Here are my notes on, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, By: Ashley Vance (Amazon):
DO YOU THINK I’M INSANE?” This question came from Elon Musk near the very end of a long dinner we shared at a high-end seafood restaurant in Silicon Valley. I’d gotten to the restaurant first and settled down with a gin and tonic, knowing Musk would—as ever—be late.
To my great surprise, Musk cut me off after a couple of minutes and simply said, “Okay.” One thing that Musk holds in the highest regard is resolve, and he respects people who continue on after being told no. Dozens of other journalists had asked him to help with a book before, but I’d been the only annoying asshole who continued on after Musk’s initial rejection, and he seemed to like that.
If some of the things that Musk says and does sound absurd, that’s because on one level they very much are. On this occasion, for example, Musk’s assistant had just handed him some cookies-and-cream ice cream with sprinkles on top, and he then talked earnestly about saving humanity while a blotch of the dessert hung from his lower lip.
I’d come to Silicon Valley in 2000 and ended up living in the Tenderloin neighborhood of San Francisco. It’s the one part of the city that locals will implore you to avoid. Without trying very hard, you can find someone pulling down his pants and pooping in between parked cars or encounter some deranged sort bashing his head into the side of a bus stop.
He jumped right into dot-com mania in 1995, when, fresh out of college, he founded a company called Zip2—a primitive Google Maps meets Yelp. That first venture ended up a big, quick hit. Compaq bought Zip2 in 1999 for $307 million. Musk made $ 22 million from the deal and poured almost all of it into his next venture, a start-up that would morph into PayPal. As the largest shareholder in PayPal, Musk became fantastically well-to-do when eBay acquired the company for $ 1.5 billion in 2002.
Another party occurred in Paris. Musk, his brother, and cousins found themselves awake at midnight and decided to bicycle through the city until 6 A.M. They slept all day and then boarded the Orient Express in the evening. Once again, they stayed up all night.
The most striking part of Elon’s character as a young boy was his compulsion to read. From a very young age, he seemed to have a book in his hands at all times. “It was not unusual for him to read ten hours a day,” said Kimbal. “If it was the weekend, he could go through two books in a day.” The family went on numerous shopping excursions in which they realized mid-trip that Elon had gone missing. Maye or Kimbal would pop into the nearest bookstore and find Elon somewhere near the back sitting on the floor and reading in one of his trancelike states.
As Musk saw it, “I just look at it as ‘What grades do I need to get where I want to go?’ There were compulsory subjects like Afrikaans, and I just didn’t see the point of learning that. It seemed ridiculous. I’d get a passing grade and that was fine. Things like physics and computers—I got the highest grade you can get in those. There needs to be a reason for a grade. I’d rather play video games, write software, and read books than try and get an A if there’s no point in getting an A. I can remember failing subjects in like fourth and fifth grade. Then, my mother’s boyfriend told me I’d be held back if I didn’t pass. I didn’t actually know you had to pass the subjects to move to the next grade. I got the best grades in class after that.”
They never really dated, but Christie found Musk interesting enough to have lengthy conversations with him on the phone. “One night he told me, ‘If there was a way that I could not eat, so I could work more, I would not eat. I wish there was a way to get nutrients without sitting down for a meal.’ The enormity of his work ethic at that age and his intensity jumped out. It seemed like one of the more unusual things I had ever heard.”
It soon became clear that Musk had a firmer grasp on the material than anyone else. “This was a group of fairly high achievers, and Elon stood way outside of the bell curve,” Farooq said. Musk’s intensity has continued to be a constant in their long relationship. “When Elon gets into something, he develops just this different level of interest in it than other people. That is what differentiates Elon from the rest of humanity.”
He’d been obsessed with video games since his childhood and had held a gaming internship. But he came to see them as not quite grand enough a pursuit. “I really like computer games, but then if I made really great computer games, how much effect would that have on the world,” he said. “It wouldn’t have a big effect. Even though I have an intrinsic love of video games, I couldn’t bring myself to do that as a career.”
