Bloomberg Risk Takers
Questions on ElonsFAQ asked in this interview (4)
Transcript
0:02NarratorBillionaire entrepreneur Elon Musk puts his money where his mouth is.
0:06Elon MuskI am personally guaranteeing that value and standing behind that guarantee with all of my assets.
0:11JournalistHis greatest asset is his ability to take this big, big dream and make other people believe that it's true.
0:20NarratorThe determined engineer's big dreams transformed three industries.
0:25Elon MuskI'm just wishing to any entities that are listening, please bless this launch.
0:30CommentatorHere's an immigrant from South Africa coming to America to say, you know, NASA, that whole rocket thing you do with the space shuttle, I've got a better way.
0:37NarratorHis better way meant risking everything.
0:40Elon MuskWe had maybe about a week's worth of cash in the bank or less. I had to make a choice then that either took all of the capital that I had left from the sale of PayPal to eBay and invest that in Tesla, or.
0:56Elon MuskOr Tesla would die.
0:57NarratorOthers weren't so willing to take a chance on him or his companies.
1:02CommentatorYou put $90 billion, like 50 years
1:05Narratorworth of brakes into, into solar and
1:08Commentatorwind to Solyndra and Fisker and Tesla and enter one.
1:12NarratorI mean, I had a friend who said, you don't just pick the winners and losers, you pick the losers.
1:16JournalistIt's very unlikely that the Tesla investment is ever repaid to the taxpayers. Electric vehicles are really not possible in ways that would be effective for most consumers still.
1:29NarratorBut his bets have paid off.
1:31Elon MuskWe didn't just repay the principal, we actually repaid it with interest and a bonus payment. So ultimately, the US taxpayer actually made a profit of over $20 million on this loan.
1:43NarratorElon Musk has even bigger dreams that might just take him farther than anyone else.
1:49CommentatorElon Musk goes a step further. Earth's not big enough with SpaceX. He literally wants to go to Mars.
1:55Elon MuskI'd really love to go to Mars. And that's the overarching goal of SpaceX.
2:11Elon MuskWhen I was a little kid, I was really scared of the dog. But then I sort of came to understand, okay, well, dark just means really the absence of photons in the visible wavelength, 400 to 700 nanometers.
2:26NarratorIt's hard to believe that entrepreneur Elon Musk was ever afraid of anything.
2:30Maye MuskAnd Elon said, darkness is merely the absence of light.
2:34Elon MuskThen I thought, well, it's really silly to be afraid of a lack of photons. Then I wasn't afraid of the clock anymore after that.
2:42Maye MuskOnce one of the kids said to him, look at the moon. It's a billion miles away. And he said, well, no, it's actually under 250,000 miles away. And they said, oh, Elon.
2:53NarratorEntrepreneur Elon Musk has spent his life proving people wrong. Growing up in South Africa, Musk was the oldest of three children and started school a year early. His father was an engineer.
3:05NarratorHis mother, May, was a model and nutritionist.
3:08Maye MuskHe was the youngest. He made about two days and the shortest and. And then he was this brilliant boy, and so people didn't really like him.
3:16Elon MuskSo I was this little bookwormy kid and probably a bit of a smart aleck. So this is a recipe for disaster.
3:23Maye MuskNot that he told me much about it, but he was picked on quite a bit.
3:26Elon MuskSo I just like, read a lot of books and try to stay out of people's way during school.
3:31Maye MuskAnd so his social life was much less than my other two kids. And that's a typical nerd.
3:39Elon MuskI read all the comics I could buy or that they'd let me read at the bookstore before chasing me away. I read every. Everything I could get my hands on from when I woke up to when I went to sleep.
3:48Elon MuskAt one point, I really ran out of books and started reading the encyclopedia.
3:52Maye MuskAnd he has a photographic memory, so he could remember everything. Anytime I had a question, my daughter Tosca would say, call genius boy.
4:01NarratorHis brother, Kimball Musk.
4:02Kimbal MuskWhen Elon was 10 years old, he got tested by IBM and he was found to have one of the highest aptitudes they'd ever seen for computer programming.
4:10Elon MuskI tried taking some computer classes, but I was way ahead of the teacher, so it didn't really help. So I started programming the space game called Blastar.
4:19NarratorMusk, already thinking like an entrepreneur, figured out how to sell his game.
4:24Elon MuskI don't think they realized I was 12.
4:27Kimbal MuskWe decided we were going to open an arcade out near our high school. We were big into video games. We figured that it was going to be a huge hit.
4:34Kimbal MuskWe got a lease on a building, we got the arcade provider to deliver the equipment, and the only thing we needed to do by the end of it was get the city to approve what we were doing.
4:44NarratorBut an adult had to apply for a city permit and they hadn't told their parents what they were up to.
4:49Kimbal MuskAnd of course, they told us we were not going to be opening up an arcade.
4:54NarratorMax Chavkin is a technology and business journalist who has profiled Elon Musk several times.
5:00JournalistReally, the most amazing thing about his childhood is his escape from South Africa.
