Elon Musk's Guide to the Galaxy
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There are many things of which Elon Musk is certain. Musk knows, for instance, how to get a liquid-fueled rocket into orbit and how to run a sports car with 7,000 tiny batteries. He knows how to manage 1,700 employees spread between two wildly ambitious companies in two different cities: the Los Angeles aerospace company SpaceX and the Bay Area electric-car company Tesla Motors. He knows how to get rich.
And then there are things Elon Musk doesn't know but simply believes. He believes that Northrop Grumman couldn't build an inexpensive rocket even if someone literally handed it plans to do so. He believes that the Chevy Volt will be a disappointment when it goes on sale later this year. And he believes that in roughly 20 years, he will step out of a space capsule and become one of the first humans -- part of a new generation of explorers, without precedent since the days of Columbus and Magellan -- to establish a human colony on Mars.
The last, of course, will require hard work. Musk will have to create and then launch a rocket capable of safely transporting humans beyond Earth's orbit -- all while avoiding the machinations of his competitors, the lingering effects of the global recession, and the ill will of members of Congress and the public who are annoyingly hostile to the idea of having private companies set up colonies on other planets.
Yes, getting to Mars will be a challenge, even for someone who knows as much as Elon Musk. So he isn't worrying much about getting back. His will most likely be a one-way mission: a glorious and romantic and -- let's be honest -- insane attempt to take civilization beyond this planet.
Whatever one thinks of Musk's ideas about multi-planetary life, he is a singular character in American business. Musk has already helped inspire a Hollywood action hero -- Tony Stark, portrayed by Robert Downey Jr. in the Iron Man movies -- and has hundreds of pages' worth of press clippings. He tends to remind people of Apple co-founder Steve Jobs. The comparison has merit: both men are committed micromanagers, and both have an instinct for the theater of business. But whereas Jobs is very good at working within constraints -- designing the perfect cell phone or the best computer operating system -- Musk likes to aim his energies far beyond the normal limits of common sense. "Lots of successful entrepreneurs want to change the world," says Steve Jurvetson, a longtime venture capitalist who has invested in Tesla and SpaceX. "For Elon, that's too narrow." The solar system is the thing.
These grand ambitions date at least to college, when Musk had an epiphany about what to do with the rest of his life. "I decided that there were three areas that were most going to affect the future of humanity: the Internet, sustainable energy, and extending life beyond Earth," Musk tells me. "I'm sure you've heard this story before."
I had heard this story before. In fact, in some small way, I helped create it. Three years ago, I wrote an article for Inc. about Musk, who had already started and sold two successful Internet companies. When he was just 23, Musk co-founded Zip2, an early Web software company that Compaq bought for $300 million, and at 27, he helped start PayPal, the Internet payments company for which eBay paid $1.5 billion. These accomplishments made him absurdly wealthy, but when I met him in 2007, he hardly seemed qualified to colonize another planet or cure humanity's addiction to oil. And yet for some reason I -- along with many others who heard his story -- believed he could do it.
Why that was, I'm not sure. Maybe it was his background, which reads like a heroic myth of entrepreneurship. As a boy growing up with divorced parents in apartheid South Africa, Musk dreamed of escaping to America. When he was 17, he left home and enrolled in college in Canada. He eventually graduated from the University of Pennsylvania. In 1995, he was accepted into a Ph.D. program in materials science and applied physics at Stanford, only to decide, two days after he had arrived on campus, to drop out and start a company.
Or maybe it was the oversize scale on which Musk seemed to live his life: not a family, but five boys, all under the age of 5. Not just one company, but three: SpaceX, Tesla, and SolarCity, a solar panel company that Musk dreamed up, funded, and then turned over to two of his cousins, Lyndon and Peter Rive.
Or maybe it was his physical presence: the imposing frame -- Musk stands over 6 feet tall, is thick through the middle, and carries himself like a rugby player -- the haughty South African accent, and the striking, if not exactly handsome, face. Or maybe it was the fact that nearly everybody who had ever worked with him, even people who clearly despised him, seemed to think he was a genius.
By late 2007, thanks to Musk's guidance and cash, Tesla Motors had built a prototype for an electric car that, it was said, could beat a Ferrari off the line. His spaceship had yet to reach orbit -- its ultimate goal -- but there had been two launches and a dozen signed contracts, including a $278 million deal with NASA. SpaceX's was the first privately funded rocket that seemed to have a legitimate chance at competing with those developed by the government and operated by the big aerospace companies, and it promised to reduce the cost of a launch dramatically. (SpaceX charges $50 million to launch a satellite, less than half the going rate.) Finally, SolarCity had quickly become the dominant solar panel installation company in California, with $23 million in revenue and nearly 200 employees.
