When Elon was twenty three, he got out of college. He went to San Francisco, the Bay Area, with a car, a computer, and two thousand dollars. Yeah, that's right, and he started a company called zip two. It was sort of like what the early Yahoo was.
It was an online directory.
Four years later, when he was about my age, he sold the company for just over three hundred million dollars to compac. And I bring this up not because it was the largest internet company acquisition at the time, but because he's done so much stuff since.
Then that nobody even remembers.
This initial success for zip to doesn't get much play.
So I'm gonna ask him some questions.
We're going to go through he's got, you know, as Jane said, three mind blowing companies, and then hopefully we'll have some time for you all to ask him some questions. So start thinking and we'll get to those. So I'm gonna put up something that probably looks familiar to most people here. This is the home page of PayPal. In two thousand, Elon was a co founder and the company was sold to eBay and two for one point five billion dollars. And we all know what PayPal is today.
But I was hoping you could sort of share with us kind of what your vision was from the beginning.
Well, it certainly evolved over time.
Initially the well, after selling ZIP two, I want to do something more on the Internet. And it seemed to me that there hadn't been all that much innovation in the financial sector. And given that money is kind of just an entry in a database and it was low bandwidth, you s didn't require some big infrastructural upgrade to the Internet. It seemed it should lend itself to innovation. So I try to think of what could be you know, what're
something compelling it could be done? And I thought, well, if we can combine all types of financial services in one so you can have like mortgages, like basically all your your entire financial relationships seamlessly integrated together in one place online, that would be cool. And then there was a little feature that just seemed like an obvious feature, which was the ability to transfer money from one person to another by entering a nique identifier like an email address.
There was like just the sort of a little feature.
But then whenever we demonstrate the product, people wouldn't get excited about the consolidated financial services, but they would get excited about emailing money, so you're sort of focusing our energy on that, and that really ended up being the big driver of growth.
Right, So it sort of went from a super bank I think that's what the media called.
Yeah, like a super financial services thing, to really narrowly focusing on email payments. Although I should point out that actually a lot of people aren't aware that a lot of the success of paypalt is due to the underlying financial services that are there, such as the money market fund, which is one of the highest yielding, in fact, I
think the highest yielding in the country. And the fact that there's a PayPal debit card which operates off the massive card system, so you can you can buy things, you know, by thinkings in the real world and get cash from an ATM that directly taps into your PayPal account. Those are actually very important to the PayPal business model.
Right.
So you were CEO of the company for for most of two thousand, I think, and you went PayPal merged or sorry, Elon's company merged with.
Another company it became PayPal.
He was running the company, he went on an investment raising trip and when he got back.
What happened?
Well, yeah, so.
You know, I think it's not a good idea to leave the office when there are like a lot of major things underway which are causing people a great deal of stress. But it was a combination of needing to raise money and I had not gotten married earlier that year and not had any vacation or honeymoon or anything. So it was kind of a combined financing trip, sash honeymoon, yeah, and and.
Anyway, but away for two weeks.
And there was just so much that there was just a lot of worry, and that that caused the management team to decide that I wasn't the right guy to run a company. And so the bard was like, you know, geez, what do we do? So basically I could, I could afford it really hard, but instead I except, you know, rather than fight at it at this critical time, best to sort of concede.
It's amazing to me how you managed.
When I first asked you about this, you said you buried their hatchet. And you know, one of the basically the person who replaced you just put I think twenty million dollars or so into your company. And how did you get past that? Kind of betrayal. I mean, did you how did you guys patch it up?
Yeah, that's actually an interesting story. Well, well, I didn't agree with their conclusion. I understood why they took the action they did. And they're not you know, Peter and Max and David and the other guys not. I mean, they're smart people with generally the right motivations. They did what they thought was was right, and I think for the right reasons. I mean, except that the reasons weren't valid in my opinion. But it's hard to argue with the ultimate outcome, which is which is positive.
So you know, I just thought, you know.
It's just easy to be better and and uh and and have I just hate them forever, but you know, it's best that the right better course of action is to any other cheek and and sort of you know, make make the relationship good. And and it was, you know, but I've put a lot of effin into sort of making things good and and then yeah, actually, recently, the Founder's Fund, which is comprised primarily of ex PayPal people, including Peter, who replaced me as CEO, invested in SpaceX.
Yeah, and I invested in Peter's things before that.