5:05Elon MuskI remember thinking and saying that America is where great things are possible more than any other country in the world. It's all cliche, but it's True, America is the land of opportunity.
5:15NarratorBy moving, Musk would also avoid mandatory service in South Africa's army.
5:20Kimbal MuskGrowing up in apartheid South Africa was pretty surreal. I mean, we didn't support that government. We didn't believe in it. And so the idea of actually going to the military service was really out of the question.
5:32Elon MuskI told my parents I was going to Canada, and they tried to convince me not to leave.
5:38Maye MuskAnd off he flew. And I thought, wow, he's so independent. I, of course, as soon as he lands, he calls me and says, what do I do now?
5:44Elon MuskSo I boarded a bus from Montreal to Vancouver, and that allowed me to kind of see Canada, at least from the highway.
5:51NarratorHe worked at odd jobs across the country before settling at Queens College in Toronto.
5:56Elon MuskIn fact, when I went to college, I rarely went to class. I'd just read the textbook and then show up for exams. The big appeal at university was being able to date girls my own age.
6:04Elon MuskI actually met my first wife there.
6:07NarratorMusk got an engineering and business degree from the University of Pennsylvania and a scholarship to go to Stanford. Silicon Valley was the promised land.
6:16Elon MuskI really wanted to kind of go where the really exciting breakthroughs were occurring.
6:22Kimbal MuskElon had this ability to look at the world and go, this is a real problem that's going to happen in 20 years.
6:30JournalistHe looked around and he saw that the world changing stuff was not happening at Stanford.
6:36Elon MuskI didn't even go to class. I called the chair of the department and said, I'd like to try starting this Internet company. It probably won't succeed. And so when it fails, I want to make sure that I can still come back.
6:48Maye MuskMy kids do funny things, and I'm never too concerned about them because, you know, if Elon wanted to drop out of college, he could always go back.
6:57Elon MuskMy brother was in Canada at the time, and I said, look, I think we should try to create an Internet company. So he came down and joined me.
7:03JournalistHe had $2,000, no friends, barely enough money for an apartment. I think he told me he was showering at the gym because they didn't have a shower where he was living.
7:15Elon MuskWe just got some futons that there were couches during the day and then turned into beds at night.
7:22NarratorSteve Jurvetson is a venture capitalist in Silicon Valley.
7:25CommentatorI first met Elon N. Kimble Musk, his brother, back in the mid-90s when they first set foot in California. I think they'd been here for about a week, and they were pitching a new company called Zip2 Silicon Valley in the mid-90s and late-90s was a gold rush.
7:38CommentatorPeople were flocking to the region to find riches to make it in the Internet business.
7:42NarratorMusk came up with an idea to bring newspapers into the digital age. He took a CD rom, yellow pages, some mapping software, wrote a little code, and put it all together to create the first online city listings.
7:56Kimbal MuskElon was more the business mastermind. I was more the sales guy.
8:00Elon MuskI still had my core programming skills, so I was able to write the software needed for the first company.
8:07JournalistNow, when Elon was starting zip two, keep in mind, the Internet was just
8:11Commentatora couple of years old.
8:13JournalistMost local businesses were not on the Internet. And the way you found a local business was you opened up the yellow pages.
8:18Elon MuskThe thought was that media companies, the newspapers, are going to need help coming online and building lots of functionality into their websites.
8:25Kimbal MuskWe had someone literally throw a yellow pages book at us and tell us, do you think you'll ever replace this? And we thought the guy was crazy because not only were we going to replace this, but that's not where it ended.
8:36Kimbal MuskIt would keep going from there.
8:38NarratorIt wasn't long before media companies across the country were signing up.
8:42Elon MuskAnd so we were able to get as investors and customers the New York Times Company, Hearst, Knightrider, and a number of other companies.
8:50NarratorIn 1999, the Alta Vista division of Compaq bought Zip2 for $307 million in cash and 34 million in stock options. Musk was just 28 years old.
9:02Elon MuskI thought, that's crazy. Why would somebody pay such a huge amount of money for this little company that we have? It actually turned out very well for them financially, so they knew a lot more about it than I did.
9:13Maye MuskWhen the kids sold them, too, it was the most exciting day. We couldn't believe it, because you don't know in the Internet world if you're going to, you know, make a million or die tomorrow.
9:30NarratorIn February 1999, Elon Musk sold his first company. At 28, he joined the ranks of Silicon Valley millionaires.
9:39Elon MuskSoftware was acquired by Compaq for a little over $300 million. And I made about 21 or $22 million as a result of that, which was a phenomenal amount of money for me.
9:49Kimbal MuskIt was obviously a financial windfall. It was super fun to go out and buy some cool toys.
9:54Elon MuskThere is John in the fastest car in the world.
9:56CommentatorOne of his first things to do is go out and get a big sports car. He comes from a family that really enjoys racing and vehicles, and he got one of the highest performance cars money could buy at the time, the McLaren F1, and proceeded to enjoy that around the bay area.
10:12CommentatorLet's say there's a number of adventures and risk taking moves with his driving.
10:18JournalistWhile I'm sure it felt, you know, wonderful to have all this money and to have people recognizing success, I think he was also frustrated that this company hadn't become as great as he wanted it to be.
