Brave Thinkers November 2010

Elon Musk

Ben Baker/Redux

After earning a fortune by founding PayPal, how did you end up creating businesses in three separate areas—electric cars, space exploration, and solar power—all at the same time?

My three big interests have remained consistent since college. I always wanted to be involved with something that could have a significant positive effect on the future of humanity. For me, the three relevant areas were the Internet, sustainable energy, and space exploration. My theory was to apply the majority of my effort to the space arena, because there is not a natural economic forcing function that will lead to space exploration. For energy, you do have a gradual increase in the price of oil and changes in the supply curve, which will force innovation. And there is a growing worldwide sentiment that maybe we shouldn’t pump the atmosphere full of CO2.

I knew it would be difficult to be CEO of three companies, so I brought on partners for Tesla [cars] and SolarCity [power]. In the case of SolarCity, that worked out really well. It has required very little time from me, apart from strategic guidance, and they have now become the largest provider of solar power in the country. Peter and Lyndon Rive, the co-founders, deserve great credit for this.

In the case of Tesla, the initial partners I chose to help build and run the organization were not able to overcome the difficult challenges of creating a car company. Especially when the economy went into recession, I had to choose to either let Tesla die or run it personally and invest all of my remaining personal capital in the company. At considerable personal sacrifice, I decided to do the latter. It is a great hardship to run two companies at once—and harder with their headquarters separated by 400 miles and in the middle of the worst recession since the Great Depression.

In June, right around the time Tesla Motors went public, your Falcon 9 vehicle achieved Earth orbit. The risks of space exploration seem on a different scale than your other enterprises. How did you assess those risks?

Yes, the risk in starting a space company is extremely high. Before SpaceX, no private company had ever reached orbit with a liquid-fueled rocket. Nonetheless, I knew that unless a new company entered the rocket-launch field and applied breakthrough innovation, humanity would never become multi-planetary. There is a big difference between getting to space and getting to orbit, where things get up and stay up. We did that only on the fourth attempt with our Falcon 1 rocket. It was definitely a nervous time trying to do an orbital flight of Falcon 9. Had we really learned from our mistakes? Would we get it right this time, with a vehicle so much larger? The Falcon 1 was comparable to a Gulfstream 5—but if the Falcon 9 were an aircraft, it would be a 747-class airplane. It has four times the thrust of a 747 and can lift a decent-size office building off its foundations. Everything worked on the first shot with the Falcon 9. So it appears that we learned our lessons.

Americans like to celebrate our culture as unusually “innovative” and to think that we have a long-term advantage in this regard over other societies, including China. Is that belief justified?

I think it is. Which is not to suggest complacency. We need to be vigilant that we have the right environment—and that we are attracting the best people from around the world.

Do you believe that innovators are born, or made? Do you take risks because of your basic outlook, or because of experiences and instruction?

I think it is some combination of the two. If I had been born in some cave, I suppose I would still try to be innovative, but there would be limits. You have to have the environment that encourages innovation as well. Let’s say I had been constrained to live in South Africa, where I was born. I would not have been able to achieve a fraction of what I have here.

The environment in the U.S. is supportive of big ideas and striving to better yourself. In a lot of countries, to attempt to exceed your station is frowned on. In France, polls always show that to have inherited your money is considered more admirable than to have earned it. That is terrible! In the United States, earning it is celebrated, which is better.

—Interview by James Fallows, national correspondent, The Atlantic
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