If you can translate that into a product that people can experience and that they like and that delights them, then that's a good measure of the success of the product. I really like the fact that when people buy a car that they experience delight And for many people they've said, they've told me it's like
the best product they've ever bought, and it made them happy. And there was one person who said, like, whenever they feel sad, they can just go to the go to their garage and look at the car and it makes them happy. And that's cool. That's really cool. So what actually made them happier? That's what they told me? The car? Yeah, what's your explanation behind this? Why this could make people happier? Pretty,
it's a beautiful car. It does a few things like when you approach, the car senses that you're coming, and the handles extend and it prepares for you to come, and it's almost like a pet. But do you still have that kind of freshness when you use the car yourself or you have been used to that and lost the excitement. My case, it's a little tricky because I'm always looking for what's wrong in order to make the car better.
I always have to be thinking. I actually think very critically, and so when I see the car, I see all the things that I think need to be fixed to make it better. And so it's certainly it's easy to lose the sense of wonder or just see the flaws, because it's a difficult thing to reconcile, because if you want to make something better, then you must analyze it for the flaws. Yes, but then that kind of prevents
the enjoyment of it. It's a difficult it's a difficult dichotomy. It seems that you believe in the fact that we're all going to drive electric cars, and maybe someday only by computers, not by human beings, you still believe in that. I think it's fairly clear that to me, at least, that all transport will go fully electric. Better for the world from an environmental standpoint and from an economic standpoint. If we transition to electric transport sooner,
we'll help with pollution, global warming and all that stuff. And I do think we're headed towards an age of autonomous transport, where you know, you just summon the car with your phone or something, and then get in and you just tell the where you want to go and it takes you there. It's going to happen very quickly. I think maybe in four or five years. Yeah, But how do you react to some the public opinions of skepticism because it seems a lot of people are watching you and say, let's see
how far this kit can go? I suppose the skepticism about anything new that's normal and not expecting that people just believe me or But I think if you look at generally my predictions have they are more often correct than not. Really just talking about five years will have affordable electric cars that go long ranges and there will be autonomous Please, let's the slag. How do you see that contradiction? How could you reconcile? Its not exactly contradiction because I always say
it's important for civilization to be a multiplanet species. So it's not like an escape from Earth and then we all leave Earth and try to go to Mars or something like that. Why don't we come now saving the planet instead of
having the back door open. I do think at nineteen nine percent of our efforts should be focused on Earth, and really ninety nine point nine percent of our effort is focused on Earth. But I do think it's it's worth saying, Okay, let's take one percent and try to establish a self sustaining city on Mars and make life multiplanetary. And I think there's a couple of good
reasons for that. First of all, there's always the possibility that there could be some terrible thing that happens on Earth that we can't and that we maybe don't anticipate them. If you look at the fossil record and the fact that there've been five major extinction events in the last five hundred million years, and what happened to the dinosaurs. They used to be here, they're not around
anymore. So that's the defensive argument. And then there's the what I called maybe the inspiration argument or the excitement the building a city on Mars would just be this incredible adventure, that there'll be things in life that are exciting and inspiring that when you wake up in the morning, you're like, yes, I'm glad to be alive. And I think having this great adventure would be
like that. So there is a proverb in Chinese called c and yotn which from two thousand years ago there was a man spend the whole day worrying about way of the heaven falls down. So everyone laughed at him, said, why can't you be concerned about something more pragmatic. Basically, so you're the guy who is worrying about maybe another millennium's way that we need to move to another planet. Okay, it's not moving to another planet, it's being multiplanet.
We're still going to be on Earth, but we'll have Mars too, and we want to become a space frank civilization and a multiplanet species and ultimately be out there exploring the stars. I think that's a much more exciting future than a future where we're forever confined to Earth until some eventual extinction event.
