Alright, this was when I was six, so the memory is a little fuzzy at this point but, as I recall, I was grounded for some reason, I don't know why, but I felt it was unjust, and I really wanted to go to my cousin's party, who was five - so it was a kid's party. At first I was going to take my bike, and I told my mum this, which was a mistake. She told me some story about how you needed a license for a bike and the police would stop me. I wasn't 100% sure if that was true or not, but I thought I better walk, just in case. I sort of thought I knew the way, but it was clear across town, so I was 10 or 12 miles away, it's really quite far. Further than I realized actually. So I just started walking to my cousin's house. I think it took me about four hours. Just as my mum was leaving that party with my brother and sister she saw me walking down the road and freaked out. I saw she saw me, so I then sprinted to my cousin's house and I was just about two blocks away and I climbed a tree and refused to come down.
When I was about ten I walked into a computer store in South Africa and saw an actual computer. I'd previously had some sort of early precursors to the Atari system and then I got the Atari system, which I'm sure a lot of people here have played, but then I saw actually having a computer where you could make your own games, and it was a Commodore VIC-20. So that was the first computer I bought, and I got some books on how to teach yourself programming, and this was like the coolest thing I'd ever seen. So I was just like, this is super awesome. So I started programming games and then selling games in order to actually buy more games - a bit of a circular thing - more games and better computers and that sort of thing. Yeah. Basically I'd spend money on better computers and Dungeons And Dragons modules and stuff like that. Nerdmaster 3000 basically.
I did like the comic Ironman, yeah. [Question about being inspiration for the movie version.] I did not. That was pretty - I would have said, 0% chance. [What kind of kid were you?] I wasn't that much of a loner, at least not willingly, but I certainly was quite - I was very bookish, I was reading all the time. I was either reading, working on my computer, reading comics, playing Dungeons And Dragons, that kind of thing. I guess when I was around 12 or 13, I came to an existential crisis and I was reading various books trying to figure out the meaning of life and what does it all mean? Cause it all seemed quite meaningless. We happened to have some books by Niche and Schopenhauer in the house, which you should not read at age 14, it's bad. It's really negative. But then I read Hitchhiker's Guide To The Galaxy which is quite positive I think and it sort of highlighted an important point which is that a lot times the question is harder than the answer, and if you can properly phrase the question, then the answer is the easy part. So, to the degree that we can understand the universe, then we can better know what questions to ask and then whatever the question is that best approximates 'What's the meaning of life?', you know, that's the question that we could ultimately get closer to understanding, and so I thought well, to the degree that we can expand the scope and scale of consciousness and human knowledge, then that would be a good thing. [When were you having these deep thoughts?] Puberty I guess - 13 through 15, probably the most traumatic years.
[Question about getting out of South Africa.] I did hatch the plan earlier. Actually, I tried to hatch several plans, which did not hatch. [Why the USA?] Whenever I'd read about cool technology it would tend to be in the United States, or more broadly, North America, including Canada. So I kinda wanted to be where the cutting edge of technology was and, of course, within the United States, Silicon Valley is where the heart of things is, although, at the time, I didn't know where Silicon Valley was - it sounded like some mythical place. So I wanted to come to the US. I tried to convince my mother or father, who were divorced, if either one would move to the United States then I could get there. At one point I convinced my father and then he reneged, unfortunately. He did say yes, and then he changed his mind. [Why?] I don't know. I guess he was fairly established, he was an engineer established in South Africa and didn't want to have to go through that again in another country. So yeah, I actually got - my mother was born in Canada and her father was American but unfortunately, she didn't get her American citizenship so that broke the link and I couldn't get my American citizenship but she was born in Canada, so, I could get - I actually filled out the forms for her and got her Canadian passport and me too, and within three weeks of getting my Canadian passport I was in Canada. I was in Canada for a few years at Queen's University and got a scholarship to go down to University of Pennsylvanian because one of the downsides of coming to a university in North America was that my parents said they would not pay for college - or, my father said he would not pay for college unless it was in South Africa. So, I could have free college in South Africa or find someone to pay it here and fortunately I got a scholarship at U-Penn and so I did a dual undergraduate in business and physics at U-Penn.
