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Saturday, July 10, 2010

Egos, ethics and "no"

Many entrepreneurs get ahead because of their brash confidence, unwillingness to settle for second best or accept limitations that have daunted their predecessors.

Is there such a thing as too much ego? Steve Jobs was legendary for his tyrannical treatment of direct reports, but also turned the company around by making swift, clear and (largely) correct decisions since his return 12 years ago.

And then there is Elon Musk, the co-founder of Tesla Motors, SpaceX, SolarCity and PayPal. Any one of those would be considered a highly visible entrepreneurial effort and (in the latter case) even a financial success. He has success I can only dream of.

However, at times he seems to have the ethics of a used car salesman. On Friday, Owen Thomas of VentureBeat enumerated various examples of when he said Musk was less than totally truthful.

I personally first noticed Musk when he called a college professor (and coworker of mine) a “douchebag” for challenging his claim to public subsidies for his electric cars. Anyone who takes taxpayer money should be open to public scrutiny — if you can’t stand the heat, get out of the kitchen. The whole incident reflected badly on Musk and his ability to handle criticism for his weaknesses or mistakes.

Some of Thomas’s allegations border on SEC violations, particularly related to his recent (and briefly underwater) Tesla IPO.

I try not to judge people I’ve not met, but sometimes there’s a clear enough picture from secondary evidence. From his exaggerations to trading in the 30-something mother of his five children, he seems to have gone through life without anyone ever saying “no.”

This is a dangerous way to be in business: yesmen will help you drive the car right off the cliff. (It is always possible that the brash public persona hides someone who’s willing to be thoughtful and analytical with trusted advisors in private, but I’ve not seen any reports either way from former lieutenants.)

However, the general pattern of the last decade reminds me of an old, old saying:
For what shall it profit a man, if he shall gain the whole world, and lose his own soul?
Bill & Dave: How Hewlett and Packard Built the World's Greatest CompanyThat’s not everyone’s guiding principle, but it’s certainly been mine. I was fortunate to work with other scrupulously honest entrepreneurs — even when they did something I didn’t agree with, they were honest about it and even reasonably predictable. I was also inspired by several role models, including Bill and Dave, and the memoir of Paul Hawken.

I realize that forced to choose between honesty and financial returns in a CEO, most VCs would go with the latter. But then I’m not too optimistic about their souls, either.