6 Biggest Lessons from Elon Musk's 100 Days or It's Free Deadline
Elon Musk, founder and CEO of Tesla Inc. offered to fix South Australia’s (the most renewable-energy dependent region in Australia) power network to help prevent the frequent blackouts they experience.
The offer was certainly a grand way to shine attention on the technology and company Musk is building. If we look at Tesla today, they are at a crucial stage in trying to be a car and energy company at the same time.
With that in mind, Australia is the perfect stage for Musk to show the world how to substitute fossil fuels with renewables. The continent is the world’s largest exporter of coal; the sunniest continent; and has a lot of wind and hydroelectric power capabilities.
Yet, the cost of electricity in the country rose by 20 percent between 2012 and 2016.
South Australia in particular has the highest electricity prices in the world. The imbalance of supply and demand has caused regular blackouts and huge bills for the state’s 1.7 million residents.
So Elon Musk gave them an offer they couldn’t refuse. A deal was struck and the rest is history. But we will still recount it here.
That is because Musk teaches us all a valuable lesson we can apply in all areas of our lives. He specifically shows us that we have to disrupt our usual ways of thinking in order to do more and achieve more.
Image credit: Reuters
Giving himself the 100-day timeline to fix South Australia’s power problem by building the world’s largest battery farm is a powerful example of pushing oneself and narrowing the gap between talk and action.
Let’s take a look at how the deal played out and the lessons we can all learn from billionaire entrepreneur, Elon Musk.
In March of 2017, Musk offered to install $25 million worth of battery storage in South Australia within 100 days or offer it for free if he misses the deadline.
The offer came on the heels of recurring power outages in the state of South Australia.
There was a blackout that stopped industry and business for about 2 weeks and created fears of more electricity outages across the nation, due to tight power supplies.
Battery storage is one of several options the Australian government is exploring in order to use reliable and consistent power supplies as the country becomes increasingly dependent on intermittent solar and wind power.
Clean Energy Finance Corp’s former CEO, Oliver Yates, said, “We have been talking with a number of large-scale battery providers about potential storage solutions, including in South Australia. To the extent Tesla is interested, we’ll also talk with them."
So Musk made them an offer they couldn’t refuse.
He made the offer in response to Mike Cannon-Brookes’ (co-founder of Atlassian Corp) comment on social media, saying that he would put together funding and political support if Tesla could supply batteries to resolve South Australia's power problems.
Musk tweeted in response, “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”
He projected a cost of $250 per kilowatt hour for 100 megawatt hour systems which would total to $25 million for the battery packs.
Cannon-Brookes responded, “You’re on mate. Give me 7 days to try and sort out politics & funding.”
Brookes received plenty of calls after the Twitter exchange and was in a hurry to get the ball rolling.
“My phone hasn’t stopped buzzing. The support is flooding in, both from individuals in terms of ‘Hell yes!’ and from corporates who are asking: ‘Can we buy power? Can we contribute dollars?',” Cannon-Brookes told Reuters.
The government was interested. The contract, between Tesla, Neoen's Hornsdale Wind Farm and the State Government, was officially signed on September 29th, 2017.
Musk on the size of the project, "There is certainly some risk, because this will be largest battery installation in the world by a significant margin … the next biggest battery in the world is 30 megawatts.
To have that [construction] done in two months … you can’t remodel your kitchen in that period of time.
When this is done in just few months, it will be the largest battery installation by a factor of three.
The South Australia battery will be paired to a neighbouring wind farm run by renewable energy company Neoen in Hornsdale to bring added reliability and stability to the state’s power supplies.”
Elon Musk Stuck to His Word: The Project Was Completed in Less Than 100 Days
The world’s largest lithium ion battery was installed in South Australia on November 24th, 2017, in less than 100 days. It is heralded as the greatest engineering marvel of the 21st century and a potential solution to Australia’s energy crisis.