[Question about three most important things for humanity.] I think I was thinking about it for a few years, during freshman and sophomore year at Queen's and then also at U-Penn and I was trying to think, what would most influence the future, what are the problems we have to solve, and I actually talked a lot to friends and my housemates and that sort of thing, and dates - which was probably not the best thing. I actually met a woman I dated briefly in college who now works at Scientific American as a writer and she related the anecdote that when we went on a date, all I was talking about was electric cars. That was not a winning conversation. She said the first question I asked her was: do you ever think about electric cars? She said no, she never did. That wasn't great, but recently it's been more effective.
[Why Silicon Valley?] I was at Penn and there was a professor who was chairman of a company in Silicon Valley who was working on advanced capacitors potentially for use in electric cars. As it turns out they're way too expensive. I thought, well, this is really awesome. 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 pretty much as good as it gets. So, I got a summer job here - it was in Los Gatos actually, at Pinnacle Research during electrolytic ultra-capacitors. The problem was that they use ruthenium tetroxide and there was, I think, only a few tons of ruthenium mined in the world, so not very scalable. You know, they'd sell it to you by the milligram. That's seen as a problem. But it had a pretty high energy density, roughly equivalent to lead-acid battery, which for a capacitor is huge.
Then I thought, well, Stanford is in Silicon Valley, it's sort of the epicenter, so that's where I wanted to come. Near Stanford or Berkley and Stanford is sort of sunnier, so I liked it. This was the summer of '95 and I'd been working on some Internet software because the three things that I thought would affect the world were Internet, sustainable energy and space exploration - making like multi-planetary, but on the Internet thing, I just couldn't figure out how to make enough money to feed myself. If I couldn't make money then I'd run out of food and die. That was not good. If I was a student then, I could be a teaching assistant and do various things and do research on electric vehicle technologies - that was my default plan - but I also thought that if I did a PhD at Stanford then I would spend several years watching the Internet go through this incredibly rapid growth phase and that would be really difficult to handle - so I really wanted to be doing something. It really seemed like things were going to take off, although nobody had made any money in Internet at the time. In '95, really, no-one was making any money in the Internet. In fact, even on Sand Hill Road people were like, what's the Internet? Amazingly, when we tried to get funding for a company in, I think it was, November of '95, more than half of the venture capitalists did not know what the Internet was and had not used it. Yeah, they'd literally ask, isn't that something that the government and universities use? And I'd be like, uhh, for now.
But then, Netscape went public in late 1995, I think it was, and then after that even a lot venture capitalists still didn't understand it, and still hadn't used it. Somebody had made money on it, so the second time we went to get funding, everyone was interested. [This was Zip2?] That's right. Funny name. We were just incredibly stupid at the time, I think. That's the main reason for that name. We thought, we don't know anything about names, so we'll get some ad agencies to suggest a bunch of options and then Zip2, seemed kind of speedy. I don't know why the hell we chose that stupid name, and it has a digit in it. Why would you chose - it could be ZipTo, it could be ZipTwo, it could be ZipToo, so people literally spelt the name every variation - which is bad if you've got a url and you don't have the other ones. Zip2 started off as, basically, like I said, we're trying to figure out how to make enough money to exist as a company and so, as there wasn't really any advertising money being made, we thought we could help existing companies get online - bring their stuff online - so we developed software that helped bring a lot of the newspapers and media companies online. A lot of them just didn't know what the Internet was and even the ones that were aware of the Internet didn't have a software team, so they weren't very good at developing functionality. We had as investors and customers: The New York Times company, Nightrider, Herst, and so we were able to get them to pay us to develop software for them to bring them online publishing stuff. We did maps and directions and yellow pages and white pages and various other things. We developed quite sophisticated technology, actually, but it wasn't actually being employed super well by the media companies. We would suggest ways to use it and then it would not be used as effectively as it could be. It was very frustrating.
[Zip2 was bought by Compaq.] That's right. Compaq had Altavista, so their thought was to combine Altavista and a bunch of other technology companies and see if that would work, which it did not. None the less, they were pretty nice guys and bought the company and that gave me the capital to do another company. I wanted to do another company with Internet because I thought we hadn't really reached the potential that we could have with Zip2. We had really sophisticated software.. our software was at least comparable to what Yahoo or Excite or others had. In fact, I thought in some ways it was better, but because it was all filtered through these partners it wasn't getting properly used. So I thought, I want to do something that can be a more significant contribution to the Internet and so the initial thought was financial services because money is digital, it's low bandwidth, at the time there was - you know, most people were on slow modems, because this was late '98, early '99.
