1. Watch the video lesson about Elon Musk
2. Check the script below for vocabulary you don’t know
Business English with Elon Musk – Script
Today we’re going to learn about a Rockstar businessman – Elon Musk – and you are going to learn lots of business English, as well…
This video is in two parts.
In part 1, we look at Elon Musk’s amazing life and career.
In part 2, I will explain business English connected with part 1.
So, let’s make a start.
On 2 March 2019 a rocket took off from Kennedy Space Center in Florida. The SpaceX rocket was carrying a capsule which later docked with the International Space Station. So what, you might say, that kind of thing happens all the time!
Well, if you think that, you would be wrong because NASA cancelled its Space Shuttle programme in 2011 and, since then, it has been paying Russia $81 million per seat to take American astronauts to the International Space Station.
Of course, there is a commercial opportunity here and Elon Musk’s SpaceX is one of NASA’s partners with a contract worth $2.6 billion. After the success of this test flight, NASA hopes to use SpaceX rockets to travel to the International Space Station, starting later in 2019.
Elon Musk has been compared to Tony Stark in Iron Man – with the rockets and supercars.
There were early signs that Elon Musk was not going to be an average type of person. At the age of 12, he designed a video game with a space theme which featured in a magazine and Musk made $500. This also shows his early interest in space!
Musk had an unhappy childhood and his relationship with his father was particularly difficult.
However, Musk was a great reader as a boy. His brother has said that it was not unusual for him to read for 10 hours a day. Musk read through 2 sets of encyclopaedias and he had a photographic memory so he would always be able to recall facts like the distance from earth to the moon.
When Elon was 10 years old he saw a computer for the first time and he soon owned a Commodore. The user manual for the Commodore would normally take 6 months to read but Musk just stayed up for 3 days without sleep and read right through it.
At 17, Musk moved to Canada. He enrolled at Queen’s University at Kingston, Ontario. Two years later, he transferred to the University of Pennsylvania to pursue degrees in economics and physics.
While Musk was doing an internship, a salesman came into the office, hoping to sell an online listing. This pitch got Elon thinking. He talked to his brother, Kimbal, about how they could set up a B2B or business-to-business enterprise
help businesses get online for the first time. The brothers wanted to convince local businesses that they needed an online presence. They set up Zip2. Musk did the original coding. For the first few months, the brothers slept at the office and showered at a local YMCA. In 1995, Zip2 began hiring people. Musk worked extremely long hours and he asked his first employees to wake him up by giving him a kick when they arrived at the office in the morning. Elon would then get straight back to work.
The Zip2 sales team explained to retailers that a sponsored listing would get a company to the top of the list of search results.
Zip2 was developed rapidly from proof-of-concept to a product which could easily be used by consumers.
Musk has always been extremely driven. In fact, when talking to a venture capitalist, Musk compared himself to a Japanese Samurai who would rather kill himself than fail.
Zip2 grew and in 1999, the PC maker Compaq Computer offered to pay $307m for the company. Zip2’s board accepted the offer and Elon became a dot-come millionaire, making $22m from the deal.
He had realised that his people skills were not always very good. One staff member wrote a quantum mechanics equation on the board but it was wrong. Musk corrected the equation but the staff member hated him after that. Elon realised that he had fixed the equation but made the staff member unproductive.
Musk then moved on to his next project – an online bank. He invested $12m of his own money into X.com and was the largest shareholder. By November 1999, X.com had become one of the first online banks in the world.
The company gained a competitive advantage by getting rid of overdraft penalties and other fees. More than 200,000 people signed up for X.com within the first couple of months.
Soon X.com had a competitor – PayPal.
But by March 2000 X.com had decided to merge with Confinity, which owned PayPal. Musk was the largest shareholder of the new company. But it was more difficult to unite the combined staff than it was to merge the businesses. In the end, a group of staff waited until Musk had gone on holiday and then delivered a letter of no confidence to X.com’s board.
In June 2001, the company was rebranded as PayPal. The next year, eBay offered $1.5 billion for PayPal and the board accepted the offer. Musk netted $250m from the deal.
The dot-com bubble burst and lots of internet companies collapsed. But PayPal survived, which shows the company’s fundamental strengths.
Next Space Travel!
As you will remember, Musk had had an interest in Space for a long time. Musk and his wife Justine decided to move to Los Angeles, an important centre for the aeronautics industry. Elon developed a plan to send mice to Mars – AND … bring them back to Earth!