You basically taught yourself a lot of things in a computer programming as a child, and after taking physics and economics in college, you taught yourself auto technologies, and then rocketry, battery technology, and so on and so forth. What's the motivation behind all this? I just I find that I basically learn whatever I need to learn to accomplish an objective. And I think actually most people could do this, but they often self limit pure are capable of more
than they think. But what I found is if you simply read a lot of books and talk to people. You can learn almost anything. But was reading also an escape or rescue to you? As a boy in school? I learned that you're the youngest in the class and bull it sometime, so what I was reading to you at that time? This is, of course, back in the days before there were video games, and TV wasn't very good either, And I was actually for quite a while the youngest and the
smallest in the class. And my parents moved a lot, so I went through six different schools, so it's difficult to make friends. And then one year and then you've been in your school. The next books certainly were something that I found comforting, and I would read all the time, just all the time morning tonight though, the philosophers and religious texts and that kind of
thing, and a lot of nonfiction as well, read the encyclopedia. And in fact, I remember when I was just in an elementary school, I was reading about ion engines and I thought they were super cool. And now we're launching satellites with ion engines. But how about real figures in history, Zach Newton or Einstein, so and so forth. Did you make up your mind to be someone great, someone who can leave a legacy in history for
all humanity. No, I never thought there were no. Actually, when I was a kid, I didn't know what I would do when I grew up. I just wanted to be involved in things that were on the cutting edge, on things that were affecting the future of the world. But I didn't think anything great would happen at all. Were you certain about what you would achieve or Oh no? Was there also most like in your future? No? Inpact, I expected to fail. I expected to fail it still
went ahead and do it. The reason I expected to fail was because most companies fail. So if ninety percent plus the companies fail and I have no track record of making companies work, then basically the most likely outcomings failure. But I didn't think it was super risky because I talked to my professor and said that I was going to try to start an internet company and that it would probably not work, and would you mind if I came back to class
if it didn't work. He said, sure, no problem. And where did the original investment come from? The own pocket money will finance by our mother? Well, yeah, I had about three thousand dollars and a computer. And then my brother came and joined and he had about I think five thousand dollars, and then another friend of ours came he had six thousand dollars, so we really, this is not a lot. And in the beginning we were just we didn't have enough money to rent an apartment and an office,
so the office was actually cheaper. We slept in the office, and we thought maybe it was more impressive to have an office. Can't have people come to an apartment. But at night we would just sleep on the couch in the office, and then we would go to the YMCA to shower. And in the very beginning, we only had one computer, so the website only worked during the day because at night I was programming software. We were brother and a friend joined you, but you were ready to fail. How
did you convince them to join you? Oh, they thought it would fail too. How did that work out? It worked out pretty well. In the end. We ended up we ended up growing the business, and it ended up getting sold from three hundred million dollars. So when a young man someday god ten some millions and then a billion, we were blown away for a while. At least, Yeah, you bet, absolutely what did you do with that money? Yeah? For what was it? Like check like
that? Yeah, that was awesome, right. Yeah. In fact, they mailed a check in. There's not a check in the mail, which is crazy. It was like this giant check in the mail. Yeah, that was one of the craziest things you did. Yeah, that was Yeah. I was with Peter Tiele, one of the co founders of PayPal. We were actually just driving up Sandy Hill Road. We're going to visit Mike Moritz at Square Capital, and Peter was asked me, so what can this
car do? And then famous last words, I said, watch this, and I flowed it and did a lane change and the black wheels broke loose and the car spun around and then we hit the embankment and knocked the car into the air, which continued spinning like a discus, like three feet in the air. Bam landed going the original direction. It was like in a movie and blew out the suspension and I drove to the side of the road
and I was like, Holy caw, that was crazy. After that, I took driving lessons on the McLaren because it's like a difficult car to drive. Are you a very prudent driver. Nowadays, I think I'm not a I think I'm a fairly prudent driver. I had a tough choice there because I could either provide all of the money for SpaceX or all of the money for Tesla and then increase the chance that one of them would survive, or I have to split the money. But if I split the money, then