[X.com became Paypal.] Yeah, it worked out better than we expected. Initially, Confinity and X.com started out from slightly different directions and converged to the same point. With X, the thought was to create an integrated set of financial services, so you could go to one place and do any financial thing and then, as a feature, we had the ability to transfer money or securities or anything, simply by entering a unique identifier - so, like, an email address or a phone number or something like that - but when we'd demo the system, the hard stuff - which was the integration of all the financial services - people would not be interested in, but they'd be real interested in being able to transfer money using an email address. That was actually quite easy, and so we focused our energy on that. Although it's easy in principle, what gets really hard is adding security while still keeping it easy to use. It's like the Willy Loman quote, why do you rob banks, because that's where the money is. Why do people rob Paypal? Same reason. You can dial up the security to a really high level but then you're going to make it very hard to use. That was one of the toughest things we wrestled with. Then, Confinity originally started as software for Palm Pilots and they had a demonstration application with the ability to beam money from one Palm Pilot to another using the infrared port. Yeah, if people remember that one. That was big at one point. They had a website, sort of parallel to that, where - because, once you'd beamed the infrared tokens you had to still then synchronize your Palm Pilot and do the transfer via the website. Then people weren't so interested in the Palm Pilot stuff, but they were interested in the website, so we kind of converged to the same point, and were quite close together so we decided to merge the companies and, in, I think, January or so 2000 - it was a very turbulent period. The growth in the company was pretty crazy. At the end of the first 4 or 5 weeks, we had 100,000 customers.
[Did you anticipate that?] We definitely did not, and it wasn't all good because we had some bugs in the software and, ya know, even if the bug only occurs 1 in 1000 times, it's still 100 very angry customers - where's my money? That would be a reasonable concern that people would have. We had customer service on University Avenue in Palo Alto. There were five people. So, when something went wrong, customer service phones would basically explode. We had many challenges and then the various financial regulatory agencies were trying to shut us down. Visa and Mastercard were trying to shut us down. E-bay was trying to shut us down. FTC was trying to shut us down. There were a lot of battles there. It was a close call. We definitely became very close to dying there in 2000 and 2001. I think we had a really talented group of people at Paypal and a lot of people have actually gone on to start many other companies - Youtube, Linked-In, Yelp, Yammer, it's quite a long list actually.
[Did you ever consider retiring?] No, not really. I did take a bit of time off. I did reasonably well from Paypal. I was the largest shareholder in the company and we were acquired for about a billion and a half in stock and then the stock doubled. So yeah, I did reasonably well, but "the idea of lying on a beach as my main thing, just sounds like the worst - it sounds horrible to me. I would go bonkers. I would have to be on serious drugs." I'd be super-duper bored. I like high intensity - I mean, I like going to the beach for a short period of time, but not much longer than a few days or something like that.
[How did SpaceX start?] When I was thinking about what would affect the world, as a student, it wasn't really from the standpoint of those are the things I'll get involved in - it was kinda more in the abstract, of these are the things that I think will happen that will affect the world, but not that I will be involved in them. As it turns out I have, but I always thought that we would make much more progress in space, and it just didn't happen. It's really disappointing. I was really quite bothered by it. When we went to the Moon, we were supposed to have a base on the Moon. We were supposed to send people to Mars, and that stuff, it just didn't happen. It's as if we went backwards. We got the Space Shuttle but the Space Shuttle could only go to low Earth orbit, whereas a Saturn V could go to the Moon. Now the Space Shuttle's gone and so, that just seemed like a really bad thing. So I thought, well, maybe it was a question of there not being enough attention or will to do this, but this was a wrong assumption, but that's the reason for the greenhouse idea.. the thought was, if there could be a small philanthropic mission to Mars.. so, I was expecting to lose all the money that I invested in that.. but if we could send a small greenhouse to the surface of Mars will seeds in dehydrated nutrient gel to be hydrated upon landing, you'd have this great shot of a little greenhouse with little green plants on a red background. I thought that would get people excited. You've gotta sort of imagine the money shot, if you will. So yeah, I think green plants on red background would be not bad, and people tend to get interested and excited about precedents and superlatives. So this would be the furtherest that life's ever traveled, the first life on Mars, as far as we know, and I thought, well, maybe that would result in a bigger budget for NASA and then we could resume the journey. That was the basic idea. I spent several months on this, actually, and went to Russia, three times. I was able to figure out how to get the cost of the spacecraft low and the communications and the greenhouse and all that, down to a reasonable number - reasonable meaning several million dollars.
