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Why Elon Musk doesn't like to follow a business plan: "These things always go wrong."
When Elon Musk has a new idea to launch, he usually misses an essential phase of starting a business: he doesn't develop a business plan. Musk has helped build many successful companies over the past two decades, from...
Updated: 49 months ago2 min read
the key is to stay "open to change" so you can adjust if your original plans go wrong.
When Elon Musk has a new idea to launch, he usually misses an essential phase of starting a business: he doesn't develop a business plan.
Musk has helped build many successful companies over the past two decades, from PayPal to Tesla and SpaceX, making him the world's richest person with a net worth of $258 billion. And he did so against the tide of conventional business wisdom.
Musk admitted he rejected ​​developing a written roadmap, which typically sets out company goals and objectives, at the 2018 South by Southwest conference. "I've had a business plan since the days of Zip2," he said. "But things always went wrong, so I didn't get into the business plan after that."
Zip2 was Musk's first significant startup: In 1995, with his brother Kimball, he founded a company that helped newspapers design city directories. It wasn't a fiasco-four years later, the brothers sold Zip2 to Compaq for $307 million in cash.
But those four years have convinced Musk that things rarely go according to plan in the startup world. So Musk decided to scrap those plans before founding his next company, X.com, which eventually merged with competitor Confinity to form PayPal.
Musk and his partners sold PayPal to eBay in 2002 in a $1.5 billion stock deal.
Many prominent experts and startup icons disagree with Musk's strategy: failing to develop a business plan is often cited like one of the most common mistakes an entrepreneur can make, especially for anyone trying to raise money.
Mark Cuban, a billionaire, says he believes in business plans he often does thorough research before starting or investing in any business. For him, the key is to stay "open to change" so you can adjust if your original plans go wrong.
Richard Branson, another billionaire, is also known to be a big supporter of tracking his business plans. "A business plan doesn't have to be a long, well-thought-out proposal," Branson once wrote in a blog post. "It can be as simple as a few notes in a notebook or scribbles on the back of an envelope."
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