Paypal and eBay... I wonder, what was in the water?

Paypal and eBay... I wonder, what was in the water?

In 1995, Musk and his brother, Kimbal, started Zip2, a web software company, with US $28,000 of their father's (Errol Musk) money.   The company developed and marketed an Internet "city guide" for the newspaper publishing industry.

After Musk obtained contracts with The New York Times and the Chicago Tribune, Compaq acquired Zip2 for US$307 million in cash and US$34 million in stock options in 1999.  Musk received 7% or US$22 million from the sale,  and parlayed $10 million of that into seed capital to co-found X.com, an online financial services and e-mail payment company.

1 year later X.com merged with with Confinity, which had a money transfer service called PayPal.  The merged company focused on the PayPal service and was renamed PayPal in 2001, went public in 2002 and was bought by eBay for $1.5 billion shortly after the IPO.  

Not bad... Today PayPal is worth nearly $50 billion and Musk seems to have "The Midas Touch... "

Not only did Musk help create the world's largest payment company (pay-pal is expected to reach $100B in revenues), but in my humble opinion as an evolving Impact Entrepreneur myself,  the credit goes to Musk for not only cashing in BIG, but doing something with his money that will continue to make a difference in the lives of millions.

In short, Musk has parlayed an initial $28,000 investment in Zip2 into a $22 million payout, reinvested $10 million to generate a personal return of $165 million from the sale of Pay-Pal and has continued parlay his gains into some of the world's most impactful enterprises.  

He is a true model for the "Doing Good and Doing Well" movement (and as of June 2015 Forbes puts his net worth at US$13.6 billion. )  Since Pay-Pal Elon Musk has helped:

1. Finance (A round) and takeover Tesla Motors, take it public
2. Personally founded Solar City, and take it public
3. Personally founded Hyperloop Transportation Technologies and Raise Capital for an alternative mass-transit system
4. Personally founded the Musk Foundation

Unlike corporations that are looking backwards, limited by existing infrastructure and trying to become socially or environmentally "Responsible" by trying to fix what's broken, or minimize negative impacts - Musk's companies are emerging Impact Enterprises, intentionally designed from the ground up to make a profit and an impact.

His Vision:

Leverage innovations in clean technology and the power of entrepreneurship to help combat global warming

Ventures By Sector:

• Electric Automotive Manufacturing
• Solar Power Plants
• Public Transit Systems 
• Philanthropy

Musk today owns controlling stakes in

Tesla Motors (TSLA)

• Musk funded Tesla's A- Round in 2004 and took over in control in 2008
• Tesla currently manufactures 3 non-carbon producing vehicles
• In 2015 scored the first 103 point (on a scale of 100) vehicle rating fromConsumer Reports
• Licensed its electric powertrain systems to Daimler for the Smart EV, Mercedes B-Class Electric Drive and Mercedes A Class and to Toyota for the RAV4 EV (both Mercedes and Toyota companies are now long-term investors in Tesla)
• Made the core IP of Tesla "Open Source" in the spirit of the open source movement, for the advancement of electric vehicle technology.  

"Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology."

(Sidebar: In August 2015 I had the chance to test drive a new Model S at the grand opening of Tesla's first dealer row location near Monterey, CA and wow!   I know what my next car will be...)

Solar City (SCTY)

• SolarCity is currently the second largest provider of clean solar power systems in the United States
• SolarCity and Tesla Motors are collaborating to use electric vehicle batteries as storage for solar produced power to increase the impact of rooftop solar contributions to the power grid
• Solar City has proposed to provide a 600-megawatt, on-site, clean and renewable energy power plant for Quay Valley (a proposed 75,000-resident solar power city in Kings County, California) halfway between Los Angeles and San Francisco.  

Hyperloop Transportation Technologies (Venture Stage)

• Hyperloop Transportation Technologies (HTT) in El Segundo, California  has designed a hypothetical clean, subsonic air travel machine that stretches approximately 350 miles (560 km) from Sylmar (a northern district of Los Angeles) to Hayward (east of San Francisco) and would theoretically allow commuters to travel between the cities in 35 minutes or less, providing a shorter traveling time than even a commercial airplane can currently provide. If proven technologically feasible at the costs he has cited, HTT would make travel cheaper than any other mode of transport for such long distances.
• The system is proposed to use a partial vacuum to reduce aerodynamic drag, which it is theorized would allow for high speed travel with relatively low power. He has estimated the total cost of the system at US$6 billion,
• HTT announced a plan to build a five-mile hyperloop test system at the Quay Valley site above.  Construction could begin in 2016 to be completed in 2017 with the first rides to begin in 2018 if his company can raise an initial $100 million in funding of a fully working and operational creation of the hyperloop

Philanthropy:

• X-Prize Foundation: As of 2015, Musk is a trustee of The X-Prize Foundation 
• Musk Foundation: Founded to focuses philanthropic efforts on providing solar-power energy systems in disaster areas. In 2010, the Musk foundation collaborated with SolarCity to donate a 25 kW solar power system to the South Bay Community Alliance's (SBCA) hurricane response centre in Coden, Alabama and In July 2011, the Musk Foundation donated US$250,000 towards a solar power project in Sōma, Japan, a city that had been recently devastated by tsunami.

