Montana Economic Development Summit
Questions on ElonsFAQ asked in this interview (3)
Transcript
0:02ModeratorNext speaker certainly thinks big, very big. He dreams big, does big things. His ideas have been described as excessively
0:15Elon Muskcool
0:17Moderatorwhether it's PayPal the car or SpaceX obviously as you know when the co founders of PayPal CEO today, Tesla drove one of his cars a short while ago and man they are, they got pick up and cool.
0:31ModeratorThey are really cool. SpaceX, you know, he's tied in here with Seacast because a lot of SpaceX rocket components are made right here in Butte by the Robins family.
0:47ModeratorSo we're very, very proud of all that. Let's give a big, big round of applause to Elon Musk.
1:04Elon MuskAll right, thanks very much for having me. I actually just came from ccast which
1:10Audience Memberis
1:13Elon Muskthey make cast titanium and inconel parts for the SpaceX rocket engines and actually brought all my five kids who are sitting right there.
1:30Elon MuskSo they got to see steel being poured and then titanium being poured as well and creating sophisticated castings. They seem pretty excited about that. And it was kind of like Charlie and the metal factory I guess.
1:52Elon MuskSo let's see. I guess I'll maybe talk a bit about entrepreneurship and technology, tell you about my experiences and what happened to me and then I think we're going to try to reserve as much time as possible for Q and A from the audience and certainly feel free to ask any questions, any and every question.
2:13Elon MuskAnd so I'll kind of give the nutshell account because it's getting a little bit long at this point. So I arrived in North America when I was about 17.
2:25Elon MuskI was born in South Africa, but I was actually named after my American great grandfather. So I was returning to my ancestral homeland actually. And he was John Elon Haldeman and he was actually from Minnesota and generally from the Minnesota, Wisconsin area anyway.
2:48Elon MuskBut I wanted to come to the United States because I think it's where great things are possible. It's where the technological frontiers are pushed forward. And I knew I wanted to be involved in that.
2:59Elon MuskI didn't know exactly how, but anyway, I went through college and ended up eventually at Stanford with the idea of studying applied physics and material science, trying to figure out ways to store energy more effectively for electric cars so you can make them go further.
3:23Elon MuskAnd I ended up putting that on hold to start an Internet company in 95. And at the time it wasn't from the perspective of making a lot of money because nobody had made any money on the Internet in 95.
3:37Elon MuskBut it seemed to me that the Internet was something that would create effectively like a nervous system for Humanity. So whereas previously if you wanted to access information, you'd have to go to a library.
3:51Elon MuskAnd you know, even if you went to a lot of libraries, you still wouldn't have access to all that much information. But if everything got connected, then anyone, anywhere, if you were in sort of a jungle in middle of Amazon jungle in South America or something, and you had an Internet connection, you'd have access to all the world's information.
4:14Elon MuskIn fact, you'd have access to more information than the US president did in, let's say, 1980. So it'd be pretty incredible and transformative. So I thought, well, I wanted to be part of helping make that happen.
4:28Elon MuskAnd so I decided to put my studies at Stanford on hold and started an Internet company initially to help the media companies get online. And so we had as investors and customers, New York Times company, Post Niter and so forth.
4:47Elon MuskAnd that ended up working out. So we sold that company and then created PayPal. And the idea behind PayPal was simply to facilitate payments on the Internet, because at the time, if you bought something from someone, you'd have to mail them a check and it would take weeks to conduct the transfer.
5:06Elon MuskWe figured out how to make it really fast and easy to transfer funds from one person to another. And that actually grew super fast. It grew virally. And the key to that was figuring out how to make the friction of signing up for an account very, very low and make it easy for one person to refer another.
5:35Elon MuskAnd so as our customer base grew, the actual rate of growth grew. And this resulted in some initial challenges in scaling because we started off with five people in customer service.
5:49Elon MuskAnd after two months we had 100,000 customers. So our phone lines exploded, basically. But we're able to overcome those issues. And then ebay bought the company in 2002, and it's sort of growing from there.
6:14Elon MuskSo what that did though, was gave me the capital to try to do some things that are fairly high capital. And there were two things. There are two areas that I really wanted to get into.
