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Elon Musk is a name synonymous with audacity, innovation, and, yes, a fair amount of controversy. But what makes Musk truly unique isn’t just his ability to dream big—it’s his willingness to take risks that others would consider insane. Peter Thiel, the billionaire entrepreneur and co-founder of PayPal, has a fascinating perspective on Musk’s approach to risk and success.
Photo: Paul Sakuma/ASSOCIATED PRESS
In this article, we’ll dive into Thiel’s insights on Musk’s risk-taking mindset, explore why most people are too risk-averse, and uncover the lessons we can all learn from Musk’s extraordinary journey.
The Man Who Knew Nothing About Risk?
Peter Thiel shares a revealing anecdote about Elon Musk’s early days. When Musk was building Tesla and SpaceX in the 2000s, many people—including some of his former PayPal colleagues—thought he was “really, really crazy.”
Thiel recalls: “There was this PayPal book that David Sacks and I thought of writing. And the Elon chapter was, I think, entitled something like The Man Who Knew Nothing About Risk.”
At the time, Musk’s ventures seemed like long shots. Tesla was trying to revolutionize the auto industry with electric cars, while SpaceX aimed to make space travel affordable. Both industries were dominated by entrenched giants, and the odds of success seemed slim.
When Two Out of Two Succeed, It’s Not Luck
What’s truly remarkable about Musk’s story isn’t just that he succeeded—it’s that he succeeded twice.
Thiel explains: “If one of the two companies had succeeded, you would say, well, maybe he still got really lucky. But when two out of two companies that people thought were completely harebrained in the 2000s, when they both succeed, man, you have to somehow reassess it.”
Tesla and SpaceX are now two of the most innovative and valuable companies in the world.
Tesla has reshaped the automotive industry, while SpaceX is leading the charge in commercial space exploration.
Why Are the Rest of Us So Risk-Averse?
Thiel’s observations about Musk raise an important question: Why are most people so risk-averse?
“Somehow, the rest of us are too risk-averse,” Thiel says. “Or there’s something about risk he knows that we don’t, or something like this.”
Here’s the truth: most people overestimate the downside of taking risks and underestimate the upside. They focus on what could go wrong rather than what could go right. Musk, on the other hand, seems to have an almost intuitive understanding of risk and reward.
What Elon Musk Knows About Risk That We Don’t
So, what’s Musk’s secret? While we can’t read his mind, there are a few key principles that seem to guide his approach to risk:
1. Think Long-Term
Musk doesn’t just focus on short-term gains—he thinks decades ahead. Whether it’s transitioning the world to sustainable energy or making humanity a multi-planetary species, his goals are ambitious and long-term.
2. Embrace Failure as Part of the Process
Musk has faced countless setbacks, from SpaceX’s early rocket explosions to Tesla’s near-bankruptcy. But he sees failure as a necessary step on the path to success.
3. Focus on Solving Big Problems
Musk doesn’t waste time on incremental improvements. He tackles massive, world-changing problems that others are too afraid to touch.
4. Surround Yourself with the Best
Musk hires top talent and empowers them to think creatively and take risks. This creates a culture of innovation and resilience.
Real-World Examples of Risk-Taking That Paid Off
Musk isn’t the only one who’s reaped the rewards of bold risk-taking. Here are a few other examples:
Example 1: Jeff Bezos and Amazon
When Bezos started Amazon, he took a huge risk by focusing on online retail at a time when most people were skeptical of e-commerce. Today, Amazon is one of the most valuable companies in the world.
Example 2: Reed Hastings and Netflix
Hastings bet big on streaming when Netflix was still a DVD rental service. Despite skepticism, he transformed the company into a global entertainment powerhouse.
Example 3: Steve Jobs and Apple
Jobs took a massive risk by launching the iPhone, a device that combined a phone, iPod, and internet communicator. The iPhone revolutionized the tech industry and made Apple one of the most successful companies in history.
How to Embrace Risk Like Elon Musk
Inspired by Musk’s approach? Here’s how you can start taking smarter risks in your own life and career:
1. Identify Your Big Goals
What’s your version of Tesla or SpaceX? Define your long-term vision and work backward to figure out the steps needed to get there.
2. Reframe Failure
See failure as a learning opportunity rather than a setback. Every mistake brings you closer to success.
3. Take Calculated Risks
Not all risks are created equal. Focus on risks that have the potential for high rewards and align with your goals.
4. Build a Support System
Surround yourself with people who encourage you to think big and take bold steps.
The Bigger Picture: Risk as a Path to Greatness
Peter Thiel’s reflections on Elon Musk remind us that greatness often requires taking risks that others won’t. While most people play it safe, the ones who change the world are those who dare to dream big and bet on themselves.
As Thiel puts it: “When two out of two companies that people thought were completely harebrained succeed, you have to reassess.” Maybe it’s not luck—maybe it’s a mindset.
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Source: The Iconoclast
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