When you embark on grand endeavors, tossing colossal ideas around like they’re mere coins aimed at a wishing well, you become accustomed to hearing the label insane. For Elon Musk, the adjective occurs so frequently, he might as well have it printed on his business card—right next to his name. Insane Elon Musk. Who else would dare to orchestrate a privately funded mission to Mars?
Yes, Mars. Take a moment to contemplate that vision, as it’s where this astonishing journey commenced: with a wild plan to highlight the stagnation in America’s efforts in space exploration.
Long before he targeted other planets, Musk played a pivotal role in two of the most successful ventures in the digital landscape. At the age of 24, he co-founded Zip2, an Internet services firm with his younger brother Kimbal, which was later sold to Compaq for $307 million. Then there was PayPal, the online payment platform he worked on alongside Peter Thiel and Max Levchin, which eBay acquired for $1.5 billion. When everything was tallied, Musk found himself with a fortune amounting to $180 million.
It requires a specific type of shrewdness to execute such deals, and one must admire a person who amasses a personal fortune in a mere seven years. So when Musk resolved, following a contemplative car journey with a college acquaintance on Long Island Expressway, to pursue the dream of sending a tiny greenhouse to Mars, folks chuckled at the thought. And when he jetted off to Moscow to negotiate the purchase of two intercontinental ballistic missiles, they entertained the notion. However, when he declared he was going to establish yet another business—this one that would develop its own rockets—they concluded he had lost his mind.
“The public often reacts to precedents and extremes,” Musk stated during a commencement address at Cal Tech last June. That’s what made the concept of sending that greenhouse to space so compelling for him. Not only would it bring life to Mars, marking the initial step of a lengthy colonization venture, but it would also represent the furthest distance life from Earth has ever traveled. NASA has dispatched rovers to the Red Planet in the past, most recently last year, to capture images and gather samples, yet the notion of introducing living organisms has only been vaguely suggested. Musk is convinced a sustainable human settlement on Mars is achievable sooner than even the most optimistic astronomers might envision, albeit significant advancements in rocket propulsion are required first.
At the moment of his cosmic epiphany, only three nations—the United States, Russia, and China—had successfully launched spacecraft into orbit. It’s understandable why some skeptics—including scientists, venture capitalists, journalists, and politicians—might have expressed doubt. Musk embarked on his mission without formal training in aerospace engineering. He graduated with bachelor’s degrees in physics and business from the University of Pennsylvania in the ’90s. Even his closest companions joined in the skepticism, a few of them coming together to voice their concerns. One actually conducted an intervention, compelling him to watch grim footage of rockets exploding. “We staged an intervention,” recalled Musk’s college roommate, Adeo Ressi. “We warned him he was going to end up losing every penny—which he did.”
To his credit, Musk was open to hearing all opinions. He relished negative feedback, understanding his friends’ worries were rooted in validity. Boeing had spent roughly $2.5 billion to design and manufacture the Delta IV rocket utilized for launching today’s satellites, employing more than 150,000 individuals. As Musk confessed to 60 Minutes, “I would have to be out of my mind to think the odds were in my favor.” Yet, that did not deter him from pressing on.
In June 2002, around the time of his 31st birthday, he founded Space Exploration Technologies Corp., commonly known as SpaceX. To launch the venture, the young innovator expended $100 million from his personal funds.
Launching Into the Unknown
By all accounts, Elon Musk should be a name recognized universally, akin to the Tony Stark character (Find out more about Robert Downey Jr. as Tony Stark) that he inspired in the Iron Man films. Yet he has always been something of a mystery.
Born in South Africa in 1971, Musk was unlike the other boys in Pretoria. Not only was he captivated by books, but he could recall nearly everything he read. Born to an engineer (in both electrical and mechanical fields) and a dietitian/model, he learned early how to leverage his intellect for financial gain. At the age of 12, he made his first sale, a software game called Blastar, earning $500. He later attempted to open a video arcade with his brother, though neither of them had the age to sign a lease. At 17, Musk departed for America to carve out his fortune. Partly, he was escaping obligatory military service, but he recognized America as the epicenter for innovation. If you wanted to create transformative ideas, that was the place to be.
Of course, you cannot just arrive in America without a green card. Therefore, Musk first traveled to Canada—the land of his mother’s origin—where he took up various odd jobs. Eventually, he enrolled at one of Canada’s premier universities, Queen’s University in Kingston, Ontario. After a year, he transferred to Penn, where he earned dual degrees while simultaneously hosting grand parties with bartenders and security personnel at the house he shared with Ressi. He graduated in 1995 and headed west to Stanford, intending to gain expertise in high-energy supercapacitors while pursuing a graduate degree. That lasted all of two days. Very quickly, he caught the entrepreneurial fever predominant in Silicon Valley, witnessed the remarkable success of the Netscape IPO, and dove headfirst into action.
