A Glimpse At The Man Behind Tesla: Elon Musk

Born in South Africa in 1971, childhood didn't turn out easy for Elon Musk as he had a tough family life and just couldn't fit in well at school. But, as is often said about extraordinary people, he was an avid self-learner from early age. His brother Kimbal attested to the fact that Elon would often read for 10 hours a day, lots of science fiction and eventually, lots of non-fiction too. By fourth grade, he could be found constantly buried in the Encyclopedia Britannica.

One thing you’ll come to find out about Musk as you read subsequent posts about him is that he sees humans as computers, which, in their most literal sense, they are. The physical body and brain is the human hardware. His software is the way he thinks, his value system, his habits, his personality. And for Musk, learning is simply the process of “downloading data and algorithms into your brain.” Among his many frustrations with the formal classroom learning is the “ridiculously slow download speed” of sitting in a classroom listening to a teacher explain something, and to this day, most of what he knows he’s learned through reading.

At the age of nine he became consumed with a second fixation when he got his hands on his first computer, the Commodore VIC-20. Coming with five kilobytes of memory and a “how to program” guide that was intended to take the user six months to complete, nine-year-old Elon finished it in three days. At 12, he created a video game called Blastar, which he said was “a trivial game…but better than Flappy Bird.” But in 1983, it was good enough to be sold to a computer magazine for $500 ($1,200 in today’s money), not bad for a 12-year-old I'd say.

Musk never felt much of a connection to South Africa as he didn’t fit in with the jockish, white Afrikaner culture, and it was a nightmare country for a potential entrepreneur. Seeing Silicon Valley as the Promised Land, at the age of 17, he left South Africa and hasn't looked back ever since. Starting out in Canada, which was an easier place to immigrate to because his mom is a Canadian citizen, a few years later, he used a college transfer to the University of Pennsylvania as a way into the US.

In college, he thought about what he wanted to do with his life, making his focal point the question,
“What will most affect the future of humanity?”
The answer he came up with was a list of five things:
The internet
Sustainable energy
Space exploration, in particular the permanent extension of life beyond Earth
Artificial intelligence
Reprogramming the human genetic code

He was iffy about how positive the impact of the last two would be, and though he was optimistic about each of the first three, he never considered at the time that he’d be involved in space exploration. That left the internet and sustainable energy as his moat viable options.

Deciding to go with sustainable energy, he finished college and enrolled in a Stanford PhD program to study high energy density capacitors, a technology aimed at coming up with a more efficient way than traditional batteries to store energy. This he knew could be key to a sustainable energy future and help accelerate the advent of an electric car industry.

But two days into the program, he got massive FOMO because it was 1995 and he “couldn’t stand to just watch the internet go by, he wanted to jump in and make it better.” So he dropped out and decided to have a go at the internet instead.

First move he made was to try to get a job at the monster of the 1995 internet, Netscape. The tactic he came up with was to walk into the lobby, uninvited, stand there awkwardly, be too shy to talk to anyone, and walk out.

Musk bounced back from this unimpressive career beginning by teaming up with his brother Kimbal (who had followed him to the US) to start their own company, Zip2. Zip2 was sort of like a primitive combination of Yelp and Google Maps, but long before anything like either of those existed. The goal was to make businesses realize that being in the Yellow Pages would become outdated at some point and that it was a good idea to get themselves into an online directory. The brothers had no money, slept in the office and showered at the YMCA, and Elon, the lead programmer, sat obsessively at his desk, working around the clock on his computer. It was hard to convince businesses that the internet was important in 1995. Many told them that advertising on the internet sounded like “the dumbest thing they had ever heard of” but eventually, they began to rack up customers and the company grew. It was the heat of the 90s internet boom, startup companies being snatched up left and right, and in 1999, Compaq got Zip2 for $307 million. Musk, who was 27 then made off with $22 million.