So I want to put up something about what this, you know, PayPal sale to eBay helped make possible.
Uh, tell us, tell us what we're looking at.
That's the Tesla Roadster, which is the world's first production electric sports car.
And how much does it cost? Give us the sales pitch. Okay, they just opened a dealership, so he should be good at this.
Yeah. Actually, I've sold a lot of cars. So the Tesla Roadster is the nutshell that you know. The elevator speech. Thing is that the Roadster is faster than a Ferrari and more efficient than a Prius, so it actually has
been better acceleration than any Ferrari except the Enzo. And it's about a three point nine seconds zero to sixty, and that actually understates the true acceleration because zero sixty for a gasoline car is measured from when the wheels start moving, but the wheels only stop moving when you engage the clutch, and it typically takes about a quarter second or more to engage the clutch. But there's no clutch for our car. It's direct drive, so you don't
have a clutch engagement delay. So it's like equivalent to a gasoline car with a zero to sixty for about three point six seconds, and it's good, incredibly good handling. And then the energy efficiency of the car is probably the most amazing thing. It only costs four dollars at current California rates to go about two hundred and fifty miles. So the range, the current EPA rated range, which is a combination of highway in the city with the conditioning on, is two hundred and forty four miles.
So it's amazing.
So this is I mean, it's so cool. It costs one hundred and nine thousand dollars. If anybody's interested.
It's it's expensive, but it's comparable to like a portion nine lemon, you know. So we wanted to have something which was in the price range of a comparable guesstline car that it could, you know, probably beat, and you know, so that's that's key because you know, it's one thing to have a compelling product, but it has to be a compelling product a compelling price.
Right you in the press obviously, this this has gotten a lot of attention, and Elon has taken a lot of flak for various redesigns. You've sort of been you've been portrayed as a micromanager, you know, redesigning the headlights or whatever.
I thought it was a nano manager. I've improveditude.
So why why does the car need to be perfect?
I mean, why did you need to redesign you know, the doors for instance.
Well, first of all, the car is definitely not perfect. In fact, one of the things that that troubles me personally is like when I see a product, it's sort of I commediately see a readout of all the flaws. I need to reprogram myself or remind myself to like look at the good things as well. So it's certainly far from perfect.
But the.
Acceptance, I mean fundamentally, if you don't have a compelling product at a compelling price, you don't have a great company. And that's that was really my gate, the gate that the product that the car had to pass through. And so there were things like the dorsals because we used
a chassis that was inherited from the Lotus lease. In retrospect, we should have completely redesigned the car and not and not use any a lease componentory because we really it's sort of like you go into a house and you think you'll just change this or that, and it'll be okay, and then you end up changing everything in the house.
It would have been better to just level the house and.
Start and produce the knew Because the car, our car is thirty percent heavier, the load points are all different, so we had to really redesign the chassis. And one of the things I said, we've got to do is to lower the dorsals.
And as it is, that dorsals is still too high.
But if I'd say, imagine if they're two inches higher, because that's what they were, it made it almost unusable in my view.
Yeah, I mean, what are you on.
I think you were quoted saying something like Dolorean failed because we built a bad car, and you need to the car needs to be worth one hundred and nine thousand dollars.
Absolutely, absolutely exactly if you don't exactly, We did not want to create another Dolorian, and the Dolorian kind of looked kind of cool, but it was really weak on performance.
It was unreliable, and there were.
Lots of little issues with the car, and we just didn't want to be in that situation. And it's not like, I mean, we could have built a worse car and still sold a bunch of them. But if you don't sell enough to make it make the business look attractive to future investors, you're not going to attract the capital to take it to the next level or even to sustain where it is.
How many orders have you taken? Twelve hundred deposits?
Wow, so we only take orders when somebody puts down a deposit of at least five thousand dollars.
Yeah, so I'm going to move to another company. But you told me that the last successful car startup was Jeep.
In nineteen forty one.
Yeah in the US. Yeah, in the US.
So doesn't that kind of say something bad about going to the car business?
I mean, why why go for this?
Well, it certainly I would not have done this if it were a gasoline car. So this is not about it's not because I thought the world had a shortage sports cars that we started Tesla. It's because it's very important that we accelerate the transition away from gasoline for environmental reasons, for economic reasons, for national security reasons. It's very, very fundamental and frankly, so you know, even if you don't think believe in the environ bental reasons, even if
you don't believe in the national security issues reasons. It's obviously gasoline oil is not a renewable resource, and sooner or later, the economic issues are going to cause a collapse of the economy, literally a collapse of the economy if we don't find an alternative, because you'll be paying twenty thirty forty dollars gas for gasling. The stuff's going to get you know, it's going to start approaching the price of gold. I mean, it's going to be crazy.
