Elon Musk, Disruptive Innovator and Industry

Pioneer

An in depth look at the man who is positively changing the future of

global technologiesBy: Curtis Forte 11/22/14 For: V.C.U. Students

Executive Summary Slide 3 Elon Musk and The World Slide 4 The Main Types of Innovation Slide 5 Disruptive Innovation in the Modern World Slide 6 Elon’s Innovative Beginnings Slide 7 Elon’s Innovative Spacecraft Venture Slide 8 Elon’s (SpaceX) Contracts Slide 9 Elon’s Innovative Automobile Entry Slide 10 Elon’s Solar Power Consolidation Slide 11 Elon’s Philosophy and Philanthropic Pursuits Slide 12 Elon’s Persistence with SpaceX Slide 13 Elon’s Persistence with Tesla Slide 14 The Final Frontier Slide 15

Table of Contents

Elon Musk will positively change global

technology as a result of his many future-oriented business ventures, philosophy, and persistence in the face of failure.

His businesses have already revolutionized existing markets and his persistence in the face of failure demonstrates his innovative and goal seeking attitude. As a result of his many successful businesses, Elon is able to be philanthropic in a way that adheres to his own sustainability-related philosophies

Executive Summary

Disruptive innovation is more prevalent today than it ever has

been, given our rapid technological increases and global access to information.

Elon Musk is an important disruptive innovator in that he has become immensely successful from his business ventures that were initially viewed with certain failure from most people.

Elon Musk said “If something is important enough, you should try, even if the probable outcome is failure”. This quote encompasses his persistence and determination in the many businesses he created, that have changed our world.

Elon Musk is a disruptive innovator, who will positively change global technology given his innovations, his philosophy, and his persistence.

Elon Musk and the World

Sustaining innovation is an innovation that does not affect

existing markets. (e.g., ipod mini)

Evolutionary innovation is an innovation that improves a

product in an existing market in ways that customers are expecting.

(e.g., fuel injection)

Revolutionary/Discontinuous/Radical innovation is an

innovation that is unexpected, but nevertheless does not affect

existing markets. (e.g., the automobile)

Disruptive innovation is an innovation that creates a new

market by applying a different set of values, which ultimately (and

unexpectedly) overtakes an existing market. (e.g., the lower priced

Ford Model T)

The Main Types of Innovation

The term is used in business and technology literature to

describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.

Disruptive Innovation in the Modern World

This graph shows the relationship between disruptive technology with performance and time

In 1995, Musk started Zip2, a web software company, with his brother.

The company developed and marketed an Internet "city guide" for the newspaper publishing industry. Musk obtained contracts with The New York Times and the Chicago Tribune. Compaq acquired Zip2 for US$307 million in cash and US$34 million in stock options in 1999. Musk received 7% or $22 million from the sale.

In March of that same year, Musk co-founded X.com, an online financial services and e-mail payment company. One year later, the company merged with Confinity, which operated a subsidiary called PayPal. PayPal and X.com each had a person-to-person email-based payment system. After initially co-branding PayPal with the X brand, including making X.com a subdomain of PayPal, he moved to officially remove the X.com brand for good. PayPal's early growth was due in large part to successful viral growth campaigns created by Musk. In October 2002, PayPal was acquired by eBay for US$1.5 billion in stock, of which $165 million was given to Musk.

Elon’s Innovative Beginnings

Musk founded his third company, Space Exploration Technologies

(SpaceX), in June 2002. The company's first two launch vehicles are the Falcon 1 and Falcon 9 rockets, and its first spacecraft is the Dragon.

SpaceX was the first company to have the first privately funded, liquid-fueled rocket (Falcon 1) to reach orbit; it was the first privately funded company to successfully launch (by Falcon 9), orbit and recover a spacecraft (Dragon); and the first private company to send a spacecraft (Dragon) to the International Space Station.

In order to maximize quality and control costs, SpaceX designs, tests and fabricates most of its components in-house, including the rocket engines used on the Falcon launch vehicles and the Dragon spacecraft. This has allowed SpaceX to offer one of the lowest launch prices in the industry and to significantly reduce conventional rocket development time.