6:27Elon MuskOne was sustainable energy production and consumption of energy in a sustainable manner. And the other was space exploration. And I started off initially with the idea of doing something in the space exploration arena.
6:45Elon MuskIn fact, it wasn't actually with the idea of creating a company. It was initially with the thought of spurring interest in sending people to Mars. So I put together this idea of called Mars Oasis, which was to send a small greenhouse to the surface of Mars and get people excited about the idea of going there and thus increase NASA's budget in order to make it happen.
7:11Elon MuskAs I got more and more into that, I discovered that the real issue was that the cost of space transportation was really high, in fact and it was getting worse.
7:21Elon MuskSo we're used to technology getting better every year, but in some arenas it actually does not. It goes gets worse. Particularly when you consider that in 1969 we were able to go to the moon and then we're unable to go beyond low Earth orbit.
7:40Elon MuskAnd now with the space shuttle retired, we're not even able to go to Earth orbit at all, even with people. So that's, you know, that was not the right trajectory.
7:52Elon MuskSo I actually went to Russia three times to look at buying an ICBM to launch this mission. Just very crazy,
8:03Moderatorvery cool.
8:09Elon MuskSo after my third trip of trying to negotiate with the Russians to buy an ICBM and I did actually get a deal so figured out what it would cost and everything.
8:23Elon MuskBut I concluded that my initial assumption had been wrong, that it was not a question of trying to generate more world to explore. Because I think the United States in particular is distillation of the human spirit of exploration people, it's face exploration is fundamental to the American psyche.
8:41Elon MuskBut people really need to believe that it can be done and it's not going to break the bank if it does. So that's when I decided to start a rocket company.
8:53Elon MuskAnd I actually didn't think it would succeed and it almost didn't. So we started off developing a small rocket which was kind of a scale model version. It was about £100,000 of thrust.
9:10Elon MuskSo big, you know, big by normal standards, but small for a rocket. And developed the engine and the airframe and the electronics and the guidance control system and then proceeded to have three failed launches in a row.
9:32Elon MuskAnd so for various technical reasons, the first three launches did not succeed in reaching orbit. Launches two and three did get to space, but they didn't achieve enough speed to reach orbital velocity.
9:46Elon MuskAnd so this is 2008 and so we're heading into the recession and we had one rocket left. And unfortunately in late 2008 that fourth launch did work and we made it to orbit and then we won an asset contract after that.
10:05Elon MuskAnd so fortunately things worked out. But if that fourth launch had not worked, then SpaceX wouldn't be around. So it was very close call. In fact, when I started I thought, okay, I've got enough money, I think I've got enough money for three launches.
10:23Elon MuskUnfortunately, it was just enough to make that fourth one. So in parallel there was, it was Tesla and the, the emphasis for Tesla was, was really to, to create a compelling electric car.
10:41Elon MuskAnd at first I thought there would, there would not really be a need for such a thing because I don't know if people are aware of this, but GM at the time had created the EV1 or Electric Vehicle 1 and Toyota done the electric RAV4.
10:55Elon MuskIt been primarily as a result of regulations from the zero emission mandate states, particularly California. So they created these electric vehicles and I thought, okay, this is great. Well, GMs obviously can go from the EV1 to the EV2 and EV3 and everything will be fine.
11:13Elon MuskBut when California changed its regulations, they actually GM recalled all the EV1s and then crushed them so that they could never be returned. So it was clear that if a startup company did not create an electric vehicle and show that it's possible to have an electric car that looks good, goes fast, has long range, and that if you created such a thing that people would buy it, then it would be a very long time before the large incumbents did so.
11:43Elon MuskAnd so that was the, I felt was important that we create Tesla for that reason. And Tesla also almost died in 2008. And as you recall, the recession was particularly difficult for car companies.
12:02Elon MuskAnd right as in the summer of 2008, we had to raise a big funding round. But because of the collapse in the financial system, that funding round didn't happen.
12:13Elon MuskAnd we had to piece together the money to keep the company going from myself and existing investors. And we were able to just complete a financing round that was just barely enough to keep the company going.