10:29JournalistIt hadn't changed the world. It had just slightly altered the course of newspaper history, which I think from his point of view is, you know, kind of a piddling accomplishment.
10:40Elon MuskI certainly had the choice at that point of retiring and buying an island somewhere and sipping mai tais, but that was not of interest to me at all.
10:49Kimbal MuskThere really wasn't a choice of we weren't going to do anything. It was just really what we were going to do next. In Elon's case in particular, it was really just a stepping stone.
10:56Elon MuskThe goal in doing my second Internet company was to create something that would have a profound effect. And it seems to me that the financial sector had not seen a lot of innovation on the Internet.
11:07Elon MuskAnd money is really just an entry in a database. And so it's low bandwidth. It seems like something that should lend itself to innovation.
11:14JournalistHe was very rich. I mean, just more money than most people could dream. And he took almost no time in between that sale and starting the company that became paypal.
11:26NarratorMusk's new company created something we take for granted today. It changed the way the world buys things, the way money is transferred from one person to another.
11:36Elon MuskAt the time, transactions were very slow. People would have to mail checks to each other, so it could take weeks just to complete a single transaction.
11:43NarratorWith his windfall from the sale of Zip2, Musk quickly turned around and founded X.com to make electronic cash transfers possible. But his new company collided with a rival mobile payment company called confinity.
11:57Kimbal MuskAnd they were really competing against each other. And the real enemy at the end of the day was ebay.
12:01Elon MuskWe combined our efforts in order to compete effectively against ebay's built in system.
12:06NarratorThey called the new company paypal.
12:09Kimbal MuskWhen he looked at PayPal, his goal was not to create a place you could do person to person payments. His goal was to transform the financial industry.
12:18Elon MuskWe're able to become the leading payment system in the world. And then ebay finally threw in the towel and acquired PayPal. In early 2002, Musk and his partners
12:30Narratorsold PayPal for $1.5 billion. Musk was the largest shareholder and walked away with 180 million. He was 30 years old.
12:40Elon MuskI could have bought probably a chain of islands, but again, that was obviously just not of interest to me.
12:49NarratorIslands weren't of interest, but outer space was.
12:54Elon MuskIt's just a much more exciting, inspiring future if we're out there exploring the stars as opposed to a future where we are forever confined to Earth. I was thinking, well, I wonder when we're going to Mars, when is NASA going to go to Mars?
13:06Elon MuskAnd I went to the NASA website and there was no plan to go to Mars and no plan to really even take the next step in space exploration.
13:13Kimbal MuskThis is Elon saying he wants to go and enable human civilization to leave the planet Earth. It's about as big a vision as you could possibly imagine. And that's going to require funds.
13:26Kimbal MuskAnd he has enough funds to go do it, so he's going to go do it.
13:32NarratorMusk had the outrageous idea that private enterprise could actually re energize space Travel. And in June 2002 he founded Space Exploration Technologies, or SpaceX.
13:45CommentatorElon was the only funder of the company for its early years. Another incredibly risky move to say nobody on the planet thinks this idea is financible. I'm going to fund all of it myself to the tune of almost $100 million, which was the majority of his net worth at the time, into a dream to take on the military industrial complex.
14:02CommentatorHere's an immigrant from South Africa coming to America to say, you know NASA, that whole rocket thing you do with the space shuttle, I've got a better.
14:12Elon MuskI actually traveled to Russia three times to look at buying a refurbished ICBM without the nuke. And I came to the conclusion that the thing that was really holding us back from making much more progress in space was really that rockets had not evolved since the 60s.
14:26JournalistSo the trick isn't figuring out how to get to orbit, it's figuring out how to get to orbit cheaply.
14:30Elon MuskSo I had to come up with lower cost ways to produce engines, the primary structure, the electronics to the launch operation, as well as run the company at with very little overhead.
14:39Elon MuskAnd the sum of inventions in all those areas is what has led us to roughly three to four fold improvements over the cost of other rockets in the United States.
14:48JournalistWhat SpaceX has been very successful at is taking basically off the shelf technology stuff that was developed by NASA 50 years ago and streamlining it. So in that way, he's kind of the Henry Ford of space, because Henry Ford didn't invent the automobile.
15:03JournalistHe Just figured out how to make the army automobile, you know, commercially viable.
15:09NarratorMusk was more than just an entrepreneur.
15:12JournalistIf you ask Elon how he managed to teach himself rocket science, he'll just look at you very seriously and just say very quietly, I read a lot of books.
15:26Narrator32 year old Elon Musk had his next big idea at his family's annual visit to Burning man, the counterculture desert happening. Although still fascinated by rockets and fast cars, he wanted to find a way to end Earth's addiction to fossil fuels.
15:42Elon MuskI was one that suggested the idea of going into the solar power arena to Lyndon and Peter Ryan, my cousins.
15:50JournalistHe basically hands this idea to his cousins and says, if you want to start this, I will fund you and it'll be your company, but I'll be the chairman.
15:59JournalistAnd they said, okay. And it works almost perfectly.