He called his brother from Queen’s University, recruited a friend, and the three of them worked tirelessly under the leaky roof of a tiny office in Palo Alto, California, which also served as their residence, coding for Zip2. The venture capitalists backing them insisted they hire a CEO to manage the operation. To this day, Musk bristles at the consequences of that choice. The company flourished, attracting business from clients such as The New York Times, Hearst, and Knight Ridder. However, Musk believes it could have emerged as a more significant competitor in the dot-com boom, genuinely contending with renowned search giants like Yahoo and Google.
When Zip2 was sold, Musk took home $22 million. He promptly invested it in his next ambitious project, a digital payment service called X.com. In the spring of 2000, at 29, he merged his company with competitor Confinity, which provided a similar service branded as PayPal.
Confinity’s CEO Peter Thiel stepped back and allowed Musk to steer the company, and by many standards, he performed admirably in integrating the two entities. Yet, he inevitably rubbed some individuals the wrong way. It’s fair to assert that Musk has never been showered with extraordinary charm. He might smile and force out a laugh, but he’s not necessarily a great conversationalist. Those who know and appreciate him have grown accustomed to him zoning out mid-discourse—even during phone conversations—lost in contemplation for extended stretches.
After nearly ten months at the helm, Musk departed the PayPal office for a long-awaited getaway to Australia. While he was away, the board of directors voted to replace him with Thiel. The dismissal hurt, Musk admits, yet it did not soften his resolve. He remained the company’s largest shareholder. When eBay approached in 2001 with a $400 million proposal, Musk challenged the management team to decline. The auction site returned with an $800 million offer, and he was even more adamant about demanding more. The company had become profitable, he argued. The business was thriving.
“That was probably the most pivotal choice we made at PayPal—not to sell, but instead, we opted to go public,” Thiel reflects on PayPal’s successful IPO in February 2002. “We ended up selling to eBay about six months later for nearly double the initial amount—$1.5 billion.”
Weathering the Storm
Is it bravery that distinguishes Elon Musk from most business executives? Certainly not. Nearly every entrepreneur must, at some point, leap into the unknown. What makes Musk remarkable is that, in an age when young go-getters with laptops scramble to springboard the next Google from their dorms, he decided to risk his entire net worth on three ventures requiring substantial infrastructures and hefty research and development expenditures.
First, he allocated $100 million to SpaceX, now based in a 550,000-square-foot facility once used for crafting 747 fuselages. Then in 2003, he invested $50 million into Tesla, a carmaker aiming to produce electric vehicles for the general populace. A mere three years later, he put down $10 million to kick off SolarCity, a firm that installs and leases solar panels nationwide.
It’s tempting to assert he makes it all seem effortless, but that’s far from the reality. Musk handed off the leadership at SolarCity to two cousins while reserving the CEO title at SpaceX for himself. Initially trying to guide Tesla from a distance, he inevitably found himself juggling a second CEO position. Today, he commutes between SpaceX headquarters in Hawthorne, California, and the Tesla command center in Palo Alto multiple times a week. The demanding workload—85 to 90 hours weekly—contributed to the breakdown of his first marriage with sci-fi author Justine Musk, and likely played a role in the collapse of his second to British actress Talulah Riley. To spend quality moments with his sons—twins born in 2004 and triplets born in 2006—he often brings them on his jet for the 400-mile journey.
Musk’s failures have been monumental. In 2000, he crashed a $3 million McLaren F1 sports car he had neglected to insure. Tesla’s $98,000 Roadster experienced considerable delays before reaching customers. The initial three rockets engineered by SpaceX resulted in crash-and-burn footage reminiscent of the videos Musk was compelled to watch with his friends. The first barely left the ground, the second spiraled out of control five minutes into its flight, and the third ended in a catastrophic failure after eight minutes, resulting in a collision between its first and second stages, scattering the ashes of astronaut Gordon Cooper and actor James Doohan—Scotty from Star Trek—into the Pacific Ocean. SpaceX, on behalf of the space services company Celestis, was endeavoring to carry these remains into orbit according to the wishes of the deceased’s families.
“That was undoubtedly a tough setback,” Musk admits. “The crucial thing is that none of our customers walked away from SpaceX. They all maintained their faith.”
