I was born in South Africa. Lived there until I was 17 and travelled - moved by myself.. do you want to hear the full story?
I was born in Pretoria, South Africa. Lived in Johannesburg and Durban as well. I was able to travel to a few countries growing up. Within Africa and around the world. Went to the US when I was.. I don't know.. 10-ish or something like that.
I read a lot of comic books, and books. It always seemed like when there was cool technology or things happening, it was kinda always in the United States. My goal as a kid was to get into.. to get to America basically.
Well. I read every comic in the store. I liked obviously, Batman, Superman and stuff. The Green Lantern. Ironman. Better not say Ironman first, because then people will think... but I did think that was a pretty cool one. But I read everything. Dr Strange.. if there was a comic on the rack, I read it.
When I was about 10 years old I went into a store in South Africa and bought a Commodore VIC 20 and.. I guess maybe I was 9 years old.. I thought it was the most awesome thing I had ever seen. You could write computer programs and make games. I'd played Atari and other things, other game consoles, when I was maybe 6 or 7. So the idea of being able to create games, I thought it was very exciting. That was my first computer.. I think it had like 8k of memory.
I wouldn't say that I always knew I wanted to be an entrepreneur. I actually wasn't sure what I wanted to do growing up. I think at one point I thought inventing things or creating stuff would be a cool thing to do. But I wasn't really sure if that meant starting a company or whether that meant working for a company that made cool stuff. In fact, when I first came out to Silicon Valley, it was to do graduate studies at Stanford in applied physics and pure science. In '95 I kinda thought the Internet would be something that would change the world in a major way and I wanted to be a part of it. Actually, what I first started to do, was I tried to get a job at Netscape. I wouldn't actually try to start a company, I'd try to get a job at Netscape.
I didn't get any reply. I mean I had a physics and economics degree, or physics and business degree from Wharton, and I was doing grad studies applied physics and materials science.. I guess that.. I mean, I didn't have a computer science degree or several years working at a software company. For whatever reason, I didn't get a reply from Netscape and I actually tried hanging out in the lobby.. but I was too shy to talk to anyone. So I'm just like standing in the lobby.. it was pretty embarrassing. I was just standing there trying to see if there's someone I can talk to but I just couldn't.. I was too scared to talk to anyone. So I left.
I was just writing software that summer and it got to the start of the quarter at Stanford so I had to make a decision and I decided to go on deferment. I figured if I start a company and it doesn't work then I can always go back and graduate school. So I talked to the chairman of the department and he let me go on deferment and I said I'd probably be back in 6 months and he said he was probably never going to hear from me again and he was correct. I've never spoken to him since.
So I started a company with my brother and a friend of mine Greg Kouri and the three of us created Zip2 which.. the initial idea was to create software that would help bring the media companies online. So we helped, in a small way, bring companies like The New York Times, and so forth, online. There weren't always online, people don't realize that.
I started off being the CEO. I was CEO for probably the first year and then.. but after we got VC funding, the venture capitalists wanted to hire a professional CEO.
At the time I thought it was a good idea. Because I didn't really know what I was doing, and I figured they would hire someone who is really good and that person would increase the chances of the success of the company. So that seemed like a good thing and I could work on software and product direction and that's what I like doing. So that seemed like a great thing. I think in retrospect that wasn't the best thing. The person that was hired, in my opinion, was actually not that great. I think, quite frankly, the company succeeded in spite of that person, not because of them.
I read a lot of books and talked to lots of people. I didn't have any one person who was a mentor but I always looked for feedback from the people around me and feedback from the historical context, which is books basically.
I don't read many general business books. I like to read biographies or autobiographies. I think those are pretty helpful, and a lot are not really business. For example, I like Franklin's autobiography and recent written biography on Franklin is really good. You can see how he.. cause he was an entrepreneur.. he started from nothing.. like a runaway kid basically. Created his printing business, how he went about doing that, and over time he goes into science and politics. I would say certainly that he's one of the people I most admire. Franklin was pretty awesome, but I think it's also worth reading books on scientists and engineers. Tesla obviously.. I've contributed some funding to save the land [for the Telsa museum]. I like the way [The Oatmeal] put it: let's have a god damn Telsa museum. Awesome.