On the strength of these accomplishments, Inc. named Musk the 2007 Entrepreneur of the Year. But to me, even this accolade felt like an understatement. Musk seemed like a superhero -- or maybe an alien. He told me that what he was doing would be one of the biggest events in the history of humanity, at least on a par with the moment when our forebears flippered their way out of the ocean and began walking on dry land. He said this seriously.
I returned to California this summer to see how the second act of Elon Musk's story was playing out. It was a Tuesday night at the Tesla Motors headquarters in Palo Alto, and Musk was in fine form, taking meeting after meeting about various aspects of the design of Tesla's forthcoming sedan, the Model S, and cracking jokes. He had just returned from his first vacation in eight years -- four days in French Polynesia and another four in a rental in Brazil after visiting a cousin. "It was the worst place I've stayed since I was a teenager," he says, shaking his head and letting out a laugh. "It stank, there were stains on the sheet, and the bedbugs did bite. It was awesome. We had a good time."
The vacation was a celebration of sorts. Three weeks before, I had watched Musk ring the Nasdaq bell in Times Square. Because Nasdaq companies are traded by computers rather than by guys in numbered blazers, there is no actual stock exchange -- just a cramped television studio in New York City -- but Musk hadn't let that fact get in the way of his spectacle. He showed up wearing a purple blazer and a checkered shirt, flanked by his beautiful 25-year-old fiancée, the actress Talulah Riley, and his now-6-year-old twins, Griffin and Xavier.
Musk noted, in his opening remarks, that this was the first IPO for a car company since Ford went public in 1956. He rang the bell, pumped his fist, and then took his entourage outside to pose for photos with Tesla cars. "We've confounded the critics at every turn," he bragged to CNBC, as its cameras panned to a bright red prototype of the company's Model S, a luxury sedan that will sell for roughly $50,000. "At a certain point, people have to get tired of being wrong."
The spectacle worked: Despite skepticism from market pundits -- case in point, Mad Money's Jim Cramer, who, just before the IPO, crowed, "You don't want to own this stock! You don't want to lease it! You shouldn't even rent the darn thing!" -- Tesla's stock settled $3 above the offering price of $17 a share, giving the company a market capitalization of roughly $2 billion. (Musk sold 5 percent of his stock in the IPO but remains the company's largest shareholder, with 30 percent of its stock.)
Musk spends two to three days a week in Palo Alto, flying in late on Tuesday mornings. He works pretty much nonstop until he flies back to Los Angeles, where he lives. When he must pause to eat, he does so with amazing efficiency. I twice saw him consume an entire meal -- chicken, a vegetable, bread, and a Diet Coke or two -- in under five minutes, all while holding forth on topics such as how best to fix a rocket vibration problem or the ridiculousness of sales as a business function. "In the early days, when Elon would have lunch meetings, I used to have to tell people that they shouldn't worry if he'd already finished before they even sat down," says Mary Beth Brown, his longtime assistant. "He just doesn't realize how fast he's moving."
Musk needs those precious minutes. Despite the growth of Tesla and SpaceX, which have tripled their staffs since 2007, Musk hasn't really changed his management style. He still vets almost all new employees -- though lower-level hires are now allowed to answer his interview questions by e-mail -- and he remains the lead product designer for both the rocket and the electric car. "A normal workaholic is sober compared to Elon," says Lyndon Rive, the CEO of SolarCity, for which Musk serves as chairman and in which he holds a 25 percent equity stake.
Musk's favorite activity is to lead technical meetings at Tesla and SpaceX. There are dozens of these gatherings each week on topics such as the car's battery pack or the rocket's navigational software. Typically, Musk sits at his desk with a dozen or more young engineers spread out on chairs, the windowsill, and the floor. Managers attend these meetings, too, but they don't do much talking; Musk prefers to get his information from the kids doing the actual work. During one of our five-minute lunches, I ask him how many people report to him. "It's not a zillion," he says, then recites a few names and guesses that it's about 20. "It's probably more than I think it is."
But reporting structures don't matter to Musk, who has trouble staying out of any detail, no matter how small or seemingly trivial. The new Tesla headquarters, a sprawling 400,000-square-foot campus that used to be a Hewlett-Packard laboratory, was still under construction when I visited, and Musk, not one to miss a bunch of potentially interesting decisions, immediately inserted himself into the process. He cast the deciding vote in a debate over how much red paint to use in the warehouse, he closely scrutinized a plan for the staircase railings, and he engaged in a 10-minute colloquy about the proper material for restroom countertops. (The director of facilities recommended tiles; Musk ruled in favor of a granite slab.)
