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Zipping Forward: Musk Starts His First Company

Article Overview: It was 1995. Musk was getting ready to begin his doctorate at Stanford University, but it was not the academic world that was exciting him. Instead, it was the Internet craze that he found himself surrounded by in Silicon Valley. “I could either watch it happen, or be part of it,” he says.

Zipping Forward: Musk Starts His First Company

It was 1995. Musk was getting ready to begin his doctorate at Stanford University, but it was not the academic world that was exciting him. Instead, it was the Internet craze that he found himself surrounded by in Silicon Valley. “I could either watch it happen, or be part of it,” he says.

With that, Musk decided to drop out of school and try to get in on the action. He quickly found himself at a standstill, however, having little money to his name. The solution, he figured, was to create a company of his own, and he had just the idea.

Musk founded a company called Zip2. It was a software company that helped news organizations publish their information online. By the time Musk sold it to Compaq, he could count the New York Times and Knight-Ridder as two of his many customers. Compaq bought Zip2 for $307 million in cash and $34 million in additional stock options.

Instead of entering early retirement with his newfound wealth, Musk decided to invest his profits into his next venture, X.com. The site began by offering a number of banking services to customers online, but Musk quickly discovered that its most popular feature was the ability to send money by email. One year later, Musk bought a company called Confinity, which had developed the ability to send money between Palm Pilots. Musk wanted to use that technology for himself.

In 2001, X.com legally changed its name to PayPal and bought the rights to the domain name. Here, Musk focused solely on improving the ability to securely email money. It was slowly becoming a popular online feature of many websites, including eBay. eBay members found it to be a convenient way to pay for their purchases. It was becoming so popular, in fact, that just months after PayPal went public, it was bought out by eBay for $1.5 billion in stock.

Again, Musk could have sat back and enjoyed his earnings, but sitting back was something Musk did not know how to do. In 2002, Musk started up his third company, but this time he was setting his sights on new heights, literally. With little experience in the field, Musk founded Space Exploration Technologies (SpaceX). He is currently both its CEO and CTO, and is overseeing the company’s efforts to manufacture low cost space launch vehicles. He wants governments, universities and businesses alike to use his company to get satellites cheaply into space. In the long term, Musk wants his company to help colonize outer space.

Musk is also taking a role in the fight against global warming. He is the Chairman of both Tesla Motors, which is trying to bring low-cost electric cars to the market, and SolarCity, a company that focuses on photovoltaics.

Many observers see Musk as being all over the map, moving from online electronic payments to putting satellites into space. But Musk sees little difference between the two ventures; both are about starting up a successful business and turning a dream into reality.

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Article Tags: academic world, banking services, doctorate, early retirement, earnings, ebay, ebay members, email money, internet craze, knight ridder, musk, new york times, newfound wealth, palm pilots, paypal, silicon valley, software company, standstill, stanford university, stock options



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