← Elon Musk Thinking
Elon Musk Thinking
17 years ago, Elon Musk old interview talking about his company!!!
00:24:40
17 years ago, Elon Musk old interview talking about his company!!! #ElonMusk Follow me on X https://x.com/Astronautman627?t=RFQEunSF2NwRkCOBc6PkkQ&s=09
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- [00:00]
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- [01:01]
Interviewer
When Elon was 23, he got out of college. He went to San Francisco, the Bay area, with a car, a computer, and $2,000.
- [01:12]
Elon Musk
I think that's right.
- [01:14]
Interviewer
And he started a company called Zip2. It was sort of like what the early Yahoo was. It was an online directory. Four years later, when he was about my age, he sold the company for just over $300 million to Compaq. And I bring this up not because it was the largest Internet company acquisition at the time, but because he's done so much stuff since then that nobody even remembers this initial success.
- [01:40]
Elon Musk
True, Zip2 doesn't get much play.
- [01:43]
Interviewer
So I'm going to ask him some questions. We're going to go through. He's got, as Jane said, three mind blowing companies. And then hopefully we'll have some time for you all to ask him some questions. So start thinking and we'll get to those. So I'm going to put up something that probably looks familiar to most people here. This is the homepage of PayPal. In 2000, Elon was a co founder and the company was sold to eBay in 02 for $1.5 billion. And we all know what PayPal is today, but I was hoping you could sort of share with us kind of what your vision was from the beginning.
- [02:18]
Elon Musk
Well, it certainly evolved over time. Initially, the. Well after slang zip2, I wanted to do something more on the Internet. And it seemed to me that there hadn't been all that much innovation in the financial sector. And given that money is kind of just an entry in a database and it was low bandwidth, so it didn't require some big infrastructural upgrade to the Internet, it seemed it should lend itself to innovation. So I tried to think of what could be, what was something compelling that could be done. And I thought, well, if we can combine all types of financial services in one, so you could have like mortgages, basically all your entire financial relationship seamlessly integrated together in one place online, that would be cool. And then there was a little feature that just seemed like an obvious feature, which was the ability to transfer money from one person to another by entering a unique identifier, like email address. There was like just a sort of a little feature. But then whenever we demonstrate the product, people wouldn't get excited about the consolidated financial services, but they would get excited about emailing money. So we sort of focusing our energy on that and that really ended up being the big driver of growth.
- [03:29]
Interviewer
Right. So it sort of went from a super bank. I think that's what the media called it.
- [03:32]
Elon Musk
Yeah. Like a super financial services thing. Yeah. To really narrowly focusing on email payments. Although I should point out that actually a lot of people aren't aware that a lot of the success of PayPal is due to the underlying financial services that are there, such as the money Market fund, which is one of the highest yielding, in fact, I think the highest yielding in the country. And the fact that there's a PayPal debit card which operates off the MasterCard system. So you can buy things, buy things in the real world and get cash from an ATM that directly taps into your PayPal account. Those are actually very important to the PayPal business model.
- [04:10]
Interviewer
Right. So you were CEO of the company for most of 2000, I think, and you went N99. N99, PayPal merged or, sorry, Elon's company merged with another company. It became PayPal. He was running the company. He went on an investment raising trip. And when he got back, what happened?
- [04:32]
Elon Musk
Well, yeah, so, you know, I think it's not a good idea to leave the office when there are like a lot of major things underway which are causing people a great deal of stress. Yeah, but it was a combination of needing to raise money and I had not. I gotten married earlier that year and not had any vacation or honeymoon or anything. So it was kind of a combined financing trip, honeymoon and anyway, away for two weeks. And there was just so much. There was just a lot of worry. And that caused the management team to decide that I wasn't the right guy to run a company. And so the board was like, you know, geez, what do we do? So basically, I could afford it really hard, but instead I said, you know, rather than fight it at this critical time, best to sort of concede.
- [05:38]
Interviewer
It's amazing to me how you managed. When I first asked you about this, you said you buried their hatchet. And. And, you know, one of the. Basically, the person who replaced you just put, I think, $20 million or so into your company. And how did you get past that kind of betrayal? I mean, how did you guys patch it up?
- [06:00]
Elon Musk
Yeah, that's actually an interesting story. Well, I didn't agree with their conclusion. I understood why they took the action they did. And they're not, you know, Peter and Max and David and the other guys. I mean, they're smart people with generally the right motivations. They did what they thought was right. And I think for the right reasons. I mean, except that the reasons weren't valid, in my opinion. But it's hard to argue with the ultimate outcome, which is positive. So I just thought it's just easy to be better and just hate them forever. But, you know, it's best. The right, better course of action is to turn the other cheek and sort of make the relationship good. And it was. But I put a lot of effort into sort of making things good. And then, yeah, actually recently, the Founders Fund, which is comprised Primarily of ex PayPal people, people including Peter, who replaced me as CEO, invested in SpaceX, and I invested in Peter's things before that.