maybe both will die. You can imagine. It's almost like if you had two children and you have only so much food, what do you do? So what was the choice? I split it? At those closest moment of a failure, What did you say to yourself? Can I survive this? No? You didn't question yourself. No, No, it's more it was just the difficulty is that in those situations, there's so much responsibility that you
have to the employees and to the investors who have come along. So it would have been extremely I would have been really disappointed if I had not been able to keep my responsibility to have the company survive. You said you almost had to nervous breakdown. Where did the tenacity or the resilience come from? But I remember the closest I ever came to a nervous breakdown I never and I never thought I was someone who I thought nervous breakdowns. That's ridiculous,
who could Why would people have such a thing. But I remember waking up on the Sunday before Christmas in two thousand and eight and thinking, damn, this is the closest I've ever gotten, you know, And it was looking pretty grown because at that point we even though the fourth launch of SpaceX had succeeded, we were still running out of money because we had three failures and
only one success, still not enough. And then the financing round for Tesla had not closed, and we had only two days maybe three, I think it was like two or three days maybe to close it before Christmas. I was like, man, this is this could be a really bad end of the year. Maybe both companies will fail screen. I didn't cry apartments, no, no, I had. My sleep was difficult. I wasn't expecting to call. I actually thought they were on the case because it was so
close to Christmas. I thought it was less than only a few days before Christmas, so I thought, there's no way they're going to call them. They must have gone home for the year. What they called them, They said that SpaceX had won this one point four billion dollar contract. What was your reaction to that piece of news. I said, I love you, which I don't think is normal response for NASA contracting officers. That was good.
And then a few days later we closed the Tesla financing round on the last hour of the last day when it was possible, which was six pm Christmas Eve, two thousand and eight. So failure said not the most terrible things. Whether you have to learn from it and react to it. Yeah, exactly. When you're building something new, there's going to be mistakes, and it's important to recognize those mistakes, acknowledge them, and take corrective action.
And the success of the company is very much more about how quick are you to fix the mistakes, not will you make mistakes or admit mistakes. Absolutely, and if you see the difference between a startup that is successful and one that is not, and it's because the successful one they both made mistakes, but the successful one recognize the mistakes fix them very quickly, and the
unsuccessful one tries to deny that the mistakes exist. Extremely smart people are sometimes quite arrogant because they believe in what they believe in right, and so when they face criticism less likely to admit they can make mistakes? Was that in your case? I learned it when I was doing when I was studying physics. In physics, you're taught to always question yourself. You're taught to always assume that you're wrong, not assume that you're right, and you have to
prove yourself not wrong. And so I think that physics framework is really where I lent it, and it's very effective for uncounterintuitive things that aren't obvious. So you are very famous in saying that failure is actually an option, and if you're not failing, that means you're not innovative in that. Yeah, it's not like I like failure. Who likes failure? Is terrible? But if you only do things that are certain to succeed, then you're only going
to be doing very obvious things. I know, Matacle, you can tell where elect always tells you don't are touching up You're being innovative can be very exciting life, but doing business sometimes persistence sometimes could be very boring. Do you have the same fun from innovation as from business running a business rather to be just an innovator, engineer instead of a business owner or runner. I'd
love to just do innovation and just do engineering. But you raise a good point because a lot of life in general, in any job there is you have to do your chores. There's nobody else can do that for you. Yeah, I think to be successful almost anything, you can't. You have to do the tough stuff and as well as the enjoyable stuff. You have to do the boring stuff as well as the non boring stuff. And if
you don't do your chores, then bad things will happen. But if they don't do the things that they don't like to do, then the company will be in trouble. You have to you Basically, it's more fun to cook the meal than to clean the dishes. Okay, but you need to clean the dishes. You need to do both. Yes, you need to do both exactly. So what are some of the ideas that excites you today?
