Interview with Sal Khan
Questions on ElonsFAQ asked in this interview (4)
Transcript
0:00Salman KhanSo, first of all, I just want to thank Elon for coming hungry. You didn't even have dinner and we didn't even feed you properly.
0:06Elon MuskSorry to be a bit late. Oh, no, I just came from the Tesla factory in Fremont.
0:10Salman KhanYes. Was something wrong?
0:13Elon MuskThere's always something wrong at any given point. There's always something wrong.
0:17Salman KhanYes.
0:17Elon MuskBecause there's just too many things going on. One of the trickiest things about a car is that there's thousands of individual components. There's thousands of unique components, and even if one of those things is missing, you can't make cars.
0:30Elon MuskYes. So, I mean, today's fiasco was, I kid you not, we were missing $3 USB cable. Okay. So we cannot complete cars because the
0:43Salman Khanwhole line was stopped.
0:45Elon MuskYeah, essentially because it's part of the wiring harness, so you can't put the interior in without this cable. And so we can either make a whole bunch of cars minus an interior, which means that you gotta stack them up in the yard.
0:59Salman KhanThe resale value would be no good.
1:01Elon MuskWell, it can be done, but then things go out of sequence.
1:05Salman KhanOh, right, right, right.
1:06Elon MuskAnd it's way more. It's way more. You don't have a music moving production line that you have to send people out to hundreds of cars that are sort of sitting in the storage yard.
1:17Elon MuskAnd so we. This happens to be a particular pernicious cable that's kind of like routed under the carpet and in a difficult place. And it's literally $3. And so we basically had to send people throughout the Bay Area to go and buy USB cables.
1:36Salman KhanLike, literally, Radio Shack. You like?
1:38Elon MuskLike fries.
1:39Salman KhanOh, fries. Fries. Oh, that's better.
1:40Elon MuskYou'll have a hard time getting a USB cable right now. Price.
1:42Salman KhanOh, really should.
1:43Elon MuskBought every one of them. That's good. And so we were able to continue production. And I don't belabor the anecdote, but essentially the supplier is in China. And we had plan A and plan B.
1:59Elon MuskAnd plan A was like the normal supply chain process. But what the supplier did was instead of sending our parts in their own package, they grouped it together with a bunch of other stuff for other companies and sent that all via some extremely slow boat from China to la.
2:21Elon MuskAnd when it got to la, the other stuff didn't pass customs. And so they wouldn't let our stuff through because they put it in like
2:28Salman Khana barrel of fruit or something.
2:30Elon MuskI don't know what they put it in, but something that customs didn't like and the paperwork wasn't in order or whatever. So it Got stuck there for like a couple weeks and then we had plan B.
2:42Elon MuskSo we called and said look, you got to air freight some these cables because little cables to us. And we talked to their US subsidiary and ordered from the US subsidiary who then communicated to China.
2:55Elon MuskBut then because this was another batch of parts, it was kind of double the order. It exceeded the credit limit that we had.
3:04Salman KhanOh yeah, you got it.
3:06Elon MuskSo it bounced off their credit limit so they didn't ship it.
3:08Salman KhanFascinating. So someone's losing their job now.
3:11Elon MuskThis is.
3:12Salman KhanNo, I'm kidding. No, no, you should fire anyone.
3:16Elon MuskI mean it's pretty farcical. Anyway, so it's coming like tonight at 11pm or something.
3:23Salman KhanWow. And these things are happening all the time. This is an unusual circumstance.
3:27Elon MuskYeah, that's like one example. But there's many things like that.
3:32Salman KhanSo I guess, I mean that's actually a really good example because that kind of leads into what I've always been fascinated by. A lot of what you're doing is, is.
3:39Salman KhanWell, I guess. Well, I'll start with how did you get into this? I mean, you know, into cars. Into cars. Into taking over NASA, into. Well, not taking over NASA.
3:51Salman KhanBeing a contractor for NASA.
3:54Elon MuskYes, taking over NASA.
3:55Salman KhanYou're not taking over NASA, they're an independent organization. But you all are becoming a major provider of services for NASA. Obviously kind of Internet payments and payments generally. I mean these are very.
4:08Salman KhanThree completely different spaces. I think a lot of people would not take someone seriously if they kind of had a business plan in one of these, right? Oh yeah, you take your time.
4:19Salman KhanWhat was your. I mean, did you always think you were going to be doing this or when did it dawn on you that you would try to revolutionize three industries?
4:30Elon MuskWell, when I was in college I didn't actually expect to do it. So it was not like this is some long fulfilled expectation. But when I was in college I thought about what are the areas that would most affect the future of humanity?
4:43Elon MuskIn my opinion and the three areas were the Internet, sustainable energy and space exploration. Particularly if humanity becomes a multi planet species. There's kind of like a pretty substantial bifurcation in our sort of future.
4:56Elon MuskIf we're either out there amongst us on multiple planets or if we're confined to earth until some obviously eventual extinction event. Not that I'm pessimistic about life on Earth.
5:07Elon MuskI mean I think things are likely to be good, but even more likely to be good.
5:10Salman KhanBy far Yellowstone's due for an explosion. Every hundred knows about that. It's been 700,000 since.