This kinda goes back to college where I was trying figure out what are the things that would most effect the future of humanity.. and the things that I thought would most effect humanity were: the Internet, sustainable energy - which is both production and consumption - and.. so, like, Solar City is production and Tesla is consumption in a sustainable way, and then also space exploration and specifically making life multiplanetary. Now I didn't expect at the time to be involved in all of those areas, but those were the areas that I thought would most effect the future and as it turned out I was fortunate enough to be involved in those areas.. but that's the thread that connects them - it's kinda my best guess at what would most likely effect the future in the biggest way.
When I first thought about doing something in space, the thing I was going to do was going to be a philanthropic mission to Mars to land a small greenhouse on the surface of Mars with seeds in dehydrated nutrient gel. They'd be hydrated upon landing and you'd have this little greenhouse on Mars and you'd have this great shot of green plants on red background. The public could respond to superlatives. I thought that would get people really excited about sending life to Mars. My expectation from that project would be 100% loss. Maybe I would make a little bit back on advertising or sponsorship or something but it would be essentially a complete loss. So starting a rocket company would necessarily have a greater likely outcome than 0% in the short term.
"At the beginning of starting SpaceX I thought that the most likely outcome was failure."
In terms of the electric car company.. at first I thought there would be no need to do an electric car company startup because California regulations basically forced General Motors to create the Volt.. or rather, the EV-1 I should say.. so when General Motors had the EV-1 I thought hey, this is great, the biggest car company in the world is making an electric car. It's called EV-1, that would imply that there's going to be an EV-2, 3, 4. [They killed that product off] and that was very unwise. It's really short sorted, I mean it's really unwise, in restrospect that's obvious. They not only cancelled that project, they forcibly removed the EV-1s that they'd given out.. that they had only gave out on lease. They removed them from customers against their wishes. Took the cars and crushed them in the yard so they could never be used again. The customers who's cars had been taken away, they tried legal action to try to.. they tried to sue General Motors to keep their cars. They actually had a candle lit vigil at the yard where the cars got crushed, and it's like, you know, when was the last time there was a candle lit vigil for a product? You know that's pretty ridiculous. Let alone a General Motors product. I mean, you have to be pretty tonedeaf to.. you don't need to do a customer survey to figure out that at least some number of people want these cars if they are treating it like somebody has been sentenced to death. Holy crap, if this is not going to happen, there needs to be a new car company that comes in and shows that it can be done.
The key thing that we've done is show that you can make an electric car that was good looking, high performance, long range and if you made such a car that people would buy it. They don't have some fundamental affinity for gasoline.
My initial thought was that I did not want to create an electric car company and run it myself because I was running SpaceX and the idea of running two companies.. that's a lot of work. Just like, imagine if a person had two pretty demanding jobs.. or you had one pretty demanding job and now you have to do two of them. That kinda takes the fun away.
Something's gotta give.
My initial thought was I'll hire some people and work the team and I'll work on the part design and the overall strategy or something, but I'll leave the day to day operations to a CEO that I hire. Unfortunately that didn't work out. I've actually tried hiring a couple of CEOs and I guess I couldn't find the right person and so it came to 2008 and.. I was kinda co-CEO from 2007 to 2008 while trying to bring some other people up to speed, and then - when the market fell apart - I had a choice between committing all my remaining resources in Tesla or it's gunna die for sure. I thought okay, if I'm going to do that I've got to bite the bullet and run the company, because there's just too much at stake. When you've got all your chips on the table, you've got to play the hand yourself.
[Why do other car companies just make horrible cars?] I don't know, it just blows my mind. You can take a body panel and stamp it with this shape or that shape and yet they choose to do the bad shape.. but it costs the same either way. There are some things that cost a little more in terms of the quality of materials and getting things to fit accurately.. so there are few things that cost more but a lot of it doesn't. You know, you can make an ugly expensive car, you can make a good looking expensive car.. and the same goes for affordable good looking cars or an ugly affordable car. I think the cost differences are really relatively small. I don't know. I think maybe large car companies are just trapped in their own history.
