CHM Revolutionaries: An Evening with Elon Musk

Welcome ladies and gentlemen to the Computer History Museum I'm John holler the CEO and it's my pleasure to welcome you tonight on behalf of our trustees our staff our members our amazing volunteers all the people involved in making the museum a great place uh thank you thank you for being here tonight for the kickoff of our revolutionaries speaker series for 2013 we have major funding for the Revolutionary speaker Series from Intel we're delighted to have Intel support for the fourth year running now and it's just it's fantastic because it enables everything that we do to

make these revolutionaries programs possible we also also get additional funding from the William K Bose Foundation I want to say a special thank you to Tesla for arranging to have a Model S here this evening I hope you had a chance to see the Model S downstairs we've been looking forward for years to An event when we could have the Motor Trend Car of the Year at the Museum and we have it here tonight so thank you to Tesla we asked SpaceX for a rocket that proved to be a little more challenging but maybe someday

and now for tonight's program Here's a thought exercise if you compiled a list of the 75 most influential people of the 20th Cent Century who would be on your list or if you compile perhaps a list of The hundred people who most affected the world in the 20th century who would be on that list now think of the same list that you might start compiling for the 21st century so far and if all of that proves to be a little too much I can offer some help Elon Musk has been on every single one of

those lists that has been compiled for the 20th century to date no matter who seems to be drawing the lists up few scientists entrepreneurs or industrialists of the Last century could stake a claim to a career as boldly ambitious as the one Elon Musk is fashioning now transforming a large measure of the world's Commerce and payment systems as co-founder and chairman of PayPal in 1999 might be enough for anyone for one lifetime but Elon Musk has gone on from there to pursue his passion for solving business environmental and scientific problem problems on a global scale

he may be best known for his work at Tesla Where he serves as CEO and head of product design the path breaking Tesla Roadster and now the model S have changed almost all of the assumptions that the automotive world has made about what the styling performance and future of a new generation of electric cars might be simultaneously he serves as chairman and principal shareholder of Solar City the nation's leading provider of solar power systems but perhaps his most ambitious and intriguing work is Taking place at SpaceX where he is CEO and chief designer SpaceX is

erasing the boundaries between space flight and private Enterprise it has a multi-billion dollar multi-year agreement with NASA to be a Workhorse for cargo flights to and from the International Space Station and in 2015 that is the company's stated goal it will begin man space FL what is the source of Elon musk's revolutionary thinking how has he been able to do what He's done with the investors he's attracted and the teams that he's built exploring these questions and more tonight with Elon is Allison van digan who is a very notable and noteworthy journalist here in Silicon

Valley a contributor to KQED in The Huffington Post and one of the best interviewers in the field through her series fresh dialogues we're delighted to have Allison here tonight this is her first time on stage she's going to be terrific As will Elon please join me in welcoming Elon Musk and Allison van [Applause] digan so I'd like to start uh you grew up in South Africa right and I heard a wonderful story of when you were six years old and you started breaking the rules even then so you were six years old and you were

invited by your cousin to a birthday party but there was only there were two problems with that one you were grounded and two it was on the Other side of toone yeah so can you explain tell tell the audience how you got there uh all right well I mean this was when I was six so the memories are a little fuzzy at this point um but um as I recall uh yeah I I I was grounded for some reason I don't I don't know why but I think I felt that was unjust um and and

um and I really wanted to go to this party my cousin's party uh who was five you know so this like kids Party but um so uh I I I um I at first I was going to take my bike um but then and I told my mom this um which is a mistake um and and and she she told me some story about how you needed a license for a bike and and the police would stop me so I wasn't 100% sure if she was that was true or not but I thought I'd better

walk just in case um so yeah just I I I sort of thought I knew the way and uh but it was clear Across town so I don't know it was 10 or 12 miles away it's really really quite far um further than I realized actually and uh so I just started walking to to my cousin's house I think it took me about 4 hours and um and just as my mom was leaving that party with my brother and sister she saw me walking down the road um and freaked out um and then I I

saw I saw she saw me so I I then sprinted to my cousin's House and I was just just about two blocks away and then climbed a tree and refused to come down oh so the first of many rule breaking Adventures for Elon Musk so by the by the time you were 12 you're already an entrepreneur and making a profit I understand you you you earn $500 equivalent in Rand uh for creating a video game can you tell us about that and what the inspiration was uh yeah sure um so I uh when when I

was about 10 I walked into a computer store in in South Africa and um saw an actual computer um I previously had um some some early sort of precursors to to the the Atari uh system and then I got the Atari system which I'm sure a lot of people here have played um and uh and and but then I saw you could actually have a computer where you can make your own games and it was a Commodore Vic 20 um so that was the first computer I bought and um and then and then I got

Some uh books on how to teach yourself programming and um and this was like the coolest thing um I'd ever seen so I was just like this is super awesome um and uh so started programming games uh and uh and then selling games in order to actually buy more games so bit of a circular thing so and more games and better computers and that kind of thing so right so the money wasn't the the end goal for you it was more a means to an end uh yeah um basically I'd spend money On um yeah

better better computers and uh Dungeons and Dragons modules and things like that we nerd Master 3000 basically uh yeah so I understand at that time you were heavily into Comics I'm curious to know um did you love Iron Man the comic Iron Man I did kind of like Iron Man yeah you did did you ever did you ever imagine that you would be the inspiration for the movie version I did not no that would that was that was Pretty that was pretty much I would say 0% I would have said 0% chance what kind of

kid were you I mean can you can you look back and see yourself were you were you a bit of a lunar kid bookish kid uh I certainly I wasn't all that much of a loner um at least not willingly um so um but but I I certainly was uh quite um I was very very bookish I was reading all the time so I was either reading uh working on my computer reading comics Playing dungeons dragons that kind of thing and um I understand Hitchhiker's Guide to the Galaxy that wonderful book by Douglas Adams that

was a that was a key book for you what what was it about that book that that fired your imagination um yeah so uh I guess when I was in the around 12 or 13 I had compan existential crisis and I was reading various books um on trying to figure out the meaning of life and well like what does it all mean because uh it starts Seeming quite meaningless and then um uh my we happen to have like some some books by n and schopenhauer in the house which you should not read at age 14