So we got to find a renewable alternative. And the good that Tesla's doing is not just Tesla's what Teslas itself, it's the example that Tesla sets for the rest of the industry. In fact, people are probably see the announcement for the Chevy Vault. Well, Bob Lat's Bob Blatz is the champion of the Chevy Vault, and he credits Tesla
with the with starting getting the Chevy volt started. Because when we unveiled our Tesla Roads to a couple of years ago, he saw the press release, he took the Tesla press release, went to his development guys and said, if a little company in California can do this, why can't we Yeah, and that's what prompted the Chevy Vault.
Yeah. Well, let's let's talk about how we power these things.
Uh oh, that's a that's a picture of the workshop in uh In Center or just south of San.
Francisco, right.
And then this is another company that you on. This is probably the one that you're maybe least involved with on a day to day basis, but it's uh it's Solar City, And sort of the elevator pitch for this one, as you've told it to me before, is you know you're gonna do for solar power what Dell did for computers, which I think is such a nice way of putting it, and I was hoping you could just unpack that for us a little bit.
Certainly, Well, Dell doesn't make the CPU or the hord drive or the memory, but they put it all together, and they managed their relationship with the end customer, and they manage the service and all that. And that's a very important element because if you had to go to Intel and buy your CPU and somewhere else and buy your hard drive and put that all together, very few people would have computers. So Solo City is about packaging that or making it really easy to use. Would just
basically make one call. It's just seamless and painless. And then they also have a lot of innovation on the financing front. So they did a three undred million dollar debt facility with the mortgage Stanley that allows the end consumer to sign up for solar power, put no money down, and your utility build decreases.
So it's a complete no brainer.
Now, it doesn't work for every house because your house has to be you know, south face, you know, have a south facing roof and of sufficient size, and you have to be in an area where electricity is not super cheap.
But it works for a lot of a lot.
Of houses and you know, maybe a third probably third of the house in California and something like that. And so they've just enjoyed phenomenal growth. I mean they're literally growing as fast as they can hire good people. And I mean the numbers for the month of August came in and solar cities as big as the next five solar power providers combined in California. So and all credit
to them. I mean, really, it's a phenomenal job. I mean I was sort of weighing every now and again, like yeah, how about that?
So how about that? But really is of very little credit?
No, no, no managing.
There, No, not at all. Yeah, thank goodness.
So Jane brought up Mars in our introduction and you know, you got out of PayPal with and zip to, you know, with a lot of money. And I think, I'm sure people in this room have had this happen to them, and many people will have it happened sometime in the future, I hope.
And instead of buying mutual.
Funds or I don't know, doing whatever one does with several hundred million dollars, you decided.
To emolts backed securities. There they're great.
You you decided to start a rocket company with the express purpose of well making it cheaper to get stuff in outer space and then eventually going to Mars for helping humanity go to Mars.
And I just wanted to.
Know, you know, why, why do that?
It isn't obvious.
Well, when I was in college, there was sort of three areas that sort of what's really going to affect the future humanity in a significant way. The three things that seemed to be most significant to me were the Internet of the transition to a sustainable energy economy, and the third was the extension of life beyond Earth becoming multiplanetary.
I didn't think i'd be involved in at all in option three, But the reason I think it's important is is it goes to how we decide that anything is important, and the lens of history is a good way to distinguish what seems important in the moment from what is
truly important over the long term. And if you zoom out and look at a long enough period of time and sell the four billion year history of Earth and the evolution of life itself, then there's only about half a dozen or so major of milestones in the.
History of life.
There's obviously single celled life, multiceliar life, differentiation to plants and animals, the transition from oceans to land, mammals, consciousness so and then also on that scale would fit life becoming multiplanetary. It would be I think at least important as life going from the oceans to land, and probably more important or more significant, because at least that that
was a gradual transition. If you didn't, if land was if things got a little uncomfortable on land, you could just hop back in the ocean, and that's not really feasible on interplanetary journeys.
So you know, here we are.