- [07:13]
Interviewer
So I want to put up something about what this PayPal sale to eBay helped make possible. Tell us what we're looking at.
- [07:25]
Elon Musk
That's the Tesla Roadster, which is the world's first production electric sports car.
- [07:32]
Interviewer
And how much does it cost? How fast does it give us the sales pitch? Okay, they just opened a dealership, so he should be good at this.
- [07:40]
Elon Musk
Yeah, actually, I've sold a lot of cars. So the Tesla Roadster is the nutshell. The elevator speech thing is that the Roadster is faster than a Ferrari and more efficient than a Prius. So it actually has better acceleration than any Ferrari except the Enzo. And it's about 3.9 seconds, 0 to 60. And that. That actually understates the true acceleration, because 0 to 60 for a gasoline car is measured from when the wheels start moving. But the wheels only start moving when you engage the clutch. And it typically takes about a quarter second or more to engage the clutch, but there's no clutch for our car. It's direct drive, so you don't have a clutch engagement delay. So it's like equivalent to a gasoline call with a 0 to 60 of about 3.6 seconds. And it's incredibly good handling. And then the energy efficiency of the car is probably the most amazing thing. It only costs $4 at current California rates to go about 250 miles. So the range, the current EPA rated range, which is a combination of highway and city with the air conditioning on, is 244 miles.
- [08:58]
Interviewer
It's amazing. So this is. I mean, it's so cool. It costs $109,000, if anybody's interested.
- [09:08]
Elon Musk
It's expensive, but it's comparable to like a Porsche 911. So we wanted to have something which was in the price range of a comparable gasoline car that it could probably beat. So that's key because it's one thing to have a compelling product, but it has to be a compelling product at a compelling price.
- [09:29]
Interviewer
Right. In the press, obviously, this has gotten a lot of attention and Elon's taken a lot of flack for various redesigns. You've been portrayed as a micromanager, redesigning the headlights or whatever.
- [09:43]
Elon Musk
I thought it was a nanomanager. I've improved several orders of magnitude.
- [09:50]
Interviewer
So why does the car need to be perfect? I mean, why did you need to redesign the doors, for instance?
- [09:58]
Elon Musk
Well, first of all, the car is definitely not perfect. In fact, one of the things that troubles me personally is when I see a product, it's sort of. I can immediately see a readout of all the flaws. I need to reprogram myself or remind myself to look at the good things as well. So it's certainly far from perfect. But the acceptance, fundamentally, if you don't have a compelling product at a compelling price, you don't have a great company. And that was really the gate that the car had to pass through. And so there were things like the dorsals because we used a chassis that was inherited from Lotus Elise. In retrospect, we should have completely redesigned the car and not used any Elise componentry, because we really. It's sort of like you go into a house and you think you'll just change this or that and it'll be all ok. And then you end up changing everything in the house. It would have been better to just level the house and start do something new because our car is 30% heavier. The load points are all different. So we had to really redesign the chassis. And one of the things I said we've got to do is to lower the dorsals. And as it is, our dorsals are still too high. But I'd say imagine if they're 2 inches higher, because that's what they were. It made it almost unusable, in my view.
- [11:23]
Interviewer
Yeah. I mean, what. Elon, I think you were quoted saying something like delorean failed because they built a bad car and you need to. The car needs to be worth $109,000 to be successful.
- [11:36]
Elon Musk
Absolutely. Absolutely. Exactly. If you don't. Exactly. We did not want to create another DeLorean, and the DeLorean kind of looked kind of cool, but it was really weak on performance. It was unreliable, and there were lots of little issues with the car, and we just didn't want to be in that situation. And it's not like, I mean, we could have built a worse car and still sold a bunch of them. But if you don't sell enough to make the business look attractive to future investors, you're not going to attract the capital to take it to the next level or even to sustain where it is.
- [12:06]
Interviewer
How many orders have you taken?
- [12:08]
Elon Musk
Twelve hundred. Twelve hundred deposits.
- [12:10]
Interviewer
Wow.
- [12:10]
Elon Musk
So we only take orders when somebody puts down a deposit of at least $5,000.
- [12:15]
Interviewer
Yeah. So I'm going to move to another company. But you told me that the last successful car startup was Jeep in 1941.
- [12:25]
Elon Musk
Yeah, in the US yeah, in the.
- [12:27]
Interviewer
US so doesn't that kind of say something bad about going into the car business? I mean, why. Why go for this?
