Depending on who you ask, Elon Musk is famous for any one of his successful business ventures: Zip2, PayPal, SpaceX, Tesla Motors, SolarCity, or Hyperloop, to name a few. His career has not been driven by one idea, or the sale of one company, but by a series of projects and experiments which seek to respond to some of the greatest needs facing humanity today and into the future.
This widespread approach to entrepreneurship might seem erratic and unfocused, but Musk’s successes have all been deeply rooted in a singular goal: bring genuine value (renewable energy, cheap transportation, the chance to expand beyond Earth’s boundaries) to the end users of his products. This singular aim, expressed in many forms, has defined his success, and it’s a virtue that can help any entrepreneur define their own success. From the design of a website to the effectiveness of marketing, the gauge of success isn’t in dollars, but in how end users value what you give them. While market research and customer reviews can help you predict this, the only real way to find the perfect sweet spot is to experiment.
Building Individual Pieces of a Larger Vision
After selling his first two companies, Zip2 and X.com (which would eventually become PayPal), Musk began the second phase of his career with a modest proposal: build a colony on Mars.
It had been his passion for many years to focus on solving humanity’s looming problems through science. In fact, it was an applied physics PhD program at Stanford that first brought him to the United States, even if he wound up dropping out after only two days of class. With some experience building viable companies behind him, as well as the nearly limitless resources made available by his sales, Musk found himself in a position to put his mind back toward the applied sciences, only this time, he’d use the marketplace as his laboratory.
“My proceeds from the PayPal acquisition were $180 million,” said Musk. “I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.”
Step one: build the rockets. Enter SpaceX, short for Space Exploration Technologies. This firm grew out of Musk’s frustrations in sourcing reasonably priced rockets from Russia. Musk realized that with the right investment, he could build his own rockets at a fraction of the cost.
Step two: make sure people have power on Mars. Solar City was Musk’s play at renewable energy, and today it’s the largest provider of solar energy in the United States.
Step three: help the Mars colonists get around. With his investment in Tesla and the burgeoning Hyperloop, Musk closed the cycle on his plans for a Mars colony. Since Mars has an oxygen-free atmosphere, combustion engines won’t work. Hence the need for reliable electric-powered transportation options.
The Marketplace as Laboratory
Of course, none of the above three steps are very easy. Rocket science is, well, rocket science, and renewable energy is one of the toughest problems facing scientists today. Musk’s career, however, has been defined by his willingness to capitalize his vision and let the market decide the direction for his various projects.
Take SpaceX, for example. The company was founded in 2002, but it wasn’t until 2009 that they finally managed to become the first private operation to send a liquid-fueled rocket into orbit with a satellite. Those seven years of experimentation were costly, but they also led to government contracts, including billion-dollar deals with NASA to run supplies to the International Space Station. Those funds, in turn, made it possible for SpaceX to switch focus on landing early-stage rockets back on recovery platforms, which will be a vital part of making regular travel to Mars cost-effective.
The same pattern of invest, experiment, capitalize, and reinvest can be seen in other ventures, like Tesla Motors. By investing his own funds into the company, he earned himself a stake in a tool that would help him refine the concept of the electric car. With each generation of Tesla, Musk is aiming to lower the price point on the cars. Each generation funds the next, which is working to both make electric cars accessible to average consumers (solving an immediate problem in the marketplace) while giving Musk the capacity to further refine his concepts for eventual use on Mars. Recently, he announced that all Tesla patents would be freely available, which betrays his true goal: progress over profits.
Conversion Optimization Tactics
While you may not be building rockets for any reason, it’s important that you look at every element of your company and its brand as a smaller part of a greater vision. Just like Musk saw in Tesla an opportunity to invest in something that would both be immediately available but also a part of his greater plan, so, too can you look at your website, or your marketing, or your product itself as an experimental project. Put it out there, see how people use it, and use that data to make it better and work toward your ultimate goals.
Let’s say you’re building a business around a tech product, like an app or a SaaS solution. To you, short-term success probably means converting new users into paying customers, and retaining the ones you convert. But if you take that a step further, you realize that your bigger goal is to be a viable solution to your user’s problems both in the short term and the long, whether that means building rockets for hauling cargo, or eventually sending colonists to Mars. When you think of your goal in those terms, instead of budgets and revenues, you can promote conversions by experimenting with the individual pieces that make up the entirety of your customer’s journey.
On your website, employ services like Hotjarto see which areas of your site users are drawn to, and which parts they aren’t. Use that info to improve or cut avenues that aren’t proven to lead to conversions, so you can focus your effort on those parts of your site that connect best with potential customers. It may take more effort, but that means you can get a website out there more quickly, and continually improve it, rather than spend a ton of money all at once on something that may not actually be effective.
It’s the same with other elements of your business, too. With your marketing, use automation software like HubSpot so you can track the success of your various calls to action and hone your message to target the right audience for your product. With your product itself, rely on the information you gather about your website and your marketing efforts to help you focus on features that seem to be appreciated most by your audience so you don’t have to guess.
Solve immediate problems based on what you know about your users, and each of those small steps will eventually add up to a broader vision that’s bigger than the sum of its parts.