Elon Musk, the CEO of Tesla, has shared his insights on how the company came close to collapsing during the 2008 financial crisis. Musk recalled that the recession hit automakers particularly hard, and Tesla’s critical fundraising round fell apart as the banking system unraveled. However, instead of giving up, Musk and a handful of existing investors managed to patch together enough money to keep operations alive.
The Turning Point for Tesla
The final financing deal was completed at the last possible hour, on Christmas Eve 2008. Without it, Tesla would have run out of cash within days. Musk emphasized that creating a company involves going through very dark times, and it’s about getting through those dark times that makes the difference between success and failure.
Why Founders Must Believe Deeply In Their Mission
Musk argued that a company is essentially a group of people aligned around a product or service that should exist. Founders must truly believe — intellectually and emotionally — that what they are building matters. This conviction is vital for raising capital. During Tesla’s darkest months, Musk put in all the money he had, even borrowing from friends to cover rent. Demonstrating that level of commitment helped convince investors to back Tesla, even as major automakers were entering bankruptcy.
Musk’s Hiring Philosophy
The Tesla CEO said this same principle applies to hiring. Founders must bring in people who care deeply about the mission. Passionate employees will remain through setbacks and crises. Musk explained that what you’re really trying to do is convince people to join you in the endeavor. Hire people who are also passionate about what you’re doing, and then they will stay during the dark times.
Current State of Tesla
Today, Tesla holds a market capitalization of $1.27 trillion. In its latest quarterly report, the company posted revenue of $28.095 billion, a 12% increase from a year earlier and ahead of expectations. Automotive revenue reached $21.21 billion, up 6% year-over-year. Overall growth was driven by higher deliveries, as well as gains in the energy and services segments.
Key Takeaways
- Team dynamics play a crucial role in determining a company’s success or failure.
- Founders must have a deep conviction in their mission to raise capital and attract passionate employees.
- Hiring people who care about the mission is essential for navigating through dark times.
- Tesla’s current success is a testament to the power of a strong mission and dedicated team.