He quit a PhD in physics at Stanford to go chase the internet with ~$2K in his bank account. He then invested the $20 million (all in) he got from Zip2 straight back into X.com which later became PayPal through what can only be described as a series of random accidents that lead to its eBay sale. That's insane risk for someone who essentially had fuck you money.
He then subsequently plowed the $300 or so million from the sale of PayPal to eBay, and pushed it directly into both SpaceX and Tesla - well before NASA or the world really had any need for either one of them - there was no guarantee that NASA would need SpaceX, or that COTS would continue to have government support (SpaceX bootstrapped on these contracts), or that any launch vendor would go with him over proven tech.
And with Tesla, there was no guarantee that laptops/smartphones/tablets would explode from 2005-2010, driving down the cost of Li-on batteries by an order of magnitude as South Asia's factories came online with their economies of scale, hundreds of millions of people and hundreds of billions in surplus capital that all combined to help make electric cars and an upstart car company price competitive with established luxury car brands.
There can be no doubt about it - Elon Musk takes huge risks, he is very lucky, and these are not the actions of a normal person. Normal people do not do these things - the risks he took were abominations on a risk adjusted scale (if the recession continued to decimate the economy and kill demand for veblen goods and SpaceX didn't get that 4th launch - Musk would be done - as in out of money and out of luck).
Which reminds me - the best investors are mentally damaged in some way, especially in terms of emotion (a distinct lack of empathy and emotion).
Because, if they weren't, well, they'd do what everyone else did, and be just like them.
To be contrarian, is to be damaged.
This does not mean that any of the people are mentally damaged - I merely found the studies on the relative percentages of functional psychopaths in leadership and investing positions highly curious (http://sgforums.com/forums/2092/topics/154210).
I suspect that he just values things differently from you -- that he's less averse to losing large sums of money, and more averse to regretting opportunities passed by, than you are. You can call him crazy if his actions are a spectacularly bad way of getting what he wants, but if he just wants differen things than you do, that's a matter of taste rather than sanity.
> Which reminds me - the best investors are mentally damaged in some way, especially in terms of emotion (a distinct lack of empathy and emotion).
I wonder, if you raised the subject with some of these guys, what they would say to this.
Truth. Same argument can be applied to terrorists and soldiers - they value the respect of their group and their families (in some cases this is monetary) over their own lives.
But then again - I presume most people think most terrorists would be damaged in some way (brain washed/delusional/lost parents) and soldiers in another way (PTSD/lose a friend/people die in front of you).
I'm not stating Elon Musk is, or is not, this - however I do find the parallels highly curious.
> I wonder, if you raised the subject with some of these guys, what they would say to this.
Kind of irrelevant if it's empirically correct.
2. Terrorists are mentally damaged.
3. Elon Musk values things differently
4. Ergo, Elon Musk is mentally damaged (or more likely to be damaged, or this is an indication that he might be damaged, as is implied).
Total analogy fail.
EDIT: Since I can't seem to be able to reply to your reply (too nested): Bringing up the analogy in the argument and finding it curious indicates that there is some reason as to why it even applies, when in fact it is completely irrelevant.
EDIT: Not necessarily. The relative percentage of CEOs, traders and investors who are psychopaths are much higher than the general population. We normally label such people as mentally damaged. Musk is both a CEO and an investor who doesn't think like normal people and fits into this group.
This does not mean he is part of the group though. It is merely interesting.
One of the weird things that happened to me when I was living in Las Vegas as a young man was that it really warped my sense of 'money'. People would roll into Vegas, lose a few hundred thousand and drive out with a 'see you next year' attitude. People would walk into a casino with a couple of hundred dollars and walk out with several thousand. Basically "money you had" was completely disassociated from "your work product" because if you won or lost was just random chance. So there was no confusion about having "worked" for this money, or "scrimped and saved" this money, it was just "Oh look, here is a bag of money where no money was before."
If you were living off a modest to low burn rate (like practically nothing) then you knew you could 'lose it all' and not a whole lot would change in your life. So betting everything you had on the next roll of the dice wasn't crazy, it was fun, either you'd keep playing or your fun was over for the night.
A number of people in the early days of the dot.com explosion were stunned at how 'easy' it was to 'make' a ton of money. There was even a cartoon about it where the CEO of some startup says "And the police never show up?" and the VC/Investor is saying "That's the beauty of it, its all totally legit!" When you're in that mode, and you've made your first few million, I could see thinking "Doesn't matter if I lose it all, I'll just make more. It's not that hard." When the music stopped if you were currently 'up' by a large margin you did a double take perhaps.
Having known people who are that agnostic to 'money', it just doesn't mean that much to them, it doesn't present like sociopathic behavior. The sociopaths I've known have always had some sort of 'score' system running as a way of evaluating whether or not they were 'winning' and money is a very attractive scoring system.
I wonder if this relates to the discovery that the two systems in the brain responsible for empathy and reason are mutually exclusive (that is, in the study I read about but can no longer find, activating one system always deactivated the other).
http://www.newyorker.com/reporting/2009/08/24/090824fa_fact_... (full article is for subscribers only unfortunately)
Elon: "I think I probably am a bit crazy. But I think maybe that’s sort of a healthy sign. Because there’s a point at which you can conclude that you're not crazy at all, then you probably are. It's sort of a recursive thing."
At the risk of invading Elon's personal life, one could go further and investigate his father Errol Musk, who was an electrical & mechanical engineer back in South Africa, to see if there is a biological explanation for any potential personality disorders.
Elon said this about his father: "Quite an astute engineer, although he's gone a little crazy later in life. I don't think he has all his cookies in the jar." Source: http://www.gq.com/news-politics/newsmakers/200901/elon-musk-...
Does this mean that Elon is crazy? I have no idea, but I think that he's a very logical person with life experiences that makes him a huge risk taker. For example, he tweeted briefly about the benefits of near death here: https://twitter.com/elonmusk/status/152394000857448448 On his google plus about page, he wrote "Not dead yet" on his bragging rights section.
So really, his worst case scenario is dying. That's his mental trick of making so many crazy risky decisions, as long as they are based on logic. That mindset cannot simply be attained by anyone, you have to experience near-death to truly get it. Mike Lazerow is another good example of such an entrepreneur. Background Story: http://www.lazerow.com/2012/06/a-new-beginning.html#tpe-acti...
Also he thinks that people should be less risk averse (8m10s) because even if they fail, it's not like they're going to starve. Source: http://www.youtube.com/watch?v=5nMQ0-1jqFs#t=5m55s This is probably based on his college experiment of eating for just $1 a day without getting scurvy, or perhaps his direct observations of starvation in South Africa. I honestly have no idea, just pure speculations.
So yeah, I hope that helps enlighten a little bit of how Elon can be such a risk-taker.
I'm not a fan of Elon Musk - that would be making a fundamental attribution error - and it is a logical fallacy to think that one person is perfect. No body should be respected irrespective of action - and merely by name - that's simply foolhardy and cognitively incoherent.
All I have merely stated is thus:
These people are early warning detection systems for future black swans that can fuck us all, and they come with high number of false positives.
So don't get sucked in with their rhetoric - but don't ignore them either - because if you do, you'll get fucked.