“I had never really run a team of any sort before,” Musk said. “I’d never been a sports captain or a captain of anything or managed a single person. I had to think, Okay, what are the things that affect how a team functions. The first obvious assumption would be that other people will behave like you. But that’s not true. Even if they would like to behave like you, they don’t necessarily have all the assumptions or information that you have in your mind. So, if I know a certain set of things, and I talk to a replica of myself but only communicate half the information, you can’t expect that the replica would come to the same conclusion. You have to put yourself in a position where you say, ‘Well, how would this sound to them, knowing what they know?’”
While pursuing this project, Musk stumbled upon what seemed like an obvious business opportunity. The United States had tried to help reduce the debt burden of a number of developing countries through so-called Brady bonds, in which the U.S. government basically backstopped the debt of countries like Brazil and Argentina. Musk noticed an arbitrage play. “I calculated the backstop value, and it was something like fifty cents on the dollar, while the actual debt was trading at twenty-five cents,” Musk said. “This was like the biggest opportunity ever, and nobody seemed to realize it.”
In the years that followed, Musk considered starting an Internet bank and discussed it openly during his internship at Pinnacle Research in 1995. The youthful Musk lectured the scientists about the inevitable transition coming in finance toward online systems, but they tried to talk him down, saying that it would takes ages for Web security to be good enough to win over consumers. Musk, though, remained convinced that the finance industry could do with a major upgrade and that he could have a big influence on banking with a relatively small investment.
It had taken Musk less than a decade to go from being a Canadian backpacker to becoming a multimillionaire at the age of twenty-seven. With his $ 22 million, he moved from sharing an apartment with three roommates to buying an 1,800-square-foot condo and renovating it. He also bought a $ 1 million McLaren F1 sports car and a small prop plane and learned to fly.
Soon enough, X.com had a major competitor. A couple of brainy kids named Max Levchin and Peter Thiel had been working on a payment system of their own at their start-up called Confinity. The duo actually rented their office space—a glorified broom closet—from X.com and were trying to make it possible for owners of Palm Pilot handhelds to swap money via the infrared ports on the devices. Between X.com and Confinity, the small office on University Avenue had turned into the frenzied epicenter of the Internet finance revolution. “It was this mass of adolescent men that worked so hard,” Ankenbrandt said. “It stunk so badly in there. I can still smell it—leftover pizza, body odor, and sweat.”
The pleasantries between X.com and Confinity came to an abrupt end. The Confinity founders moved to an office down the street and, like X.com, began focusing their attention on Web and e-mail-based payments with their service known as PayPal.
More fights broke out over the design of the company’s technology infrastructure. The Confinity team led by Levchin favored moving toward open-source software like Linux, while Musk championed Microsoft’s data-center software as being more likely to keep productivity high. This squabble may sound silly to outsiders, but it was the equivalent of a religious war to the engineers, many of whom viewed Microsoft as a dated evil empire and Linux as the modern software of the people.
History has demonstrated that while Musk’s goals can sound absurd in the moment, he certainly believes in them and, when given enough time, tends to achieve them. “He always works from a different understanding of reality than the rest of us,” Ankenbrandt said. “He is just different than the rest of us.”
The start-up life, which Musk described as akin to “eating glass and staring into the abyss,” 4 had gotten old and so had Silicon Valley. It felt like Musk was living inside a trade show where everyone worked in the technology industry and talked all the time about funding, IPOs, and chasing big paydays.
The Russians, who often skip breakfast, would ask to meet around 11 A.M. at their offices for an early lunch. Then there would be small talk for an hour or more as the meeting attendees picked over a spread of sandwiches, sausages, and, of course, vodka. At some point during this process, Griffin usually started to lose his patience. “He suffers fools very poorly,” Cantrell said. “He’s looking around and wondering when we’re going to get down to fucking business.” The answer was not soon. After lunch came a lengthy smoking and coffee-drinking period. Once all of the tables were cleared, the Russian in charge would turn to Musk and ask, “What is it you’re interested in buying?”
