Is Elon Musk’s erratic behaviour just the price we need to pay for brilliant entrepreneurs?
Kathy Gromotka, associate at Downing Ventures, says YES.
We back entrepreneurs because we buy into their desire and ability to behave in a way that creates value, whether they’re a star in the spotlight or operating in stealth mode.
Elon Musk’s behaviour, erratic or not, is the price we pay for Elon Musk’s vision – for electric cars, for solar power, and eventually for space travel.
If shareholders have bought into Musk’s vision for creating value, and into his maverick persona that generates constant publicity, then his behaviour along the way while executing this vision shouldn’t matter, so long as he is not deviating from the end goal and is creating more good than harm. Twitter storms and odd interviews aren’t a problem in and of themselves.
Of course, if those tweets and comments are directly responsible for sinking the value of the company, that’s a different matter. This time, Musk may have gone too far. But vision is vision, and if shareholders continue to back him, it’s because they think his genius is worth the volatility he causes.
Elena Shalneva, communications consultant and non-executive director, says NO.
Visionary, genius, whatever – don’t tweet when unstable.
Some years ago, I worked on an IPO with a mini-Musk, a financial wizard who was good at deals. He was volatile and petulant; in meetings, he was either high or stoned; he ignored advisers and openly despised lawyers.
On listing day, irregularities were uncovered and the company lost more than half of its value. His supporters echoed Musk’s: leave him alone, they urged, he is a big picture man, he couldn’t be bothered with details.
I guess Musk is also a big picture man. But if his free spirit is suffocated by US securities regulations, he should have kept Tesla private.
I admire talent, and I make many allowances for it. But I don’t think Musk is one.
Regardless, “responsibility towards shareholders” is not an empty phrase, as Musk’s investors, many of whom are not sophisticated, buy and sell based on what he says.
Time for him to go to the moon, or do something else.