I'm available 24 7 to help solve issues right call me 3 A.M on a Sunday morning I don't care the way that I usually describe myself is an engineer uh because that's mostly what I I most of what I do is engineering um so I spend most of the week with my engineering and design team working on you know the current car and future cars and the rockets and spacecraft and that kind of thing you know when I was a kid I didn't really have any Grand designs I mean the reason I started programming computers
is because I like computer games and I play lots of computer games and I learned that if I wrote software and sold it then I could get more money and buy better computers so it wasn't really you know with some Grand Vision or anything when I was growing up I'd read lots of books and uh they were very often set in the United States and it seemed like a lot of new technology was being developed in the United States so I I thought okay I really want to work on new technology so I want to
get to Silicon Valley foreign at first to convince my parents to move to the US but uh Neil of them were they were divorced and and So eventually I was able to get my Canadian citizenship because my mom had been born in Canada so I moved first to Canada by myself when I was 17 and then a few years later I moved to the U.S the reason I came out to Istanbul was actually to work on energy storage Technologies for electric cars at that suburb of 95. I was looking at the the internet and it
seemed to me like the internet was going to have a big effect on Humanity so I I thought well I can either work on electric vehicle technology and do my PhD at Stanford and once the internet get built or I could put my studies on hold and try to be part of the internet and at first I try to get a job at Netscape because that was the only internet company and they didn't respond to me so and I was like okay if I can't get a job at the only internet company then I better
try starting something but I talked to my professor and I said look I'm going to try starting a company I'm probably not going to succeed and if it doesn't succeed can I come back he said sure no problem and so I put my studies on hold and I started the company did some internet stuff one of which was PayPal I think maybe it's helpful to say one of the things that was important then in the creation of PayPal was whisk was kind of how it started because initially the initial I thought was with PayPal was
to create an agglomeration of financial services so if you have one place where all your financial services needs would be seamlessly integrated and um and and work smoothly and then we had like a little feature which was to do email payments and whenever we we should show the system off to someone we'd show the hard part which was the um the agglomeration of financial services which was quite difficult to put together nobody was interested then we'd show people email payments which was actually quite easy and everybody was interested I think it's important to take feedback
from your environment do you want to be as closed loop as possible we focused on email payments and really try to make that work and and that's what really got things to take off um but if we hadn't if we hadn't responded to what people said then we probably would not have been successful going from PayPal I thought it will what what are some of the the other problems that are likely to most affect the future of humanity um it really wasn't from the perspective of what's the rank ordered best way to to make money
um which which is which is okay but it was really what I think is going to most affect the future Humanity so the I think the the biggest terrestrial problem we've got is uh sustainable energy but the production and consumption of energy in a sustainable manner if we don't solve that this the sensory is the century we're we're in deep trouble um and then the other one being the extension of life beyond Earth to make life multi-planetary um so the latter is the basis for for SpaceX and the former is the basis for Tesla and
Silver City foreign I started SpaceX it actually initially I thought that well there's no way one could possibly start a rocket company I wasn't that crazy but but then I thought well what is a way to increase NASA's budget that was actually my initial goal so I actually went to I went to Russia three times to look at buying a refurbished icvm I can tell you it was very weird going there in in 2000 late 2001 2002 going to the Russian rocket forces and saying I'd like to buy two of your biggest Rockets but you
can keep the nuke they thought I was crazy but but I did have money so that was okay [Music] particularly if you're starting a company you need to work super hard so what what does Super heart mean well when my brother and I were starting our first company instead of getting an apartment we just rented a small office and we slept on the couch and we showered at the YMCA and uh we're so hot up we had just one computer so the the website was up during the day and I was coding at night seven
days a week all the time briefly had a girlfriend in that period and in order to be with me she had to sleep in the office so work hard like every waking hour that's that's the the thing I would I would say do simple math to say like okay if somebody else is working 50 hours and you're working 100 uh you'll get twice as done as much done in the course of year as the as the other company work like hell I mean just have to put in you know 80 hour 80 to 100 hour
weeks every week that all those things improve the odds of success if other people are putting in 40-hour work weeks and you're putting in 100 hour work weeks then even if uh you're doing the same thing you know that in in one year you will achieve what they achieve you you will achieve in four months when it takes them a year to achieve [Music] 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 working at SpaceX on Monday and then
Monday night fly to Bay Area I spent Tuesday and Wednesday at Bavaria then at Tesla and then fly back on Wednesday night spend Thursday and Friday at SpaceX um in in the last several months then I would fly back here on a Saturday um and either spent Saturday and Sunday at Tesla uh or spend Saturday at Tesla and Sunday at SpaceX so seven days a week sleeping in the factory I worked everything I worked in the Paint Shop General Assembly Body Shop you ever worry about yourself imploding like it's just too much absolutely no one
