Tonight in Los Angeles, Pando Daily‘s Sarah Lacy interviewed Elon Musk on entrepreneurship at Cross Campus, a coworking space in Santa Monica. The conversation was great, and it was especially interesting to hear him talk about how different his risk tolerance is than Peter Thiel’s. Peter is one of the other “PayPal Mafia”, and while Elon put his $180 million into starting a few companies- $100 million on a rocket company he was sure would never make a dime, $70 million on an electric car company, and $10 million a residential solar panel installation company, Thiel chose the safer route of Venture Capital.
Lacy retold an anecdote which highlights their different styles, about a time when Musk was driving Thiel to a meeting on Sand Hill Road in his new Mclaren F1. Thiel asked “So, what can it do?” Musk replied “Watch this!” And damned if that thing couldn’t make a simple lane change at speed. (detailed description in the video, it’s too painful to recount here. Suffice to say, the car must have recovered, as it was later sold) Later in the interview, he literally said “I’ve got more tolerance for risk than Peter Thiel, I’m more a “pedal to the metal” kind of guy. Charming! So when will we see a Tesla racing series?!?! I recall plenty of Roadster owners taking theirs for an illicit (racing voids the warranty) and thrilling spin around Laguna Seca at the Refuel event we’ve covered.
Some highlights from the interview:
Lacy: Considering all you’re doing, running multiple companies- Are you crazy?
Musk: I think I probably am a bit crazy. I think that’s a healthy sign. There’s a point at which you don’t think you’re crazy, then you probably are.
Lacy: Will you do an Internet company again?
Musk: Probably not, although I still find it interesting. I am allocating my efforts to that which will best impact humanity in a good way. Also, there’s not as many new entrants in these industries (space and automobile). New entrants are what drives innovation.I didn’t seek investor funding in first 3 funding rounds of SpaceX, because investors want to know about prior successes in this industry. There were none to show them in the nascent commercial space industry. Along with my own $100m, I got backing from friends, who paid into the Founder’s Fund. I’d never actually made physical stuff before starting SpaceX, and thought the most likely outcome was failure.
Lacy: Why did you feel SpaceX needed to be done?
Musk: The pinnacle of space progress was in 1969, then it just declined to nothing. I kept thinking there’d be a plan to send people to Mars, as the next step. My initial plan was to send dehydrated green cells, to seed the planet. Because you want a future expecting things to be better, not worse. However, it soon became clear the rocket technology was nowhere near where it needed to be. I started SpaceX to make space travel affordable, initially did it as a philanthropic venture, not expecting to make money. Yet it’s been profitable the past two years.
Lacy: What’s it like to work as hard as you do and experience failure?
Musk: Yeah, it super sucks, especially in 2008- We had our third launch failure in a row at SpaceX, lost a round of funding for Tesla, even Solar City was struggling. It looked like all three companies were going to fail, and I was going through a divorce. I kept all three companies going despite imminent failure. Solar city didn’t need much capital, but SpaceX & Tesla were tough choices. I had a long standing interest in electric cars, but tried very hard not to be CEO of Tesla. Again, at the end of 2008, I chose to step in and take over. But it was really not fun.
It’s been great being able to go from spending all my waking hours on them to only 98%. Solar City has never required nearly as much sweat equity from me, so I don’t even like to claim the title of co-founder. There may come a point several years in the future when Tesla’s fundamental goal has been accomplished, then the catalytic value of Tesla will have been realized, and I won’t need to run it anymore.
Lacy: Fisker & A123 are having a lot of issues, what are you doing better?
Musk: We do serious engineering, solve tough problems, do our own manufacturing, from raw materials. All the software, design, hardware. But Fisker is all about styling. We’re focused on making great products- Toyota & Damlier buy electric power trains from us.
The reason we (society) don’t have electric cars is not for a lack of styling!
Lacy: Do you only enjoy this if the odds are failure?
Musk: No, I’m enjoying life more, and hope never to return to the experiences of 2008.
Lacy: Are you now “F!!! no, I’m not starting another company”?
Musk: Well, I think an electric jet is a good idea. When I see a sad thing in technology, I think, how can we make it not a sad thing? For example the Concorde- It’s sad that it’s out of commission. If you just changed the engines, you could double the range. Then I did the math, saw that the higher you go in the atmosphere, there’s less drag, so the faster & more efficient it is. So an electric motored plane could really work. Another sad thing is the California bullet train, it’s the slowest & most expensive per mile. If they’re saying $60 billion now, it’ll be more. Whereas SpaceX has only needed $200m, and has been profitable for past 2 years.
What is the fastest way to get from Los Angeles to San Francisco? Evacuated Tube transport. It never crashes, the average speed is 2x faster than aircraft, getting you from LA to SF in less than 30 minutes. Evacuated tube transport could also be self powered via solar, which could generate more power than needed.
Then Elon fielded questions from the audience. Mine was “Honda and Mercedes have clearly expressed to me that they feel hydrogen fuel cells are the real future, but I feel strongly that batteries are the future. Why do you think they feel this way?”
Musk replied “I don’t really know, because the math makes it obvious that batteries are drastically cheaper. If you take the best case scenario for a fuel cell, as optimized as possible, it always loses against current LiIon. I think they felt for a long time that there was this need to do something. Since fuel cells were always ten years off in the future, they could keep saying they’re doing something. At Tesla, we call them “Fool Cells”. And with that, and much complaining about LA traffic, Elon dashed off to a screening of “Baseball in the Time of Cholera“. Le sigh.