Elon’s Innovative Spacecraft Venture

In 2006, NASA awarded the company a contract to design and

demonstrate a launch system to resupply cargo to the International Space Station (ISS). SpaceX has since flown four missions to the ISS.

Besides NASA contracts, SpaceX has signed contracts with private sector companies, non-American government agencies and the American military for its launch services, filling a growing launch manifest. It has already launched, for paying customers, 12 Falcon 9 rockets and has at least 30 planned future launches.

Elon’s (SpaceX) Contracts

Elon began Tesla Motors, believing that an opportunity

existed to benefit the human race by focusing more on renewable energy uses instead of gasoline. He first built an electric sports car, the Tesla Roadster, with sales of about 2,500 vehicles to 31 countries. Tesla began delivery of its four-door Model S sedan on June 22, 2012 and unveiled its third product, the Model X, aimed at the SUV/minivan market, on February 9, 2012. Model X is scheduled to begin production in early 2015.

In addition to its own cars, Tesla sells electric powertrain systems to Mercedes and Toyota. Musk was able to bring in both companies as long-term investors. He wants to enable automakers to produce electric vehicles at affordable prices without having to develop the products in house, as an added bonus he has allowed Tesla’s technology patents to be used freely.

Elon’s Innovative Automobile Entry

SolarCity is another venture of Elon Musk, developed in part

to charge his Tesla cars at specific charging stations. It is now the largest provider of solar power systems in the United States. The underlying motivation for funding both SolarCity and Tesla is to help combat global warming. In 2012, Musk announced that SolarCity and Tesla Motors are collaborating to use electric vehicle batteries to smooth the impact of rooftop solar on the power grid.

On June 17, 2014, Musk committed to building a Solar City advanced production facility in Buffalo, NY that would triple the size of the largest solar plant in the United States. Musk stated the plant will be "one of the single largest solar panel production plants in the world," and it will be followed by one or more even bigger facilities in subsequent years.

Elon’s Solar Power Consolidation

Elon is chairman of the Musk Foundation, which focuses its

philanthropic efforts on science education, pediatric health, and clean energy.

Elon began a program through his foundation in 2010 to donate solar-power systems for critical needs in disaster areas.

Elon had plans for a "Mars Oasis" project in 2001, which would land a miniature experimental greenhouse on Mars, containing food crops growing on Martian regolith.

His long-term goal is to help humanity through SpaceX by creating a true spacefaring civilization. Musk's philosophy adheres to future-oriented sustainable values in which innovation and better products can be produced in combination with sustaining the earth’s resources and environment.

Elon’s Philosophy and Philanthropic Pursuits

SpaceX had enough money for the first three

launches. However, each of the three failed. The company managed to scrape together enough money for a last-chance fourth launch.

Elon remarks “I was so tense [during the launch] that when it succeeded I didn’t actually feel elation – just stress relief, that’s all.”

Elon’s Persistence with SpaceX

Tesla, the electric car company was raising a round of

funding in the summer of 2008 when the financial crisis hit. After car companies like Chrysler and GM went bankrupt, Musk had a hard time approaching investors about Tesla.

“People were angry that you brought it up,” he said.

Musk said he put everything he had left into the company, even borrowing money from friends. Tesla went on to close the investment round on the last hour of the last possible day. If the fundraise hadn’t come through, the company would have gone bankrupt a few days later.

Elon’s Persistence with Tesla

Elon Musk is an important innovator and creative

entrepreneur that will impact the future of global technology and potentially that of the human race.

Throughout his life he has failed, but he has never stopped trying to pursue his passions and goals. Some of us may not be as ambitious and brave with our money as he is, but we can learn many things from his disruptive innovations and his life.

I propose that everyone stay informed with regards to Elon’s innovations, he may be leading us to colonize mars in the near future. It is important as students to realize the opportunities that his actions and pursuits create.

The Final Frontier

http://

en.wikipedia.org/wiki/Disruptive_innovation http://thenextweb.com/entrepreneur/2013/10/

31/elon-musk-failure-fear/

http://addicted2success.com/entrepreneur-profile/elon-musk/

http://en.wikipedia.org/wiki/SolarCity http://en.wikipedia.org/wiki/Elon_Musk http://en.wikipedia.org/wiki/Falcon_9

Works Cited