A Case Study of Elon Musk
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Using framing to identify new opportunities to reach entrepreneurial success: a case study of Elon Musk Daan Janse | 10647708 Business Bachelor’s Thesis 2016/2017 14/07/2017 Beta-Gamma - Major: Business Tutor: Ileana de Bresser Abstract: Framing is an upcoming tool for design thinkers to approach problems in a new way, as an effective way to solve complex issues. The main objective of this study is to confirm whether framing is also a valuable way to identify new opportunities for business ventures. This is studied by a case study of Elon Musk, who surprised the world with his astonishing entrepreneurial successes. A conceptual model is made of the core of framing and how opportunities may be identified using framing. In addition to this, the frames Musk uses are identified. The thought processes of Musk, called first principle thinking, are explained and linked to framing. It is explained how Musk uses framing to identify new opportunities for business ventures. At last, it is argued that framing is a valuable tool to identify new opportunities. Statement of Originality: This is to certify that to the best of my knowledge, the content of this thesis is my own work. This thesis has not been submitted for any degree or other purposes. I certify that the intellectual content of this thesis is the product of my own work and that all the assistance received in preparing this thesis and sources have been acknowledged. -Daan Janse 1 Table of Contents 1. Introduction ................................................................................................................................... 3 2. Literature review ............................................................................................................................ 5 2.1 Successful entrepreneurship ........................................................................................................ 5 2.2 Identifying opportunities for venture businesses ......................................................................... 6 2.3 The core concepts of framing. ...................................................................................................... 8 3. Conceptual Model ........................................................................................................................ 11 4. Methodology ................................................................................................................................ 14 4.1 Research strategy: case study .................................................................................................... 14 4.2. Research methods: desk research ............................................................................................. 15 4.3. Data analysis: coding and interpretation ................................................................................... 15 4.4. Guaranteeing research quality: validity, reliability and generalizability .................................... 16 5. Results and data-analysis ............................................................................................................. 17 5.1 The frames of Elon Musk ............................................................................................................ 17 5.2 Elon Musk’s first principle thinking combined with framing................................................. 20 5.3 How Musk uses framing to identify new opportunities ........................................................ 24 6. Discussion ..................................................................................................................................... 26 7. Conclusion .................................................................................................................................... 29 References ........................................................................................................................................... 30 Appendix .............................................................................................................................................. 32 Qualitative data .................................................................................................................................... 32 A.1 ................................................................................................................................................ 32 A.2 ................................................................................................................................................ 32 A.3 ................................................................................................................................................ 33 A.4 ................................................................................................................................................ 33 A.5 ................................................................................................................................................ 34 A.6 ................................................................................................................................................ 34 A.7 ................................................................................................................................................ 35 List of codes ...................................................................................................................................... 36 Axial codes ....................................................................................................................................... 37 Selective coding ................................................................................................................................ 38 2 1. Introduction Elon Musk surprised the world with astonishing successes with his businesses, which he all started from the ground up. According to his vision, the future for mankind lies in sustainability, space travel, the human genome and artificial intelligence. In these key theme definitions, he started his companies (Urban, 2015). Tesla, SpaceX, the Boring Company and Neuralink are a few of his key businesses at the moment. When he first introduced SpaceX, he was mocked for this ‘insane’ plan (Urban, 2015). However, before he started SpaceX he went to take a look at the fundamentals of rocket science and key necessities. He frowned upon the basic elements needed and the current costs of other rockets. He was sure the costs could be reduced to one-third comparing to other rockets. Thus, he created SpaceX, and in the end, he managed to create a whole new working rocket with 70% reduced costs (Urban, 2015). He called this way of thinking the ‘first principles thinking’. He describes this as reasoning from the ground up, instead of listening to prior experience (Baer, 2015). In this case that would mean the general assumption that space travel was too expensive and too difficult to enter the market. His first principle thinking is similar to what in design thinking is called framing. Framing is an individuals’ conception of the acts, outcomes and contingencies associated with a particular choice (Dew, Read, Sarasvathy & Wiltbank, 2009). According to Dorst (2011), framing is a term to create a new standpoint from which a problematic issue can be dealt with. The frame Elon Musk used in the given SpaceX example, helped him see what was not there – rockets could be a lot cheaper, and he found a reason for himself to go for it and start SpaceX. In design thinking studies, framing is particularly used as way to approach problems and find solutions for them. In entrepreneurship literature however, there is few literature found about framing used to aid in the field of entrepreneurship. One can argue, without an opportunity or a venture idea, there is no entrepreneurship. (Short, Ketchen, Shook & Ireland, 2010). An important aspect of entrepreneurship is thus to identify an opportunity to exploit for a venture business. It is argued that the identification of an opportunity can be seen as a problem to solve, just as design thinkers do when using framing. Therefore solving problems using framing can be related to identifying new opportunities for businesses. This study aims to close the gap of how framing can also be used in the field of entrepreneurship, since in this context framing has not yet been deeply researched. More specifically, this research will focus on Elon Musk and his entrepreneurial successes. How Elon Musk used his first principle thinking, and thereby looking at an issue from a different frame, could provide information onto how framing can be used in the business world to exploit new business opportunities. A case study of his companies and his way of framing will be made using qualitative data obtained through desk research of interviews and literature. He used certain frames of thinking, even though he was declared a madman for this, and in contrary to what has been said, he 3 managed to exploit new business ventures, such as Tesla, SpaceX and The Boring Company. The research question of this research therefore is: ‘How did Elon Musk use framing to identify successful new entrepreneurial opportunities?’ The first research objective is to reach an understanding what the first principle thinking for Elon Musk means and how he developed it. The second research objective is to identify the frames Musk uses in general to accompany his vision. The third objective is find an understanding how he used these frames to identify new opportunities.