[Did you do a drawing of the greenhouse?] Yeah, I hope we've got that somewhere. I mean, I'm sure it looks pretty goofy in retrospect, but that's the idea that we had and I spent several hundred thousand dollars getting the design worked out and engaging some companies to come up with the design specifications for the subsystems. Then it came to buying the rocket and the problem was that the cost of the rocket was really high. The lowest cost rocket in the US at the time was Boeing's Delta II and that would have been about $50M and you'd still need to have an upper stage for Mars, so probably like $60M all-in, and I wanted to do two of these missions because I thought if I did just one, and it didn't work, then that could have the opposite effect - look how dumb it is to try to send something to Mars. What an idiot. So I wanted to do two and I just didn't have enough money to do two complete missions. [About $100M?] Well, I was hoping it would be less than that, but not more than that - about roughly on that order would be the most that - I couldn't spend much more than that. I had three quite interesting trips to Russia to try to negotiate purchase of two Russian ICBMs. [Did they think you were evil?] They just thought I was crazy, but that's not good either if you're buying ICBMs. Minus the nuke, I think that would have been a lot more. I slightly got the feeling that that was on the table, which is very alarming, but yeah, those were very weird meetings with the Russian military and what-not. I think they thought that I was a bit crazy but then they read about Paypal so they thought, okay, he's crazy but he's got money, so importantly I could pay on-time. Remarkably capitalist, was my impression.
[When did you decide to start SpaceX instead?] I came to the conclusion that my initial premise was wrong. In fact, there's a great deal of will, there's not such a shortage, but people don't think there's a way. If people thought there was a way, or at least something that wouldn't break the federal budget, then people would support it. Which, in retrospect, I think is actually kind of obvious because the United States is a distillation of the human spirit of exploration. People came here from other places. There's no nation which is more a nation of explorers than the United States, but people need to believe that it's possible and they're not going to have to give up something like healthcare or something that's important. That's important. So, I thought, well then, it's not a question of will, it's a question of showing that there's a way and I started reading quite a bit about rockets to try to understand why they're so friggin' expensive. Where does the $60M go for the Delta II and now I think a Delta II is now $100M or something even, some crazy number, and that's a relatively small rocket. So if you go to one of the bigger rockets it's nearer from $200M to $400M. Anyway, I came to the conclusion that there wasn't really a good reason for rockets to be so expensive, and they could be a lot less. Even in expendable format they could be less and if one could make them reusable, like airplanes, then the cost of rocketry would drop dramatically - cost of space travel would drop dramatically. The cost of the fuel was maybe anywhere from 0.2% to 0.5% of the cost of the rocket. It's kind of like a plane. How much is the cost of the fuel in the plane vs the cost of the plane itself? It's at least a two order of magnitude difference. But nobody had really been able to make a reusable rocket work. So I thought that, okay, if we can do that, then that would really be the key breakthrough for space travel. So far we have not succeeded, I should point out.
[Why is failure so important?] I think failure is bad. I don't think it's good, but if something is important enough then you do it even though the risk of failure is high. My advice, if someone wants to start a company, is they should bare in mind that the most likely outcome is that it's not going to work and they should reconcile themselves to that strong possibility. They should only do it if they feel that they are really compelled to do it. The way starting a company works is, usually at the very beginning it's kind of fun and then it's really hellish for a number of years. Yeah, there's a friend of mine who's a successful entrepreneur and started his career around the same time as I did and he has a good phrase - his name's Billy - he said, yeah, starting a company is like eating glass and staring into the abyss. That's generally true, and if you don't eat the glass, you're not going to be successful.