12:29Elon MuskAnd we closed it on the last hour of the last day that it was possible to do so. It was Christmas Eve 2008, 6pm and after that the investors would have had, they were going on vacation, wouldn't have been possible to bring them back to the table, and we would have run out of money a few days after Christmas.
12:54Elon MuskSo that was also a close call. So while things are going really well these days, I think it's always important to remember that when you're creating a company there are very dark times and it's about getting through those dark times.
13:09Elon MuskThat's the difference between success and failure. So of course now things are actually going pretty well for Tesla. May they stay that way. And also for SpaceX, we've got the Model S which is in production and it's the, it was like Consumer Reports gave it a 99 out of 100, which is actually the highest score that Consumer Reports has ever given a car of any kind was given to the Model S.
13:44Elon MuskAnd then when the federal government did the safety tests, it actually also got the highest safety rating of any car ever, including many vans and SUVs, so for a sedan.
14:02Elon MuskAnd anyway, so that's going pretty well. And we're actually exporting a lot of the cars to Europe currently, and then we start exporting to Asia. And it's funny because I was wondering, we got these incredibly good rates for shipping goods to China because all these container ships come in full and they go back empty.
14:25Elon MuskSo it's real cheap to ship things to China. So we'll start doing that in first quarter. And then with SpaceX, we've got a launch coming up which is our next generation rocket.
14:40Elon MuskBecause the key thing for rocketry, the key breakthrough that's needed, is to create a fully reusable rocket. Because I think what SpaceX has done thus far is evolutionary but not revolutionary.
14:53Elon MuskIn order for that to occur, you have to bring the rocket back to the launch pad and be able to relaunch it again. It has to be reusable, much in the way that an airplane or a car or any other mode of transport is reusable.
15:05Elon MuskSo that's kind of the holy grail goal of spaceflight, which we're hoping to make progress towards, but it's very risky. So there's a good chance that the upcoming launch could go wrong.
15:19Elon MuskIt's currently slated for the end of this month and hopefully that goes well. It's a tricky thing with rocket business because you can't issue a recall or, you know, send a software patch or anything after the rocket lifts off.
15:36Elon MuskNine minutes later, it's either in orbit or it's exploded. So, yeah, it's nervous. Nine minutes.
15:48Elon MuskAll right, so with those introductory remarks, let's just go to Q and A and I'm happy to answer any questions you have.
15:54ModeratorYeah, I think that one question lined up. Student Vice president of University of Montana, Zane. Somehow, magically, Zane's going to appear on the screen, ask a question. Okay, thanks, Zane.
16:11ModeratorIt.
16:36Elon MuskWell, in terms of influencing public policy,
16:44Elon MuskI'm not sure we've been particularly successful in influencing public policy, but we've been able to go with the flow of what other people are doing to influence public policy, I think.
16:57Elon MuskSo in the case of electric vehicles, GM was a big proponent of electric vehicle tax credits to help with the EV1, or not the EV1, I mean, the Volt and then Nissan was also a big proponent of that.
17:15Elon MuskSo they have a lot more influence than Tesla did, certainly. But we were able to kind of go with them in that direction, maybe add a little bit to the influence on that front.
17:28Elon MuskAnd then on the space side, we've been arguing for a greater share of that. More of space should be commercial. And I think that's, there's been some success in that direction.
17:41Elon MuskAlthough it's still a very small part of the NASA budget. It's, it's Maybe, I think, 7 or 8% of the NASA budget. So it's still still probably fairly small.
17:50Elon MuskSo I wouldn't, I wouldn't say we've been particularly successful in influencing, you know, policy, but, but we have taken note of where policy, what general policy directions are happening and then trying to go along with those.
18:10ModeratorYeah.
18:10Elon MuskOn the truth, I'll ask the first
18:14Moderatorquestion, then we can open it up. It said something which is very interesting and true. That is every business started up reaches a point where the clouds are dark.
18:29ModeratorYes. And it's leaving yourself and going through with the Tesla and also with SpaceX, a couple of times you almost lost it.
18:41ModeratorMost companies all over the country and also clear in our state face issues like that. Could you just tell us a little bit more about how you dealt with those dark moments?
18:52Elon MuskYeah, sure.
