The Era of the First Trillionaire
Tesla’s share price rose to more than $880 in January, making Elon Musk the world’s richest person. With a net worth of $195 billion, he now beats Jeff Bezos by about $10 billion.
But, according to billionaire VC Chamath Palihapitiya, Musk is going to get a whole lot richer. He could well be the world’s first trillionaire if Tesla’s shares rise to three times their current price.
Palihapitiya believes that might happen. The reason why he thinks this could be a lesson for every entrepreneur. It’s not because Musk is a cult figure with more than 42 million Twitter followers.
Why did Elon Musk become a billionaire?
Is it because of his electric cars? Or because of his SpaceX program that has been responsible for numerous historic launches and the first man to walk on the moon? Probably not.
It’s because Elon Musk came up with an idea, and he followed through on it. Entrepreneurs are like this. If you have an idea you can follow through on, people will follow it.
If it’s in a technology that has been tried and tested, it’s probable that the product will be successful and that the customers will be customers for life. But if you don’t know how to get your product to market or survive when you do, you might find that you fail miserably.
Sometimes the product itself doesn’t profit, so how do you turn a profit if you don’t know how to do that? That’s where the venture capital comes in.
How do you become a billionaire?
If you own a company that can grow revenue by one-third, grow earnings at about 40% per year, and creates a truly transformative product or service, it’s not all that difficult to become the world’s richest person.
Palihapitiya told CNBC: If a company like Tesla can grow revenue by 1,000 percent and continue innovating and being the best at anything, it will be precious in creating a global footprint.
Because as Tesla scales, they become the default choice for most consumers in the world, which creates an almost endless pool of growth for the company. This could well be the most important lesson of all.
- If you want to be a billionaire, you must work on a product or service that people love, not an investor’s most trusted white paper.
What is the future of the first trillionaire?
‘The question has been whether Musk can achieve a high growth in electric vehicles with them becoming mainstream over time,’ he says. “Or whether the company would have to settle for a still very competitive-priced model.” It’s here that Tesla will need to play its cards right.
“The next step would be for Tesla to enter the manufacturing and distribution of the Model 3,” he adds. “Tesla needs to prove it can efficiently do this.”
- The automotive industry’s future is in doubt, and we see it becoming more electric.
And while Palihapitiya says that he doesn’t believe the Tesla Model 3 will be a mass-market car, he does think that it will sell well. The real trouble with such a move is that it won’t be easy.
An entrepreneur’s lesson from Elon Musk
But, because Musk has built a company that has earned a great deal of value for investors. Advertisement Over the past 12 months, Tesla shares have risen by 80 percent. They are currently trading at $392 — a rise of $67 per share in that time.
Palihapitiya says Tesla’s shares could reach $700, based on their recent trading. Tesla might be at an inflection point for its future — to reach a level where they turn a profit and begin to pay their investors a decent dividend. If they can get to this stage, they will be one step closer to turning a profit.
While you don’t need a new car company to achieve a level of profitability, it’s clear that Tesla is not profitable enough to make this investment necessary.
Conclusion
We will continue to cover this topic on the site and discuss it with the entrepreneurs that we meet.
We’ve also given much thought to knowing the pitfalls of working with someone just because they are famous. It is the headline of this article that brought us back to the topic.
Musk shared some fascinating posts on Twitter. Take a look at them and give our take on what he might have meant.