Musk himself never wavered. When the fourth rocket soared into the azure sky above the Marshall Islands—2,400 miles southwest of Hawaii—on September 28, 2008, he lacked the funds to construct a fifth rocket. Nevertheless, about 9.5 minutes into the launch, at an altitude of 250 miles above mission control, the second stage engine shutdown happened as intended, and the Falcon 1 became the first privately developed liquid-fueled rocket to reach orbit around the Earth. “This is one of the most incredible days of my life,” the CEO exclaimed during the post-mission celebration he shared with SpaceX’s 150 team members. “We will be taking over for the Space Shuttle when it retires.”
If grasping how one individual could allocate $100 million towards such an ambitious dream seems difficult, consider how challenging it would be to take the last $3 million from your bank account and invest it in a faltering automobile manufacturer. That was precisely what Musk did three months following the success of SpaceX, during a time when banks nationwide were clamoring for federal bailouts, and General Motors and Chrysler stood on the brink of bankruptcy. “I had to borrow money just to make rent,” he shares.
It represented the most soul-crushing phase of his existence, a time he styles as the “period of maximum suckage.” He worked tirelessly. His first marriage was falling apart. His ambitions for Tesla seemed to be hanging by a thread. Yet he never flinched. “Either I go all-in or Tesla fails,” Musk recounted to a Men’s Journal reporter. “I didn’t want to look back and think there was something more I could have done.”
No Final Frontier
On May 25, 2012, SpaceX’s latest rocket, Falcon 9, transported a laptop, 162 meals, and fresh attire to astronauts at the International Space Station, marking the beginning of a contract worth $1.6 billion with NASA for a minimum of 12 more resupply missions. In the same week, Tesla proclaimed that it would, ahead of schedule, start fulfilling orders for the Model S, a four-door electric sedan priced around $50,000 after tax credits. It is now accepting orders for a similarly priced crossover SUV known as the Model X. When the company went public in June 2010, it boasted a valuation of $2.2 billion. SolarCity entered 2013 with plans to raise $200 million through its own IPO.
This is not to say that Musk’s detractors have retreated. During a recent presidential debate, Mitt Romney questioned the federal funding that had supported Tesla during its challenging times. America’s auto dealers have called Musk out for opting for company-owned showrooms, much like Apple, instead of working with them. Meanwhile, the national gossip outlets have been combing through his divorce documents, not to mention every quarterly earnings report, searching for signs of weakness.
Musk remains unfazed. He frequently appears on television alongside Jon Stewart and David Letterman, discussing weighty topics in his softspoken manner: the sun, the moon, enlightenment, and the apocalypse. He goes to great lengths to outline his reasoning, but honestly, it’s challenging to follow his leaps in logic. Who else self-studies the intricacies of rocket science through literature and inquiries?
Musk exemplifies a time when the U.S. was a bastion of extraordinary ideas when efforts were made to connect coasts with railroads, excavate the Panama Canal, and, indeed, put a man on the moon. “He possesses an extraordinary sense of mission,” remarks Thiel, the individual who displaced him from the CEO position at PayPal. “The initiatives he’s involved with—if he weren’t doing them, nobody would.”
Regarding Musk’s now-famous risk appetite, Thiel argues that it’s misguided to view SpaceX, Tesla, and SolarCity as outrageous gambles. “All have achieved considerable success,” he explains. “If you succeed in all three, it’s not merely a lucky strike of a lottery. The strategy of pinpointing crucial sectors that were thoroughly overlooked was vital to their success. In a way, that rendered it less hazardous than it initially appeared.”
Musk acknowledges that there is little difference between analysis and intuition in his bold business decisions. “Data shapes the instinct,” he asserts. “Generally, I wait until the data and my intuition align. If either the data or my instincts seem misaligned, I tend to continue working the issue until they coincide, positively or negatively.”
While much attention is given to Musk’s struggles in his personal life—uneven conversations, two failed marriages, friendships strained by his profound thoughts and ambitions—the reality is he possesses profound insight into human motivations. He comprehends that constructing a mere functional electric vehicle isn’t enough. To ignite global imagination, the vehicle must accelerate from zero to sixty in under 3.9 seconds—akin to a Ferrari. To usher in an entirely new perspective, merely reaching the International Space Station won’t suffice. The objective must be to render space travel accessible and bring the venture to Mars within reach for affluent travelers.
Therefore, the pressing question is not whether Elon Musk is crazy. It’s whether we are irrational to doubt him—to question that, as he posits, the nation’s roadways will soon throng with electric vehicles over the coming two decades or to believe that humans couldn’t possibly set foot on Mars within the next ten years.
If history is any indicator, Musk will prove us wrong.