is bad it's really negative um so so uh but but then I then I read hit is gu the Galaxy which like quite positive I think and um and sort of highlighted the the an important point which is that a lot of times the question is harder than the answer and If you can properly phrase the question then the answer is the easy part um and so uh the if to the degree that we can um better uh understand the universe then we better know what questions to ask and um then whatever the question is

that most appro approximates what's the meaning of life you know that that that's that's the question we could ultimately get closer to understanding um and so I thought well to the degree That we can expand the scope and scale of Consciousness and and knowledge um human knowledge then that would be a good thing wow so you're having these deep thoughts at what age 10 14 yeah sort of in the puberty I guess was 13 13 through 15 probably the most traumatic years right and so by the time you were 17 you were you were ready

you were actually left right I assume you hatched the plan earlier when you were around 14 15 I did Hatch the plan earlier actually I I tried to hatch several plans uh which they did not hatch right um but by 17 you were on a plane from South Africa you you had enough of South Africa you were ready to seek new pastures now why was it the United States was your destination why not Europe or somewhere else in the world well just whenever I'd read about cool technology it would tend to be in the United

States you know or more broadly North America Or including Canada so um uh so I kind of wanted to be where The Cutting Edge of Technology was um and of course within the United States uh Silicon Valley is is the is where the the heart of things is so um although at the time I didn't know where Sil Valley was it sounded like a mythical Place really great um so yeah so I I I wanted to come to the to the US I try to convince my um my mother or father who were divorced if

either one of them would move to the United States then I could then I could get there at one point I convinced my father but then he renaged unfortunately um so you had him convinced and then he changed his mind he did say yes and then and then he changed his mind why I don't know I guess um he was sort he was fairly established he's an engineer he was sort of established in South Africa and didn't want to have to go through that again in another country right so you Got on that plane all

by yourself at 17 uh yeah so um I I actually got um my my mother was born in Canada and actually her her father was uh American U but unfortunately she didn't get her American citizenship so then that broke the link and I couldn't get my American citizenship but she was born in Canada so I could get uh I actually filled up the forms for her and got her a Canadian passport and me too um and then as soon as within 3 weeks of my getting my Canadian passport I was in Canada right and then

you ended up at University of Pennsylvania yeah you did degree in physics and business yeah so I I I was in Canada for a few years at Queens University got a scholarship to go down to uh University of Pennsylvania um because one of the downsides of of coming to University of North America was that my my parents said they would not would not pay for college if it was well my father said he would not pay for College unless it was in South Africa so so it was either so I could have free college in

or or find some way to pay it here and uh fortunately I got a scholarship at at upen and um and so did uh did he U business under dual undergraduate uh business and and physics at upan Wharton and it was there that you came up with this idea of three main areas that you felt were most important to humanity can you describe how You Came Upon them was It just one day you had a flash of inspiration these are the three areas that are important and I want to concentrate on or how did did

that how did that inspiration come to you now I think I was thinking about it for a couple years um and during sort of freshman and sophore year at queens and then also at upen um and I was trying to think what would most influence the future uh you know what the problems that we that we have to solve um and um And I I actually talked a lot to friends and and my housemates and that kind of thing and dates which is not maybe not the best thing so yeah um actually met uh met

a woman I dated briefly in in college um who now works at Scientific American as a writer and uh and and she she related the anecdote that uh we went on a date I was all I was talking about was electric cars um that was not a big a winning conversation so it was a bit of a Monologue was it yeah she said she said the first question I asked her was do you ever think about electric cars no she never does so you learn from that that wasn't the best shout out L wasn't wasn't

great it has recently it's been more effective there you go I know this man that's wonderful we'll get on to Tesla soon but I want to I want to um go from from University of Pennsylvania you ended up in Silicon Valley and you've described Silicon Valley as darwinian can you talk about what it was the most positive sense really and was positive um can you elaborate on what that means and why it had to be Silicon Valley what what Drew you to Silicon Valley um well uh well I was at I was at pen and

um there was a professor who um who was chairman of a company in Sil Valley that Was working on Advanced capacitors for use in electric cars or potentially for use in electric cars uh as it turns out they they're way too expensive but um but I thought well this is this is really awesome because then I asked if I could get a summer job because it was in Silicon Valley and working on technology for electric cars I thought well that's that's pretty much as good as it gets um so I got a summer job here

was in Las Godus actually um at at Pinnacle Research uh doing um uh electrolytic uh Ultra capacitors which were um but they had a the problem was that they they used the ruthenium tantalum oxide um and there was I think only a few tons of ruthenium mined in the world um so not very scalable um and they you know they'd sell it to you by the sort of milligram so you know that's you know there's a problem um but but it had a pretty high energy density it's sort of roughly Equivalent to a Le acid

battery which for capacitor is huge mhm but you ended up then after that at at Stanford yeah so then um I I thought well uh Stanford is in Silicon Valley sort of epicenter and so that's where I wanted to come um you Stanford or Berkeley and Stanford sort of Sunny air so I like to Sun air that's great and you I understand you were at Stanford University for a whole two days before you decided no it's time I'm going to do my first startup yeah I Figured well um so this is a summer of '95

and uh uh and I've been working on some internet software so because the three things I thought were pick the world with internet um sustainable energy and and uh space exploration making life multiplanetary so uh the um but but on the internet thing I just couldn't figure out how to make enough money to to feed myself you know Cuz like uh if I didn't makes make make money then I would like run out of food and die so that was that was not good uh so basic needs right yeah literally um so whereas uh you

know if I was a student then I could be teaching assistant and do you do various things and and and do research on um electric vehicle Tech technologies that that was my default plan but but then I also thought that if I if I did a PhD at Stanford then um I could I would spent Several years watching the internet go through this incredibly rapid growth phase and that would be really difficult to to handle like it's like it really wanted to be doing something so you saw the wave growing it sort of really seemed

like things were going to take off um although nobody made any money on the internet at the time in '95 there was really nobody was making any money on the internet and in fact even on Sand Hill Road people were like what's the Internet they amazingly um when we tried to get funding for a company in I think it was November or something of9 there about October November um more than half of the bench capitalists we met with did not know what the internet was and had not used it that's amazing yeah literally I like

