Entrepreneur of the Year, 2007: Elon Musk

The state-of-the-art method for accomplishing this is Boeing's Delta IV rocket, which cost the aerospace giant roughly $2.5 billion to design and build. Boeing is a $61.5 billion company with more than 150,000 employees. SpaceX employs 370, it uses a converted tractor-trailer as a control room, and its CEO, a man with no prior experience with rockets, doubles as chief engineer. Yet the company has developed a competitive launch vehicle in less time and for less money than would have seemed possible. "Here, we look at every way to do something and then ask what's the minimum amount of money we need to do it--and it's approved like that," says Tom Mueller, vice president of propulsion development, or, as Mueller puts it, the "engine guy." Mueller spent 14 years at defense giant TRW prior to joining SpaceX. From 1995 to 2000, Mueller was part of a TRW team of about 80 people that built an engine intended for the Delta IV, only to see his work abandoned when Boeing selected a competing firm as its engine supplier. Tens of millions of dollars and thousands of hours amounted to no finished product. "I can't think of anything I was responsible for at TRW that ever flew," he says. At SpaceX, Mueller developed a working engine with only 25 engineers. Musk's salespeople have managed to book 14 flights for customers including NASA, the Malaysian government, and MDA, a Canadian data company, charging from $7.1 million to $35 million per trip. SpaceX was cash-flow-positive in the fourth quarter of last year and is on track to reach profitability when the books close on 2007.

Amazingly, the aerospace business has reached such levels of inefficiency that you can have a profitable rocket company without having successfully launched a rocket. So far, SpaceX has completed two test launches--achieving less than ideal results. At its first launch, in 2006, the engine caught fire upon liftoff. The second rocket, launched earlier this year, made it 180 miles up but was doomed by a problem known in the rocket business as "slosh." During the abortive flight, engine vibrations caused the liquid propellants inside the fuel tank to begin sloshing around. This threw the rocket into a spin and kept the engine from running properly. Unfortunately, Musk and his engineers hadn't installed anything inside the fuel tank to slow the liquid down. About five minutes into its flight, the rocket started to wobble. Three minutes later, it was plummeting back to Earth.

As he pilots the Prius toward an exit ramp, Musk joins the meeting and begins speaking. He fires off a list of directives, concerns, and ideas related to the fuel tank: How many baffles are necessary? How can SpaceX avoid Teflon clips? What about a filter? Should the team build a model or test it with a computer simulation? Still holding the phone to his ear, Musk parks the Prius smack in the middle of SpaceX's overcrowded lot--at a company that adds 11 employees a month, finding a parking spot is tough--and strides off to finish the meeting. Later that afternoon, he interviews a prospective IT manager and a recent college graduate who hopes to become a launch engineer. He meets with a couple of bankers from Morgan Stanley. After that, he has an extended meeting with a flip-flop-wearing 29-year-old who happens to be in charge of designing the rocket's fins. Musk frets over the state of Tesla Motors--he has interviewed 20 candidates and still can't find a suitable CEO--and gives an interview to a writer with Photon magazine about the promise of SolarCity. There are many, many e-mails to answer.

If simultaneously shepherding three disruptive companies sounds tough, it's business as usual for Musk. As a 12-year-old growing up in the South African city of Pretoria with divorced parents, Musk created a video game, Blaster, and sold it to a computer magazine for the ungodly sum of $500. About a year later, Elon and his younger brother Kimbal, who has long been Musk's closest friend and chief co-conspirator, drew up plans to open an arcade near their school. "It was a very compelling proposition when you're 13 and you love video games," Musk says, letting out a rare chuckle. They gave up when a city official informed them that an adult's signature would be required to obtain a permit and instead sold homemade chocolates to their classmates. In his teenage years, Musk parlayed his small entrepreneurial fortune into several thousand dollars of stock market gains.

Just before Elon's 16th birthday, and without telling their parents, the brothers took a bus to the Canadian embassy and applied for passports. (Their mother, a Canadian national, now lives in Manhattan.) A year later, Elon bought a plane ticket to Canada and, over the objections of his father, left South Africa for good. Musk says he was fleeing compulsory service in the South African Defense Force, which was still repressing the country's black majority. But he is quick to add that he'd long dreamed of coming to America. "I would have come here from any country," he says. "The U.S. is where great things are possible." When I ask Musk if his father ever forgave him for leaving, he answers, "I don't really care." The two seldom speak today.

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Max Chafkin

Senior writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York.

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