[Why did you get involved with Tesla?] Like I said, my interest in electric vehicles goes back a long time - goes back 20 plus years. In fact, the original reason I came to Silicon Valley was work on electric vehicle energy storage technology. I thought that big car companies would develop electric cars because obviously it's the right move, and I thought that was vindicated when General Motors was doing their EV-1 and Toyota did the electric Rav-4, the original one, and they made those announcements and then brought those to market. I thought, okay, this is great, we're going to have electric cars. GM is obviously going to do the EV-2 and 3 and they'll just keep getting better and everything will be cool. When California relaxed its regulations on electric cars, GM recalled all the of the EV-1s and crushed them into little cubes, which seemed kind of nutty. In fact, the people didn't want their EV-1s recalled. They tried court orders to stop the cars from being recalled. They held a candle lit vigil, okay, at the yard where the cars were crushed. I did not attend, but I was moved by it. It's crazy - I mean, when was the last time you heard about any company's customers holding a candle lit vigil for the demise of that product. Particularly a GM product. I mean, what bigger wake-up call do you need? It's like, hello, the customers are really upset about this. They'd really prefer it if it didn't get recalled. That kind of blew my mind. So I was like wow, okay. Then we had the advent of lithium-ion batteries which really - that's one of the key things to making electric cars work - and still nothing.
So, in 2003, I had lunch with one of the other co-founders of the company, Jeffrey Straubel who was actually working on, I think, a hydrogen airplane or something, and he mentioned to me the T-Zero car that was done by AC Propulsion. They had some of the guys, I think, who had been on the EV-1 program and they took a gasoline sports car, kind of a kit car, and outfitted it with lithium-ion batteries, sort of consumer grade cells, and they created a car which was essentially the precursor of the Roadster. In fact, it had very similar specifications: sub-four second 0 to 60 miles per hour, 250 mile range, and also two seater sports car, but it was quite primitive. It didn't have a roof, for one thing, at all. In fact, I don't know if it had doors. It didn't have any safety systems, no airbags, it wasn't homologated - so you couldn't sell it. So, in order to create a commercial version of the car, something we could actually produce and sell to people, there was a fair bit of work that was required. I kept trying to get AC Propulsion to commercialize the T-Zero and I said, look, I'll fund the whole effort, you really need to do this, and they just sort of refused to do it. They didn't want to do it. They wanted to make like an electric Scion. Which, in principle sounds good, but it would have cost $75,000 and no-one wants to buy a $75,000 Scion. The technology was just not ready - there was just no way to make a good value-for-money proposition with something like a Scion.
[Why did you have to be CEO of Tesla?] Well, I really didn't want to be CEO of two companies. I tried really hard not to be, actually. Ac Propulsion finally said okay. I actually told AC Propulsion, look, if you're not going to do this, I'm going to create a company to do this and they said, well, there's some other guys who are also interested in doing that, and you guys should combine efforts and create a company and that's basically how Tesla came together. Then we had a lot of drama. Since I provided, like, 95% of the money I could have been the CEO from day one, but the idea of being CEO of two startups at the same time was not appealing and shouldn't be appealing, btw, if anyone is thinking that's a good idea. It's a really terrible idea.
[And Solar City?] If you're going to have an epiphany to start a company, it'll probably be a Burning Man. Solar City is part of the whole sustainable energy thing. You have to have sustainable means of producing and consuming energy. So, even if you have electric cars, you have to have the other side of the equation. So, how do you produce energy in a sustainable way and I think solar is the primary means of sustainable energy generation. In fact, the Earth is almost entirely solar powered today. The only reason we're not a frozen ice ball at 3 degrees Kelvin is because of the sun. The sun is responsible for all precipitation. It's responsible for the vast majority of the ecosystem, apart from chemotrobes at the bottom of the ocean. So, there's just a tiny amount of energy that people consume 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. To deal with that, we could, in fact, power the entire world with solar power. Quite easily.