it's like isn't that they literally ask isn't that something that the government and Universities use like uh for now but you know yeah uh but then then uh netgate went public in late 95 I think it was and then after that even though lot of vure capitalist still didn't understand it and still hadn't used it they they somebody had made on it so now that was on the radar yeah so when we went to get funding the second time we tried to get funding um everyone was interested right so this company was zip 2 that's

right and terrible name Yeah what what what was the reason for that name um well we were just incredibly stupid at the time I think that was that's the the main reason for that name um and uh because we got some Ad Agency because we thought well we don't know anything about names so we'll get some add in to suggest a bunch of options and then zip two seemed kind of Speedy I don't know what the hell why the hell we chose that stupid Name um and it has a digit it's like why would you

pick it because it could be zip to could be Zip T wo it could be zip t oo so like people like literally spelled the name every variation um which is bad if you got a URL and you don't have the other ones um so so um so is up to started off um as basically uh like said we're trying to figure out how to how to make enough money to exist as a company and the so so since there wasn't really any Advertising money being made uh we thought we could um help existing companies

get online bring their stuff online so we developed software that helped bring um lot of the newspapers and media companies online CU a lot of them just didn't they also didn't know what the internet was big customers didn't you yeah mhm um and and even the ones that were aware of the internet didn't have a software team so they they weren't very good at developing Functionality um and uh so we had as um investors and customers uh the New York Times company night rder H and and so we were able to get them to pay

us to develop software for them to bring them online so online publishing stuff and we did maps and directions and yellow pages and white pages and uh various other things um and uh we developed quite sophisticated technology actually but um I it wasn't actually being employed super well by The media companies like we we would suggest ways to use it and then it would not be used as effectively as it could be it was very frustrating right but you did sell that company successfully to compact yeah right and that allowed you to go on and

uh create x.com that's right yeah exactly so um the yeah compac had uh had alter Vista so their their thought was combine alista and a bunch of other technology companies and see if that would if that Would work which it did not um but but nonetheless they they they were pretty nice guys and bought the company and and that gave me the capital to to do another company and I want I want to do another company in the internet because I thought we haden't really reached the potential that we could have with with sub2 um

because we had really sophisticated softare our software was sort of at least comparable to what Yahoo or excite or others had in fact I Mean I thought in some ways it was better so uh but it wasn't because it was all filtered through these Partners it wasn't getting properly used uh so I thought we um I I want to do something that could be more a more significant contrib contribution to the internet and um and so the initial thought was with financial services because um money is digital um it's low band with at the time

there was you know most people were on modems still on modems and um because This was uh late 98 early 99 so this was x.com was a precursor to PayPal basically you merged with confinity and it became PayPal major success yeah so it worked out better than we expected um yeah um so yeah uh confinity so initially confinity and EXO com started out with from slightly different directions and then converged to the same point um with with x the thought was to create integrated set of financial services um so you could go to One place

and do all of your financial anything um and and then as a feature we had the ability to transfer money or Securities or anything simply by enter entering a unique identifier so like a you know email address or phone number or something like that um and uh but when we demo the system the hard stuff which was the integration of all the financial services uh people would not be interested in but they'd be really interested in in being able to transfer Money using an email address even though that was actually quite easy um and so

we focused our our energy on that um and although it's easy in principle it uh what gets really hard is is adding um security while still keeping it easy to use that so because you know it's like the Willie lurman quote like why do people why do you rub Banks because that's where the money is so why do people rub PayPal the same reason um and and so you can e you can dial up the Security to a really high level but then you're going to make it very hard to use um and and so

that that that was was one of the toughest things we wrestled with um and then confinity originally started as kind of um software for Palm pilots and and then they had a demonstration application which was the ability to beam money from one Palm Pilot to another using the infrared Port yeah people remember that one yes um that was big at one point um and and then they They had a website uh sort of parallel to that where you because once you beam the infrared tokens you had to still then um synchronize your P pilot and

do the transfer via the website so but then people weren't that interested in the PM pilot stuff but they were interested in the website so we kind of converge to the same point um and we're quite close together so we we decided to merge the companies um and uh in I think January or so of 2000 Was very toing period um and the the the growth in the company was was pretty pretty crazy like we had at at the end of the first sort of four or five weeks we had 100,000 customers it's incredible incredible

growth um did you anticipate that when you started definitely did not and and it wasn't all good because uh we had some bugs in the software uh and you know what even if the bug only occurs one in a thousand times still Have, customers you have 100 very angry customers like where's my money that would be you know reasonable a reasonable concern that people would have and and then we we we had customer service on University and Avenue and paloalto uh there were five people um so when something went wrong customer service phones were basically

explode oh my goodness um and uh so we we had many challenges and then the Various Financial Regulatory Agencies were trying to shut us down visa and mascard were trying to shut us down eBay was trying to shut us down uh FTC was trying to shut us down um there were a lot of battles there wow it's quite incredible with all that adversity you you conquered and you came out with hundred million right yeah it was a close call um we definitely I mean came very close to dying there in 2000 and 2001 um and

what was the reason for that Success what would you put it down to in that case how did you overcome uh well you know I think we had a really talented group of people at PayPal um and a lot of those people have actually gone on to start many other companies yes um you know YouTube LinkedIn Yelp uh Yammer um it's like quite a long list actually um and so for you personally there you were with several hundred million were you not tempted just to go on buy an Island um really what was it that

drove you what I'm getting at because I I know you didn't but what I'm getting at is why were you so driven to jump into the next thing well I was um did you take any time off I I did take a bit of time off uh because um after PayPal um I did reasonbly well for PayPal I was the largest shareholder in the company so um and we required for about a billion and a half in stock and then the Stock doubled so um so you know it did did reasonably reason well but the

the idea of of like lying on a beach as my main thing uh just sounds like the worst that sounds horrible to me uh just boredom factor I would go Bonkers I would you know um I would have to be on serious drugs I mean just or serious P coladas right exactly I mean it's just I'd be super duper bored um so that uh I mean I like I like High intensity um I mean I like going to beach for a short period of time uh but but not much longer than like you know a