I had a hard time keeping a straight face while the self-taught rocket scientist got worked up about bathroom furnishings. But later that week, when I used the SpaceX men's room, I noticed a design touch that seemed positively Muskian. When I asked him about it, Musk informed me that he had indeed personally selected the toilets at SpaceX. His favorites: a urinal that incorporates a psychedelic strobe light and another that employs, instead of a porcelain receptacle, a large steel bucket. "I was looking for creative urinals," he explains. "It's a nice pot."
The allusion to having a pot to piss in is apt. Two years ago, Musk and his companies were perilously close to bankruptcy, and Musk was perilously close to falling apart. "Those were dark days," he says of the summer of 2008. "I think I still have some emotional scar tissue. Just thinking about that time stresses me out."
The trouble began in 2007, just as production for the Tesla Roadster was set to begin. That was when Musk discovered that the Roadster, which was supposed to sell for $92,000, was actually costing the company $140,000 in raw materials alone. Musk blamed the failure on lax accounting practices -- and on intentional obfuscation by co-founder and CEO Martin Eberhard. He fired Eberhard and installed a new CEO, who began renegotiating supplier contracts, slashing costs, and raising prices. Over the next year, Tesla would fire roughly 30 percent of its staff and close the Detroit office that had been developing the Model S sedan. Eberhard did not leave quietly. On his blog, Teslafounders.com, he portrayed Musk and his cohorts as coldhearted, shortsighted, and mean, calling the layoffs a "stealth bloodbath." (The pair eventually resolved their dispute in mediation.)
In addition to the public spat with Eberhard, Musk found himself embroiled in a lawsuit with Henrik Fisker, a former Tesla designer who had started a competing company. Meanwhile, Musk's marriage was falling apart, and his wife, Justine, being a professional writer, was, naturally, blogging about the divorce. "No one who knows my ex-husband would accuse him of being weak-willed," she wrote that October. "The same qualities that helped bring about his extraordinary success dictate that the life you lead with him is his life...and that there is no middle ground (not least because he has no time to find it)."
The result of all this was a barrage of terrible press. A long article in Fortune questioned whether Tesla would ever deliver production cars. A series of posts on the blog Valleywag suggested that Musk was intentionally steering Tesla into bankruptcy, that he had engaged in an extramarital affair, and that he was a habitual liar. Musk did his best to strike back with denials and rejoinders, but the battling took its toll. "I'd never seen him so sad," says Maye Musk, Elon's mother. "Everything was collapsing around him."
It got worse. In August 2008, SpaceX suffered its third consecutive launch failure, losing a rocket and two satellites -- and the remains of James Doohan, the actor who played Scotty in the original Star Trek TV series. Doohan had paid to have his ashes shot into orbit. Instead, they ended up in the South Pacific, with what was left of the rocket and the satellites.
Musk was devastated. SpaceX's goal had been to make rockets cheaper to launch and more reliable. Instead, the company had lost every rocket it had launched and had spent nearly all of the $100 million that Musk had used to found the company.
Then, just as Musk was trying to raise additional funds so Tesla could begin building the Model S, the credit markets collapsed, and the auto industry seized up. Tesla had just four months of operating capital left in the bank at a time when no investor wanted to sink money into an unprofitable car company. Even SolarCity was foundering. Morgan Stanley, which had been financing no-money-down solar panel leases, pulled out of the program, temporarily cutting the company's sales in half. "It looked like all three might go under," says Musk.
I had never seen Musk show any kind of emotional vulnerability before he told this story. He looked down and then confessed that he would often wake up and discover that he had been sobbing in his sleep. To Musk, a man who had steered his own destiny since his early teens, the loss of self-control was terrifying. "I'd wake up and just be like, What the fuck," Musk says. "I think that it's like" -- he pauses, suddenly seeming far younger than his 39 years, and then tries to explain -- "When you're asleep, there's just much less emotional control."
After SpaceX's third launch failure, Musk announced that the company was raising outside capital for the first time -- $20 million from the Founders Fund, a venture capital fund run by his former PayPal co-founder Peter Thiel. The investment did two things: It showed that somebody other than Elon Musk believed he might succeed, and it gave him enough money for at least two more launches.
