Elon Musk Has Found a Creative Way to Fundraise for His Newest Company
Want to raise $700,000 for your business? Follow Elon Musk's lead and sell some hats.
Earlier this year, the CEO of Tesla and SpaceX apparently got really frustrated with Los Angeles traffic and tweeted that he wanted to dig some tunnels to alleviate the problem. Hence, The Boring Company was born. With this pet project, Musk aims to dig a 6.5-mile tunnel to prove the concept in Los Angeles, with plans for more extensive tunnels in the city to follow.
Sounds great, but digging tunnels requires approval from government officials, which may take a bit (that's not a drill joke).
There's no doubt in my mind that Musk is completely self-aware of his status as, let's be honest, a messiah-like figure among those who admire his business acumen and his potential to save the world. Perhaps that's why a man who can generate pre-orders with a tweet dropped this head bomb back in March.
So, while The Boring Company may have had a slow start on its primary mission of digging tunnels, it certainly has seen success as a merch company. Musk is aware of this and in on the joke.
The *real* money comes from merchandising. I learned it from this documentary https://t.co/E4gpqhl6KF— Elon Musk (@elonmusk) December 3, 2017
He even went ahead and created more demand for the Boring hat, limiting the quantity available.
To preserve the transcendent majesty & specialness of The Boring Company cap, we are capping cap orders at 50,000 caps. Almost there ... https://t.co/YqjEQAfy3u— Elon Musk (@elonmusk) December 3, 2017
Now, he's started boasting sales of said $20 hat, reporting the latest figure, as of Dec. 12, at 35,000. That's $700,000 in sales. (Presumably, the company keeps the profits after the cost of manufacturing and shipping the hats.) It's a smart and low-overhead fundraising idea for any company pre-launch to drum up intrigue, excitement and early adopters.
The money is a great start for the nascent Boring Company, but a drop in the bucket for Musk. After all, Tesla, according to Bloomberg data, burns through $480,000 an hour, or about $8,000 a minute.
Better get those Boring sweatshirts ready, Elon.