few days or something like that right so let's talk about the seeds of SpaceX I understand it started not as the idea of let's let's start start a rocket ship company uh you had a philanthropic idea you were really surprised when you found out that NASA didn't have any plans to go to Mars and you came up with this idea of let's put a greenhouse on Mars So can you explain how that whole idea came into being for for SpaceX sure well um so so when I was thinking of like what I thought would would

affect the world uh as a student it wasn't really from the standpoint of those are the things I'll get involved in it was kind of more in the abstract these are the things I think will happen that will affect the world um but but not that I will be involved in them as it turns out I have but uh I I always Thought that we would make much more progress in space um and it just it just didn't happen it was it was really disappointing so um uh yeah I was I was was really quite

bothered by it MH um so you know when we went to the moon um we were supposed to have a base on the moon we're supposed to send people to Mars and that stuff just it just didn't happen it we went backwards um you we got the space Shuttle but the space shuttle could only go to lowth orbit where a Saturn 5 could go to the moon now the space shuttle is gone and so that just seemed like a a really bad thing so uh I thought um well maybe it was a question of of

um there not being enough attention or will to to do this um but this I this was was this was a wrong assumption so I um so but that that's the reason for the greenhouse idea was to the thought was if if um if there could be sort of a Small philanthropic Mission to Mars you know so I wasn't I was expecting to lose all all the money that I invested in in that um but if we could send a small Greenhouse to the surface of Mars with with seeds in in dehydrated nutrient Deale and

hydrated Point Landing and you'd have this great shot of you know little Greenhouse with with little green plants with on on a red background um I thought that would get people excited so you literally imagined a photograph Inspiring a new generation yeah you got to sort of imagine the money shot if you will um so so yeah I think I think you know green plants in red background would be that um and and people tend to get interested and excited about precedents and superlatives so this would be the furthest that life's ever traveled the F

the first life on Mars um as far as we know um and uh and I thought well maybe That would result in in a in a bigger budget for NASA and and um and then we could sort of resume the journey that was the basic idea and and I I spent several months on this actually and uh went to Russia three times um because I was able to to figure out how to get the cost of the spacecraft low and the communications and the the the greenhouse and all that to a reasonable number reasonable meaning

several million dollars um and Did you have did you actually physically draw out a greenhouse of how you imagine yeah yeah actually I hope we got that somewhere um that would be amazing to see yeah um I mean I'm sure it looks pretty goofy in retrospect but but that's the that's the idea that we had and it's um so and I I spent several hundred, just kind of getting the design worked out and engaging some companies to um come up with the design specifications for the Subsystems um and uh and then but then it came

to buying the rocket and the problem was that the the cost of rockets is really high uh and the lowest cost rocket in the us at the time was the uh the Delta 2 Boeing Delta 2 and and that would have been about $50 million um yeah and then you need still need to have like an upper stage from so probably 60 million all in and that was uh and I wanted to do two of these missions because I thought if if it did Just one and and it didn't work then that could have like

the the opposite of effect like look how dumb it is to do to to try a same all this money down the drain right what an idiot so so I wanted to do two and I just didn't have enough money to to do two complete missions so you had a budget of about 100 million something like that well I was hoping it would be less than that but uh but not more than I mean not more than that Um but but then yeah I guess roughly on that order is about most I'd be I mean

I couldn't I couldn't spend much more than that uh so um so the Russians didn't help you out yeah had three three quite interesting trips to Russia to try to uh negotiate purchase of two Russian icbms yeah and did they think you had evil inent no they just thought I was crazy uh but I mean that's not good either U if you're buying Icbms um but minus the nuke I mean I think that would have been a lot more so so you didn't talk nukon no I I mean I didn't I I got slightly got

the feeling that that was on the table if I which which was very alarming um but but yeah that that was uh those are very weird meetings um with with the the Russian military and whatnot um I mean I think they they thought I was bit crazy but then they thought they read about PayPal and okay it was crazy he's Got money uh he did something right yeah well and more importantly I could pay him um right yes so so that's that's really I mean there yeah it was remarkably capitalist was was my impression of

the Russians yeah right right i' I have heard that before yep um so tell me how what was the turning point from you know talking with the Russians and then deciding okay I'm going to do this I'm going to set up a company what was that turning point for You well um I I I guess I I I had I came conclusion that um my initial premise was was wrong uh that in fact the um there's there's a great deal of will uh you know that there there's there was not such a shortage um but

people don't think there's a way um and and that if people thought there was there was a way or at least something that wouldn't you know break the federal budget um then then people would support it um which in retrospect I think is actually kind of Obvious because um the the United States is a distillation of the human Spirit of exploration um people came here from other places um I mean it's you know there's no n there's no I mean there's no nation that that's more a nation of explorers than un United States but but

people need to believe that it's possible and it's that it's not you know it's they don't have to give up like healthcare or something important you know it's just it's got to Be that that that's that's important so so I thought okay well then it's not a question of will it's it's a question of showing that there's a way um and and the and I started reading quite a bit about Rockets to try to understand why they're so so freaking expensive um um you know is there something you know where does this the $60 million

go for the Delta 2 um and that's subsequently Now Delta 2 I think is1 $100 million even some crazy number um and Delta 2 is I mean that's a relatively smaller rocket um so if you go to like a really you know one of the bigger Rockets it's anywhere from $200 to $400 million um anyway so so I came conclusion that there there wasn't really a good reason for Rockets to be so expensive um and and and that there could be a lot less and even in in Expendable format uh there could be less and

uh and and that in if one could make them reusable like airplanes then the cost of rocketry Would go would drop dramatically cost of space travel would drop dramatically because the the cost of the fuel was maybe anywhere from 0.2 to .5% of the cost of the rocket right um you know it's kind of like a plane I mean how much is the cost of the fuel in the plane versus the plane itself it's a at least a two of magnitude difference um but nobody had really been able to make a reusable rocket work so

that that but I thought okay that if we can do that Then that would that would really be the the key breakthrough for space travel right but you also said that so far we have not succeeded I should point out um you've also said that failure was the most likely outcome can you talk about failure in that sense and in a broader sense of being an entrepreneur and an innovator why is failure so important uh well I I mean I I think I think failure is bad um I don't think it's good um but if