Image credit: The Guardian
Tesla says the battery, which is the size of an American football field, can power 30,000 homes.
This is how the battery works, in Musk’s words, "You can essentially charge up the battery packs when you have excess power when the cost of production is very low … and then discharge it when the cost of power production is high, and this effectively lowers the average cost to the end customer."
The Tesla battery stores energy; it does not create it. The state already has investments in wind and solar energy so the battery simply serves as a power bank to reduce the pressure of supplying consistent power during periods of high demand, and to help better manage the electrical grid.
The project could potentially change the future of energy in the country and in the world as a whole. “This is a great example to the rest of the world of what can be done,” Musk said.
It was certainly a disruptive moment in history. And it all started with a tweet.
Musk Has Done It Before
That is not the first time Musk challenged to complete a large and revolutionary project within a short timeframe.
In January 2017, Tesla unveiled its 396 fridge-sized batteries in a storage farm in southern California. The batteries have the capability to power 15,000 homes.
He announced the project on September 15th, 2016 and said it would be completed within three months. It was completed in December, before the deadline, and officially opened on January 30th, 2017.
Image credit: The New York Times
It was the world’s largest battery storage project before South Australia’s Tesla battery development.
Both ventures provide the proof Musk has been looking for in saying that the world’s energy future is both practical and economical.
What We Can Learn from Elon Musk
Bold thinkers are remembered throughout history. And Tesla boss Elon Musk is as bold as they come.
From inventing the most electrifying car company of the 21st century to making space travel a reality to disrupting different industries (Cars, Space, Batteries, Transport and Payments), Musk is arguably the biggest risk taker among his entrepreneurial peers.
In an interview with CNBC's Squawk Box, Billionaire investor Ron Baron explained what makes Musk a truly unique and successful entrepreneur.
"What [Elon Musk] does, it reminded me a little of Robert Kennedy. [Musk] is a guy who thinks about things that never were and says, 'Why not?'"
Having a “why not” mindset encourages one to take big risks and take on projects that others think are impossible, which often leads to huge innovations and successes.
Recounting Musk’s history, Baron said, "His history is that he built a business when he was a young man and sold it for $10 or $15 million. Built PayPal, sold it for $150 million. He could have retired but he took everything and put it at risk to develop electric cars.
He looks around and says 'Gee. This is how fast a human walks and this is how fast a robot walks...Why do we have the robots going this speed, why can't we have them go five times as fast?'"
But how does Musk, considering the intense life he lives, manage to do it all?
A self-made billionaire, he is the founder and CEO of multiple companies: Tesla (carmaker), SpaceX (space exploration), OpenAI (non-profit artificial intelligence research), Neuralink (brain internet interfaces) and The Boring Company (a company to dig tunnels underground to help reduce traffic). And he does it all with six hours of sleep each night.
This is how he manages to do it:
6 Biggest Lessons We Can Learn from Elon Musk
Musk is one of only two people to have founded three billion dollar companies. And the funny thing is that he doesn't care that he is a billionaire. And he doesn't like it when journalists ask him about his billions either.
He wants them to instead ask about the higher, worldly problems he is trying to solve.
Image credit: CNBC
He is concerned about and focused on humanity’s future. More specifically, he is concerned about sustainable energy, interplanetary space travel and clean transportation.
And he is making big moves in all three fields and sharing some captivating insights with throughout his journey.
Here are a few that were pulled from some interviews he’s given in recent years.
Be Open to Criticism
Nobody likes being criticized. However, it is just like exercise, in the beginning. It is difficult. But it slowly but surely builds you into a healthier and more fit individual.
Criticism leads to personal and professional improvement in the long-term. That is what Musk believes.
He says, “When I spoke with someone about the Tesla Model S, I didn’t really want to know what’s right about the car. I want to know what’s wrong about the car.
When my friends get a product, I ask them to please not tell me what they like. Rather, tell me what you don’t like. And if I’ve asked that a few times of people, then they will start automatically telling me without me having to always ask the question."