16:04CommentatorWhat they figured out is that if you sort of do a hundred things 10% better in the area of solar cell installation for homeowners, you can dramatically consolidate an industry that's currently a bunch of mom and pop shops.
16:17CommentatorSo what SolarCity did was they said, how about no money down? You want solar shelves, we'll just put them in.
16:22Elon MuskYou don't pay a center.
16:23CommentatorIt's like leasing a car, but even better.
16:25NarratorSolarCity started in five Western states and soon grew into the largest solar service provider in the US the solar cells keep going.
16:34CommentatorSolarCity then owns those at the end of lease. So it's a fascinating business model where in the long term they may become the largest energy generator in America off
16:42Elon Muskall of these rooftops.
16:44NarratorBut renewable energy was just one part of a much bigger goal. Musk had a more ambitious plan for a sustainable future.
16:52JournalistHe had this idea that he wanted to make electric cars help humanity get off fossil fuels.
16:58Elon MuskAnd so SolarCity is about sustainable energy creation, whereas Tesla is about sustainable energy consumption.
17:05NarratorIn April 2004, Musk helped launch Tesla with $6.3 million of his own money. It was the first auto industry startup in decades and the only one born in Silicon Valley.
17:18Elon MuskAnd it's really pretty simple. Make a high priced car at low volume, because that's essentially the only thing we could afford to do. And then step two is a medium priced car at medium volumes, and step three is a low priced car at high volumes.
17:31NarratorTesla's plan was to introduce a high end, high performance product to first attract outliers, then make an affordable car for the masses. Tesla's co founder and first CEO, Martin Eberhard.
17:45JournalistWe expect to change the way people think about electric cars with this car and that we hope to open the market for us to sell other electric cars. But we also know that if you start off by saying, let's first change human nature and make everybody drive crummy little cars, that doesn't work.
18:00JournalistSo instead, let's build a car that people want to drive. Let's build a car that's hot and desirable and beautiful and convince people that driving an electric car is not a compromise.
18:08Kimbal MuskThis idea of actually going in and putting it in a high end car and breaking the mold of what an electric car was, was exciting. This is no longer going to be a golf cart.
18:19Kimbal MuskThis is going to be a Ferrari.
18:21JournalistAny cops watching?
18:22Maye MuskNope.
18:22Elon MuskText is clear.
18:23CommentatorWhen we first saw Tesla, it had a good explanation for how they get to market without having to spend exorbitant amount of money. How they would create a brand and an object of desire in consumers.
18:33CommentatorAnd each part of the story clicked together.
18:35Elon MuskHe talked about Silicon Valley smarts, being able to show Detroit how to do something that Detroit didn't think was possible. It's batteries, it's drive electronics, it's electric motors. Those are skills that are present in Silicon Valley and not present in Detroit.
18:50NarratorTesla's revolutionary technology for the Roadster started with a computer battery as the power source for the automobile. J.B. straubel, Tesla's chief technology officer, was the main designer of the electric powertrain.
19:04Tesla EngineerFor the first time, it was possible to drive over 200 miles and have performance that was directly comparable, competitive with what a gasoline car could do. And Tesla was the first company to take those principles and put that into practice and try it.
19:17NarratorCalifornia Governor Schwarzenegger showed up for the roadster's 2006 coming out party.
19:22Elon MuskA test drop. This one, it's hard.
19:24NarratorHe bought one. So did Leonardo DiCaprio and George Clooney. But could Musk sell regular customers on his idea?
19:33Elon MuskAt that time, there was very little activity in the auto industry in electric vehicles. We were in the age of the large suv. So it was a little unusual to hear about this company in California that was planning to come to market with a high end, all electric sports car.
19:50Tesla EngineerWe were very passionate about trying to make sure that this car was going to just throw down the gauntlet on what the technology could do and really prove to the world that electric vehicles could be incredibly fast and could have incredibly long range.
20:01Tesla EngineerThere was kind of a sense of adventure, you know, doing these things for the first time and doing it in a really scrappy way. We did some of the very first battery packs in my garage in Menlo park before we actually were able to rent a real office.
20:15NarratorThe big issue for Tesla, as with all electric cars, has been the batteries, their cost, and how long they last. Eric Noble is president of Car Lab, an automotive consulting firm that evaluates new cars and trucks.
20:29JournalistAmerican consumers are very ready for battery electric vehicles. Unfortunately, battery electric vehicles aren't ready for American consumers.
20:37NarratorThe first results at Tesla seem to support this gloomy forecast. Tesla.
20:42Elon MuskWhen we first started out, the thought was simple and really, obviously in retrospect, quite naive, which was to make use of some technology that we develop ourselves, but also some technology that we'd license from AC Propulsion, put that together, and create an electric sports car that would be compelling.
20:59Elon MuskSo let's see, where did that fall apart?
21:03NarratorIt fell apart when the team told Musk that the projected cost had skyrocketed from $65,000 to $140,000. As the problems mounted, Musk faced a do or die decision at Tesla.
21:16NarratorHe would have to choose between investing his PayPal payoff or let his new company collapse.