if if is important Enough then you you do it even though the risk of failure is high MH um and and so I think my advice if somebody is wants to start a company is they should bear in mind that the most likely outcome is is that it's not going to work and they should reconcile themselves to that POS strong possibility um and they should only do it if they feel that they they they are really compelled to do it you know right um because it's it's it's going to the Way starting company works is

like usually in the beginning it's the very beginning it's kind of fun um and then it's really hellish for for a number of years you talked about chewing glass yeah there's there's a a friend of mine who's uh successful entrepreneur um and uh started actually his career around the same time as I did and he he has a good good good phrase his name's bully uh um he said yeah your starting a company is like eating glass and staring Into the abyss um and and you agree with that generally true um yeah and and and

and if you don't eat the glass you're not going to be successful that's that's yeah tough medicine tough medicine so let's move along and we're going to get down into Innovation and motivation shortly but I want to just go through your whole business career first so shortly after founding SpaceX you then got interested In electric vehicles and I understand you watched the visuals for the death of the ev1 when they were all smashed talk about that and and why you felt even after founding SpaceX I have to get involved with Tesla yeah um well um

as I said like my interest in electric vehicles goes back a long time to you know goes back 20 plus years scene yeah EXC exactly um and and in fact the the original reason I Came silen Valley was to work on electric vehicle energy storage technology right um and and I I thought that um that the big car companies would develop electric cars because obviously the right move um and and and and I thought that was Vindicated when General Motors and uh Toyota announced their General Motors was doing the ev1 Electric Vehicle One Toyota did

the electric R 4 the original one um and they made those announcements and then And they brought those to Market and I thought okay well this is this is great um you we're going to have electric cars GM's going to obviously do the ev2 and three and then you know they just get keep getting better and everything would be cool um and uh and then uh when when California relaxed its regulations on electric cars GM recalled all of the ev1s uh and crushed them into little cubes you know which is seems kind of nutty um

so in Fact uh the people didn't want their EV ones recalled yeah and in fact they they tried they tried court orders to stop the cars from being recalled they they held a candle it vigil okay at the yard where the cars were crushed did you attend that vigil no I I did I did not you moved by it well certainly I mean it's it's crazy if if I mean when is the last time you heard about any company customers holding a candle it viil for The demise of that that product um particularly AGM product

okay I mean I mean what bigger wake up call do you need it's like it's like hello the customers are really upset about this they would really prer it if it didn't get recalled um so that that that kind of blew my mind so I was like wow okay um and then uh and we had the Advent of lithium ion batteries which really helps Helps the it makes you know that that's one of the key things for making electric cars work it's still nothing and so um in 2003 uh actually had lunch with one of

the other co-founders of the company JB strael who um was actually working I think on like a hydrogen airplane or something um and um he mentioned to me uh the um t0 car that was done by AC propulsion um AC propulsion I think consist of guys some of who had actually Been on the ev1 program and they uh they took an a gasoline sports car kind of a kit car and outfitted it with uh with lithiumion batteries sort of consumer great cells and they um uh created a car which was which is essentially the preaster

of the Roadster um and uh and in fact it had very similar specifications um so subz sub4 second 0 to 60 milph um 250 mile range and um Also two-seater sort of sports car but but it had but it was quite primitive um it didn't have a roof one thing at all um and in fact I don't know if it had doors uh but it didn't have any Safety Systems no airbags it wasn't homologated so you couldn't sell it um so in order to sell that car in order to create a commercial version of the

car something that a manufacturer could produce and sell to people there was a fabit of work that was required and uh but anyway I Kept trying to get AC propulsion to commercialize the the t0 and I said look I'm going to I'll fund the whole effort can you know you really need to do this um and they they just they just sort of refused to do it um they didn't want to do it they they wanted to make uh I think the what's that uh oh they want to make like an electric Scion um which

in principle sounds good except that it would have cost $75,000 and nobody wants to buy $75,000 iion um and and uh the technology just was not ready there was just no way to to make um a good value for money proposition um and what was what was it that compelled you to say I have to be CEO here and Lead this company why not say you know I'll help you JB get this get this ruling well I really didn't want to be CEO of two companies uh if I tried super really hard not to be

actually uh and um Yeah so anyway so AC repulsion finally said Okay I I actually told AC repulsion look if you're not going to do this I'm going to create a company to to do do this um and they said well there's some other guys who are also interested in doing that um and you guys should combine efforts and and and create a company um and that's basically how Tesla uh came together um and uh and then we had like a lot of drama um and uh but but I mean I I had um Since

I was the you I provided like 95% of the money so I could have been the CEO from day one but I really you know the idea of being CEO of two startups at the same time was not uh appealing and shouldn't be appealing by the way if anyone's thinking that's a good idea it's really terrible idea but then again you know going back to your um trajectory here not only did you take on two you took on three you had a an epiphany at Burning Man I understand and decided you have to watch those

epiph burning not necessarily what you should pursue um and you came up with the idea um yeah it's it's uh well um you know solar is kind of part of the whole sustainable energy thing so sustainable energy you have to have sustainable means of of producing and consuming uh energy and so even if you have electric cars you have to have the other side of the equation say how do You produce energy in a sustainable way way um and I think solar is the obvious primary means of sustainable energy generation u in fact the Earth

is almost entirely solar power today um the the uh the only reason we're not a frozen ice ball at sort of 3° Calvin is because of the Sun and and the Sun is responsible for all precipitation it's it's responsible for the vast majority of the ecosystem apart from sort of chatres the bottom of The ocean so uh the the there's just a tiny amount of energy that people that people consume to to power civilization it's actually a very tiny amount of energy relative to the amount of energy that the sun sends in our general direction

um and so in order to deal with that we couldn't in fact power the entire world with solar power quite easily this is maybe not super obvious to people B so was that the Epiphany you had at Burning Man was It a vision no I knew that long long I knew that in college but what what was the the key Vision that came to you at Burning Man we all want to imagine you there Vision um the uh no it was it was more um the the uh I wouldn't say it was a a particular

