Speaking to young founders at Y Combinator's AI Startup School in San Francisco earlier this week, Tesla Inc. TSLA Elon Musk shared raw, humorous and insightful reflections on his early startup journey—and why rejection shaped his mission to build the future.
What Happened: In a fireside chat with Y Combinator CEO Garry Tan, Musk revisited his 1995 decision to drop out of Stanford University's PhD program and take a gamble on the internet—then a largely unknown frontier.
Musk admitted he initially didn't intend to start a company—he just wanted a job at Netscape, the leading browser company at the time.
“I sent my resume into Netscape and [Marc Andreessen] knows about this but I don’t think he ever saw my resume and then nobody responded,” he said, adding, “So, I’m like man, this is ridiculous, so I’ll just write software myself and see how it goes.”
That "see what happens" mindset led to Zip2, Musk's first startup. With no money for rent, he and his co-founder slept in the office and showered at the YMCA. He once also drilled a hole through the floor to access the ISP downstairs.
Though Zip2 sold for $300 million, Musk said a key mistake was ceding too much control to investors who didn't understand the internet.
Another lesson that can be derived from his life story is that, rather than doing otherwise, he "kept the chips on the table." Musk put nearly all of his Zip2 money, which Musk said was $20 million, into X.com.
The billionaire said he wanted to build tech without limitations and go directly to consumers.
Musk also noted that today's AI startup valuations are "eye-watering", and while some may succeed, the hype is intense. He sees AI as a potential civilization-scale economic revolution—but also a tsunami compared to the “trash on the beach” of current political issues.
He said that politics is all noise, while engineering demands truth. He's now focused again on technology, his “main quest,” after what he called a "side quest" of dealing with bureaucracy and fraud in DC.
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Why It's Important: Musk currently has a net worth of $366 billion, according to Bloomberg's Billionaire Index.
According to Tesla's 2024 proxy statement, Musk holds roughly a 13% stake in the company. The EV giant has a market cap of $1.037 trillion.
Musk's space venture, SpaceX, meanwhile, is valued at nearly $350 billion based on a tender offer from December 2024.
In March, Musk's AI venture, xAI, took over his social media platform X, formerly Twitter, through an all-stock transaction valued at $33 billion.
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Photo Courtesy: Frederic Legrand – COMEO on Shutterstock.com
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