21:22CommentatorAnd Elon was looking at this and saying, the dream is still there. But oh my gosh, what have I got? I gotta get this under control.
21:35NarratorBy 2007, Tesla was running out of money fast. No one wanted to step up to save the unproven automobile startup Elon Musk had to take the leap alone.
21:47Elon MuskWe have to make some pretty dramatic changes, essentially recapitalize the business and invest about twice what we'd originally expected. What we really expected is the outer limit.
21:58JournalistBasically, Tesla got to this point where they only had enough money in the bank for a couple of months and there's nobody around who are willing to put more money in.
22:08Elon MuskI take all of my reserve capital and invest it into Tesla, which was very scary because, you know, it would obviously be quite sad to have the fruits of my labor with Zip2 and PayPal not amount to anything.
22:21Elon MuskBut there was no question that I would do that in my mind because Tesla was too important to let die. I'm available 24 7. Help solve issues. Call me 3am on a Sunday morning.
22:33Elon MuskI don't care.
22:34Kimbal MuskWe had to go in and make some really hard decisions on personnel changes. And Elon really had to dedicate his time to the company.
22:44Elon MuskI want names named. So if someone's always on the hot seat and is always the root cause for problems, they will not be part of this organization long term.
22:54Elon MuskIt's not okay to be unhappy and part of this company. And if somebody can't get happy, get the boots.
23:00NarratorMusk and his board replaced Martin Eberhard, one of the co founders who had been running Tesla.
23:05Elon MuskAnd I think we kind of really exceeded the level that Everhard could handle. And that became apparent in 2007.
23:13Kimbal MuskWe either were going to have to shut the company down or Elon was going to have to take over as CEO.
23:17Tesla EngineerIt was actually a process of building a company as well as building a car. A lot of people that, that fit in very well with the company when it was extremely small, didn't end up fitting in as well when it was larger.
23:28NarratorEverhard didn't go quietly. He sued Musk for libel, slander and breach of contract.
23:34JournalistI believe that I was scapegoated to take the blame for the programs that
23:37Narratorwere not run well. Musk resolved the dispute through mediation, but his company was in serious financial trouble. In September 2007, Musk flew to Germany with a scheme to raise extra cash by force forging an alliance with Daimler Mercedes.
23:52Elon MuskDaimler is the company that invented the internal combustion engine car, the maker of Mercedes Smart. And their endorsement carries a great deal of weight. So that was just a very important moment.
24:02NarratorHe had to convince the company that Tesla could supply battery packs for its cars. They were skeptical.
24:08Elon MuskReally. The key thing with Daimler was to demonstrate hardware that worked.
24:13Tesla EngineerYou know, if they can't touch it, they can't drive it. It's not particularly real.
24:17NarratorHe pushed his team to retrofit a Daimler Smart Car with Tesla's electric motor. But first they had to find one.
24:24Tesla EngineerThe challenge of converting a Smart Car to electric was doubly difficult because we couldn't find a Smart Car.
24:29Elon MuskThe Smart Car is not for sale in the United States. So we had to send somebody down to Mexico to buy a Smart Car, bring one to the US and then the Smart Car is really tiny, so we had to fit a motor and power electronics charger and everything in the Smart Car.
24:43NarratorThe challenge was daunting. To replace the Smart Car's gas engine with a Tesla drivetrain and battery, fit it in the tiny space under the hood, and do it all in less than four weeks.
24:56Tesla EngineerWe didn't have much time at all. We knew that from the beginning. And we kind of prepared for almost battle and, you know, set up a war room in the shop.
25:03NarratorThey worked around the clock, stealing naps on the factory floor right up to the deadline.
25:09Elon MuskThe Daimler executives arrived and not at all convinced that it made any sense to work with an American car company, let alone a little tiny American car company in Silicon Valley.
25:17NarratorWhile waiting for Daimler's decision, Musk brought in one of the world's leading automobile designers to help create his next project, a modern and sexy family sedan, which he called the Model S.
25:30NarratorOriginally with
25:31Elon MuskModel S, I thought, well, let's have Henry Fisker, who, who had a design studio do the styling. We paid him a pretty good sum of money to do that.
25:38Elon MuskCuriously enough, the designs that he worked on that he came up with for us were terrible. And what he didn't tell us was that he was actually working on a competing car company.
25:52Elon MuskTesla officials claimed that perhaps Henrik had come in to learn what Tesla was doing, while all along he was planning to form his own company, do his own vehicle.
26:05Elon MuskWe were pretty upset with him for basically taking what were at the time the original specifications for the Model S and then going and shopping a business plan to create that same car.
26:17JournalistTesla sued him. He sued Tesla and there was all kinds of infighting.
26:23NarratorHenrik Fisker wouldn't grant Bloomberg an interview, but he told us that I believe there is enough space in the market for several new car companies that pursue a new type of electrified powertrain with different philosophies.
26:35NarratorIn November 2008, the court ruled in Fisker's favor. It was a setback for Musk, who was also going through a tough time personally. After eight years of marriage and five children, Elon and Justine Musk divorced.