- [12:38]
Elon Musk
Well, certainly I would not have done this if it were a gasoline car. So this is not about. It's not because I thought the world had a shortage of sports cars that started Tesla. It's because it's very important that we accelerate the transition away from gasoline for environmental reasons, for economic reasons, for national security reasons. It's very, very fundamental and frankly. So, you know, even if you don't believe in the environmental reasons, even if you don't believe in the national security issues reasons, it's obviously gasoline. Oil is not a renewable resource. And sooner or later, the economic issues are going to cause a collapse of the economy, literally a collapse of the economy if we don't find an alternative. Because you'll be paying 20, 30, $40 gas for gasoline and stuff's going to get, you know, it's going to start approaching the price of gold. I mean, it's going to be crazy. So we got to find a renewable alternative. And the good that Tesla is doing is not just Tesla's, what Tesla does itself. It's the example that Tesla sets for the rest of the industry. In fact, people have probably seen the announcement for the Chevy Volt. Well, Bob Lutz. Bob Lutz is the champion of the Chevy Volt and he credits Tesla with getting the Chevy Volt started. Because when we unveiled our Tesla Roadster a couple years ago, he saw the press release, he took the Tesla press release, went to his development guys and said, if a little company in California can do this, why can't we? And that's what prompted the Chevy Volt.
- [14:20]
Interviewer
Yeah. Well, let's talk about how we power these things. Oh, that's a picture of the workshop just south of San Francisco. And then this is another company that Elon, this is probably the one that you're maybe least involved with on a day to day basis. But it's SolarCity and sort of the elevator pitch for this one, as you've told it to me before, is, you know, you're going to do for solar power what Dell did for computers, which I think is such a nice way of putting it, and I was hoping you could just unpack that for us a little bit.
- [14:51]
Elon Musk
Certainly. Well, Dell doesn't make the CPU or the hard drive or the memory, but they put it all together and they manage the relationship with the end customer, they manage the service and all that. And that's a very important element because if you had to go to intel and buy your CPU and somewhere else and buy your hard drive and put that all together, very few people would have computers. So SolarCity is about packaging that all making it really easy to use. Just basically make one call. It's just seamless and painless. And then they also have a lot of innovation on the financing front. So they did a $300 million debt facility with Morgan Stanley that allows the end consumer to sign up for solar power, put no money down and your utility bill decreases. So it's a complete no brainer. Now it doesn't work for every house because your house has to be, you know, south face, you know, have a south facing roof and be of sufficient size and, and you have to be in an area where electricity is not super cheap, but it works for a lot of houses and maybe probably a third of the houses in California, something like that. And so they've just enjoyed phenomenal growth. I mean they're literally growing as fast as they can hire good people. And I mean the numbers for the month of August came in and solar cities as big as the next five solar power providers combined in California and all credit to them. I mean really, it's a phenomenal job. I mean, I was sort of weighing every now and again like, yeah, how about this? Or how about that? But really, I deserve very little credit.
- [16:25]
Interviewer
For no nano managing there.
- [16:27]
Elon Musk
No, not at all. Thank goodness.
- [16:30]
Interviewer
So Jane brought up Mars in her introduction and you know, you got out of PayPal with and Zip2, you know, with a lot of money. And I think, I'm sure people in this room have had this happen to them and many people will have it happen sometime in the future, I hope. And instead of buying mutual funds or, I don't know, doing what everyone does with several hundred million dollars, you decided to.
- [17:01]
Elon Musk
Mortgage backed securities. They're great.
- [17:09]
Interviewer
You decided to start a rocket company with the express purpose of, well, making it cheaper to get stuff in outer space than eventually going to Mars or helping humanity go to Mars. And I just wanted to know, why do that?
- [17:26]
Elon Musk
It isn't obvious. Well, when I was in college, there were sort of three areas that I thought, what's really going to affect the future of humanity in a significant way? The three things that seemed to be most significant to me were the Internet, the transition to a sustainable energy economy, and the third was the extension of life beyond Earth, becoming multiplanetary. I didn't think I'd be involved at all in option three, but the reason I think it's important is it goes to how we decide that anything is important. And the lens of history is a good way to distinguish what seems important in the moment from what is truly important over the long term. And if you zoom out and look at a long enough period of time and say the 4 billion year history of Earth and the evolution of life itself, then there's only about half a dozen or so major milestones in the history of life. There's obviously single celled life, multicellular life, differentiation to plants and animals, the transition from oceans to land, mammals consciousness, and then also on that scale would fit life becoming multiplanetary. It would be, I think, at least as important as life going from the oceans to land. Probably more important or more significant because at least that was a gradual transition. If things got a little uncomfortable on land, you could just hop back in the ocean. And that's not really feasible on interplanetary journeys. So, you know, here we are. It's sort of the first time in the 4 billion year history of Earth that life has been able to go beyond Earth. And that window may be open for a long time. And I'm optimistic that I hope it will, and I'm actually fairly optimistic about the future of Earth. But something may happen that closes that window and prevents life from extending beyond Earth and that risks the extension of life, or at least consciousness as we know it. And that would be a terrible thing. Life is a terrible thing to waste.