should put this many hours into work this is not good control should not work this hard I'm not they should not do this this is very painful painful in what sense it's because my it hurts my brain and my heart this is not recommended for anyone I just did it because if I didn't do it then Tesla your chassis would die [Music] basically both SpaceX and Tesla from the beginning a probability of less than ten percent of like we've elected to succeed in the beginning I wouldn't actually wouldn't even let my friends invest because I
don't want to lose their money I thought it was like I don't lose my own money we almost did die at SpaceX actually so we I budgeted for three flights um I mean technically I didn't have a plan where I had to have the money from PayPal I had like about 180 million from PayPal I thought you know I'll I'll allocate half of that to SpaceX and Tesla and SolarCity and um that should be fine I'll have 90 million likes just Flats you know but but then what happened is um things cost more and took
longer than I thought so I had a choice of either put the rest of the money in or the companies are going to die um for example I ended up putting all the money in and borrowing money for rent from France if you want to try to come up with an Innovative breakthrough um that's kind of that's going to be how it is anything which is significantly Innovative is going to come with a significant risk of failure you've got to take big chances in order for the potential for a big positive outcome if the outcome
is exciting enough then taking a big risk is worthwhile really I approach it but but then once executing down a path I actually do my absolute best to reduce uh risk you know because or to improve the another way of saying to improve the probability of success because uh when you try to do something that is very um very risky uh that you hate you you have to spend a lot of effort trying to reduce that risk as you've been blocked down that path I mean I I think I'm kind of constitutionally just geared to
to just keep going I don't know um it's a [Music] yeah I mean it just like I I don't know I mean it certainly there are times when things don't go well and then that's quite desperating for sure um and so then it's difficult to proceed with the same level of enthusiasm but I do think like I do think the things that we're doing are you know pretty important to the Future um and if we don't succeed then you know there's well there's there's not it's not clear what other things would succeed and if if
we don't succeed then we'll be certainly pointed to as a reason why people shouldn't even try for these things so I think it's important that we do whatever is necessary to keep going so how do you keep your focus on the big picture when you're constantly faced with we could be out of business in a month well it's just a very small percentage of mental energies on the on the big picture like you know you know where you're generally heading for and the actual path is going to be some sort of zigzaggy thing in that
direction um I try not to deviate too far from the path that that you want to be on but you're going to have to do that some degree one of the most difficult choices I ever faced in life was was in 2008 [Music] I think I had maybe 30 million dollars left or 30 or 41 left in 2008 I had two choices put it all into one company and then the other company would definitely die or splitter between the two companies and but if I split it between the two companies they both might die and
you know when you put your Blood Sweat and Tears into creating something we're building something it's like a child it's like which one am I going to let one stop to death I can bring myself to do it so I put I split the money between the two fortunately thank goodness they both came through was it a great feeling well I certainly have lost many battles uh so far I've not lost the war but I've certainly lost many battles oh yeah more than I could count probably um I mean we had many at Tesla came
many times close to bankruptcy in fact at the end of 2008 we were only a few days from bankruptcy it was literally two days three days maybe because in general what do you think of the Silicon Valley Mantra fail fast fail often or as Esther Dyson says always make new mistakes as if failure is The Crucible of learning I'm curious if you had any further thoughts on that and that maybe off the cuff comment you made out there I mean there are many bits of I mean I think it's sort of there's like some entropic
basis with us like there are many more ways to fail than to succeed so you I mean you have to explore I mean particularly like for a rocket there's like a thousand ways to think and fail in like one way it can work so uh you could you could have a lot of Rocket failures to explore all the ways in which you can fail um so but I do think that one great thing about this Silicon Valley is that failure is not a not a big stigma so it's like if you if you try hard
and it doesn't work out uh that's okay like you can learn from that and you know do another company and it's not a big deal I mean I think it's it's like quite quite painful and difficult honestly and it feels terrible um but uh yeah I mean the the company's sort of looking to you know me to you know rally them and so I do but I honestly feel super bad place was hard and Rockets tend to fail unfortunately um and even when you've got like a lot of really smart people working super hard to
minimize the probability of failure it's still still there and it's um and it's you know it's quite significant you know people have asked me like well why why are Rockets you know especially hard um and and the you know part of it is like everything has to work the first time like there's there's no you can't do a recall you can't patch it it's got It's like nine minutes to orbit or it's over that mindset that Embraces failure how do you personally I mean it that those kinds of failures would drive a lot of us
in this room nuts but it doesn't seem to drive you nuts seems like you're very comfortable with it can you talk about the mindset that requires for you to be that accepting of that kind of failure well I think of the there's a certain amount of time and within that time you want the the best net outcome so for you know all the set of actions that you can do there's going to be uh and some which will fail some which will succeed and you want the the net useful output of your set of actions