26:50Elon MuskI got divorced. Personal life in somewhat of a shambles and in addition getting, you know, attacked by some in the media, you know, my ex wife, every bad thing you could imagine.
27:03NarratorThere was more bad news when his bold space transport company, SpaceX again failed to get a rocket into orbit.
27:10Elon MuskThe first launch didn't get very far, got about a minute up and then was there was an engine fire and that was it. The second flight actually did make it to space, but not to orbit.
27:21Elon MuskAnd then also flight three, we didn't get all the way to orbit.
27:25JournalistHe started saying, I've got enough money for three cracks at it. He put $100 million of his own money and he sort of hinted at the idea that after three, if he didn't make would be over, SpaceX would die.
27:39NarratorMusk burned through the 100 million he had sunk into SpaceX. Now he was on his way back to the drawing board.
27:46JournalistThree days after the failure, he announced like first that he knew what was wrong. He announced that they'd raised money to finance a fourth launch. And the fourth launch was going to happen in a matter of months, which in the rocket industry was a crazy announcement.
28:02Elon MuskWe were able to solve the problems and then just as we solved those problems, we ran smack into the worst economic recession since the Great Depression.
28:11Maye MuskIt's been one of the darkest days on Wall street in recent memory. Stock market falling the most since 9 11.
28:17Elon MuskThe Dow off more than 500 points.
28:20Maye MuskThis is what financial Armageddon looks like. Red screens that scream sell, sell, sell.
28:35NarratorIt was a week that shook Wall street and indeed the world.
28:37JournalistAnd a realization that the economy may still head into a deeper downturn.
28:42NarratorAs 2008 drew to a close, Elon Musk faced the worst crisis of his career. All three of his companies appear to be in free fall.
28:51Elon MuskThe worst point was probably just the weekend before Christmas in 2008 we had the economic tsunami take place and made things even worse. If it wasn't needed, we had to shut it down and, and just figure out what's.
29:06Elon MuskHow do we get through this dark period and not go bankrupt?
29:09Maye MuskGeneral Motors shares falling to more than a 20 year low after Goldman cut the automakers rating to sell on a worsening sales outlook.
29:20Elon MuskThat was tough. It was, it was obviously an economic period that saw the bankruptcy of General Motors and Chrysler. And there we were a young company selling a very, very optional car.
29:33Elon MuskI mean it was really a. You people don't need a hundred thousand dollar sports car and they certainly wouldn't
29:38Narratorwant one getting poor reviews. The popular BBC program Top Gear took the Tesla roadster on a test drive in December 2008.
29:49Elon MuskThis car van really was shaping up to be slightly something wonderful.
29:54NarratorBut then,
29:58Elon Muskalthough Tesla say it'll do 200 miles, we worked out that on our track it would run out after just 55 miles. And if it does run out, it's not a quick job to charge it up again.
30:09NarratorThe combative CEO charged the incident was faked and said he had proof that the roadster had not run out of power. He sued the BBC to block reruns of the show.
30:19NarratorThe case was later dismissed. But things would get even tougher. His energy company SolarCity foundered. The bank that had backed their leases pulled out of the deal.
30:31Elon MuskI certainly did not anticipate that we would have the worst economic climate since the Great Depression and one which was disproportionately bad for cars. I mean General Motors went bankrupt.
30:44Elon MuskI mean General, General F and Motors,
30:47Narratoryou know, Musk was in the fight of his life.
30:50Elon MuskWe had maybe about a week's worth of cash in the bank or less. And there was just very little time left in the year to resolve these things. I mean, there were like two or three business days left in the air.
31:07Elon MuskI never thought it was possible for me to have a nurse breakdown, but it was possible for me to have a nurse breakdown there. That was about as close as I was going to come.
31:15Maye MuskWhen Elon was going through his sad period, I was so sad. I felt like I had a hole in my heart and there's nothing you can do. You just hurt so much.
31:25Maye MuskAnd I just didn't see him getting out of it. He was just so sad. And then the next thing I get this call saying, ma, you can't believe it.
31:34Maye MuskI've met a wonderful woman.
31:36NarratorThe one bright spot was meeting Tallulah Riley, a British actress who had never heard of Tesla, SpaceX, or Elon Musk. They married in 2010.
31:46Elon MuskI thought it was some sort of hapless engineer that had wandered into a London club.
31:50Maye MuskAnd he just looked so forlorn. He was sort of just sat in
31:54Elon Muskthe corner on his BlackBerry and he
31:55Maye Muskjust looked really out of place and sad.
31:59Elon MuskI was, you know, trying to be very sweet to him and sort of humoring him, going, oh, yes. When he was going, this is my rocket and. And then this is my car.
32:08NarratorMusk's personal life was looking up, and the future of SpaceX was finally taking off. We have liftoff. The fourth attempt to launch the Falcon 1 was a huge success.
32:19NarratorAnd three months later, NASA rewarded SpaceX with a $1.6 billion contract to resupply the International Space Station. But Musk had no time to celebrate. Tesla was on the verge of financial disaster.
32:35Elon MuskI had to make a choice then that either took all of the capital that I had left from the sale of PayPal to eBay and invest that in Tesla, or Tesla would die.