- [19:35]
Interviewer
So I want to give people a sense of what kind of we're talking about. So we just have a short. Oh, this is, you know, building the rocket and this should give people a sense of. So that's your rocket and that launched.
- [20:15]
Elon Musk
Yeah.
- [20:18]
Interviewer
That launched what, about three weeks ago or four weeks ago? And we'll get to what happened. But I just want to ask you, I mean, watching that and, and when you watch that for the first time, your first rocket went in 05, I believe, or.
- [20:32]
Elon Musk
Right.
- [20:33]
Interviewer
I mean, how did that, how did you feel when $100 million years of work and you're shooting something in the air? I mean, it must have been amazing.
- [20:43]
Elon Musk
Yeah, it's pretty nerve wracking, that's for sure. The pucker factor on launch day is very high. So no, you know something. Well, yeah, I mean, you know, I'm actually, should be said, I'm actually kind of like a physics guy. I mean, I'm like an engineer really, and I do kind of the business stuff because, you know, you kind of have to do the business stuff or if you don't do the business stuff, somebody's also going to do it for you and then you could be in trouble. And actually the chief designer of the rocket, I mean, I could tell you I could redraw that rocket without the benefit of blueprints for the most part. Yeah. So it's sort of like seeing my baby go up there, you know, and it's pretty scary.
- [21:31]
Interviewer
So there have been three flights so far and each one has. Obviously the goal is to get into orbit. Each one has sort of not made it. How did you deal with the.
- [21:43]
Elon Musk
Well, it got to space.
- [21:44]
Interviewer
Okay, it got to space, but it didn't. You didn't get where you wanted to go.
- [21:48]
Elon Musk
Not all the way.
- [21:51]
Interviewer
Sorry.
- [21:54]
Elon Musk
Well, you know, didn't necessarily go all the way on the first few days.
- [21:58]
Interviewer
SpaceX has.
- [22:02]
Elon Musk
Got to work your way up there, but certainly flights two and three got to well into well beyond the boundaries of space. It didn't get to full orbital velocity though.
- [22:14]
Interviewer
Yeah, but I mean you've got. SpaceX has several hundred employees and obviously you said it was like your baby. I mean, how did you deal with it personally and then how did you deal with the company as a manager, sort of helping them get past it and helping your customers get past it, obviously to keep their money, because nobody's taken their money out of SpaceX. They've sold 12 flights and none of the customers have asked for their money back.
- [22:39]
Elon Musk
That's true.
- [22:40]
Interviewer
So how did you do that?
- [22:43]
Elon Musk
Lots of therapy, lots of hand holding. I think the customers that have signed up for SpaceX are pretty sophisticated. They understand that in the early attempts at flight, in the development phase, essentially called the beta phase, if it was software, there will be crashes and things won't necessarily go 100%. They obviously do expect that once we get out of the development phase that there will be good reliability and that really is a function of eliminating design related issues. The last launch had a problem because we had a brand new engine on it that had a thrust transit that was longer than the last one. And so there was an issue following stage separation. But generally they're quite sophisticated customers and they understand what's going on. And actually the first three flights were paid for by, well, the first two were paid for by darpa, the Defense Advanced Research Project Agency, and the third one was played for by the Air Force Operational Response for Space Office. And the outcomes they were looking for were not really the delivery of a satellite to orbit. They were actually looking for demonstration of rapid launch. So they actually felt that we were fully paid for three flights.
- [24:09]
Interviewer
Right. So I'm going to ask one more question and then we'll have some time for a quick Q and A. You know, there's another rocket that looks just like this right now in the Marshall Islands where SpaceX launches from. And it's. I think you told me it's going to go on this coming week, hopefully, or hopefully this week. And you know, you told me, and I think you've written this elsewhere, that starting a rocket company is so risky, it's like playing Russian roulette.
- [24:38]
Elon Musk
And well, each launch is a bit like Russian roulette. Yeah.
- [24:41]
Interviewer
Okay.
- [24:42]
Elon Musk
And Russian let you know, it's worth pointing out that you're probably going to win.
- [24:51]
Interviewer
But I wanted to ask you, Russian roulette, how do you know that you're dead? I mean, when do you stop? When do you say, you know what, I'm not going to make it, or how do you know?
- [25:04]
Elon Musk
I think if we run out of money, but we actually, I know this sounds crazy, but we were profitable last year, we're going to be profitable this year. I'm not a big profit, we're fairly small profit and we have enough funding on hand and with existing contracts that are independent of Falcon 1 to last through the end of next year.
- [25:23]
Interviewer
Okay, so I was just told. I guess we don't have time for questions. And I'll let that be my last question. But, Elon, thank you so much for being here and just sharing your story with us. It's so inspiring.
- [25:38]
Elon Musk
Thank you. Thank you.