In what would come to be a recurring theme for Musk, he finished one venture and immediately dove into a new, harder, and more complex one. If he were following the millionaire rulebook, he’d have known that after hitting it big during the 90s boom, what you're supposed to do is either retire off into the sunset of leisure and angel investing, or if you've still got ambition, start a new company with someone else’s money. But Musk doesn’t tend to follow normal rulebooks, and he plunged three quarters of his net worth into his new idea, an outrageously bold plan to build essentially an online bank—replete with checking, savings, and brokerage accounts—called X.com. This seems less insane now, but in 1999, an internet startup trying to compete with the large banks was totally unheard of.

In the same building X.com worked out of was another internet finance company called Confinity, founded by Peter Thiel and Max Levchin. One of X.com’s numerous features was an easy money-transfer service, and later, Confinity would develop a similar service. Both companies began to notice a strong demand for their money-transfer service, which put the two companies in furious competition with each other, and they finally decided to just merge into what we know today as PayPal.

This brought clashes among a lot of egos and opinions—Musk was now joined by Peter Thiel and a bunch of other now-super-successful internet guys—and despite the company growing rapidly, things inside the office did not go smoothly. These conflicts boiled over in late 2000, and when Musk was on a half fundraising trip / half honeymoon (with his first wife Justine), the anti-Musk crowd staged a coup and replaced him as CEO with Thiel. Musk handled this surprisingly well, and to this day, he says he doesn’t agree with that decision but he understands why they did it. He stayed on the team in a senior role, continued investing in the company, and played an instrumental role in selling the company to eBay in 2002, for $1.5 billion. Musk, the company’s largest shareholder, walked away with $180 million (after taxes).

If there ever was a semblance of the normal life rulebook in Musk’s decision-making, it was at this point in his life, as a beyond-wealthy 31-year-old in 2002, that he burned the rulebook for good.

What he did over the next 13 years leading up to today is what we’ll thoroughly explore over the rest of this series. For now, here’s the short story:

Even before the sale of PayPal even went through in 2002, Musk started voraciously reading about rocket technology, and later that year, with $100 million, he started one of the most unthinkable and ill-advised ventures of all time: a rocket company called SpaceX, whose stated purpose was to revolutionize the cost of space travel in order to make humans a multi-planetary species by colonizing neighbouring Mars with at least a million people over the next century.

Sounds quite lofty right?

Then, in 2004, as that “project” was just beginning to gain momentum, Musk decided to launch the second-most unthinkable and ill-advised venture of all time: an electric car company called Tesla, with the purpose of revolutionizing the worldwide car industry by significantly accelerating the advent of a mostly-electric-car world in order to bring humanity along on the path toward a sustainable energy future. Musk funded this personally as well, putting in $70 million, despite the fact that the last time a US car startup succeeded was Chrysler in 1925, and the last time someone started a successful electric car startup was never.

A couple years later, in 2006, he threw in $10 million to found, with his cousins, another company, called SolarCity which intended to revolutionize energy production by the creation of a large, distributed utility that would install solar panel systems on the homes of millions of people, dramatically reducing their consumption of fossil fuel-generated electricity and “accelerating mass adoption of sustainable energy.”

Had you been observing all this in those four years following the PayPal sale, you’d have thought it was a sad story. A delusional internet millionaire, in over his head with a slew of impossible projects, doing everything he could to squander his fortune.

By 2008, this seemed to be playing out, literally. SpaceX had figured out how to build rockets, just not rockets that actually worked. It had attempted three launches by then and all three had blown up before reaching orbit. In order to bring in any serious outside investment or payload contracts, SpaceX had to show that they could successfully launch a rocket—but Musk said he had funds left for one and only one more launch. If the fourth launch also failed, SpaceX would be done.

Meanwhile, up in the Bay Area, the shit was hitting the fan in Tesla. They had yet to deliver their first car, the Tesla Roadster, to the market, which didn’t look good to the outside world. Silicon Valley gossip blog Valleywag made the Tesla Roadster its number 1 failed tech company of 2007. This would have been much easier to deal with if the global economy hadn’t suddenly crashed, hitting the automotive industry so hard as well as sucking dry any flow of investments into car companies, especially new and unproven ones. And Tesla was running out of money fast.

During this double implosion of his career, Musk’s marriage of eight years took a hot too, falling apart entirely in a soul-crushing, messy divorce.

