Tesla CEO Elon Musk and Virgin chairman Richard Branson are brimming with advice for would-be entrepreneurs. The two billionaires don’t agree on everything, but they are in alignment on one particular life lesson, one that they both learned the hard way. Starting a company is not glamorous; it will consume you, and you’ll likely fail. But you should do it anyway.
Musk and Branson chatted live today in one of the most epic Google Hangout sessions I’ve ever seen. The session was sponsored jointly by Google for Entrepreneurs, the set of tools to support startups, and Virgin’s nonprofit, Virgin Unite.
The two talked about some of their biggest hardships and failures in an honest way. Musk closed the call by prattling on about the Hyperloop — plans for the bullet train alternative will be revealed in due course.
The video is worth watching. But here are some of the highlights and lessons from the hangout:
On the fear of failure
Both Branson and Musk had plenty to say on this topic, given that their business ventures almost fell to pieces in the early years. Musk’s most traumatic years were around 2008-2009; he desperately needed financing for electric car venture Tesla during the global economic recession. “It was the last hour of the last day that financing needed to be closed, or the company would go bankrupt,” he said. The stock market had gone into a free fall, and investors kept changing the terms. Musk took over the reins as CEO and funneled millions of his own money into Tesla.
Musk’s advice is to assume that a company could fall apart any minute. He shares some advice from a friend that founding a startup is like “eating glass and staring into the abyss” as you’re constantly worried about it dying. The optimize the chances of success, Musk recommends working around the clock and laser focusing on building a delightful product in those early years.
“I’m surprised his hair is black, and not gray,” Branson joked.
Branson’s own locks started turning gray in the early days of Virgin.
“A bank manager [was] sitting on our doorstep saying on the Friday that he would foreclose the Virgin Group on the Monday,” Branson said. “We had to scramble over the weekend to get our overdraft facility down.” The company was able to get its finances in shape by sheer luck and continue to attempt to disrupt the traditional airline industry.
Branson agrees that entrepreneurs need to “fight to survive, [which] goes without saying.” However, he does stress that founders shouldn’t take it too personally if the business doesn’t succeed, as “most will fail.”
On overcoming intimidation from larger players
“Big companies will try to stamp out small companies,” said Branson, who shared a particularly sensitive story about his protracted dispute with rival airline, British Airways.
Branson won the “dirty tricks” air war against British Airways in the early 1990s. He accused the larger airline of attempting to discredit the Virgin Group in High Court, in a case that was later referred to by the press as the “mother of all libel battles.” Branson recommends using extreme tactics like these — if it can make the difference between success and failure.
“Sue the bastards,” said Branson. “If we hadn’t do that, we wouldn’t be around today.”
On Silicon Valley versus other tech hubs
Musk admits that Silicon Valley-based entrepreneurs do have an advantage in the race. The infrastructure — the funding, talent, systems — it’s all contained in one place. “[Silicon Valley is] a concentration of entrepreneurial talent around the world,” he said.
However, he admonishes entrepreneurs who believe that relocating to the Bay Area will change their fate. Silicon Valley startups — just like those based all over the world — aren’t immune to failure.
On avoiding ‘burn out’ and learning to delegate
Branson’s key piece of advice for entrepreneurs is to find a talented person to run the day-to-day operations of the company as it begins to grow. Don’t try to do it all. That frees up time to maintain your health and fitness, spend time with the family, and contemplate the big picture. “You can always find someone as good as yourself — or better,” he said. “And be a good listener — you’ll get so many ideas from other people.”
Unless you’re Elon Musk. The serial entrepreneur said he did not intend to run Tesla and SpaceX at the same time, but felt he compelled to do so. He hasn’t been able to find the right person for the job. “I was always hoping that [running Tesla] wouldn’t be necessary,” he said.
On reflection, Musk admits that assuming the top position at two companies is “too much.” However, he’s probably not the ideal role model if you’re an entrepreneur that intends on maintaining a work-life balance.
“Think about it [your company] in your sleep, seven days a week: no breaks, nothing. That’s what you should do when you’re starting a company,” Musk advised.
On making a meaningful difference in the world
Branson is perhaps better known these days for his philanthropic work than his business career. He spends much of his time working with various charities, including Children with AIDS, Swan Lifeline, and Greenpeace. From the outset, he suggests that founders consider ways to reduce their carbon footprint.
However, Branson advises businesspeople to focus first on building the company and then to consider ways to make a global impact. He has devoted far more of his time to various causes later in life.
“You won’t make a massive difference as you build your company,” said Branson. “Once you’ve got your business established, then you can think, ‘what can I do to make a real big difference in the world’?”
On the Hyperloop
Musk seemed hyper-cautious about revealing plans for his latest venture, the Hyperloop, a transportation method so futuristic and cool that Tokyo’s levitating high-speed trains would look like old-fashioned steam locomotives in comparison.
However, Musk did say that the idea was inspired when he was reading about plans for California’s high-speed rail, which he called a “weird route” from Los Angeles to San Francisco.
Musk said it made him “sad” when “things aren’t better in the future,” so he began to contemplate an alternative. The result? The Hyperloop, a bullet train alternative that travels faster than the speed of sound and could supposedly take San Franciscans to Los Angeles in 30 minutes.
“You’d have to travel at an average speed of 700 miles an hour to get there in half an hour,” he explained. “It involves a tube but not a vacuum tube — [and is] very low friction.”
Musk was reluctant to give away any more details, but stressed that all will be revealed Monday.