Elon Musk is a very successful entrepreneur.
Elon Musk has overseen innovations that could affect the course of history.
Elon Musk has very questionable character traits.
Elon Musk has no idea how to run a social media platform.
All of these statements can be (and I would argue, are) true at the same time. However, by the time many eyeballs have got to this line, there is already an internal struggle going on in the reader’s mind.
How can it be that one person is apparently the most (financially) successful human to have ever existed, and at the same time it can be so easy to pick out his individual and managerial flaws? How can the richest man in the world also be accurately described as a poor manager of a business? Isn’t his fabulous wealth proof of the opposite?
This conflict, which I have just described is caused by what some refer to as the “Halo Effect.”
A halo effect occurs when an individual or entity becomes unusually successful in a narrow field of endeavour, and then said success begins to insulate them from all wider scrutiny, criticism or reasonable doubt.
Elon Musk has become unusually successful at making and selling electric cars and reusable rocket vehicles, ergo Elon Musk will also be unusually successful at anything else he puts his hands to, be it crypto investment, personal relationships or becoming a Kim Jong-Un style sole administrator of Twitter. And you know the thing about Halo Effects? They are illusions.
Money can distort reality
A few years ago in this column, I used the illustration of Dafe, a fictional tech entrepreneur whose business goes to IPO and makes him a USD multimillionaire at the ripe old age of 28. This early outsized financial success, I argued, can only have the effect of exponentially inflating his ego and risk appetite, while simultaneously dulling his natural caution and any ability to see his own flaws and limitations.
This is not entirely his fault. As anyone who has ever possessed significant sums of money will tell you, having certain amounts of wealth can vastly insulate one from the real world.
In this situation, one can spend an entire lifetime surrounded only by people who work desperately to get into one’s good books because they hope to get a favour, a handout, a job, a promotion or an investment.
After a few years inside this surprisingly resilient bubble, Dafe would have to be a truly extraordinary person to avoid losing his grip on material reality and fully embracing the fictional “Dafe is Just Grrrreat” world built around him.
Soon, he genuinely begins to believe that he is actually all those things that the sycophants, hangers-on and yes-men around him constantly tell him.
A few months ago, I had an interaction with one such “Dafe” whose reputation was built on having co-founded a developer outsourcing solution and a bog standard web payment processor. To be sure, he was and presumably is an eminently competent coder, but neither of these things qualified him to loudly butt into a conversation about macroeconomics and governance, announcing his presence by stating that I was apparently “bereft of vision” for arguing that $450 million on a tourism park in Cross River State was a white elephant project that should never have been approved.
In his characteristic bloviating fashion, said Dafe went on to state that he could raise $100 million from “investors” to resuscitate the long-dead park and make it viable.
When I pointed out that investors would sooner physically light their money on fire and warm their hands with it than dump $100 million into a defunct flight of fancy in a country that is existentially threatened by terrorists, he flared up and went off on a tangent. T
he problem is not that Dafe is overconfident, underqualified, unaware of his own crippling intellectual limitations and drunk on his own ego. Those things are true, but the real problem is that he does not know that they are true. Which brings us back to Elon Musk.
The law of averages
It is often said that humans erroneously view the journey to success as a linear event – a straight line. In reality, success follows so many arbitrary, nonsensical, zig-zag paths that to even describe it as a journey is to significantly overstate the aptitude of those who embark on it.
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Take everyone’s friendly neighbourhood Twitter CEO for example. Most people know Elon Musk as the guy who was an early investor in PayPal, and went on to found Tesla and SpaceX. That is a simple linear journey that starts from good, carries on to better, and culminates at best. It is also complete weapons-grade balonium.
There is Zip2, a company he founded, which he was later ousted from for terrible performance. There was the initial iteration PayPal, which was at the time voted among the top 10 worst business ideas. There is the Hyperloop, which is the modern city planner’s version of the monorail from the 1990s – an expensive punchline that never gets old.
There is SpaceX, which failed and almost went out of business until the NASA Commercial Resupply Services (CRS) tender – a government contract – was awarded to SpaceX in December 2008, which financially saved SpaceX, Tesla and Musk himself from ruin.
There is also Tesla itself, which despite being the most successful part of his portfolio, continues to make as much as 20 percent of its profits from selling carbon credits to other automakers, which significantly inflates the apparent “success” of the company.
My point? Apparent financial success on its own is by no means a barometer with which to measure an individual’s personal or professional competence. People make money in a lot of ways, for a lot of reasons and under a lot of unique circumstances.
If Elon Musk himself were asked to recreate his journey from young upstart to Kim Jong-Tweet, even he could not hope to do so because his story had/has so many moving parts.
If he had been born in the same country he was born in, but a few shades browner and his name was Katlego Msondela instead of “Elon Musk,” none of this would have happened.
If the Obama government did not effectively bail him out in December 2008, he would also not be here. Given a few regulatory changes in the early 2000s, PayPal could have been history with no value created.
The fact that he was able to make his way through all this and become Kim Jong-Tweet is not evidence that he possesses superpowers. It merely means that he was extremely persistent and extremely lucky – and there is no shame in that.
Tony Stark is only a fictional character at the end of the day.