18:52ModeratorBecause I think that's pretty key to succeeding.
18:55Elon MuskAbsolutely. So I think. So when you create a company, I mean, if you think, well, what is a company really? A company is a group of people gathered together to create a product or service and that's really all a company is.
19:12Elon MuskAnd so you have to really believe in what you're doing, creating and know in your heart and mind that this is something that matters and that the world ought to have.
19:27Elon MuskAnd I think it's important to investors to show that you're all in. And I think, for example, with Tesla, the fact that I invested all the money I had, literally I had to borrow money from friends to pay the rent in 2008.
19:50Elon MuskSo the fact that I was all in, I think was hugely made a huge difference to investors to convince them to invest in Tesla at the same time that, say, GM and Chrysler were going bankrupt.
20:08Elon MuskAnd yeah, I think you have to show that you really care. Like, it's like you've got skin in the game, that you've given it everything that you've got. And then the other people at the company will follow suit, as will investors.
20:30Elon MuskI think that's really important.
20:33ModeratorAnd
20:35Elon Muskyeah, I did that at both SpaceX and Tesla. That's really. And then when you hire people, or really what you're trying to, when you Hire people. That just means you're convincing people to join you in the endeavor.
20:51Elon MuskYou should hire people that are also passionate about what you're doing. So it's not just that they're not just there for the salary. They really need to care about what they're doing and then they will stay during the dog times.
21:08ModeratorThank you. Thank you very much. Thank you. Elon, while we're waiting, next question. I just seen your five sons in the front row. Reminds me I went to see your dad about five or six, seven months ago.
21:21ModeratorI saw your photographs on the wall. Elon has five boys, three triplets and two twins. And I want you to know your dad is really proud, really proud of all you talked about you on his
21:32Audience Memberunder the law of Earth.
21:33ModeratorOkay, first question.
21:35Elon MuskYes, sure. Well, I mean, I think the reason it's important to develop sustainable energy production consumption is that even if one ignores the environmental consequences and says, okay, well, it's simply a scarce resource, well, unless we move towards something that is sustainable that will be there in the long term, then leaving aside any questions of environmental impact, we'll face economic collapse if we run out of fuel to burn and put in vehicles.
22:11Elon MuskSo my initial interest in sustainable energy production and consumption was actually not driven from an environmental standpoint, although I do think there are environmental consequences, but rather from the importance of the continuance of human civilization, which we would face a disaster if we did not find some alternate means to power society and travel.
22:40Elon MuskAnd although the scarcity issue will only become really serious maybe towards the end of the century, because of the enormous industrial base of power generation and transportation, it will take decades to transform that to a sustainable system.
22:57Elon MuskSo we must take action now in order to avoid a calamity towards the end of the century. I think sustainable production, consumption of energy is the most important terrestrial problem that we face in the 21st century.
23:18ModeratorYeah, right here.
23:20Elon MuskWell, the overarching goal of SpaceX is to develop technologies that will enable the establishment of a permanent city on Mars, a self sustaining base on Mars, and we'll try to get as far in that direction as possible.
23:35Elon MuskBecause I think the future of humanity is fundamentally different. If we are a space faring civilization and a multi planet species compared to one where we are not. And I think both for defensive reasons, essentially to have life insurance for life itself on another planet and for frankly the adventure of it, I think we ought to do that sort of thing.
24:01Elon MuskAnd I actually personally am sort of more motivated by the fact that it would just be the greatest adventure.
24:15ModeratorIf Any of us would like to join you. I realized I was a tan. A card. I should have been addressing people, the questioners at the microphones. That's why they lined up over there.
24:24ModeratorOkay. Yes, over there.
24:27Audience MemberMr. Musk, welcome to Montana. And I have to tell you that you've been one of my great heroes ever since Jeremy Clarkson on Top Gear fell in love with an electric car.
24:38Audience MemberThank you very much for that. My question for you is, how do you balance your capacity for risk, your risk tolerance, against your desire to continue to innovate? How do you manage to weigh the two?
24:55Audience MemberBecause with Tesla, you went all in, right? So how do you reconcile that risk with yourself, knowing that this last project could very well be, you know, the end versus your desire to keep innovating with the hyperloop or whatever innovations you have down the pike?
