Elon Musk Goes To Charm School
Wall Street thought Elon Musk was apologizing. He was letting them know he’s prepared for the next chapter.
(This story first appeared in Chief Executive Magazine)
“I want to apologize,” were the four sweetest words Wall Street has ever heard from Elon Musk. That full act of contrition on his recent earnings call led to a 15% increase in the share price of Tesla or more than $2 billion per word. But the apology was only the beginning.
During the call, Musk hit all the high notes: the company would be “cash flow positive every quarter after,” and “production would ramp up.”
Then he apologized, and not a public relations mea culpa either. From a Wall Street perspective, it doesn’t get much better than making money and hearing Elon Musk say he’s sorry.
It is a far cry from a few months back when the iconic entrepreneur sounded more like a petulant teenager, “don’t make a federal case out of it,” or a bill collector waving away a dead beat’s argument, “these questions are so dry, they’re killing me.”
After that episode led to a stock crash of 8%, the pundits predicted the inventor was insane: “I don’t think there’s a more bizarre earnings call I’ve listened to.” said Paul Argenti, a professor at Dartmouth’s Tuck School of Business.
When I interviewed a noted Silicon Valley venture capitalist, Zach Coelius, he made it clear Musk has surmounted more challenges than anyone imagines. Here is what Coelius had to say:
“Running a startup is like jumping on a rocket ship flying at the fastest speed possible until it smears you against your wall of incompetence. Even as great an entrepreneur as Elon Musk, he almost went bankrupt with both Tesla and SpaceX. One of the greatest successes in modern history and the thing was dead so many times. His wall of incompetence is a lot higher than mine, but wherever your incompetence resides, that’s where the wall finds you.”
After Musk misspoke to the analysts, he did what conquerors have done since the Song of Roland. Retreat to the monastery, repent, transform, return, and clobber the giant. His factory is his monastery, and those nights on the couch are his repentance, and it taught him a better way to tell the story.
When he said he was sorry, it may have sounded like an apology, but it was just Musk climbing over the wall.
Like all great inventors, Musk hates being underestimated even more than misunderstood. It is why his communication style gets in the way sometimes, and may explain some of the cynicism.
Teddy Roosevelt said: “It is not the critic who counts; not the man who points out how the strong man stumbles….The credit belongs to the man who is actually in the arena because there is no effort without error and shortcoming.”
While the cynical scrum sees a gambler who likes to roll the dice, more thoughtful observers see in Musk an inventor ‘in the arena’ who has earned some credit for changing the world.