Another salesman flew down to SpaceX to sell the company on some technology infrastructure equipment. He was doing the standard relationship-building exercise practiced by salespeople for centuries. Show up. Speak for a while. Feel each other out. Then, start doing business down the road. Musk was having none of it. “The guy comes in, and Elon asks him why they’re meeting,” Spikes said. “He said, ‘To develop a relationship.’ Elon replied, ‘Okay. Nice to meet you,’ which basically meant, ‘Get the fuck out of my office.’ This guy had spent four hours traveling for what ended up as a two-minute meeting. Elon just has no tolerance for that kind of stuff.”
Tesla’s strategy of starting with a high-priced, low-volume product and moving down to more affordable products over time, as underlying technology and manufacturing capabilities advanced. Musk and Eberhard were big believers in this strategy, having seen it play out with a number of electronic devices. “Cellphones, refrigerators, color TV’s, they didn’t start off by making a low-end product for masses,” Eberhard told the paper. 7 “They were relatively expensive, for people who could afford it.”
Like so many people privy to these performances, Lyons came away with no illusions about Musk’s personality but with the utmost respect for his vision and drive to execute. “Working at Tesla back then was like being Kurtz in Apocalypse Now,” Lyons said. “Don’t worry about the methods or if they’re unsound. Just get the job done. It comes from Elon. He listens, asks good questions, is fast on his feet, and gets to the bottom of things.”
“What he went through in 2008 would have broken anyone else. He didn’t just survive. He kept working and stayed focused.” That ability to stay focused in the midst of a crisis stands as one of Musk’s main advantages over other executives and competitors. “Most people who are under that sort of pressure fray,” Gracias said. “Their decisions go bad. Elon gets hyperrational. He’s still able to make very clear, long-term decisions. The harder it gets, the better he gets. Anyone who saw what he went through firsthand came away with more respect for the guy. I’ve just never seen anything like his ability to take pain.”
It seems unfathomable, but the rest of the space industry has made space boring. The Russians, who dominate much of the business of sending things and people to space, do so with decades-old equipment. The cramped Soyuz capsule that takes people to the space station has mechanical knobs and computer screens that appear unchanged from its inaugural 1966 flight. Countries new to the space race have mimicked the antiquated Russian and American equipment with maddening accuracy. When young people get into the aerospace industry, they’re forced to either laugh or cry at the state of the machines. Nothing sucks the fun out of working on a spaceship like controlling it with mechanisms last seen in a 1960s laundromat.
Musk has managed to conjure up that Steve Jobs–like zeal among his troops. “His vision is so clear,” Singh said. “He almost hypnotizes you. He gives you the crazy eye, and it’s like, yes, we can get to Mars.” Take that a bit further and you arrive at a pleasure-pain, sadomasochistic vibe that comes with working for Musk. Numerous people interviewed for this book decried the work hours, Musk’s blunt style, and his sometimes ludicrous expectations. Yet almost every person—even those who had been fired—still worshipped Musk and talked about him in terms usually reserved for superheroes.
SpaceX’s original headquarters in El Segundo were not quite up to the company’s desired image as a place where the cool kids want to work. This is not a problem for SpaceX’s new facility in Hawthorne. The building’s address is 1 Rocket Road, and it has the Hawthorne Municipal Airport and several tooling and manufacturing companies as neighbors. While the SpaceX building resembles the others in size and shape, its all-white color makes it the obvious outlier. The structure looks like a gargantuan, rectangular glacier that’s been planted in the midst of a particularly soulless portion of Los Angeles County’s sprawl.
Musk realized he could tap into their stores of knowledge. He would trap an engineer in the SpaceX factory and set to work grilling him about a type of valve or specialized material. “I thought at first that he was challenging me to see if I knew my stuff,” said Kevin Brogan, one of the early engineers. “Then I realized he was trying to learn things. He would quiz you until he learned ninety percent of what you know.” People who have spent significant time with Musk will attest to his abilities to absorb incredible quantities of information with near-flawless recall.