32:45JournalistThe company is really teetering on the brink of failure. And there's this board meeting late in 2008 where they're discussing what's going to happen and Elon just says, well, I'm going to raise a 40 million dollar round to keep the company going.
33:00JournalistAnd the board members are kind of wondering, well, how's he going to do that? And he says, I'm going to put it all in myself.
33:06CommentatorAnd that incredible braggadocio confidence catalyzed a change in people's opinion. And we and everyone else around the table, oh my gosh, we want to be part of this. We want to get as much of this investment as we can.
33:18CommentatorHe saved the company in its darkest hour with an act of heroism that is hard to describe there's nothing quite like spending your last remaining dollar on a project you believe in.
33:31Elon MuskIt was thankfully a good week, but definitely took its toll from mental strain standpoint. I think I mentally just burned out a few circuits.
33:41NarratorJust after his emergency cash infusion came the news they desperately needed a 40 million dollar deal with Daimler for smart car batteries. Daimler later added 50 million for 10% of the company.
33:55NarratorDetermined not to repeat past mistakes, Musk focused on bringing his family car to life.
34:01Elon MuskSo I decided, look, we really need to have our own design studio. And that's when I hired Franz von Holzhausen to design the Model S. His
34:08Narratorgreen agenda was irresistible to von Holzhausen, a legendary figure in car design who had already revolutionized the looks of vw, GM and Mazda.
34:18Elon MuskHe's completely passionate to really rid the world of this addiction to fossil fuel. And that was something that he talked about from the very first sentence, first conversation that we had.
34:31NarratorWith a new team in place, Musk completely revamped the look of the Model
34:35Elon MuskS. A sedan doesn't have to be a brick, it doesn't have to be a big blocky car.
34:40Tesla EngineerWe wanted to bring this kind of passion and feeling back to this marketplace. The architecture of Model S is really
34:49Elon Musksimilar to a skateboard. The floor of the vehicle is the battery pack and the motors between the rear wheels and everything above that is the opportunity space.
35:03NarratorIn March 2009, Musk unveiled the prototype for the Model S. It could hold seven passengers and as much luggage as a station wagon. But to build it, he knew he needed a piece of the US government's new 7.5 billion dollar loan program to support alternative energy vehicles in order for
35:23Elon MuskModel S to truly be successful. You know, it was important that the loan come through.
35:29NarratorThe government funding was controversial. The New York Times writer Randy Strauss called the program the bailout of very, very high net worth individuals who invested in Tesla Motors act.
35:40NarratorMusk struck back.
35:42Elon MuskRandy's cross is a huge douchebag
35:46Kimbal Muskand an idiot.
35:48NarratorOkay, it wasn't a bailout, but a loan. The Obama administration agreed to lend Tesla $465 million to mass produce the Model S, a move that astounded many in the industry.
36:01JournalistIt's very unlikely that the Tesla investment is ever repaid to the taxpayers. Electric vehicles are really not possible in ways that would be effective for most consumers. Still, this is just the religion of electric vehicles.
36:18JournalistAnd like Jonestown, that religion will come to an end. There are most certain people who want to see Tesla fail because they it is an attack on the mainstream car industry,
36:32Elon Muskof course, the biggest impact that Tesla will have is not the cars that we make ourselves, but the fact that we show that you can make compelling electric cars that people really want to buy.
36:43NarratorThe government loan came with a challenging condition. To get the money, he had to first find a place to build his electric car.
36:55NarratorTesla burned through $300 million since 2003. Elon Musk needed to get his Model S into production fast. Ever the risk taker, he took another giant gamble, purchasing a plant in Fremont, California, abandoned by Toyota.
37:13Elon MuskThe dream factory location for Tesla was always the new ME factory, which was a 50% Toyota, 50% General Motors factory. It's one of the biggest car plants in the world.
37:21Elon MuskIt's a great location close to Tesla headquarters.
37:24JournalistThe reality is, for very little money, Toyota got an albatross off its books. From an industry perspective, it looked incredibly savvy on Toyota's part and incredibly naive on Tesla's part.
37:36JournalistCar factories are big pieces of sunk capital. To retool a factory takes a tremendous incremental investment.
37:46NarratorThe acquisition released the government funds to begin production. Despite the fact that Tesla had posted a profit just once since its founding. Musk took his company public in June 2010.
37:58Elon MuskThe smartest money in the world is betting on Tesla.
38:01NarratorNot everyone was as upbeat about the company's future.
38:04Tesla EngineerTesla stock voted by Wall street as
38:06Narratorthe least likely to succeed. You don't want to own this stock,
38:10Elon Muskyou don't want to lease it. Heck, you shouldn't even rent the darn thing.
38:13CommentatorThere hasn't been an IPO of a car company in America since Henry Ford and that caught people's attention.
38:18NarratorInvestors ignored the skeptics. Tesla raised $226 million in its IPO. Musk now had the capital to get rolling on the Model S. You just
38:31Journalistsaw on his face this sort of just elation and this feeling like all of this suffering is worth it. And it's, and we're, and it's real now.