 

Who else will lead the next generation in conscious business innovation?

The world needs more visionary leaders and companies like Elon Musk but where will they come from? I have been keeping an eye on two of Elon Musk's co-workers from e-Bay  -working from both the bottom up and the top down to make an impact:

Jeffrey Skoll - (Bottom Up) 

e-Bay Connection: E-Bay's first employee, president and once eBay's second largest stockholder, Skoll cashed out a portion of his company holdings, yielding him around $2 billion and used the wealth to found:

• Participant Media - A media company he created to fund feature films and documentaries that promote social values while still being commercially viable. Its first three films were Syriana; Good Night, and Good Luck; and North Country, along with the documentary Murderball. These films accounted for 11 Oscar nominations in 2006.  
• Skoll Foundation  - Skoll has donated approximately $1 billion of eBay stock since its formation in 1999. The Foundation supports "social entrepreneurship". Skoll chairs the Foundation and today makes grants in excess of $80 million per year. The Skoll Foundation's assets rank it as the largest foundation for social entrepreneurship in the world.
• Note: Skoll owns a Tesla Roadster and is also an investor in the company... Hmmm

Pierre Omidyar (Bottom Up)

eBay Connection: e-Bay's Founder and largest shareholder used wealth from his success to found:

• Omidyar Network - a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives.  The organization invests in and helps scale innovative organizations to catalyze economic, social, and political change.  To date, the firm has committed investments of more than $270 million to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple investment areas, including property rights, government transparency, and social media.
• ON is also an inspiration for GAIA - The Global Accelerator for Impact and Awareness I founded in 2014

Some of the world's largest corporations are trying to make an impact as well led by:

Richard Branson - Founder of  Virgin Group

eBay Connection: In 2010, Branson established and co-founded Enterprise Zimbabwe along with Pierre Omidyar and the Nduna Foundation 

• Branson (and Virgin by extension) is dedicated to using its corporate strength to do good.  (If you want truly amazing examples of this, check outThe Elders, Virgin Unite, The Carbon War Room and Branson Centre for Entrepreneurship. Author:  Screw It, Let's do It. Lessons in Life and Screw Business as Usual...
• Launched Virgin Startup, an official delivery partner for the UK’s Start Up Loans programme. Through this new organisation, he will provide loans to entrepreneurs between the ages of 18 and 30 UK-wide. A pilot of the scheme, which ran over 11 months, injected £600,000 into 100 businesses.
• Created the Branson Centers for Entrepreneurship in the Caribbean and Africa (for which I am a currently a mentor)

(Sidebar: Richard Branson's book "Screw Business As Usual" was both the impetus and inspiration behind my 2012 restructuring and what is today The Mystic Media Group.   I also serve as a Entrepreneurship Mentor and member of the B-Team at the Branson Centres for Entrepreneurship.  My most audacious goal is to spend a week on Necker Island working directly with Branson on uniting Virgin Startup with the GAIA Accelerator, and impacting the world... One business at a time...)

For those who think business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.” – Ray Anderson, founder of Interface Inc. as quoted in "Screw Business As Usual", p. 99

Meg Whitman - (Top Down)

eBay Connection: CEO, helped the company grew to approximately 15,000 employees and $8 billion in annual revenue by 2008.

• Current Chairwoman, president, and chief executive officer of Hewlett-Packard and HP Labs (2015)
• Led HP Labs to createe the world's first architecture for a Net-Zero Energy Data Center (May 2012).  Read HP's Living Progress Report (2015)
• Founded Griffith R. Harsh IV and Margaret C Whitman Charitable Foundation -  with 300,000 shares of eBay stock worth $9.4 million.  By the end of its first year of operation, Foundation had $46 million in assets and has disbursed $125,000 to charitable causes. Most of the money disbursed went to the Environmental Defense Fund. 

These are only a few of the luminaries and leaders who are consciously using the power of business to change the world...

Written by

Dr. John G. Locke