- Tesla CEO Elon Musk is more like an old-school automotive entrepreneur than a modern-day business manager.
- His personality is consistent with what it always takes to start a car company, but it’s unfamiliar to many because no one has started a major automaker in decades.
- If we had access to a time machine, we could go back to the early 20th century and find a lot more people who were like Elon Musk.
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If you had a time machine and could travel back to the turn of the 19th century, you’d find a world that still made great use of the horse — but that was newly captivated by a clattering new contraption, the motor car.
The automobile was the internet of the late 1800s and early 1900s, attracting a frenzied level of entrepreneurship, launching hundreds of new companies, and transforming a shipping center in the upper Midwest into Motown, the center of what would become the auto industry.
The car business is now very different. Ford and General Motors were each founded over 100 years ago. Upstart Toyota has been manufacturing cars since the 1930s. Even dashing Ferrari has been around since 1939, selling road cars since the late 1940s.
Automakers operate at a huge scale, across international time zones, employing hundreds of thousands of people while selling millions of vehicles annually. They can’t be run by visionaries anymore because visionaries, while valuable, aren’t good at keeping the giant machine humming.
This is why Tesla CEO Elon Musk is such a shock. His personality isn’t so different from one of those determined entrepreneurs from the 1900s who wanted to stick a motor on a carriage and get people moving without having to hitch a horse. For grizzled industry veterans, Wall Streeters, and Musk critics, he can be tough to take.
But he’s not usual, in the history of people who start car companies. In fact, he’s true to type. Here’s why:
1. You have to be crazy to start a car company. And I mean crazy.
I don’t mean literally crazy, of course. But if you intend to enter the auto industry with a new brand, you have to defy the odds, conventional wisdom, and probably the advice of everyone who doesn’t want you to lose every dime and the shirt off your back.
It’s been over a century since feverish entrepreneurship around the world gave us the first automobiles. Unbridled creativity and risk-taking were the order of the day back then, and hundreds of people wanted in on the action. Imagine a world filled with dozens of Elon Musks.
Nowadays, there are still some serious "car people" in the car business, but the industry is so large and global that the managerial skills needed to run it reward MBA types more so than madmen.
2. Cars really are dream machines.
When Jim Hackett became CEO of Ford a few years ago, he realized that he was coming from a non-automotive background, so he needed to develop a grasp of the business.
He talked to a lot of people, and one major takeaway stood out for him: people truly love cars and have an emotional investment in them.
Hacket knew that, at some level, but he didn’t know how much that love defined his customers’ relationship with Ford’s products.
That revelation is one that Musk knows well. He set out to produce cars that owners could adore, and he’s succeeded. Tesla might have its problems, but building dream machines isn’t one of them.
For years before Musk and Tesla came along, people wanted great, widely available electric cars, but the industry wasn’t able to make them. They were a dream. Tesla made them a reality.
3. Musk’s biggest job is as Tesla’s marketer-in-chief.
Musk is one of the more technically knowledgeable CEOs in the auto industry, at least when it comes to electric cars. He also knows about rocketry, given that he’s also CEO of SpaceX. I can safely say that no other CEO in the car business can call themself a rocket scientist of any sort.
Musk is also not as operationally disadvantaged as some of his critics think. His problem isn’t that he doesn’t understand how cars are built and sold; it’s that he’s too ambitious about improving a manufacturing process that might not need it.
But the truth is his real job, his most important one, is to be a car salesman.
The only other top exec to come along in the past few decades who was as effective as Musk was Lee Iacocca, who ran Chrysler in the 1980s. The business world has sort of forgotten about Iacocca, who was an old-school, cigar-chomping cheerleader for his company.
Much of this is because the type that Iacocca embodied isn’t effective at overseeing most big, global carmakers in the 21st century. They need to be futurists and diplomats, leaving the rough-and-tumble of grinding out sales to capable lieutenants.
Musk is certainly a futurist, but he’s rarely a diplomat. His driving goal is to sell as many Teslas as possible, to end humanity’s dependence on fossil fuels. That requires something more like a field general, or a king.
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