A previous venture (Zip2--maker of software for the media industry) was sold to Compaq for $300m in 1999. Now flush with eBay's cash, Musk has set up his third company, SpaceX, an organization with the ambitious goal of creating a permanent manned settlement on Mars--though all he offered about this on Monday was that "we're building a rocket in LA."
Musk was a member of a distinguished panel of high achievers from Silicon Valley visiting Oxford University this week at the request of the Said Business School. The theme of the "Silicon Valley Comes to Oxford" event was to explore lessons in entrepreneurship that could be learned from the panelist's individual experiences in America's technology epicenter.
Musk's fellow panelists included Kim Polese, chairman of Marimba; Raymond Nasr, communications director of Google; Paul Drasyon, chairman of PowderJect; Sally Osberg, president of the Skoll Foundation; and VC fund managers Steve Cinelli and Samir Perge. The panel was chaired by Michael Malone, former editor-in-chief of Forbes ASAP and author of several books about Silicon Valley.
The timing of the discussion was interesting, as Silicon Valley sinks deeper into recession, unemployment is rising and there is now a net outflow of people from the San Francisco Bay Area to other parts of America. Traffic levels, real estate prices, and contractor day rates are all showing downward trends as every possible metric and measure shows that Silicon Valley is firmly in the grip of hard times. It's arguably suffering from its worst recession ever.
To a man, and a woman, the panelists said that they believe Silicon Valley will recover from the slump and that the example it sets as a region 100 percent focused on its mission to foster new invention, new companies and wealth creation is as relevant as ever.
Kim Polese fleshed out the Valley's ability to survive the recession. "While it may seem dire to many on the outside," the Valley is returning to its more noble roots, she says. "The one thing that people love in the Valley, and that the Valley is known for, is having a lot of fun, being on a mission, building something great, and deriving satisfaction from that and not from cashing out, not from becoming wealthy. As someone who grew up in the Bay Area it was very disheartening to see what was the Valley was becoming. It was very much focused on money, and greed, and self-aggrandizement," she said.
Polese said that the recovery in Silicon Valley's fortunes has already started. "Silicon Valley has had to reinvent itself a couple of times before and emerged from difficult periods before... and I am absolutely confidant that is the case and in fact it is already underway. I personally know of a number of new companies...very sharp people, great teams, and that's what's happening now... the only companies that are being funded are companies that are solid, that are being built by people that have done it before, have the experience and who are proven, because you can't get funded otherwise."
So, what advice did the entrepreneurs have for the scarily ambitious MBA students at the Said Business School? Musk: "focus on the product"...it's more important than the marketing, sales or anything else," he said. Musk also had a useful tip for saving money on rent in notoriously expensive Silicon Valley: recounting how he lived in his 24-hour office, sleeping on a futon and showering at the YMCA. Musk suggested that doing something entrepreneurial while you are young and "have nothing to lose and no dependencies" also makes good sense.
Kim Polese's advice was to "find the pain". Elaborating on this observation, she described how her firm found the tricky problems that customers would be willing to pay a technology company to fix. Sally Osberg said, "Know yourself...and listen to your gut." Paul Drayson: "don't give in."
And the VC guys? "Develop relationships... and be prepared to fund your idea on your own," said Damir Perge. "I raise the luck word, because I think it should be defined as where skill meets opportunity," said Steve Cinelli.
Michael Malone stressed the Valley's tolerance of failed ventures, and its understanding of the 'badge of honor' and learning value when entrepreneurs go through a failed venture, or "kiss frogs" as Malone puts it. The infrastructure that exists in the valley is also seen as a major strength. Malone said: "The friction is so low now in the Valley," describing a wide range of services and people that exist to support and nurture fledgling companies.
Whether or not the Valley returns to its glory days is impossible to say. I left Oxford persuaded by Kim Polese and Michael Malone that Silicon Valley will indeed recover, and probably quite soon. But in an increasingly global economy, how important are the myths and folklore of one geographical region, even if it is Silicon Valley we are talking about? Many people believe that the next most influential high technology regions will be in Asia--in Hyderbad or Beijing. Maybe, but before these places take the Valley's crown, they will need to build their own powerful bank of myths and tales as strong as the Valley's--and that may take some time.