38:41Elon Musk3, 2, 1,
38:46Narratorlift off. Falcon 9 has cleared the powers. In 2010, after winning the $1.6 billion contract from NASA, SpaceX became the first private company to successfully launch and return a spacecraft from orbit.
39:01Elon MuskSo SpaceX was, was the first purely commercial ground up development to reach orbit.
39:09Kimbal MuskThe first successful launch at SpaceX was incredibly emotional.
39:14CommentatorFalcon 9 stage 2 and the Dragon
39:15Elon Muskcapsule are now in orbit around the Earth. I'm just wishing to any entities that are listening, please bless this launch.
39:25NarratorThree, two, one and two years later, in May 2012, it made history as the first privately held company to send a cargo payload to the International Space
39:38Kimbal MuskStation
39:41Narratorback on Earth, the long awaited launch of Tesla's new sedan was also taking off. It's time, it's time to start delivering
39:49Maye MuskModel S.
39:52NarratorThe Model S started rolling off the production line, although questions about range and service remained.
39:58Elon MuskLet him go.
40:01NarratorNot everyone was cheering. In a 2012 presidential debate, Republican candidate Mitt Romney blasted President Obama for the government loan to Tesla, lumping Tesla in with other financially troubled green companies.
40:15CommentatorYou put $90 billion, like 50 years
40:18Narratorworth of brakes into solar and wind
40:21Commentatorto Solyndra and Fisker and Tesla and enter one.
40:25NarratorI mean, I had a friend who said, you don't just pick the winners and losers, you pick the losers. But Tesla was no loser. In the eyes of the automotive industry, the Model S was the first electric sedan to win Motor Trend's Car of the Year.
40:38NarratorMusk didn't have much time to celebrate. A few months later, the New York Times delivered a devastating review of the Model S. It reported the battery died on its test drive from Washington to Boston and published an image no CEO would want.
40:53Elon MuskThere was this sad shot of our car on a flatbed as though that was the only outcome possible for such a drive. And that's just not true.
41:02NarratorMusk went on the offensive and lots
41:04Elon Muskof people said, oh, it doesn't matter if you're right or wrong. You don't battle the New York Times. And it's like, the hell with that.
41:11NarratorThe battle between the reporter and the renegade CEO ended when the New York Times public editor concluded, concluded the reporting was imprecise, but not done in bad faith. But the story didn't affect his bottom line.
41:24NarratorRemember that loser comment from a presidential candidate about the 465 million dollar government loan?
41:30Elon MuskIt really feels good to have repaid the US taxpayer. That's really what's important here. And we didn't just repay the principal, we actually repaid it with interest and a bonus payment.
41:43Elon MuskSo ultimately, the US taxpayer actually made a profit of over $20 million on this loan.
41:49NarratorTesla repaid the loan nine years ahead of schedule. Never short on optimism or confidence, Musk made a stunning promise for the nearly $70,000 car.
42:00Elon MuskWe're guaranteeing that the value of the Model S will be no less than that of a Mercedes S class after three years. I am personally guaranteeing that value and standing behind that guarantee with all of my assets, not just with Tesla.
42:14NarratorHe has guaranteed free charging for the life of the car and has expanded the charging system across the country.
42:20Elon MuskYou'll be able to travel all the way from LA to New York just using the Tesla Supercharger network. And Supercharger system is free. So it's not just free now, it's free forever.
42:30Elon MuskThat's the Tesla commitment.
42:31NarratorHis commitment to customers has paid off. Since its IPO, Tesla shares were up more than five fold. SpaceX and SolarCity were also turning profits.
42:41Elon MuskNASA's our biggest and most important customer, but almost three quarters of our customers are commercial.
42:48NarratorSpaceX says it has more than $4 billion in revenue under contract. But of all his companies, perhaps the greatest success was the one addressing the world's energy need. SolarCity is now the largest solar solar service provider in the US and has more than quadrupled in value.
43:05NarratorSince its initial public offering in December
43:08Journalist2012, SolarCity has been very, very impressive. I mean there are, you know, thousands of people with panels on their roofs and lots of big offices. I believe eBay has SolarCity panels.
43:18JournalistSo it's having a very big, very visible impact on the world.
43:22CommentatorHe really wants to change the world. And in Elon Musk's vision of the future, you'll have clean and renewable sources of energy feeding the grid and all of our vehicles will run off that.
43:33NarratorThis is really the future.
43:35CommentatorIt's something you want to tell stories about.
43:37JournalistElon has a self confidence that is just, it's breathtaking and it's especially breathtaking when you think about the things he's confident about. The idea that humanity is going to get to Mars, that not just humanity is going to get to Mars, but that he, in his lifetime, Elon Musk will get to Mars.
43:56NarratorCrusader or canny businessman Named one of Time magazine's most influential people in the world. The risk taking, multitasking CEOs estimated net worth was $6 billion. In June 2013, divorced for the second time, Musk splits his time between his five sons, his companies and thinking about
44:17Elon Muskthe future, just is it significant? It, it really the question is, are things I'm working on, are they really going to matter or do they have the potential for really