Epiphany it was more that I was at Burning Man with um with with my cousins or to my cousins uh ly Lyon and Peter Lyon and Peter R uh Who are awesome guys and they and and they were sort of trying to think what should they do after their um after their first startup so they did company called everdream which did um large scale management of of computers so if you've got like 60,000 computers it's kind of hard to manage them so they wrote this they create a software that enables people companies to do that

um and that company actually got sold to Dell uh um so they were looking for a New Venture and looking for your ideas well I would initially looking for my ideas but I actually was trying to convince them that they should do solo um uh and uh because I just thought I just thought it was an area that needed people like them uh who really good good entrepreneurs so uh and and since I was like somewhat overcommitted I thought to say the least yeah uh I thought well and and I said Like look if if

you guys will will do a solo company I'll I'll find you you know F all the funding and um you know whatever guidance I can or help I can provide uh i' do that that's and I thought it was really important that there be uh you know good entrepreneurs like them in in Sol solar because just wasn't wasn't doing very well as an industry so um and I thought people were kind of focusing on not the they weren't Focusing on the right problem um the everybody sort of thought that the uh the panel was the

problem but actually it's it's not it's it's a problem but it's not it's not the it's not the most important problem um the and and the panel is somewhat commoditized at this point so it's you know making standard efficiency solar panels is about as hard as making drywall it's really easy in fact i' say drywall is probably harder um and um but but what what is a thorny Problem is trying to figure out how to get um solar on tens of thousands eventually hundreds of thousands of rooftops right the logistics part yeah it's it's kind

of like you got to re-roof um millions of buildings right um and and then figure out how the grid interconnects work and then manage all those systems like so if You' got hundreds of thousands or maybe millions of systems eventually you've got to manage all these distributed systems you Have this really complex distributed utility effectively um which I think actually plays to two their strengths in creating their price strength in creating uh really scalable software for managing you know hundreds of thousands of computers um in a distributed fashion right um and uh and that's that's

kind of what they did and did an awesome job it was just like I basically would show up at the board meetings to hear what's the good news this time you know it's Like really you know we had like maybe a couple of bad news board meetings well late 2008 there were some bad news board board meetings but um for the most part apart from a few a few times when the macroeconomic conditions were really terrible um they just did an amazing job with you know almost no help from me so you've been able to

leave it in their good hands yeah it's uh they deserve the vast majority of the credit for for the success of that company awesome so I'd Like to move on to Innovation and motivation there's been a lot of talk lately about the fact that Innovation is leveling off we're not making the dramatic increases or improvements in Innovation like we did when the plane was invented do you do you agree with that and uh no I don't agree with that I don't think that's true um okay uh I think we've we've seen well and I'm not

sure what time period that is exactly but we've seen um huge improvements in Um the in the internet and new new things uh I mean in you even in recent years Twitter and Facebook being being pretty huge when people kind of thought the internet was done MH um and uh you know I think there there are some of the things that we're doing like you know electric cars or or a new thing uh and uh uh I I I do think there's there's a pretty significant break through I mean in genomics um we're getting better

and better at decoding genomes and and being Able to write genetics I think that's going to be a huge huge area I think there's likely to be some breakthroughs in artificial intelligence um and um I suspect we will even see the flying car all right is that is that going to be an El on musk production no you're going to let someone else do that uh yeah I well I think someone else I think someone else is doing that all right okay that's another conversation do you feel uh the government is Standing in the way

of innovation at all well sometimes um the government I I don't think the government tends to stand the way Innovation but sometimes it can overregulation becomes very difficult um I mean in the the order industry used to be a great hot bed of innovation at the beginning of the 20th century but uh but now there's so many regulations that are intended to protect consumers um I mean the body of Regulation for cars could like full you know this room it's just crazy how much uh regulation there is down to like what the T the head

lamps are supposed to be like and the they even specify the some of the elements of the user interface on the dashboard which and some of these are completely anachronistic um because they're they're relating back to the days when you had like a little light that would Illuminate an image um so like we have to reserve space on the instrument panel the model S for where all of the the indicators like that a car would have you know you got like these little lights like check engine or whatever yeah like all these little little things

there's like a whole bunch of them and we can't have anything else in that space like uh well how would it create one space and render a different graphic like oh no because people are expecting To see it in that space like nobody is expecting to see it in that [Music] space yeah so you feel you can't argue with these regulations you just have to well you can argue with them but not with great success uh and and you you can actually get these things changed but it takes ages um like one of the things

we're trying to get is like like why should you have side mirrors if you can have say little Video cameras tiny video cameras and have them you know display an image inside the car um but there are all these regulations saying you have to have side mirrors and I went and met with the secretary of Transport like can you change this regulation still nothing has happened that was like two years ago um you know so your head against a wall here a little bit it's not easy to get these regulations changed so talking of Government

uh President Obama is obviously trying to do what he can if you had five minutes with President Obama what would you advise him for one stimulating the economy and an entrepreneurship and creating jobs is there one thing that if he could successfully get through that would be a big stimulus do you think well I think actually um I I think the reality of being president Is that you're actually like the captain of a very huge ship and have a small Rudder um because because obviously if I mean if there was a button that a president

could push that said economic Prosperity you'd be like they're hitting that button real fast full steam ahead you measure the speed of light by how fast they me they press that button because that would be that's called like the re-election button um so so so I'm not Sure how much the president can really do but um but I think I think uh uh you know I'm I'm generally a fan of like minimal government interference in the economy um like the government should be kind of a like the referee but not the player um and there

shouldn't be too many referees um but but um there is an exception which is when there's uh an unpriced externality um such as the CO2 Capacity of the oceans in atmosphere so when you have an unpriced externality then the normal Market mechanisms do not work and then government is government's role to to intervene in a in a way that's sensible um and the best way to intervene is to is to put is to assign a proper price to whatever the the common good is that's being consumed um and then and then so you're saying there

should be a tax on gas there should be a tax on carbon you know if if the bad Thing is uh carbon accumulation in the atmosphere then then needs to be attacks on on that um and then we can that will and then you get rid of all subsidies and all everything else um and it seems like logical that you should tax things that that are most likely to be bad rather than you know like like that's why we tax cigarettes and alcohol um because those those are probably bad for you um certainly cigarettes are

um and um so so uh you so so you want to ER on The side of taxing things that are probably bad and and not tax things that are that are good um and so I think given that there is a need to gather tax for the um you know to pay for the federal government we should shift the tax bur to to bad things and then adjust that that tax of that bad thing according to whatever is going to result in in the behavior that we think is beneficial for the future I mean I