[Was the that epiphany you had a Burning Man?] Oh no, I knew that long ago. I knew that in college. I wouldn't say it was a particular epiphany, it was more that I was at Burning Man with two of my cousins, Lyndon and Peter Rive who are awesome guys, and they were trying to think what should they do after their first startup. They did a company called Everydream which did large scale management of computers. If you're got like 60,000 computers it's kind of hard to manage them, so they created software that allows companies to do that. That company actually got sold to Dell. I wouldn't say they were looking for new ideas. I was actually trying to convince them that they should do solar because I just thought it was an area that needed people like them - really good entrepreneurs - and since I was somewhat over-committed, I thought, well look, if you guys will do a solar company, I'll provide all the funding and whatever guidance or help I can provide. I'd do that. I thought it was really important that there'd be good entrepreneurs like them in solar because it just wasn't doing very well as an industry. I thought people weren't focusing on the right problem. Everybody thought that the panel was the problem but actually - it's a problem, but it's not the most important problem. The panel is somewhat commoditized at this point. "Making standard efficiency solar panels is about as hard as making dry wall. It's really easy. In fact, I'd say dry wall's probably harder." What is a thorny problem is trying to figure out how to get solar on tens of thousands, eventually hundreds of thousands, of rooftops. It's kind of like you've got to re-roof millions of buildings and then figure out how the grid interconnects work and then manage all those systems. If you've got hundreds of thousands or maybe millions of systems, eventually, you've got to manage all these distributed systems. You've got this really complex distributed utility, essentially. Which I think actually plays to their prior strength in creating really scalable software for managing hundreds of thousands of computers in a distributed fashion. That's kinda what they did and an awesome job. I'd basically show up at the board meetings to hear, what's the good news this time? We had, like, maybe a few bad board meetings - well, late 2008 there was some bad board meetings but, for the most part, apart from a few times when the macroeconomic conditions were really terrible, they just did an amazing job with almost no help from me. Yeah, they deserve the vast majority of the credit for the success of that company.
[Question about the pace of innovation decreasing.] No, I don't agree with that. I don't think that's true. I think we've seen - and I'm not sure over what time period this is, exactly - but we've seen huge improvements in the Internet and new things. In recent years, Twitter and Facebook being pretty huge when people kinda thought the Internet was done. I think some of the things that we're doing, like electric cars, are a new thing. I do think there's some pretty significant breakthroughs. In genomics we're getting better and better at decoding genomes and being able to write generics. That's going to be a huge huge area. I think there's likely to be some breakthroughs in artificial intelligence. I suspect we will even see the flying car. [You're going to let someone else do that?] Yeah. I think someone else is doing that.
[Is the government standing in the way of innovation?] Well sometimes the government - "I don't think the government intends to stand in the way of innovation but sometimes it can over-regulate industries to the point where innovation becomes very difficult." I mean, the car industry used to be a great hotbed of innovation, at the beginning of the 20th century, but now there's so many regulations that are meant to protect consumers. The body of regulations for cars could fill this room, it's just crazy how much regulation there is. Down to what the headlamps are supposed to be like. They even specify the elements of the user interface on the dashboard, and some of these are completely anachronistic because they're relating back to the days when you had like a little light that would illuminate an image. We have to reserve space on the instrument panel on the Model-S for where all the indicators that a car would have - like, you have these little lights, all these little things, there's a whole bunch of them, and we can't have anything else in that space. Well, how about if we have one space and render a different graphic? Oh no, because people are expecting to see it in that space. I'm like, nobody is expecting to see it in that space. [You can't argue with regulations.] Well, you can argue with them, but not with great success. You can actually get these things changed but it takes ages. One of the things we're trying to get is - like, why should you have side mirrors if you can have say, little tiny video cameras and have them display an image inside the car? But there are all these regulations saying that you have to have side mirrors. 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. It's not easy to get these regulations changed.
[What one thing would you request from President Obama?] Well, I think, actually, I think the reality of being President is that you're actually the captain of a very huge ship and have a very small rudder. Obviously, if there was a button that a President could press that said economic prosperity, he'd be hitting that button real fast. You could measure the speed of light by how fast they press that button, because that's called the reelection button. So I'm not sure how much the President can really do, but you know, I'm generally a fan of minimal government interference in the economy. The government should be like, the referee but not like, the player, and there shouldn't be too many referees. There is an exception which is when there's an unpriced externality, such as the CO2 capacity of the oceans and atmosphere. When you have an unpriced externality then the normal market mechanisms do not work and then it's government role to intervene in a way that's sensible, and the best way to intervene is to assign a proper price to whatever the common good is that's being consumed. There should be a tax on carbon. You know, if the bad thing is carbon accumulation in the atmosphere then there needs to be a tax on that. Then you can get rid of all subsidies and everything else. "It seems logical that you should tax things that are most likely to be bad rather than - like, that's why we tax cigarettes and alcohol, because those are probably bad for you." Certainly cigarettes are. So, you want to err on the side of taxing things that are probably bad and not tax things that are good. So I think, given that there is a need to gather tax to pay for the federal government, we should shift the tax burden to bad things and then adjust that tax on the bad things according to whatever is going to result in the behavior that we think is beneficial for the future. I think currently, what we're doing right now, which is mining and burning trillions of tons of hydrocarbons, that used to be buried very deep underground and now we're sinking them into the atmosphere and running this chemical experiment on the atmosphere and then you've got the oil and gas companies which have ungodly amounts of money and you can't expect them to just roll over and die. Like, they don't do that. Actually, what they'd much prefer to do is spend enormous amounts of money lobbying and running bogus ad campaigns and that sort of thing, to preserve their situation. It's a lot like tobacco companies in the old days. I mean, they used to run these ads with doctors, or like a guy pretending he's a doctor, essentially implying that smoking is good for you and like, having pregnant mothers on ads smoking.