Where a typical manager may set the deadline for the employee, Musk guides his engineers into taking ownership of their own delivery dates. “He doesn’t say, ‘You have to do this by Friday at two P.M.,’” Brogan said. “He says, ‘I need the impossible done by Friday at two P.M. Can you do it?’ Then, when you say yes, you are not working hard because he told you to. You’re working hard for yourself. It’s a distinction you can feel.
From time to time, Musk will send out an e-mail to the entire company to enforce a new policy or let them know about something that’s bothering him. One of the more famous e-mails arrived in May 2010 with the subject line: Acronyms Seriously Suck: There is a creeping tendency to use made up acronyms at SpaceX. Excessive use of made up acronyms is a significant impediment to communication and keeping communication good as we grow is incredibly important. Individually, a few acronyms here and there may not seem so bad, but if a thousand people are making these up, over time the result will be a huge glossary that we have to issue to new employees. No one can actually remember all these acronyms and people don’t want to seem dumb in a meeting, so they just sit there in ignorance. This is particularly tough on new employees. That needs to stop immediately or I will take drastic action—I have given enough warnings over the years. Unless an acronym is approved by me, it should not enter the SpaceX glossary. If there is an existing acronym that cannot reasonably be justified, it should be eliminated, as I have requested in the past. For example, there should be no “HTS” [horizontal test stand] or “VTS” [vertical test stand] designations for test stands. Those are particularly dumb, as they contain unnecessary words. A “stand” at our test site is obviously a test stand. VTS-3 is four syllables compared with “Tripod,” which is two, so the bloody acronym version actually takes longer to say than the name! The key test for an acronym is to ask whether it helps or hurts communication. An acronym that most engineers outside of SpaceX already know, such as GUI, is fine to use. It is also ok to make up a few acronyms/ contractions every now and again, assuming I have approved them, eg MVac and M9 instead of Merlin 1C-Vacuum or Merlin 1C-Sea Level, but those need to be kept to a minimum.
We’re trying to have a really big impact on the space industry. If the rules are such that you can’t make progress, then you have to fight the rules. “There is a fundamental problem with regulators. If a regulator agrees to change a rule and something bad happens, they could easily lose their career. Whereas if they change a rule and something good happens, they don’t even get a reward. So, it’s very asymmetric. It’s then very easy to understand why regulators resist changing the rules. It’s because there’s a big punishment on one side and no reward on the other. How would any rational person behave in such a scenario?”
The company also expected to participate in an expanding market for human flights. SpaceX has never had any interest in doing the five-minute tourist flights to low Earth orbit like Virgin Galactic and XCOR. It does, however, have the ability to carry researchers to orbiting habitats being built by Bigelow Aerospace and to orbiting science labs being constructed by various countries.
At first the more traditional automakers viewed the Model S as a gimmick and its surging sales as part of a fad. These sentiments, however, soon gave way to something more akin to panic. In November 2012, just a few months after it started shipping, the Model S was named Motor Trend’s Car of the Year in the first unanimous vote that anyone at the magazine could remember. The Model S beat out eleven other vehicles from companies such as Porsche, BMW, Lexus, and Subaru and was heralded as “proof positive that America can still make great things.”
Musk, though, approaches everything from a Platonic perspective. As he sees it, all of the design and technology choices should be directed toward the goal of making a car as close to perfect as possible. To the extent that rival automakers haven’t, that’s what Musk is judging. It’s almost a binary experience for him. Either you’re trying to make something spectacular with no compromises or you’re not. And if you’re not, Musk considers you a failure. This position can look unreasonable or foolish to outsiders, but the philosophy works for Musk and constantly pushes him and those around him to their limits.
Both the Roadster and the Model S also take advantage of what’s known as regenerative braking, which extends the life of the brakes. During stop-and-go situations, the Tesla will brake by kicking the motor into reverse via software and slowing down the wheels instead of using brake pads and friction to clamp them down. The Tesla motor generates electricity during this process and funnels it back to the batteries, which is why electric cars get better mileage in city traffic.