to be the highest so I could use like a baseball analogy like you know Facebook they don't let you just sit there and wait for the perfect pitch until you get a real easy one that you're gonna give you three shots the third one and they say okay and they get off the go back to the put somebody else up there um so these three strikes on on baseball so what you're really looking for is like what's your batting average you know how you doing on on tour and it just there's going to be some
amount of failure but you want your net output that useful output to be maximized failure is essentially relevant unless it is catastrophic for SpaceX first three launches failed and uh we're just barely able to scrape together enough parts and money to do the fourth launch that fourth launch had failed we would have been dead so multiple failures along the way um I tried very hard to get the right expertise in for SpaceX I tried hard to to find a great cheap engineer for the rocket but it's not the good Chief Engineers would join and the
bad ones when there was no no point in hiring them so I ended up being chief engineer of the rocket so if I could have found somebody better than we would have maybe had less than three failures how do you think about making a decision when everyone tells you this is a crazy idea where do you get the internal strength to do that well first of all I'd say I actually think I I think I feel feel fear quite strongly um so it's not as though I just have the absence of fear I feel quite
strongly um but there are just times when something is important enough you believe in it enough that you do it in spite of fear there are people who've been in the rocketry business for decades yeah who say about you that you don't know what you don't know well I suppose that's true of anyone how can anyone know what they don't know but when critics say you can't do this your answer to them is we've done it you know there are American Heroes who don't like this idea Neil Armstrong Gene cernan have both testified against commercial
space flight in the way that you're developing it and I wonder what you think of that I was very sad to see that because those guys are yeah [Music] you know those guys are heroes of mine so it's really tough no I I wish they would come and visit and see the hardware that we're doing and I think that would change their mind they inspired you to do this didn't they yes and to see them casting stones in your direction it's difficult did you expect them to cheer you on so they hoping they would what
are you trying to prove to them what I'm trying to do is to make a significant difference in in space flight and and and help make space flight accessible to to almost anyone so many people try to choke me out of starting a ride company it was it was crazy what did they tell you one good friend of mine collected a whole series of of videos of rockets blowing up and made me watch those you just didn't want me to lose all my money we're doing these things that seemed unlikely to succeed and we've been
fortunate and at least thus far they have succeeded generally starting a business I'd say number one is have a high pain threshold that's it there's a friend of mine who's got a good saying which is that starting a company is like eating glass and staring into the abyss okay that's that's generally what happens because um when you first start a company there's lots of optimism and things that things are great and then so happiness at first is high then you encounter all sorts of issues and happiness will steadily Decline and then you'll go through a
whole world of hurt and then eventually you'll if you succeed and in most cases you will not succeed and Tesla almost didn't succeed came very close to failure um then if you succeed then after a long time you will finally get back to happiness frankly the starting company you I would advise people to have a high pain tolerance it is definitely true that I mean maybe they're occasionally companies that get created where where there's not an extended period of extreme pain um but I'm not aware of you know very many of such instances but I
do think that your new great entrepreneurs are born of every day and we'll continue to see amazing companies get built but I I would uh definitely advise people for starting a company to expect a long period of quite High difficulty it's really not that fun I mean there are periods of fun and there are periods of where where's the store for um and particularly if you're a CEO of the company um you actually have a distillation of all the worst problems in the company there's no point in spending your time on things that are going
right so you only spend on things on your time and things that are going wrong and and the things that are going wrong that other people can't can't take care of so you're like the worst you have a filter for the Crafters problems in the company the most pernicious and painful problem I think you have to feel quite compelled to do it and have a fairly High pain professional I mean as long as people stay super focused on creating the absolute best product or service that really Delights their end customer like if they stay focused
on that then basically if if you get a search that your customers want you to succeed then then you probably will if your customers love you your Art's a success or dramatically higher for somebody who's just starting out as an entrepreneur I think the internet is a great place to start because if you're just starting out unless you've got a ton of capital that you somebody gave you or you're inherited or something you have to do something you have to start a company that requires a small amount of capital where it's heavily awaited towards the
intellectual capital in your head um so I think anything to do with with sort of software and you know the internet is is a really good starting point you know it would have been impossible for me to to have done electric cars or Rockets you know right from the start because I would have those require money to get anything done being focused on something that you're confident will have high value to someone else um and just being really rigorous in making that assessment because people tend to natural human tendency is wishful thinking um so a