While compliments make you happy, value criticism more. It will help you improve and make more successful career and entrepreneurial moves.
Focus, Focus and Focus Some More
The power of focus has been lauded by many successful entrepreneurs, including Warren Buffet, Mark Zuckerberg and Steve Jobs.
Jobs is famous for saying that “deciding what not to do is as important as deciding what to do.” It’s all about focus.
Musk believes that to be the case as well.
He only focuses on product development. Most of the companies in his industry focus more on marketing than they do engineering. Musk, however, would rather focus on marketing a remarkable product than an average one.
He says, “At Tesla, we’ve never spent any money on advertising. We’ve put all our money into R&D, engineering, design, and manufacturing to build the best car possible.
When we consider spending money, we ask, 'Will this create a better product?' If not, we don’t proceed with spending the money.”
Reality is Not Really Reality
What do we mean by that? Well, Einstein once said, “You can’t solve problems with the same thinking that caused them.”
And Musk agrees with that.
When people make definite statements about “the reality of things,” don’t take them for their word. Always challenge reality as Musk does.
For example, when people said battery packs would always be expensive (they are expensive to make), Musk disagreed.
He found that when you break down batteries into their individual components (nickel, aluminium, cobalt, polymers, carbon and a steel can) and build your own, the costs drop significantly.
That is how he created Tesla Energy, which revolutionized the energy industry. In challenging reality, Musk developed home energy storage that created radical changes in the way we live and in our future.
So, the lesson, or advice, that he gives is to always question when someone tells you that something is the way it is because it has always been that way.
Ask tough questions and break down your challenges into useful and individual components.
Don’t Be Afraid to Fail
The fear of failure holds many of us back from embarking on life-changing journeys.
For example, you may not have applied to your dream job because you were afraid you wouldn’t get it. Perhaps you haven’t built your company yet because you are scared you’ll fail and waste all that money and time.
Let’s learn a brief lesson from Musk.
When he started SpaceX, failure was a very viable option. Musk anticipated failure and created a contingency plan for the company.
Musk said, “If we don’t get the first SpaceX rocket launch to succeed by the time we’ve spent $100 million, we will stop the company. That will be enough for three attempted launches.”
The first launch failed. So did the second. Millions of dollars were lost. The third and last attempt, however, was very successful. SpaceX consequently won a $1.6 billion contract from NASA.
Musk was afraid of failure. But he had a contingency plan in place and that is exactly why he was able to launch rockets into space.
Live Your Worst-Case Scenario
Even after having a contingency plan, you may still be afraid to fail.
Well, why not live your worst-case scenario?
When Musk decided he wanted to follow his entrepreneurial spirit at 17 years old, he put himself on a struggle budget of $1 a day.
Not because he was poor, but he wanted to see if he had what it took to become an entrepreneur. He survived on hot dogs and oranges and determined that money wouldn’t be an issue.
He went into entrepreneurship and founded several billion dollar companies.
Think Beyond Yourself
A lot of us fail to think about how our work impacts humanity. We naturally think about how much money we’re making; how fun or challenging our job is; and whether it makes us happy.
But how about how it impacts the world?
Musk, upon leaving PayPal, asked himself, “What are some of the problems that are likely to affect the future of humanity?”
And that’s how Tesla and SpaceX were formed.
He doesn’t discuss profit in interviews. He instead talks about SpaceX’s goal and vision to create a multi-planetary humanity, and Tesla’s vision to make majority of the world’s cars electric.
He thrives by solving problems for the world, not himself.
Here are a few more lessons he shares on starting a business
Elon Musk is never satisfied with the status quo. He is always thinking about ways to improve; create revolutionary ideas and companies; and new and cooler ways to do things.
It is that mindset that enabled him to help fix South Australia’s power problems in under 100 days.
So, what’s your 100-day challenge to change the world for the better?