[Question about climate change skeptics.] As far as climate change skeptics, I believe in the scientific method and one should have a healthy skepticism of things in general and first thing from a scientific standpoint is that you always look at things probabilistically, not definitively, and so, a lot of times, if someone is a skeptic in the scientific community what they're really saying is that they're not sure that it's 100% certain that this is the case, but that's not the point. The point is to look at it from the other side. What do you think the percentage chance is of this being catastrophic for some meaningful percentage of the Earth's population? Is it greater than 1%? Is it even 1%? If it is even 1%, why are we running this experiment? We're playing Russian roulette and as each year goes by we're loading more rounds in the chamber. It's not wise. What makes it super insane is that we're going to run out of oil anyway. It's not like there's some infinite oil supply. We're going to run out it. So we know, we have to get to a sustainable means of transportation, no matter what, so why even run the experiment? It's the world's dumbest experiment.
[Question about Steve Jobs.] Well, he's certainly someone I've admired. Although I did try to talk to him once at a party and he was super rude to me, but I don't think it was me. I think it was, sort of, you know I'm not the first. I was actually there - ya know, 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 Jobs. So it's not as like I'm going tugging on his coat like, ya know, please talk to me. Being introduced by Larry Page is not bad. Obviously he was an incredible guy and made fantastic products that, ya know, I don't know. There was a certain - the guy had a certain magic about him. That was really inspiring. I think that's really great. I think Steve Jobs was way cooler than I am.
[Question about coming up with new ideas.] It's somewhat cliche, but it happens a lot in the shower. I don't know what it is about showers or - get the camera. No, I do, I just sort of stand there in the shower and - [Do you have long showers?] I do actually. Sounds wrong but yeah, I do. Not to mention the Burning Man epiphanies. Those are huge. There are sometimes, like, late at night, if I've been thinking about something and I can't sleep, I'll be up for several hours pacing around the house thinking about things. Occasionally I'll sketch something or send myself an email or something like that.
[Who inspires you?] I don't have a mentor per se but I try to get feedback from as many people as possible. I have, like, friends and I ask them what they think about this, that, or the other. Larry Page a good friend of mine. I value his advice a lot. I have many other good friends and so I think it's good to solicit feedback and particularly negative feedback, actually. Obviously, people don't love the idea of giving you negative feedback unless it's on blogs, they do that. [Like Neil Armstrong.] Yeah, that was weird. That was kind of troubling because growing up Neil Armstrong was kind of a hero. Like, it kind of sucks. That's a bit of a blow, but I think in his case he was somewhat manipulated by other interests. I don't think he quite new what he was saying in those congressional hearings.
[Question about building good teams.] Well, if you think about a company, a company is a group of people that are organized to create a product or service. That's what a company is. So, in order to create such a thing, you have to convince others to join you in your effort and so they have to be convinced that it's a sensible thing, that there's at least some reasonable chance of success, and that if there is success the reward will be commensurate with the effort involved. I think getting people to believe in what you're doing, and you, is important. In the beginning, there will be few people who believe in you, or what you're doing, but then over time, as you make progress, the evidence will build and more and more people will believe in what you're doing. I think it's a good idea, when creating a company, to have a demonstration or, if it's a product, to have like a good mockup, or even if it's software to have good demoware or to be able to sketch something, so people can really envision what it's about. Try to get to that point as soon as possible and then iterate to make it as real as possible as fast as possible, if that makes sense.