Rocket companies normally spend months after a launch failure carefully reviewing what happened before they make their findings public. But just four days after the crash, Musk took to the SpaceX blog and wrote that he was "certain as to the origin of this problem." He planned to have a new rocket on the launching pad within a month. To industry veterans, the swiftness of the response was impressive -- and also a little frightening. "A lot of people were seriously questioning whether SpaceX could put everything together and have a successful launch," says Jeff Foust, an aerospace analyst with the Bethesda, Maryland, consulting firm Futron and the editor of The Space Review, an online journal that covers the industry. "If Elon had failed again, he would have been roundly criticized for not taking a more methodical approach. It was a bit of a bet on his part."
But SpaceX didn't fail. On September 28, 2008, Elon Musk's Falcon 1 rocket became the first privately funded spaceship to reach orbit from the ground. A grainy webcast shot from a camera mounted on the rocket showed the engine burning red above the blue Earth, while loud cheers from hundreds of employees echoed over the feed. In December, NASA announced that it had purchased 12 flights on Musk's new, larger rocket, the Falcon 9, to resupply cargo to the International Space Station; the contract was worth roughly $1.6 billion over seven years.
Musk made a similarly risky gamble to shore up Tesla. At a board meeting in October, with the company's future in doubt, Musk informed the board that he was raising a $40 million round from existing shareholders -- even if it meant that he would be the only shareholder putting in money. He eventually invested about $20 million in cash. "That was it," he says. "I was all in."
Musk's investors were floored. "I don't think I've ever seen an entrepreneur with so much resolve," says Steve Jurvetson. "That was a heroic act. It was a risky act. It saved the company." The gesture helped persuade Jurvetson and other Tesla shareholders to dig a little deeper. Kimbal Musk, Elon's brother and a board member at Tesla and SpaceX who contributed to the round, told me that it never occurred to him to advise his brother not to bet the remainder of his wealth on Tesla. "There was no question he was going to do it," says Kimbal. "Elon's psyche is so tied up in the idea of changing the world. His attitude was, So what if I don't have any money left?"
Musk's official titles at Tesla had been product architect and chairman, but as the largest shareholder, he had long been a de facto CEO. Now he took the title formally and announced that he would personally refund buyers' deposits if Tesla failed to produce a car. He also began aggressively campaigning to tap several hundred million dollars' worth of government-guaranteed loans that had been approved as part of the $7.5 billion Advanced Technology Vehicles Manufacturing Loan Program, a green-auto initiative that President George W. Bush signed into law just before leaving office.
The decision to apply for government funding was controversial, especially in the light of the financial crisis and the auto industry bailout. New York Times columnist Randall Stross wrote a scathing column in November in which he questioned whether it was appropriate for taxpayers to help out a sports car manufacturer and proposed the loan program be renamed the Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act. Musk had always been an enthusiastic patron of the press -- he accepts most interview requests, rarely seems to censor himself, and does not use a publicist -- but he took an especially aggressive tack in defending Tesla during the financial crisis. "Randy Stross is a huge douche bag and an idiot," he said in a video interview with Yahoo's finance website. (Musk stands by the assertion. In fact, when I asked him about it, he spent a few minutes parsing the difference between the two slurs and then he added another: "Renowned dickhead." I didn't ask for an explanation, but I'm sure he had one ready.)
Musk defended Tesla's application for the loan guarantee by pointing out that government dollars were already going to gas-guzzling carmakers. How, he asked, could anyone begrudge a tiny electric-car company a few million dollars when Washington was giving billions to General Motors and Chrysler? The argument worked. Tesla won approval for a $465 million loan, the chief source of financing for the Model S. (The big companies made out just fine. As part of the alternative-fuel program, Ford received $5.9 billion, and Nissan got $1.6 billion.)
The confrontational pose has since become Musk's default. During my visits, he made cracks about the astronaut (and vocal SpaceX opponent) Neil Armstrong, Audi, GM, BMW, Democrats, Republicans, the U.S. Senate, Lockheed Martin -- as well as a smattering of lesser villains that included enterprise software companies (useless, overpriced) and Santa Monica restaurateurs (purveyors of low-quality fare). These barbs can be quite funny -- and they make for excellent copy -- but Musk's tendency to publicly humiliate anyone who stands in his way can also be coercive and a little creepy.
On the other hand, Musk has little choice but to defend himself. He points out that his rivals in the auto and aerospace industries are among the most entrenched in the world. "The lobbying power they have is gigantic," he says. "They have literally buildings full of lobbyists in D.C. We have one guy. If this was something about who has the most lobbying power, we would be screwed." Musk has received plenty of government money -- and the Obama administration has embraced Tesla and SpaceX -- but suggestions by commentators that this is the result of some kind of quid pro quo arrangement seem off base. During the 2008 election, Musk, a registered Independent, contributed more money to Republicans than Democrats. He gave $2,300 to the Obama campaign.
