The False Musk-Jobs Parallel

By Jean-Louis Gassée

by Jean-Louis Gassée

Because of his indisputable creativity and his provocative, self-aggrandizing utterances, Elon Musk has often been compared to Steve Jobs. Certainly, the frequency and occasional lack of discretion in some of @elonmusk’s tweets make Jobs’ record seem taciturn, but this is probably due to the epoch. Although Jobs reminisced that his LSD experience in the 1970’s was “one of the two or three most important things” he had done in his life, he would not have allowed himself to be recorded on a Web show smoking a big fat spliff (a mix of tobacco and marijuana). Welcome to the age of the unedited podcast.

And now we have another similarity: Jobs was forced to leave Apple in 1985; Elon Musk just got kicked out of Tesla’s Chairman seat (but will remain CEO) and has been fined $20M (Tesla itself must also shell out $20M). These are the summary terms of a settlement reached with the SEC following Musk’s infamous Funding Secured tweet. According to the SEC release, both $20M sums “will be distributed to harmed investors”. (Here, I bow to Apple’s autocorrect for suggesting fumes instead of sums. Autocorrect must have sensed the glaring disparity between the approximately $5B of evaporated market value as a result of Musk’s loose lips and the $40M in fines.)

Perhaps this recent electric (sorry) shock might be a benefit to both Musk and Tesla (or so the apology goes). Let us recall that after he fell from his high Apple horse in 1985, Jobs dusted himself off, kickstarted Pixar and founded NeXT. Twelve years later, he re-took the reins of the company he had cofounded and produced a turnaround of stunning and lasting proportions. Seven years after his death, Apple 2.0 is worth more than $1Trillion.

Maybe Musk should consider a similar redemption formula: Take the opportunity to build other businesses, gain more experience, and then return to Tesla where he will drive the company to its preordained throne in an auto industry liberated from fossil fuels.

It’s an exciting fantasy and would add more chapters to a compelling Musk biography…as long as we don’t let reality get in the way. Except for matters of temperament, Jobs and Musk are hardly similar.

Jobs was only 30 years old when he had to leave Apple. A college dropout, his only business experience was the company he cofounded with Steve Wozniak in 1976 and that went public in 1980. (See his Wikipedia biography for more details on his complicated family history, education, spiritual quests and travels. I have what attorneys called personal knowledge of some fragments and found the reading moving, much more so than his authorized bio.)

No such lack of experience for the 47-year-old Musk (who was also a college dropout…from Stanford’s Ph.D. program in physics). A year before taking over Tesla from founders Martin Eberhard and Mark Tarpenning in 2003, Musk created SpaceX. Before SpaceX, he founded online bank X.com and then sold it under the name “PayPal” to eBay for $1.5B in 2002. And before that…but now I’m just reciting Musk’s Wikipedia bio, which you can (and should) read yourself.

Considering Musk’s educational pedigree and diverse entrepreneurial experience, one has a hard time seeing how spending a few years in the wilderness outside of Tesla would provide the kind of “finishing” Jobs received when he built Pixar and NeXT. Drawing a parallel between Jobs and Musk might be a persistent meme as it bounces around the Web echo chamber, but Musk wasn’t entirely evicted from his company, nor was his punishment due to the company’s performance.

So how is Tesla doing? As usual, it’s a mix. On the plus side, the company will achieve or slightly exceed its goal of producing 50,000 Model 3 vehicles for the quarter just ended, and Tesla Model 3 sales for July were the highest in the Small and Midsize Luxury segment in the US (according to cleantechnica.com):

More good news: The Reno, Nevada Gigafactory is now the biggest battery factory in the world and, according to partner Panasonic, is becoming less of a problem for Model 3 production.

On the other hand, there seems to be an executive exodus: According to a Tesla short-seller named Jim Chanos, 41 Tesla execs departed in 2018. And while Tesla’s production is improving it still feels improvised: Musk had to build a production line in a tent at its Fremont site.

I’ve been skeptical of Tesla’s production line, especially after a visit to the Fremont factory, one that violates many of the rules of the universally practiced Toyota Production System. I was also somewhat disappointed in Tesla’s improvised and haphazard service after receiving the family Model S.

But this is Musk’s style. Unpleasant or even unbearable for many around him — including some of his customers — he keeps the company balanced on the edge of the abyss, it’s what got Tesla where it is today.

As many observers have pointed out, the strain is often visible in Musk himself. Some of his declarations aren’t just hyperbolic, they’re mean-spirited and delusional. But imagining he should be — or even can be — replaced by a “more rational” leader is also delusional, the company would very likely collapse, be dismembered, and become a sad memory, another high-intensity pioneer with the right idea, but too soon, too fast.

Musk doesn’t deserve to be compared to Steve Jobs, he’s a category unto himself. He has improvised on a scale we’ve never seen before and has forced the incumbents to wake up and adopt EVs as their future. Competitors, especially from Germany, seem eager to make announcements, such as Audi two weeks ago, on September 17th, disclosing a $75K SUV, the e-tron, available next year — with only 20,000 vehicles allocated for the US market, a number to be compared to Tesla’s output. Every car maker will eventually deploy one or more EVs — they have no choice, and part of that imperative is due to Musk, with our thanks.

With continued luck and Musk’s wiles, Tesla will be seen as the one and only pure, prosperous EV maker, the successful pioneer of a new era.

— JLG@mondaynote.com