5:20Elon MuskRight, right.
5:21Salman KhanBut yeah, super volcano, for those of you who don't know, it would envelop the.
5:24Elon MuskWell, yeah, no, exactly. I know exactly what you're talking about. Exactly.
5:27Salman KhanWe read the same books. Like, it felt.
5:29Elon MuskAbsolutely. I mean, something bad is bound to happen if you give it enough time. And civilization has been around for such a very short period of time that these timescales seem like very long, but on an evolutionary time scale, they're very short.
5:46Elon MuskA million years on evolutionary time scale is really not much. And it's been around for four and a half billion years. So that's a very tiny, tiny amount of time, really.
5:56Elon MuskBut for us, that would be. I mean, can you imagine if human civilization continued at anything remotely like the current pace of technology advancement for a million years? Where would we be?
6:07Elon MuskI mean, I think we're either extinct or on a lot of planets.
6:10Salman KhanYes, we should.
6:12Elon MuskThose are the two options.
6:13Salman KhanBut given that, I mean, one that's kind of as epic as one can think about things. I mean, literally, I mean, how did you make that concrete? How does that turn into SpaceX, Tesla and PayPal?
6:32Elon MuskWell, so I thought about these things kind of in the abstract, not from the expectation that I would actually have careers in those arenas, but I wanted to be involved in at least one of them.
6:45Elon MuskAnd at first I thought the best bet was going to be electric cars. And so the area that I was studying was advanced capacitors. So essentially capacitors that have an energy density exceeding that of batteries because they have a very high power density, but low energy density.
7:02Elon MuskWe have a lecture to that.
7:03Salman KhanOh, yes, yes.
7:04Elon MuskNo, we should do that. We'll get later. Exactly. So obviously, if you could make a capacitor that had anywhere near the energy density of a battery, and with its incredibly high power density and its quasi infinite cycle and calendar life, then you have an awesome solution for energy storage and mobile applications.
7:23Elon MuskSo I was going to sort of work on that and try to leverage the equipment that was developed for advanced chip making and photonics to create ultra precise capacitors at sort of at the molecular.
7:38Salman KhanAnd this is when you were going to go into grad school, you had a brief stint at Stanford.
7:41Elon MuskThat's right.
7:42Salman KhanA PhD in applied physics.
7:44Elon MuskApplied physics. Material science.
7:45Salman KhanRight. This is what you were. So even then you were thinking of kind of trying to do something in the space.
7:49Elon MuskWell, actually this was. Yeah, this was to work on energy storage solutions for electric cars. And I'd actually worked at a company in Silicon Valley called Pinnacle Research which did advanced capacitors.
8:02Elon MuskThere were electrolytic capacitors sort of and actually were pretty good. They had like the energy density of a lead acid battery, which for a capacitor is. That's a big deal.
8:16Elon MuskBut they used ruthenium tantalum oxide and I think at the time there was maybe like 1 or 2 tons of ruthenium mined per year in the world. So it's not a scalable solution, but I thought there could be some solid state solution, like just like using chip making equipment.
8:33Elon MuskThat was going to be the basic idea. But it was one of those things where I wasn't sure if success was one of the possible outcomes. It's difficult to bound that problem exactly and say, ok, so you're saying I
8:48Salman Khanfelt like this was a destined failure is another way to parse that sentence.
8:50Elon MuskBut anyway, no, I didn't think it would fail, but I wasn't sure that success was a possibility.
8:56Salman KhanOk, yes.
8:59Elon MuskAnd generally you want to embark on something, it's desirable to figure out if success is at least one of the possibilities.
9:08Salman KhanRight, exactly.
9:10Elon MuskBecause for sure failure is one of the possibilities. Yes, but ideally you want to try to bracket it and say success is in the envelope of outcomes. And I wasn't quite sure if that was the case.
9:25Elon MuskI think success on an academic level would have been quite likely because you can publish some useless paper and most papers are pretty useless.
9:34Salman KhanWe have a few, don't take a few.
9:37Elon MuskHow many PHP papers are actually used by someone ever? I mean, that's a good point. Percentage wise it's not good. So it could have been one of those outcomes where you add some leaves to the tree of knowledge and that leap is, nope, it's not possible.
10:01Elon MuskThey go seven years of my life. So that was one path and I was prepared to do that. But then the Internet was. The Internet came along and I was like, okay, the Internet, I'm pretty sure success is one of the possible outcomes.
10:13Elon MuskAnd it seemed like I could either do a PhD and watch the Internet happen or I could participate in a help bullet in some fashion. I just couldn't stand the idea of watching it happen.
10:25Elon MuskYeah. So I decided to put things on hold and start an Internet company. And that was kind of a. We worked on Internet like publishing software, maps and directions, Yellow Pages kind of things.
10:41Elon MuskAnd we had as investors and customers the media companies like New York Times company, Knight Rotter.
10:49Salman KhanAnd this was just at the early stages. This was like late 95. 95. So it's really early stages. It's really out the gate.
10:55Elon MuskYeah, absolutely. And so then we. The reason we worked with the media companies, because we knew they had money. Like, there was no advertising money in 95. In fact, the idea of advertising Internet seemed like a ridiculous people.