25:15Elon MuskSure. Well, I mean, at the end of the day, I think that. I mean, I was certainly facing the loss of all assets. I mean, technically I would have been negative because I would have been owing people money.
25:32Elon MuskBut I figured I could always make enough to, you know, or at least borrow enough to pay the rent and, you know, and that kind of thing. So I didn't think we would starve or lack for shelter, although it would have been sad to not have lost all the assets gained from prior companies.
25:56Elon MuskBut really, the toughest decision was not whether to invest the money into Tesla. It was really that had Tesla and SpaceX. And the tough decision was if I split the money between the two companies, then it's possible that both may still have died.
26:20Elon MuskAnd so I had to decide, would I dedicate funds to just one company and let the other one die for sure, or split the funds between two companies? And that's.
26:33Elon MuskThat was a really. That was the really difficult decision.
26:37ModeratorOkay, a couple more questions. Keep them very short, please, and we'll have short answers.
26:46Audience MemberYeah. Dustin DeYoung, Montana Department of Commerce. Thank you for your time. Mr. Musk, my question relates to EVs and electrical storage on the grid and what your thoughts are on that and what your company is doing to move that forward.
26:59Elon MuskSure. I do think that we'll need to pair solar power with grid storage with battery storage. And I don't think actually using the car is going to be ideal solution, because people usually want to use their car and their house.
27:15Elon MuskSo I think. But this is often suggested, and it is true that the car has a big battery, and so one could use it, perhaps in an emergency. But I think what we'll need to do is Have a moderate amount of stationary pack storage combined with solar and then an electric car.
27:35Elon MuskAnd I think that works over here.
27:37ModeratorYes, sure.
27:41Audience MemberThank you for your presentation today. And my question to you really is as a young man who's out there searching for himself and as many in my generation are, we have, have jobs, not really careers, and we're searching, we're continuously facing unemployment.
27:54Audience MemberHow do we convert the ideology of space, future and energy and how do we personalize it so that we ourselves can convert this energy into something meaningful? How do we get involved?
28:05Elon MuskOkay, well, I think you can either work at a company in those arenas or say, okay, what's some important piece of the puzzle in rockets or cars or something?
28:18Elon MuskAnd then put together a group of people and figure out how to make that piece of the puzzle super good. And that's, that's, I think that that's the way to do it over here.
28:32Audience MemberGood morning. Matt Sargent from Headframe Spirits here in Butte. I'm wondering how a rural state like Montana can increase its technology economy. You know, what lessons have you learned from Silicon Valley that could apply here in small town America?
28:48Elon MuskWell, I mean, the most important thing is people. So you need to gather together a group of engineers essentially to create technology. And that's what engineers do, they create technology.
29:02Elon MuskBut you have to have a critical mass of such people that's equal to the task that you attempt to complete. So that's the most important thing. Critical mass of people.
29:16ModeratorThank you.
29:16Elon MuskOver here.
29:18Audience MemberHey, Max. Elon. Right on, John. Right on, John. Innovations. Elon, it's pleased, pleasure to talk to you here. You're like myself here, except you with innovation. But you have more money.
29:33Elon MuskI started out with zero, though.
29:35Audience MemberYes. I met that spot point right at this point. I have innovations that could actually move SpaceX, the tunnel, even Tesla car. What would be the easiest way to be in contact with you to bring these ideas forward?
29:58Elon MuskWell, you can send an email to Elon muskofficepacex.com if you'd like.
30:03Audience MemberThat's okay.
30:04Elon MuskAll right.
30:04Audience MemberAnd can I, I do have a sheet right here with my, with my info. If I could leave it with somebody that you would.
30:12Elon MuskAll right, thank you very much.
30:14ModeratorWe'll get it to him. Okay.
30:15Audience MemberYes, hello, my name is Jackson.
30:18Elon MuskI'm a Sentinel high schooler from Missoula, Montana. Thank you for coming. And I want to know what is
30:24Audience Memberthe one thing that has surprised you about your life?