I think currently that you know what we're Doing right now which is Mining and burning trillions of tons of hydrocarbons that that used to be buried very deep underground and now we're sticking them in the atmosphere and running this crazy chemical experiment on the atmosphere um and then you've got the oil and gas companies which have ungodly amounts of money um and you can't expect them to just roll over and die like they don't do that um so actually what they much prefer to do is Spend enormous amounts of money lobbying and running bogus ad

campaigns and that kind of thing to preserve their their situation um you know it's a lot it's a lot like uh tobacco companies in the old days I mean they used to run these ads with doctors like well guy with a doctor you know a pretending he's a doctor uh you know essentially implying that smoking is good for you and like having pregnant mothers on ad smoking um do you Have a message for the climate change Skeptics and and the the Big Oil people well as far as climate change skeptic I me like I'm you

know I like to I believe in the scientific method and one should be one should have a healthy skepticism of things in general and you know as if if you're first things from a scientific standpoint you always look at things probabilistically not definitively and so I think a lot lot of times if somebody's a skeptic in the science Community what they're really saying is that they're not sure that it's 100% certain that that this is the case but that's that's that's not the point the point point is um that is is is is look it

from the other side see what what do you think the percentage chance is of of this being catastrophic for some meaningful percentage of the Earth's population um is it greater than 1% is it even 1% um if it is even 1% why are we running this experiment right you Called it a Russian Roulette we're playing Russian roulette with the atmosphere we're playing Russian roulette and then and and as each year goes by we're loading more rounds in the chamber it's not it's not wise um so so that's and and and what makes it super insane

is that we're going to run out of oil anyway like it's not like there some infinite oil supply we're going to run out of it so we know we have to get to a Sustainable means of of of Transportation no matter what so why even run the experiment right it's the world's dumbest experiment right yeah [Applause] so let's move on to focus on Silicon Valley Steve Jobs is was and is a wonderful Silicon Valley icon is he someone that you've admired and what have you learned from Steve's life and Work U well he's certainly someone

i' I've admired um although I did try to talk to him once at a party and it was super rude to me uh but I don't think it was me I think it was sort of you know po the course I think you weren't the first yeah not the first no it was um but but uh yeah and I was actually there with like Larry Page is an old friend of mine I've known Larry since before he got Venture funding for Google and Larry was the guy That introduced me to Steve jop so it's not

as like I'm I'm going like and tugging on his coat like you know please talk to me um but you know so was introduced by Larry pig is not bad so um but uh I mean he obviously he was an incredible guy and made fantastic products uh that that um you know and I know there was like a a certain um the guy had a certain magic about him you know to sort of that was kind of that was really inspiring so I mean I think That's that's really great is there is there that magic

that you try and emulate uh no I I think Steve Jobs is way cooler than than I am so oh okay so I'd like to get inside your head a little bit about you know when you come up with an idea do you doodle it you know on a pad of paper or do you get your iPad out and and take notes I mean when you come up with something new you know a new rocket design or whatever it is how does that Manifest itself could we see you being creative um I mean it's somewhat

cliched but it's it happens a lot in the shower um I don't know what it is about showers or yeah exactly get the camera um like y um no I'm just no I do I just kind of stand there in the shower um so you have long showers I do actually long showers sounds wrong um but yeah I do um and so there's not to mention the Burning Man Epiphanies um right that those are those are huge um so yeah I think that's uh yeah and and and then um there there are sometimes like late

at night uh if I've been thinking about something then I can't sleep and I'll be up for you know for several hours um thinking about sort of pacing around the house and thinking about things and um occasionally I'll I'll sketch something or send myself an email or something like that right so we have a question From the audience um who inspires you or do you have a mentor um well um I I don't have a mantro per se although I try to I try to get feedback from as many people as possible um and um

so I have I have like friends and I ask them to you know what they think of this that that and the other thing and um you know as mentioned you know lar Larry's a good Larry p is a good friend of mine value his advice a lot um and um have many other good Friends and uh so so I think it's good to feedback in particularly negative feedback actually because you know obviously people aren't don't love the idea of giving you negative feedback um unless unless it's like some you know on on on blogs

they they do that um yeah how do you deal with negative feedback because you got some tough um criticism especially with SpaceX you had incumbents like Neil Armstrong even U speaking out and saying this is Wrong we don't want you know commercial companies in space it's not a place for Commerce so how did you deal with that and how do you deal with in general cuz you've had a lot yeah that was kind of troubling uh because uh you know growing up NE is kind of a hero so it's like it kind of sucks to

you know back that's a bit of a blow yeah um so yeah but I I think in his case he was somewhat manipulated you know by by other interests so I think he quite knew what He was saying in those in those Congressional hearings so yeah okay and um talk about you know it's one thing to have these wonderful ideas in the shower at Burning Man but there's another thing to build motivate and retain a team of excellent people can you talk about some tips and some things you've learned that obviously work for you yeah

um well I mean if you think about a company a company is is a group of people that are Organized to create a product or service that's uh that's what a company is so so in order to um create such a thing you have to convince others to join you in in your effort um and and and so they have to be convinced that that that it's a sensible thing that it's like that there's at least some some good some reasonable chance of success uh and if if there is Success that the reward will be

commensurate with the effort involved um And uh you know so so I think that's getting people to to believe in what you're doing uh and in in you is is is important um so in in the beginning there will be there will be uh few people who who do who believe in you or what you're doing um and uh but then over time as you make progress the the evidence will build and and more more people will believe in in what you're doing so um I think it's a good idea when creating a company to

to Um to create it to have a demonstration or you know if it's a product to have like a a good markup or if even if if it's software to have good demo Weare or to be able to sketch something so people can really Envision what it's about um think that that's a try to get to that point as soon as possible and then iterate to make it as as real as possible as fast as possible um yeah I if that makes sense but okay so you're running you're CEO of two Companies you're chairman of