Musk tried to negotiate a deal to buy rockets from Russia. In one meeting, the Russians said rockets were $8 million each. Musk offered $8 million for two and the Russians responded “Young boy. No.” In the end, Elon angrily stormed out of the meeting because he felt the Russians just weren’t taking him seriously.
Musk began developing a plan to build a rocket much more cheaply than the Russian rockets. In June 2002, Space Exploration Technologies – or SpaceX – was born.
As ever, Musk had a very ambitious (or very short) delivery schedule. Thanks to the sale of PayPal to eBay, Musk had additional liquidity and he was able to invest more than $100 million in SpaceX.
In March 2006, SpaceX’s first rocket, Falcon 1, launched but flew for less than 30 seconds before crashing. A year later, Falcon 1 launched again. This time it flew for more than 5 minutes – but then it crashed again.
Most people would think that this was enough of a challenge but Musk turned his attention to electric cars alongside his work with SpaceX.
Tesla had been founded in 2003 and Musk was one of the first big investors in the company. The initial research and development (or R&D) team had no experience in the automotive sector and their first task was to develop a prototype. While the team lacked experience, the company culture encouraged them to fail fast, review the data and make decisions very quickly.
The engineers began experimenting with batteries by supergluing them together. One early problem happened when the team tested the batteries and found that they exploded like “bottle rockets”.
Despite the setbacks, by 2005, a new KIND of car had been built by a team of just 18 people. However, the project was taking a toll on Musk’s finances.
By 2008, the Roadster had cost $140 million to develop – way over the $25 million estimated in the 2004 business plan.
SpaceX was also taking a lot of Musk’s money and he started to sell valuable possessions like his McLaren car.
Musk’s marriage and family were under pressure and, ultimately, the result was a difficult divorce.
Next came another blow: the Falcon1 rocket failed at the third attempt. Musk knew that he only had enough funds for one more attempt. On 28 September 2008, the fourth launch was scheduled. Would it be the last ever launch for SpaceX?
Well, in the end, the fourth launch was successful but Elon was not able to enjoy his victory for long because of his serious financial problems.
By the end of 2008, he had run out of money. Tesla was burning through about $4 million a month and the company urgently needed to secure more funding. Musk’s brother Kimbal was close to bankruptcy but invested what he had into Tesla. Elon needed to find extra funds for his companies’ payroll. Finally, Musk was able to secure more funding and he escaped financial collapse.
SpaceX’s great achievement has been competitive pricing in the commercial launch market. Usually, of course, space exploration is undertaken by governments not private companies. Musk’s approach to his businesses is very hands-on – for example, he interviewed almost all of SpaceX’s first one thousand hires himself.
In 2012, Tesla began shipping its Model S all-electric sedan car. The car was luxurious, efficient and very safe. Tesla had decided to sell the Model S directly through its own websites and showrooms. The salespeople were not paid on commission and therefore did not engage in hard-selling. Some technical problems could be solved remotely – as if by magic – the Tesla engineers worked on the issue while the owner slept. Tesla made lots of sales to early adopters in Silicon Valley.
Tesla went public in June 2010 – the first IPO for an American car-maker since Ford in 1956.
However, by 2013, Tesla sales were down as customers worried about the cars’ unreliability. Musk himself said, “The word of mouth on the car sucked.” Musk started discussions to sell Tesla to Google. However, while the discussions were going on, the sales figures improved dramatically and Tesla posted its first-ever profit. As a result, Tesla shares increased in value from $30 to $130. Understandably, the talks with Google came to an end.
As Tesla has grown in subsequent years, Musk has continued his rollercoaster ride. In August 2018, he tweeted that he was thinking of taking the company private. Musk and Tesla were each fined $20 million by the U.S. Securities and Exchange Commission, who found the tweet to be misleading and damaging to investors. However, the achievements of the company cannot be denied as Tesla has brought fully-electric vehicles to the mass market. To take an example, Tesla’s Model 3 was the best-seller amongst electric cars in the Netherlands in February 2019.
SpaceX is seeing similar success and is now valued at more than $20 billion. (Forbes)
Elon Musk’s own net worth was estimated to be $21 billion by Forbes in March 2019.
So, it’s fair to say that the career of this Iron Man of business is rocketing out of sight!
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Richard Luscombe, www.theguardian.com, 2.3.19
Forbes profile of Musk as at 7.3.19, https://www.forbes.com/profile/elon-musk/#1613fc2a7999
Elon Musk, Ashlee Vance, Virgin Digital, 2015