[Do you do focus groups?] No, it's literally just a series of weekly iterations with the design team. Every Friday afternoon I meet with the design and the engineering team and we go over every nuance of the car. Every bumper, every curve, every little piece of the car. What's right, what's wrong, and then that has to be filtered against the engineering needs and the ergonomic needs, and the regulatory requirements. So it's a really.. there's a lot of constraints. You can't make a car just any old shape you want. It has to achieve - meet all the regulatory requirements, the crash safety and all that. It just requires a lot of iterative activity and caring about every millimeter of the car. That's what results in a good product.
The hyperloop.. I need to set aside some time to actually write down some of the details. I want to make sure I don't say something completely stupid. I'm spending time with both the SpaceX aerodynamics team and the Tesla aerodynamics team, just to make sure that whatever I put out there really will work.
I think it genuinely would be a new mode of transport. I think one way to think of it is like it's.. it's kinda like a ground-based Concorde.
If you could make something go as fast as a Concorde, on the ground, how would you do that?
We shall see. No actually, I think rails are not needed.
I've got more ideas than time to implement. I think so.
[Where do you come up with your best ideas?] This sounds really cliche, but like, the shower is probably like the most.. wake up, go shower in the morning and I think so what's really happened is things have percolated in the subconscious and it's not really occurring in the shower but you're kinda getting the results from last night's you know, computation, basically. And then sometimes it's late at night, if I can't sleep and there's something bothering me, then it'll occur then.
One key idea for a supersonic, vertical takeoff and landing electric plane occurred to me at Burning Man. It's a very creative place.
I think in terms of advice, I think it is very important to actively seek out and listen very carefully to negative feedback. This is something people typically tend to avoid because it's painful. But I think this is a very common mistake - to not actively seek out and listen to negative feedback.
Everyone I talk to is a - in fact, when friends get a product I say look, don't tell me what you like, tell me what you don't like. Because otherwise your friend is not going to tell you what he doesn't like. He's going to say 'I love this, and that' and leave out the 'this is the stuff I don't like' list. Because he wants to be your friend and, you know, doesn't want to offend you. So you really need to coax negative feedback, and you know if someone is your friend, or at least not your enemy, and they're giving you negative feedback, then - they may be wrong, but it's coming from a good place. And sometimes even your enemies give you good negative feedback.
So I think that's important. I suppose it should just be like, positive feedback is like water off a duck's back. That's like, really underweight that and overweight negative feedback.
I also think it is important to reason from first principles, rather than, by analogy. So the normal way we conduct our lives is we reason by analogy. We're doing this because it's like something else that was done or like what other people are doing. Iterations on a theme. It's kinda mentally easier to reason by analogy rather than from first principles. First principles is kinda a physics way of looking at the world and what that really means is you kinda boil things down to the most fundamental truths and say okay, what are we sure is true? or sure as possible is true? and then reason up from there. That takes a lot more mental energy.
Somebody could say.. in fact, people do.. that battery packs are really expensive and that's just the way they'll always be, because that's the way they've been in the past. Well, no, that's pretty dumb, because if you applied that reasoning to anything new, then you would never be able to get to that new thing. You can't say, oh, horses - nobody wants a car because horses are great and we're used to them and they can eat grass and there's lot of grass all over the place and you know, there's no gasoline that people can buy, so people are never going to get cars. People did say that, you know. And for batteries, they would say, oh, it's going to cost - you know, historically it's cost $600 per kWh and so, it's not going to be much better than that in the future, and you say no, what are the batteries made of? So first principles means you say okay, what are the material constituents of the batteries? What is the spot market value of the material constituents? So you can say, it's got: cobalt, nickle, aluminum, carbon and some polymers for separation and a steel can. So break that down on a materials basis and say okay, if we bought that on the London metal exchange, what would each of those things cost? Like, oh, jeez, it's like $80 per kWh. So clearly, you just have to think of clever ways to take those materials and combine them into the shape of a battery cell. and you can have batteries that are much much cheaper than anyone realizes.
[Are batteries the challenge at Tesla?] It's the single biggest item but it's - right now it's not any kind of obstacle to us. There's a whole bunch of little issues that, are kind of trivial, that are challenges when you're making a new product because there are several thousand unique parts in the car, 90% of them are fine, 5% of them are slightly problematic, 3% or 4% are are problematic and 1% are extremely problematic. But you can't ship a car that is 99% complete. With software you just have to get stable functionality, but with a car, you know, you can't ship it without a steering wheel, or without a back seat, or anything like that.
Thanks for coming by.