When you consider the ranks of Australia’s billionaires, it’s hard to think of any entrepreneurs who you could classify as being "cool”.
Gina Rinehart doesn’t particularly fit the bill, nor does Gerry Harvey or Frank Lowy. James Packer has a bit of flair thanks to his love of rich toys, but is he really cool? Even our youngest billionaire, coal baron Nathan Tinkler, would struggle to fit snugly into the "cool” category.
Our local billionaires shouldn’t be embarrassed by their lack of coolness – in the main, the ranks of billionaires around the world are, well, decidedly daggy.
But one exception stands out – the world’s coolest entrepreneur is without question South African born, US-based Elon Musk.
While Mark Zuckerberg, Sean Parker and even Peter Thiel get all the plaudits as the leaders of the brave new world of wealth, Elon Musk is at least their equal.
Consider what he’s done in the last two weeks.
In late May, Musk’s space travel company SpaceX successfully launched its space cargo vessel Dragon, docked it with the International Space Station (the first privately-owned spacecraft to do this) and brought it back to earth.
"I don’t have words enough to express the level of excitement and elation we feel here at SpaceX for having done this work,” Musk said after the historic docking was achieved. "It’s just a fantastic day, and I think a great day for the country and the world. I think this really is going to be recognised as a significant step in space travel.”
If that wasn’t enough, Musk’s other company, the electric car maker Tesla, also announced that it would start deliveries of its new Model S sports car by the end of June, several months ahead of schedule.
Historic rocket missions? Electric sports cars? Is it any wonder the Musk, who is valued at $2 billion by Forbes and is likely to have seen his wealth rise since the SpaceX mission, was cited by the makers of the Iron Man films as part of the inspiration for the films’ billionaire super hero, Tony Stark?
While SpaceX and Tesla are the companies that will take Elon Musk to worldwide acclaim, they are only part of his incredible success story.
Let’s take a closer look at Musk’s path to becoming the world’s coolest billionaire.
The boy who devoured encyclopedias
Musk was born in the South African town of Pretoria to a Canadian-American mother (who was a dietician and engineer) and South African father (an engineer).
His mother Maye described him as something of a nerd in a recent Forbes article.
"If I was walking with the three kids and Elon disappeared, he was in a bookstore. He’d be sitting on the ground in a world of his own. He read the entire Encyclopedia Britannica when he was only eight or nine – and he remembered it!”
Musk got his first computer at the age of 10 and by the age of 12 he had created (and sold for $500) his first game. But Musk must have been developing a very clear idea of what he wanted from life – and South Africa wasn’t it.
At the age of 17, and against the wishes of his parents, he left South Africa for good and settled in Canada.
Getting rich for the first time
Musk went to university in Canada before making his way to America to study at the University of Pennsylvania's Wharton School and, in 1995, at the prestigious Stanton University.
But Musk’s time at Stanford lasted just two days and he dropped out to start a company called Zip2 with his brother Kimbal. It was Musk’s first major success. The business created online content publishing software for media companies and in 1999 it was acquired by Compaq’s AltaVista division for US$307 million in cash and US$34 million in stock options.
Musk pocketed $US22 million, but as he told Inc eight years later, he considered the venture something of a failure. He was looking for a big idea and he found it in electronic payments.
Musk’s next company was the uber-cool sounding X.com. which raised $US25 million from investors – including legendary venture capital firm Sequoia Capital – to pursue Musk’s vision of transforming the financial services sector.
X.com would eventually focus on a product that allowed users to make payment via email and in 1999 Musk merged the business with a competitor called Confinity, which had a similar product known as PayPal.
Musk ran the merged business for 10 months before a mutiny led by Peter Thiel saw him ousted and the company renamed PayPal. Musk retained his shares and was in fact the biggest shareholder when PayPal was acquired by eBay in 2002 for $US1.5 billion.
Despite earning a big pay day from PayPal, Musk was never completely satisfied with what the company achieved from its giant user base.
"It has 120 million customers, and there's a high trust factor,” Musk told Inc in 2007 (the user base is now even larger). "There's a lot of unleveraged value there."
The next frontiers
Musk was now truly rich, but still in his 30s and brimming with ideas.
"If you have millions of dollars it changes your lifestyle, and anyone who says differently is talking bullshit,” Musk has said.
"I don’t need to work, from a standard of living point of view, but I do, you know. I work every day and on weekends and I haven’t taken a vacation for years.”
But despite his decidedly Silicon Valley roots, Musk chose to focus on two established industries: the automotive sector with Tesla and the space sector with SpaceX.
Musk bankrolled both ventures with proceeds from his PayPal stake, initially shunning investment so he could retain tight control.
Tesla went public in 2011 and now has a market capitalisation of about $3.08 billion, with Musk retaining a 29 per cent stake worth $893 million.
SpaceX is privately held, although Musk has said he will move towards an IPO perhaps as early as next year. This could be a big IPO. The company says contact cargo space flights could start as early as September, and a recently a company called PrivCo has put the value of the business at $2.4 billion, based on trading in secondary markets.
PrivCo says the value of the company has doubled since April. Based on the higher valuation, Musk’s stake is worth around $1.6 billion.
The success of SpaceX and Tesla is staggering given Musk has admitted both companies have been on the brink several times.
The SpaceX success is clearly particularly sweet for Musk.
"If you go back, back a few hundred years, what we take for granted today would seem like magic – being able to talk to people over long distances, to transmit images, flying, accessing vast amounts of data like an oracle. These are all things that would have been considered magic a few hundred years ago,” he told Forbes a few weeks ago.
"So engineering is, for all intents and purposes, magic, and who wouldn’t want to be a magician?”
Magic. Now that is pretty cool.
John Wylie, managing director of Lazard in Australia, is an investor in Australian Independent Business Media, publisher of Business Spectator.
RICH PICKINGS: The coolest billionaire in the world?
Elon Musk is making his money with radical ventures in the automotive and space industries – but his adventurous spirit was apparent from an early age.
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