30:27Elon MuskOh, one thing. Wow. Well, I certainly, I'm surprised by the whole thing, honestly. I certainly didn't expect to for any of these things to happen. Honestly, Yeah, I just knew.
30:43Elon MuskI knew I wanted to be involved in technology. And in fact, the only reason I started a company back in 95, an Internet company, was because I couldn't get it.
30:53Elon MuskThere were only a few Internet companies, and I couldn't get a job at any of them. I tried to get a job at Netscape and sent my resume in and tried hanging out in the lobby, but I was too shy to talk to anyone.
31:06Elon MuskAnd then I was like, okay, well, I guess I'll have to start a company because I can't get a job anywhere. Thank you.
31:20Audience MemberMy name is Toby McAdam. I have a company called Rising Sun Health. I deal with government regulations. What do you think of them? I actually. Dealing with the FDA, and after talking to Senator DeBauch, I've had 15, 15 attorneys, and they spent three and a half million dollars.
31:36Audience MemberWe're in the middle of a consent. They have 15 attorneys. After I've talked to Senator Baucus and Senator Tester, we ended up with 15 attorneys on the FDA, and they've signed a consent decree.
31:49Audience MemberBut government regulation, what do you think of those? Are they too strict? Because with the fda, they haven't had a reg. They haven't had a. I guess since 1995, but they keep changing the rules.
32:02Audience MemberAnd right now, in the last three years, more fatalities have been in the previous 50.
32:07Elon MuskYeah, I mean, I think we probably are getting a bit too regulated, you know, how would you recommend going about it?
32:15Audience MemberBecause I tried Senator Debauch and Senator Tester, and I just keep getting attorneys. I actually had to file papers against the FDA myself.
32:25Elon MuskRight. Well, I don't know. I think generally with laws and regulations, I think they should all come with some sort of a sunset clause, you know, because otherwise they have infinite life.
32:38Audience MemberRight. Do you think they should set standards where all companies follow?
32:43Elon MuskWell, I do think. I mean, I do think that there ought to be standards bodies. I'm not. I'm not completely libertarian in the sense of, like, I don't think there should be regulations at all.
32:51Elon MuskI just think that the natural bias of regulations is to last forever unless they're actively. I mean, you have to actively delete a regulation or a law, you know, the way things are set up in most laws.
33:05Elon MuskSome laws have sunset provisions. And the problem with that is you get vested interests who like that law, and there's an inertia around it. And so over time, the body of law and regulations grows and grows and grows.
33:20Elon MuskAnd I mean, it is something that I think is not ultimately good for society. So, in fact, I think it would generally be a good idea to have it such that it's hard to establish a rule and easy to remove one.
33:36Audience MemberWhat you're saying is the rules should be consistently used to all, all companies?
33:40Elon MuskWell, sure, of course, absolutely. That's. That's fair.
33:47Audience MemberThank you.
33:48ModeratorYou're very welcome. One couple more, very quick. We're, we're already over the end.
33:53Elon MuskThere's a big sign here that says the end, by the way. It's just Craig Sundberg.
33:59ModeratorIt's not the end.
34:00Audience MemberYou know, I'm just. I'm just always been there.
34:02ModeratorGo ahead. Right here.
34:02Audience MemberI just. I've been interested in space travel. I know one of the problems where they've had was the lack of gravity and effects of that on the human body.
34:09Audience MemberI was wondering how your company has made progress in that area so that, you know, colonization of Mars at some point can be possible.
34:18Elon MuskSure. Well, the zero gravity on the way to Mars is not too much of a problem because people have actually shown that they can live for over a year in zero gravity.
34:28Elon MuskAnd, you know, your bones do get a little thinner, but they come back and they're walking around, they're doing fine. So I think the zero gravity trend, you know, spending three to six months in zero gravity is not a problem.
34:44Elon MuskAnd then one can deal with the solar radiation, solar storms, essentially, by having a column of water between you and the sun. So on your spaceship, you orient the spaceship so that there's a column of water between you and the sun.
34:56Elon MuskThat'll take care of the solar storms. Thank you.
35:00ModeratorWe're going to have to wrap up here. I'm really very Elon will tell you this sign. The end has been up for about 10 minutes.
35:09Elon MuskYeah.