The guys like Straubel who had been at Tesla since the beginning are quick to remind people that the chance to build an awesome electric car had been there all along. “It’s not really like there was a rush to this idea, and we got there first,” Straubel said. “It is frequently forgotten in hindsight that people thought this was the shittiest business opportunity on the planet. The venture capitalists were all running for the hills.” What separated Tesla from the competition was the willingness to charge after its vision without compromise, a complete commitment to execute to Musk’s standards.
What’s more, SolarCity is a key part of what can be thought of as the unified field theory of Musk. Each one of his businesses is interconnected in the short term and the long term. Tesla makes battery packs that SolarCity can then sell to end customers. SolarCity supplies Tesla’s charging stations with solar panels, helping Tesla to provide free recharging to its drivers. Newly minted Model S owners regularly opt to begin living the Musk Lifestyle and outfit their homes with solar panels. Tesla and SpaceX help each other as well. They exchange knowledge around materials, manufacturing techniques, and the intricacies of operating factories that build so much stuff from the ground up.
Musk speaks about the cars, solar panels, and batteries with such passion that it’s easy to forget they are more or less sideline projects. He believes in the technologies to the extent that he thinks they’re the right things to pursue for the betterment of mankind. They’ve also brought him fame and fortune. Musk’s ultimate goal, though, remains turning humans into an interplanetary species. This may sound silly to some, but there can be no doubt that this is Musk’s raison d’être. Musk has decided that man’s survival depends on setting up another colony on another planet and that he should dedicate his life to making this happen.
Thiel has watched Musk go through this maturation—from the driven but insecure CEO of PayPal to a confident CEO who commands the respect of thousands. “I think there are ways he has dramatically improved over time,” said Thiel. Most impressive to Thiel has been Musk’s ability to find bright, ambitious people and lure them to his companies. “He has the most talented people in the aerospace industry working for him, and the same case can be made for Tesla, where, if you’re a talented mechanical engineer who likes building cars, then you’re going to Tesla because it’s probably the only company in the U.S. where you can do interesting new things.
Brown went to Musk and asked that she be compensated on par with SpaceX’s top executives, since she was handling so much of Musk’s scheduling across two companies, doing public relations work and often making business decisions. Musk replied that Brown should take a couple of weeks off, and he would take on her duties and gauge how hard they were. When Brown returned, Musk let her know that he didn’t need her anymore, and he asked Shotwell’s assistant to begin scheduling his meetings.
I feel a bit like my grandmother. She lived through the Great Depression and some real hard times. Once you’ve been through that, it stays with you for a long time. I’m not sure it ever leaves really. So, I do feel joy now, but there’s still that nagging feeling that it might all go away. Even later in life when my grandmother knew there was really no possibility of her going hungry, she always had this thing about food. With Tesla, I decided to raise a huge amount of money just in case something terrible happens.”
As Page puts it, “Good ideas are always crazy until they’re not.” It’s a principle he’s tried to apply at Google. When Page and Sergey Brin began wondering aloud about developing ways to search the text inside of books, all of the experts they consulted said it would be impossible to digitize every book. The Google cofounders decided to run the numbers and see if it was actually physically possible to scan the books in a reasonable amount of time. They concluded it was, and Google has since scanned millions of books. “I’ve learned that your intuition about things you don’t know that much about isn’t very good,” Page said.
Some of the conversations between Musk and Page take place at a secret apartment Google owns in downtown Palo Alto. It’s inside of one of the taller buildings in the area and offers views of the mountains surrounding the Stanford University campus. Page and Brin will take private meetings at the apartment and have their own chef on call to prepare food for guests. When Musk is present, the chats tend toward the absurd and fantastic.
By the time our last dinner had come around, I had decided that this propensity for risk had little to do with Musk being insane, as he had wondered aloud several months earlier. No, Musk just seems to possess a level of conviction that is so intense and exceptional as to be off-putting to some. As we shared some chips and guacamole and cocktails, I asked Musk directly just how much he was willing to put on the line. His response? Everything that other people hold dear.