Because there are so many brilliant ideas around the world, How could you keep focused on the things you're doing instead of being distracted by so many other good ideas. There's not a lot of opportunity and electrification of cars, of aircraft and of boats, And I think there's a particular opportunity for a supersonic vertical takeover and landing electric jet. That's something I'd love to do at some point in the future if might time allows. Were you certain about what you would
achieve? Oh? No, I thought it was most likely. And also, even machines are taking a lot of functions away from us, there are still functions that we have to deliver ourselves. For example, fatherhood. So how would you educate your five boys? Actually I created a little school. Yeah, what kind of school could you describe to us? Sure, it's small, it's only got fourteen kids now and it'll have twenty kids in September. It's called ad Astra, which means to the stars. That's maybe a
bit different from most other schools is that there aren't any grades. There's no like grade one, grade two, grade three type of thing, and making all the children go in the same grade at the same time like an assembly line. I know. Because some people love English or languages, some people love math, some people love music and different abilities at different times, it makes more sense to cater the education to match their aptitudes and abilities like That's
one principle. Another is that it's important to teach teach problem solving or teach to the problem, not to the tools. So this would be like, let's say you're trying to teach people about how engines work, or you could start by a more traditional approach would be to say, we're going to teach you all about screwdrivers and wrenchers, and you're going to have a course on screwdrivers, a course on wrenches and all these things, and it's a very
difficult. A much better way would be like, here's the engine. Now let's take it apart. How are we going to take it apart? Oh, you need a screwdriver. That's what the screw driver's for. You need a wrench, That's what the wrench is for. And then a very important thing happens, which is that the relevance of the tools becomes a aren't so your five boys are in that school and two when this is from school, they like it. They like it? Yeah, and you want to keep
them away from regular schools. No, I just didn't see that the regular schools. They weren't doing the things that I thought should be done those two principles. They weren't adhering to those principles. I thought, let's see what we can do, maybe creating a school will be better, and actually hired a teacher from the school they were at who also agreed with me that there was a better way to do it. Have they surprised you in a way
of their innovative thinking. Yeah, it seems to be going pretty well. The kids really loved going to school. I think that's a good sign. I hated going to school when Isaac kid it was torture. The fact that they actually think vacations are too long. They want to go back to school. Yeah, exactly. There are so many young people, the millennium generation who wants to start up their own company with all these accessibility of the internet
and such a big market. What's your advice for them, because sometimes they may easily go to the day dreaming part or the wish for thinking part. What's the balance between imagination and pragmatism? Basically, I do think that in terms of creating a company, what Edison said, which was like, it's one percent inspiration nineteen nine percent perspiration, is true. A lot of it
in creating a company is execution. You start off with an idea, and that idea is mostly wrong, and then you adapt that idea and keep refining it, and you listen to criticism. Some criticism you discard, you try to discard the wrong criticism, try to listen to the correct criticism, and then engage in for self improvement and constantly refining it and making it better.
And you have to work super hard, and that's very important. And then just keep making keep iterating on a loop which says, am I doing something useful for other people? Because that's what a company is supposed to do. A company is just a group of people gathered together to produce a product or service, and a company should only exist if that product or service is truly
useful to customers. Al Masaco, we should you come way show, But you're not going to be running Tesla all the time, or what's the next step for you? I certainly I'll be running Tesla and SpaceX into the foreseeable future. And a key goal with space with, a key go with Tesla is to be able to make an affordable, great electric car, a sort of third generation car, because you can only change the world for electric cars if people can afford to buy a great electric car. The affordable electric cars
are not great, and the great electric cars not affordable. We need them great electric cars that are affordable. So that's the goal with SpaceX with Tesla. Now with SpaceX, that's a bit of a longer term goal because we need to make reusability work with rockets. That's fundamental to improving the cost of spaceflight by a factor of one hundred. And then we need to make the rockets really big and be able to send large amounts of people in cargo to
Mars. And right now nobody's been to Mars. This is a very tall Hilty client. Do you want to be one of those to try the trip? I'd like to. I'll go as long as I think SpaceX will be okay without me, then I'll go to Mars. So do you feel there is a kind of destiny for you? No, I feel, but I don't know if there's any merit to that feeling. What are the rules that you want to live by? Because it seems that you have broken many rules,
But what are some of the rules that you would buy by. I want to be useful and I want to be able to look back and say that my actions had a good effect on the world. Wonderful. Thank you so much for a time. Yeah, thanks for having me. I really enjoyed the conversation