Still, his days as an outsider are probably numbered. Tesla is on track to book about $100 million in revenue this year, on sales of the Roadster and battery packs for Daimler's electric Smart car and the Mercedes A-Class -- as well as Toyota's electric Rav4. (Both automakers now have substantial investments in Tesla; the battery-pack deals are joint ventures.) In 2012, the Model S is set to start rolling off production lines in a Bay Area factory that once made Chevy Novas and Geo Prizms for GM.
SpaceX, meanwhile, has 40 launches on its manifest -- including the NASA deals, a $500 million contract with the satellite giant Iridium, and contracts to provide launch services to the space agencies of Taiwan and Argentina. "For many years, we've seen proposals for lots of new launch vehicles, but most of them never materialize," says Foust, the aerospace analyst. "For SpaceX to have launched the Falcon 9 successfully is a major accomplishment. Commercial space has moved past the PowerPoint stage."
Between the electric cars and rocket launches, Musk clearly has a lot on his plate. But that hasn't stopped him from plotting another trio of ambitious business proposals.
"The simplest," Musk tells me, "is to use aerospace engineering to double-decker the freeways." He plans to start a company that will create prefabricated metal risers out of space-grade aluminum. Then, he wants to drop those risers onto Los Angeles's famously congested 405, doubling the capacity of the freeway without stopping traffic. "It's a no-brainer -- easily done," he says. "They would also look quite pretty."
His other two ideas are more speculative, but not entirely so. Musk hopes to one day turn his attention to solving the problem of commercial nuclear fusion -- that is, generating nuclear power without nuclear waste -- and to design and manufacture a zero-emission airplane. "The idea would be to go several generations beyond what's currently available," he says. "It would be an electric, supersonic vertical-takeoff plane -- much more convenient. I know that would work, too."
It sounds pretty wild, but so did Musk's ideas when, in 2002, he looked into shooting a greenhouse into space and landing it on Mars. But after making three trips to Russia in an attempt to buy a cut-rate launch on a decommissioned intercontinental ballistic missile, Musk learned that even the least expensive rocket launch would cost $20 million or more. "The cost was prohibitive," he says. "It's 100 times worse than it needs to be, and it hasn't been improving. The U.S. had almost no rocket infrastructure in 1960. Nine years later, we were on the moon. And so you'd think, Sure, we can go to Mars by now. No way. We can't even get back to the moon."
SpaceX is working on a version of its rocket that will use two extra boosters to carry as much as 35 tons into orbit. Musk says the parts necessary to build a Mars spaceship could be launched on these more powerful rockets and then assembled in space, the same way the International Space Station was built. Or SpaceX could build a much larger craft -- "A big freaking rocket," Musk says -- to go straight to the Red Planet from our own.
None of this, of course, is paid for yet, and there is no clear market for Mars rockets. "We're taking a walk-before-you-run attitude," says Lori Garver, the deputy NASA administrator and the former space adviser to the Obama campaign. "We're hoping there will be some near-term successes to prove out our plan for commercial space." To date, Falcon 9 has flown only once, and there are two test flights remaining before it can begin flying to the space station. If it suffers more failures, any talk of Mars would seem to be off the table.
In that case, it's hard to imagine Musk failing gracefully. The psychic blow would be too great -- or he would destroy himself financially trying to salvage his dreams.
Musk hopes to eventually devote the bulk of his energy to SpaceX. Tesla's government loans require him to hold on to most of his stock until the loans are repaid, and an agreement with Daimler mandates that he stay on as CEO at least until the completion of the Model S in 2012. "I'm committed to Tesla, but nobody should be CEO forever," he says. "I think I've burnt out some mental circuits over the past couple of years."
Musk's chief concern is that by the time humanity is ready to get to Mars, he will be too old or frail to survive the journey. "I don't want to be doddering around up there, needing a quadruple bypass or something," he says, adding that, ideally, he will be on Mars by 2030, and by 2040 at the very latest.
But even that sounds ambitious. I ask him if he can really, really get it all done in his lifetime.
"Probably," he says. "Hopefully."
Then he pauses for a few seconds to consider the enormity of that question. He will be 69 in 2040. "Thirty years," he says. "That's me since I was 9. I think I can get a lot accomplished in that period of time."