Solar City talk about time management how on Earth do you do this well do you get any sleep uh sometimes not enough sleep is is really great uh because because if I find if I don't get enough sleep then I'm I'm quite grumpy um I mean obviously I think most people are that way um and and and also um like I try to sort of figure out what's the right amount of sleep because I I found I could have I Could drop AOW a certain threshold of sleep and although I'd be awake more hours and

I could sustain it I would get less done because um mental acurity would be affected um so I found generally the right number for me is around 6 to six and a half hours on average per night um that's not too bad yeah right and any other tips on average though any other tips on on just managing to run two companies simultaneously I mean do you do you find I mean I know you're up here Monday Tuesday is it all Tesla when you're up in Silicon Valley and all SpaceX Wednesday Thursday it's having a sort

of um having a smartphone is incredibly helpful because that means you can do email during um interstitial periods like if you're in a car you're walking in the bathroom everywhere you can do email practically when you're awake um and uh and so that's really helpful to have email for space and Tesla Integrated on on my phone um and then uh and then it's just you have to apply a lot of hours to actual working actually working so the way I generally do it is I'll be uh working at SpaceX on Monday and then Monday night

fly to the Bay Area uh spent Tuesday and Wednesday at the Bara then at at Tesla and then fly back on Wednesday night it's spend Thursday and Friday at SpaceX um in in in the last several Months then I would fly back here on a Saturday um and either spend Saturday and Sunday at Tesla uh or spend Saturday at Tesla and Sunday at SpaceX um and and where do the boys fit in you have five Sons um yeah did they tag along with Dad on some of these trips I do drag them along on a

lot of things actually um they're remarkably unimpressed by yeah I wish they would be sort of More interested but I mean they're only the twins are are eight and the triplets are six so maybe they'll get more more interested later but do you see one day grooming one of them or several of them to take over your companies well I I mean I think if if if they're inclined to I mean if they're really interested in working at teslo SpaceX then I you know help them do that um I'm not sure want to necessarily try

to insert them Into the CEO role at some point you know it's kind of like if if uh if the rest of the team and the board kind of felt that they were the right person then that would be that would be fine but uh I wouldn't want people to feel like I kind of you know installed you know my my kid there um and I don't think that would be good for either the companies or the kid really um uh but but I have I I I was actually at one point over school thought

that um you Know it's best to give away kind of like 99% or more of one's assets um kind of like the buffet school ofth and um I'm still mostly of that incline in that direction but after seeing what happened with Ford and GM and Chrysler where GM and chryler went went bankrupt but Ford did not and and Ford seemed to make better long-term choices than than the other two companies and that's in part because of the influence of the Ford family um and I thought well okay there May be some Merit in having some

longer term family ownership at least at least a portion of it so it's it acts as a positive influence uh this is still something I'm think about but acting as a positive influence in in the long term so the company kind of does do proper long-term things um and like I'm you know if look at what happened also in in silic Valley with with HP I I think it's quite quite quite sad um and um and that that that to some Degree is because there was um much diminished uh influence by the the the huet

and Packard families right um I think they should have prevailed in in in their you know where they were opposed to the the merger that took place at one point and I think they were right actually right and keeping and looking to the Future for SpaceX is there an IPO plan for this year no there's no IPO plan no um let say running a public company does does have Its drawback um so you're not in a hurry no okay um I mean in the case of Tesla and SpaceX uh we we had to raise Capital

um and and we had kind of a complex Equity structure that needed to be resolved by by going public um and um and so so I thought we we kind of needed to do that in those two cases we don't have to do that in SpaceX I think think there's a good chance we will at some point in the future but but spacex's objectives are Are super longterm and and the market is is not so I'm a bit worried that if we did go public certainly if we're in public too soon that it the that

market pressure would would force us to do uh short-term things and abandon kind of long-term projects like going to Mars right going to Mars very longterm yes that's an important one so you do have other projects on the back burner you've talked about the hyperloop uh a way of getting people From downtown LA to downtown San Francisco in under half an hour an electric supersonic airplane yeah which of those two are bubbling up that we might hear more about in the near future well I I did promise that I'd um do some paper on on

the hyperloop idea um and uh things got a little a little hectic towards the end of last year uh because had I had these had committed to to make these milestones at Tesla to to the public markets and um I Had to stay true to that obligation um which required just a just an insane level of work and attention um and uh and then we also had the solar City IPO which was a very difficult IPO to to get done I mean that IPO occurred just by the skin of its teeth I mean that was

so so such a tough one were you just determined it had to be in December well um if it wasn't in December it would mean pushing it out you know quite a bit Um and uh and the problem is that we' already pushed it out quite a bit so if we didn't go public we'd have to do a private round and then um and it just the whole thing wouldn't feel right you know it's like you're sitting at the it's like you're you're you know at the at the altar and you don't do the do

the wedding it's like what a bit awkward you know um to say the least yeah uh so so we really need we really needed to do it um and and uh And I think if we hadn't done it people would have looked at it as a failure and it wouldn't have been good um because there's just been too many failures in the Solar or too many not enough success let's say in the Solar Arena they needed to be sort of we need to choke up the success in the it's a rare piece of sunshine for

the solar year ironically for a solar industry does not have a lot of that yes so it's time unfortunately for the last question you come a long Way since you were that six-year-old little boy breaking the rules um you turned 42 this year right what is on the cards where do you where do you see yourself in 10 years time 20 years time 40 years time because you famously said you want to die on Mars just not on impact right exactly tell us about that dream um yeah well actually was asked by journalist do you

want to die on Maus And I said yes and I was like but wait not not impact just to be clear that's one of the possibilities um so um yeah so I uh I guess um I I mean I'd like to be able to go to Mars while I'm still able to manage the journey reasonably well so I think like I don't want to be like 75 and go to Mars you don't want to take your Zimmer frame with you right U you know it it it could be at least in the beginning could Be

you know mildly uous so um wanted to I'd like to I'd like to get there um I don't know I mean ideally in my 50s that would be that would be kind of cool so you see that happening in the next well I mean I I aspire to make that happen and I I can see the potential for that happening um and um I'm not saying it will happen but I I I I I think it can happen um I'll try to make it happen great ladies and gentlemen Elon Musk thank you very