rescuing its image and C5s sat gathering dust in Dixons on high streets around the UK.
Or how about BlackBerry? Nicknamed the CrackBerry when 3G internet was new because people got hooked on sending emails from its tiny typewriter keyboard, the arrival of touchscreen smartphones left it lagging.
A desperate reinvention seemed to combine the worst aspects of both phones and profits slumped. BlackBerry lost $670 million as recently as 2016.
I would say that in any sector, the ability to reinvent a business to adapt to changing times, and tell a compelling story, is key to maintaining or attaining success.
Musk’s billions are proof that strategy can work.
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