Darkness. The future was definitely looking bleak.

But here’s the thing. Musk is not a fool, and he hadn’t built bad companies. In fact he had built amazing companies. It’s just that creating a reliable rocket is unfathomably difficult, as is launching a startup car company, and since no one wanted to invest in what seemed to the outside world like overambitious and probably-doomed ventures, especially during a recession, Musk had to rely on his own personal funds. PayPal made him rich, but not enough to keep these companies afloat for very long on his own. Without outside money, both SpaceX and Tesla were on a short leash. So it’s not that SpaceX and Tesla were bad, it’s that they needed more time to succeed, time they no longer had.

And then, in the most dire hour, everything turned around.

First, in September of 2008, SpaceX launched their fourth rocket—and their last one if it didn’t successfully put a payload into orbit—and it succeeded. Perfectly.

That was proof enough for NASA to say “fuck it, let’s give this Musk guy a try,” and it took a gamble, offering SpaceX a $1.6 billion contract to carry out 12 launches for the agency. Lifespan extended. SpaceX saved.

The next day, on Christmas Eve 2008, when Musk scrounged up the last money he could manage to keep Tesla going, Tesla’s investors reluctantly agreed to match his investment. Lifespan extended once again. Five months later, things began looking up, and another critical investment came in—$50 million from Daimler. Tesla saved.

While 2008 hardly marked the end of the bumps in the road for Musk, the overarching story of the next seven years would be the soaring, earthshaking success of Elon Musk and his companies.

Since their first three failed launches, SpaceX has launched 20 times, all successes. NASA is now a regular client, and one of many, since the innovations at SpaceX have allowed companies to launch things to space for the lowest cost in history. Within those 20 launches have been all kinds of “firsts” for a commercial rocket company, to this day, the four entities in history who have managed to launch a spacecraft into orbit and successfully return it to Earth are the US, Russia, China, and SpaceX. Currently, SpaceX is testing their new spacecraft, which will bring humans to space, and are busy at work on the much larger rocket that will be able to bring 100 people to Mars at once. A recent investment by Google and Fidelity has the company's value at $12 billion.

Tesla’s Model S is a smashing success, blowing away the automotive industry with the highest ever Consumer Reports rating of a 99/100, and the highest safety rating in history from the National Highway Safety Administration, a 5.4/5. They are getting closer and closer to releasing their true disruptor—the much more affordable Model 3, and the company’s market cap is just under $30 billion. Not ended there, they are quickly becoming the world’s biggest battery company, currently working on their giant Nevada “Gigafactory,” which will more than double the world’s total annual production of lithium-ion batteries.

SolarCity, which went public in 2012, now has a market cap of just under $6 billion and has become the largest installer of solar panels in the US. Currently, it is building the country’s largest solar panel-manufacturing factory in Buffalo, and will likely be entering into a partnership with Tesla to package their product with Tesla’s new home battery, the Powerwall.

And since that’s not enough, in his spare time, Musk is pushing the development a whole new mode of transport, the Hyperloop.

In a couple of years, when their newest factories are complete, Musk’s three companies will have an employee base of over 30,000 people. After nearly going broke in 2008 and telling a friend that he and his wife may have to “move into his wife’s parents’ basement,” Musk’s current net worth is around $12.9 billion.

All of this has made Musk somewhat of a living legend. His building a successful automotive startup and its worldwide network of Supercharger stations has him being compared to visionary industrialists like Henry Ford and John D. Rockefeller. The pioneering work of SpaceX on rocket technology has led to comparisons to Howard Hughes, and because of the advancements in engineering Musk has been able to achieve across industries, many have drawn parallels between Musk and Thomas Edison. Perhaps most often, he’s compared to Steve Jobs, due to his remarkable ability to disrupt giant, long-stagnant industries with products customers didn’t even know they wanted. Some believe he’ll be remembered in a class of his own. Tech writer and Musk biographer Ashlee Vance has suggested that what Musk is building “has the potential to be much grander than anything Hughes or Jobs produced. Musk has taken industries like aerospace and automotive that America seemed to have given up on and made them into something new and fantastic.”