challenge for entrepreneurs is to say well what's the difference between really believing in your ideals and sticking sticking to them versus pursuing some unrealistic dream that doesn't actually have Merit and it's it's that is a that is a really difficult thing to to tell you can you tell the difference between those two things you know so you need to be sort of very rigorous in yourself self-analysis a successful entrepreneur has probably come in all sides of shapes and flavors and obsessive nature with respect to the quality of the product thank you it is very important
but even if you if you're the best the best there's always a chance of failure so I think it's important that you really like whatever you're doing if you don't like it life is too short if you like what you're doing you think about it even when you're not working I mean it'll just it's something that your mind is drawn to um and and if you don't like it just really can't make it work I think if you're creating a company or if you're joining a company the most important thing is to uh is to
attract great people so either be with join a group that's amazing that you really respect or if you if you're building a company you've got to gather great people I mean all the company is is a group of people that are gathered together to create a product or service and so depending upon how talented and hard-working that group is and the degree to which they're focused uh cohesively in a good direction that will determine the success of the company so do everything you can to to gather great people if you're creating a company then I'd
say focus on on signal over noise a lot of companies get get confused they spend money on things that don't actually make the product better so for example at a Tesla we've we've never spent any money on Advertising we put all the money into r d and Manufacturing and design to try to make the car as good as possible and I think that's that's the way to go so for any given company just could keep thinking about are these efforts that people are expanding are they resulting in a better product or service if they're not
stop those efforts [Music] don't just follow the trend so um you may have heard me say that it's good to think in terms of the physics approach your first principles which is rather than reasoning by analogy you boil things down to the most fundamental truths you can imagine and you reason up from there and this is a good way to figure out if if something really makes sense or if it's just what everybody else is doing it's hard to think that way you can't think think that way about everything it takes a lot of effort
but if you're trying to do something new it's the best way to think and that framework was developed by by physicists to figure out counter-intuitive things like quantum mechanics so it's really a powerful powerful method I think that's the final thing I would encourage you to do is now is the time to take risk you don't have kids as you get older your obligations increase so and once you have a family you start taking risks not just for yourself but for your family as well it gets much harder to do things that might not work
out so now is the time to do that uh before you before you have those obligations so I would encourage you to take risks now do something bold um you won't regret it I think when I was I don't know five or six or something I thought I was insane it was just strange because it was clear that other people did not their mind wasn't exploding with ideas it was like hmm and strange I don't think I don't think you'd necessarily want to be me it's very hard to turn it off it's like a never-ending
explosion all the time when I was a kid I was wondering kind of what's the meaning of life why are we here what's it all about came to the conclusion that work really matters is trying to understand the right questions to ask the more that we can increase the scope and scale of human consciousness the better we are able to ask these questions there's certain things that are necessary to ensure that the future is good some of those things are in the long term having long-term sustainable transport and sustainable energy generation be a space-bearing civilization
and for Humanity to be out there among the stars and be a multi-planetary species being a multiplayer species and being out there Among the Stars is important for the long-term survival of humanity the part that I find personally most motivating is that it creates a sense of adventure and it makes people excited about the future how many things can you buy that you really love that really give you Joy so rare So Rare I wish there were more things that's what we're trying to do is make things that somebody loves the universe as we know
it will dissipate into a fine mist of cold nothingness eventually I don't want to sound like like things are too dark because I think like you kind of have to be optimistic about the future there's no point in being pessimistic like what are the set of things that can be done to make the future better I think that a future where we are a space-faring civilization and out there Among the Stars this is very exciting this makes me look forward to the future it makes me want that future I need to be things that make
you look forward to waking up in the morning you wake up in the morning you look forward to the day look forward to the future that second version is incredibly exciting and inspiring you know life can't just be about solving problems otherwise what's the point there's got to be things that people find inspiring and make life worth living in a future where we are space-bearing civilization and out there Among the Stars I think that's very exciting that is a thing we want whereas if if you knew we would not be a space-frying civilization but forever
confined to Earth this would not be a good future that would be very sad I think [Music] there are two futurists and one future as we're out there among the stars and things we read about and see in science fiction movies the good ones are true we have these starships and we're [Music] going to see what other planets are like we're a multi-penet species and the scope and scale of Consciousness is expanded across many civilizations and many planets and many Star systems this is a great future [Music] this is a wonderful thing to me and
that's what we should strive for