It's sort of the first time in the four billionaire history of Earth that life has been able to go beyond Earth. And that window may be opened for a long time, and I'm optimistic that I hope it will, and I'm actually fairly optimistic about the future of Earth. But something may happen that that closes that window and prevents us, prevents life from extending beyond Earth, and that risks the extension of life, or at least consciousness as we know it, and that would be a terrible thing.
Life is a terrible thing.
Aways, So I want to give people a sense of what kind of we're talking about.
So we just have a shut Oh, this is you know, building the rocket, and this should give people a sense of So so that's your rocket, and and and that launched.
Yeah, that that that launched, Uh what about three three weeks ago or four weeks ago?
And we'll get to what happened.
But I just want to ask you, I mean, watching that and and and when you watch that for the first time, the first your first rocket went in five I believe.
Or I mean, how did that how did you feel when.
You know, one hundred million dollars years of work and you know you're shooting something, you know, in the air.
I mean it must have been amazing.
Yeah, it's pretty new wracking, that's for sure. The Parker factor on launch day is very high. So now you know me, well, yeah, I mean, you know, I'm actually should be said, I'm actually kind of like a physics guy. I mean, I'm like an engineer really, and I do kind of the business stuff because you know, you kind of have to do the business stuff, or if you don't do the business stuff, somebody's else can to do it for you, and then then you could.
Be in trouble. And I actually the chief designer of the rocket.
I mean I could tell you I could redraw that rocket without without the benefit of blueprints for the most part. So it's sort of like seeing my baby go up there, you know, and it's it's pretty scary.
Yeah.
So, so there have been three flights so far, and each one has obviously the goal is to get into orbit.
Each one has sort of not made it.
Did you deal with the Well, we got to space.
Okay, you got to space, but it didn't you didn't get where you wanted.
To go not all the way sorry, well you know, but necessarily go all the way on the first few days.
SpaceX has.
You gotta work your way up there.
So but it certainly flights two and three got to well into well beyond the boundaries of space. It didn't get to full a little velocity though.
Yeah, but I mean you've got SpaceX has several hundred employees, and obviously you said it was like your baby. I mean, how did you deal with it personally? And then how did you deal with the company as a manager, sort of helping them get past it and helping your customers get past it obviously to keep their money because nobody's taking their money out of SpaceX. They've sold twelve flights and none of the customers have asked.
For their money.
Bet, that's true.
So how did you do that?
Lots of therapy, lots of handholding. It was just I think.
The customers that are that are signed up for SpaceX are pretty sophisticated.
They understand that.
In the early early attempts at flight, you know, in the development phase essentially called the beta phase if it was software, there will be crashes and things.
Things won't initially go hum percent.
They obviously do expect that once we get out of the development phase that there will be a good reliability and that really is function of eliminating design related issues. You know, the last launch had a problem because we had a brand new engine on it that had a a thrust transit that was longer than the last one, and so there was an issue following stage separation. But generally they're quite sophisticated customers and they understand what's going on.
And actually the first three flights were paid for by well, first two were paid for by DARPER, the Defense Advanced Research Project Agency, and the third one is played for by the Air Force Operational Responsor Space Office. And their outcome, the outcomes they were looking for were not really the delivery of a satellite to all bit. They were actually looking for demonstration of rapet launch, right, and so they actually felt that that we were fully paid full three flights.
Right.
So I'm gonna ask one more question and then we'll have some time for a quick Q and A. You know, there's there's another rocket that looks just like this right now in the Marshall Islands where SpaceX launch is from, and it's I think you told.
Me it's going to go on this coming week, hopefully.
Hopefully this week.
And you know you told me, and I think you've written this elsewhere that starting a rocket company is it's so risky, it's like playing Russian Roulette, and uh.
Well each launch is a bit like Russian Roulette.
Yeah okay, and.
But yeah left Russian. Let you know, it's with pointing out that you're probably gonna win.
But but I wanted to ask you, you know, Russian roulette. You know, how do you know that you're dead? I mean, when do you when do you stop? When do you say you know what I've I'm not going to make it?
Or how do you know?
I think if we run out of money, but we actually I know this sounds crazy, but we were profitable last year.
We're going to be profitable this year. I'm not a big profits.
We feel a small profit and we have enough funding on hand and with existing contracts that independent of Falcon one, to last through the end of next year.
Okay, So I was just told I guess we don't have time for questions, and I'll let that be my last question. But Elon, thank you so much for being here and just sharing your story with us, it's it's so inspiring and thank you, thank you,