Grading Elon Musk's Horrible Year
The University of X indicates that Musk's best days are behind him.
I just returned from South Texas, and the Uber driver couldn't stop talking about the impact Elon Musk created in the region and Boca Chica.
Boca Chica is located in Cameron County, on the southernmost tip of Texas, along the Gulf Coast. It is a very small town, "Boca Chica is an unincorporated community of about 40 houses, mostly one-story homes with soft-orange brick exteriors." The city has no restaurants, grocery stores, banks, or amenities. So, why did Elon Musk choose the city to be a home for SpaceX?
He chose Boca Chica because Texas has business-friendly politicians, affordable and abundant land, and natural resources essential to host a company like SpaceX that is building Starship, a rocket designed to take people to the Moon and Mars.
The State of Texas worked hard to court SpaceX with millions of dollars in incentives and legislation that would restrict residents' access to beaches along the Gulf. SpaceX used these incentives to buy every home in town. However, about 20 people refused to leave, and the company negotiated with them for a long time.
Elon Musk wants to incorporate the town and change its name to Starbase, Texas. He feels that he owns the entire town now, but the city still lacks a lot of amenities, and without it, it is near impossible to attract good people to work there. Instead of focusing on developing the town, Musk wants to start a university in Austin, Texas Institute of Technology & Science.
I think for the last few years, Musk has been jumping from one project to another without creating a huge impact on any of them. He became too rich and too bored with a lot of money. Money and boredom lead to unimpactful businesses. I will rate each of his big 3 companies later, but for now, let's discuss the University of X.
Musk created The Foundation to create a better STEM education.
Musk created a new nonprofit organization named The Foundation and donated $100 million.
Musk's vision is to build STEM-focused elementary, middle, and high schools to funnel people into his new university. The university will focus on a traditional curriculum, but it will add a new dimension, a hands-on learning experience. Musk wants students to graduate ready to work at SpaceX, X (formerly known as Twitter), Tesla, and other high-tech companies.
Elon Musk saw a problem in STEM education, and rather than complain, he jumped into action and offered a solution. My only issue is that he is not thinking very big. He is thinking small about this issue, "The school plans to enroll about 50 students and grow over time initially. It expects to be funded through donations and tuition fees, although it notes that the school will offer scholarships to support students who couldn't otherwise afford to attend."
It seems Musk wants to create a secretive laboratory school for brilliant kids, like the school he started for his kids.
A decade ago, Musk created the world's most exclusive school.
Musk's University of X is not his first attempt at improving the educational system in this country. A decade ago, he created Ad Astra school at SpaceX's California headquarters to educate his children and those of other employees, which has since grown into an online education program.
Providing an excellent educational STEM experience to rich kids is insufficient to cause a dent in the world, and it falls short of Musk's earlier big dreams.
So, let me rate each of his companies very quickly.
Twitter is now worth just 50% of what Elon Musk paid.
X, the platform formerly known as Twitter, is worth less than 50% of what Elon Musk paid for it. A year ago, Musk purchased Twitter Inc. for $44 billion. Today, X is worth $19 billion.
This is what went wrong in the last 12 months. Musk rebranded Twitter to X. Twitter was one of the most recognizable names in the world, so why would Musk do that? Nobody knows. Musk started to charge users, but he didn't offer them any real benefits. He continued to pick a war with advertisers and lost most of them, "Several major companies — including Disney, Apple, IBM, Comcast, Lionsgate, Warner Bros. Discovery, Sony Pictures, and Paramount — paused their ad spending on the platform."
What's next for X? Nothing good.
X or Twitter: F
Tesla's dominance in the EV market is fading
The demand for Tesla is starting to weaken across the world.
As Business Insider reported last month, "Tesla is losing ground in the electric-vehicle market as competition heats up, raising the stakes for the launch of the long-awaited Cybertruck." Customers have been waiting for Tesla's Cybertruck for 4 years. This year, the company released the Cybertruck, but the EV market is more crowded than it used to be and is not selling well.
According to Cox Automotive, Electric Vehicle sales in the US hit a record high in the third quarter, and Tesla's share fell to a record low of 50%. It is clear that Musk is starting to lose ground in the face of a more overcrowded EV market.
If he doesn't start to innovate fast, he will lose more and more of the market soon.
Tesla: C
SpaceX Is 2 years behind schedule.
SpaceX has been working at a furious speed, but they are still behind what Musk thought the company should be doing now.
As SpaceX continues toward its goal of launching 100 rockets in 2023, the company is falling short; they have only launched 92 rockets. Also, due to technical difficulties, "NASA is worried that SpaceX's giant new Starship vehicle won't be ready to carry astronauts to the moon's surface in late 2025, as planned."
Going to space is not easy, and If Musk wants SpaceX to succeed, he needs to refocus on the company's mission.
SpaceX: C
I only wanted to evaluate his three top companies, but Musk owns many more, including Starlink, Neuralink, The Boring Company, X.AI, etc. So, feel free to evaluate his other companies and let me know how he is performing at these companies.
Your thoughts?