[With everything you're doing, do you get any sleep?] Sometimes not enough. Sleep is really great because I find if I don't get enough sleep then I'm quite grumpy. I mean, obviously, I think most people are that way. I try to figure out what's the right amount of sleep, because I found I could drop below a certain threshold of sleep and although I could be awake more hours, and I could sustain it, I would get less done because my mental acuity would be affected. So, I found, generally, the right number for me is around six to six and half hours, on average, per night. That is an average though. [Question about SpaceX/Tesla split.] Having a smartphone is incredibly helpful because that means you can do email during inter-social periods - you're in a car, in the bathroom, walking everywhere. You can do email, practically, whenever you're awake. That's really helpful, to have email for SpaceX and Tesla integrated on my phone. Then you have to apply a lot of hours to actual working. The way I generally do it is I'll be working at SpaceX on Monday and then Monday night fly to the bay area. Then Tuesday and Wednesday at the bay area, at Tesla and then fly back on Wednesday night and then Thursday and Friday at SpaceX. In the last several months I would fly back here on Saturday and either spend Saturday and Sunday at Tesla or spend Saturday at Tesla and Sunday at SpaceX.
[Where do your son's fit in?] I do drag them along on a lot of things, actually. They're remarkably unimpressed - I wish they were sort of more interested. The twins are 8 and the triplets are 6, so maybe they'll get more interested later. [Are they going to take over your companies?] Well, I think if they're inclined to.. I mean, if they're really interested in working at Tesla or SpaceX then I'd help them do that. I'm not sure I'd want to, necessarily, try to insert them into the CEO role at some point, ya know. It's sort of like, if the rest of the team and the board felt that they were the right person then that would be fine but I wouldn't like people to fell like I'd installed my kid there. I don't think that'd be good for either the companies or the kid, really. I was, at one point, of the school of thought that it's best to give away 99% of one's assets - kind of like the Buffet school of thought - I'm still mostly inclined in that direction, but after seeing what happened with Ford and GM and Chrysler where GM and Chrysler went bankrupt but Ford did not, and Ford seemed to make better long term choices than the other two companies, and that's in-part because of the influence of the Ford family, and I thought, well, maybe there is some merit in having some longer term family ownership. At least a portion of it, so it acts as a positive influence. I mean, this is something I'm still thinking about, but acting as a positive influence in the long term, so the company does proper long term things. Look at what happened, also, in Silicon Valley with HP and I think it's quite sad, and that is to some degree because there was much diminished influence by the Hewett and Packard families. I think they should have prevailed when they were opposed to the merger that took place at one point and I think they were right, actually.
[Is there a IPO for SpaceX planned for this year?] No, there's no IPO planned. Running a public company does have it's drawbacks. In the case of Tesla and Solar City, we had to raise capital and we had kind of a complex equity structure that needed to be resolved by going public and I thought we kinda needed to do that in those two cases. We don't have to do that at SpaceX. I think there's a good chance that we will at some point in the future, but SpaceX's objectives are super long term and the market is not. So, I'm a bit worried that if we did go public too soon that market pressure would force us to do short term things and abandon long term projects. Going to Mars is very long term.
[Question about Hyperloop and electric supersonic aircraft.] I did promise that I'd do some paper on the Hyperloop idea and things got a little hectic towards the end of last year because I committed to make these milestones at Tesla to the public markets and I had to stay true to the obligation which required just an insane level of work and attention, and we also had the Solar City IPO which was a very difficult IPO to get done and that IPO occurred just by the skin of it's teeth. It was such a tough one. If it wasn't in December, it would mean pushing it out quite a bit, and the problem was that we'd already pushed it out quite a bit already. If we didn't go public we'd have to go a private round and then the whole thing just wouldn't feel right. It's like you're sitting at the altar and you don't do the wedding - it's a bit awkward, ya know. So, we really needed to do it 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 because there's just been too many failures in the solar - or not enough successes today in the solar arena. We need to chalk up a success. [A rare piece of sunshine.] Yes, ironically, the solar industry does not have a lot of that.
[You're 42 now. Where do you see yourself in the future?] Actually, I was asked by a journalist, 'Do you want to die on Mars?' and I said 'Yes!' and I was like, but wait, not on impact, just to be clear. That's one of the possibilities. I guess I'd like to be able to go to Mars while I'm still able to manage the journey reasonably well. So I think I don't want to be like 75 and go to Mars. At least in the beginning, it could be mildly arduous, so I'd like to get there ideally in my 50s, that would be kind of cool. I aspire to make that happen, and I can see the potential for that happening and I'm not saying it will happen but I think it can happen. I'll try to make it happen.