Innovation's Cult of Personality

Why ego is a double-edged sword when it comes to technological progress

Part IV of the series “Innovation’s Elon Musk Problem”, see Part I, Part II, and Part III.

Elon Musk believes that he’s a genius. And his fantastical ideas about Mars colonization or “hyperloop” transportation systems would not get taken seriously if fair number of people did not also agree. But this story of genius, until recently, was underlined with the assumption that the rest of us are not smart enough to judge his ideas. When one transportation consultant criticized Musk’s tweets about mass transit, Elon’s three-word reply was “You’re an idiot.” 

Perhaps some degree of arrogance necessarily afflicts all visionaries. However, the inherent hubris of the “heroic innovator” story can destabilize innovation efforts. An exacting attitude does help for fostering constant technical improvement. But it can quickly devolve into an effort to shore up an impossible story of individual genius, and on maintaining control. Tech firm engineers end up in the position of having to protect the product (and themselves) from an increasingly obstinate and dogmatic leader. Twitter (now X.com) wasn’t Musk’s first egocentric rodeo, and it won’t be his last.

Newly hired engineers at Musk’s first company, the online city guide website Zip2, were burdened by the firm’s young CTO’s pride. They would go home for the evening and return to work the next morning to find that Musk had surreptitiously altered their codes during the night. Despite often needing his own programming rewritten, Musk still claimed, “I could code way better than them. And I’d just go and fix their fucking code.” 

Musk’s first startup: Zip2

Tesla’s highly skilled workforce today fares even worse than Zip2’s engineers. Employees describe having “a constant sense that your company does not care about you at all, that you simply do not matter”, even as they work 70 hour weeks. Personality cults, whether in technology or politics, are usually tortuous for the people at the bottom. The peons are driven to bear whatever sacrifice is deemed necessary to achieve the visions of the great leader. 

Musk can be simultaneously mercurial and inflexible. Zip2 was scheduled to merge with competitor CitySearch for $300 million. Musk initially favored the move but switched his position shortly after the public announcement. When the merger then failed, he blamed the CEO and tried to leverage the failed merger into a promotion for himself. Instead, he was demoted from his chairman position.

After his experience Zip2, Musk focused more and more on maintaining control. He made sure that he owned the majority share of X.com (the online bank he founded in 1999, not Twitter). After fellow co-founder Harris Fricker made a failed coup attempt, Musk had to hire new engineers in a rush. This continued after the merger with Confinity, where Musk’s abrasive focus on control, again, backfired. The board replaced him as CEO with Peter Thiel, who brokered the buyout by eBay. It was Thiel’s business acumen that earned Musk a cool $250 million in the deal. 

Musk isn’t the first technology pioneer to be preoccupied with maintaining control over his creative vision. Thomas Edison lost control of the company that became General Electric. He was ousted after committing himself to a future powered by DC, or direct current, electricity, while waging a very heated and largely unnecessary battle against the alternating current of George Westinghouse. Edison went so far as to finance the creation of the electric chair using his competitor’s technology. A few of his allies suggested calling death by electric chair being “Westinghoused.” 

Some think that Edison’s role in the invention of the electric chair was ploy to undermine trust in competing AC electricity

But the industrialists recognized that it was mainly Edison’s ego that stood in the way of an electrical industry that was rapidly drifting toward and desperately in need of a national standard. His control of his company shrunk after successive waves of investment, and he sold his shares and resigned his position after J.P. Morgan bought Edison’s company and merged it with a firm that specialized in alternating current technology. 

It is difficult to know to what degree the intransigence of innovators like Musk or Edison is a product of the Heroic Innovator story or the source material for it. Although the story has likely carried Musk through dark times, it results in friction between himself, his fellow executives, and his employees, at times endangering the very projects Musk sees himself as championing. But the trouble with the myth of the genius inventor doesn’t just blind us to technology innovators’ very normal human flaws and limitations, it also obscures the failings of their inventions. 

Zip2 ultimately made Musk enough money to move on to his next ventures, but accomplished little else. Even though Compaq bought Zip2 for over $300 million in 1999, it had next to no impact. Shortly after the acquisition, Compaq’s stock price dropped precipitously. They had to shut down the service before it earned a single cent in profit. Given the massive price tag, even if the sale didn’t actively contribute to sinking Compaq, it certainly didn’t help.

PayPal, on the other hand, massively changed the online landscape and, in so doing, contributed to the massive shift in retail consumption on the internet. But it wasn’t really Musk that did it. The history of X.com suggests that PayPal is just as likely to have become influential despite Musk’s efforts. He brought a “movie set” of a website to the merger with Confinity, software that was so vulnerable and unstable that the service was losing money even while gaining customers, and Musk’s divisiveness nearly sank the company.

But Musk isn’t really celebrated for Zip2 and PayPal but for Tesla and SpaceX. In the next parts of the series we look at companies and products that made Musk a household name. Where does the great innovator story have a kernel of truth? Where has it obscured how innovation really happens?