11:10Elon MuskObviously not so ridiculous anymore. But at the time, it seemed like a very unlikely proposition. And a lot of the media companies weren't even sure that they should be online.
11:20Elon MuskLike, what's the point of that?
11:21Salman KhanAnd do you all think that PayPal was just going to be a simple little Internet way, or do you think it was going to turn into the major kind of transaction processing engine that it is right now?
11:30Elon MuskI didn't expect PayPal's growth rate to be what it was, and that actually created major problems. So we started PayPal on University Avenue. After the first month or so of the website being active, we had 100,000 customers.
11:44Salman KhanReally?
11:44Elon MuskThat.
11:45Salman KhanThat. Wow. I didn't realize it was.
11:46Elon MuskYeah, it was nutty.
11:48Salman KhanAnd how did it start? How did people just even know to use it? And I mean, obviously, both buyer and seller have to be involved.
11:54Elon MuskYeah. Well, we started off first by offering people $20 if they open an account and $20 if they refer to anyone. And then we dropped it to $10, and then we dropped it to $5.
12:08Elon MuskAs the network got bigger and bigger, the value of the network itself exceeded any sort of carrot that we could offer.
12:16Salman KhanHow much did you all spend with that kind of 5, 10, $20 incentive to get that critical mass going?
12:21Elon MuskIt was a fair amount. I think it was probably 60 or 70 million dollars.
12:26Salman KhanOh, wow. Okay. So it was a substantial. Oh, okay, so we're not talking peanuts here. Yeah, this is.
12:30Elon MuskYeah, it depends on your relative scale.
12:31Salman KhanYeah,
12:34Elon Muskit's a peanut to Google.
12:36Salman KhanYes. No, that's right. That's right.
12:38Elon MuskYes, yes. I mean, Google's got 50 billion. Apple's got, I don't know, 150 billion. Some crazy amount of money. That's cash.
12:45Salman KhanYeah. Yeah. So it's not an outland. Well, yeah, no, I didn't realize. I didn't realize that was cash.
12:51Elon MuskWould be $500 million. So that's 0.1% of Google's.
12:55Salman KhanThat's true. You're right. That's inexpensive.
12:57Elon MuskRelative to them, it's pretty inexpensive.
13:00Salman KhanThat's right.
13:02Elon MuskAnd then we just did a. A bunch of things to decrease the friction because. And it's just like bacteria in a petri dish. So what you want to do is try to have one customer generate, like two customers.
13:22Elon MuskYeah, okay. Or something like that. Maybe Three customers, ideally. And then you want that to happen really fast. And you could probably model it just like bacterial growth in a petri dish.
13:34Elon MuskAnd it'll just expand very quickly until it hits the sides of the petri dish, slows down.
13:41Salman KhanAnd then after PayPal, then, I mean, to some degree, especially us in Silicon Valley, we kind of understand the Internet. We know people. I mean, PayPal is obviously of a scale that is noteworthy.
13:52Salman KhanBut then SpaceX just seems really, you know, well, one, how did you decide that? I'm definitely going to do that. And then, like, what's the first thing that you do?
14:03Salman KhanLike, how do you even, like, go out? Like, I don't even know how to start trying to make a rocket company.
14:09Elon MuskWell, neither did I, really. And in fact, the first three launches failed. So it's not as though it was like, you know, spot on, did not hit the bullseye.
14:19Salman KhanBut even getting to the point that you're launching rockets, I don't even know how to, like, how do you get there? And, like, what did you do on, like, one?
14:25Salman KhanHow did you decide? And then what did you do on day one? Like, who did you call? Or did you write a plan? Did you start? I don't even know, actually.
14:30Elon MuskI mean, the origin of PayPal is, or rather SpaceX, is that I was trying to figure out why we'd not sent any people to Mars, because the obvious next step after Apollo was to send people to Mars.
14:48Elon MuskBut what in fact happened was that we sent a few people to the moon and then we didn't send anyone after that to the moon or Mars or anything.
14:55Elon MuskBut if you'd ask people in 1969, what would 2013 look like, they would have said, there'll be a base on the moon. We would have at least sent some people to Mars, and maybe there'd even be a base on Mars.
15:06Elon MuskThere'd be, like, orbiting space hotels, and there'd be all this awesome stuff in space. And that's what people expected. And if you'd said, well, actually, the United States in 2013 will not be able to send anyone to orbit.
15:18Elon MuskBut I tell you what will exist is that there'll be this device in your pocket that's like the size of it, smaller than a deck of cards that has access to all the world's information and you can talk to anyone on planet Earth.
15:28Elon MuskAnd even if you're like, in some remote village somewhere, as long as there's something called the Internet that wouldn't know what that means, of course, then you'd be Able to communicate to anyone instantly and have access to all of humanity's knowledge.
15:44Elon MuskLike, bullshit. There's no way that that's going to be.
15:46Salman KhanRight, right, right.
15:48Elon MuskAnd yet we all have that and space is not happening. So I try to figure out, like, what was the deal here? And this was 2001. There was just a friend of mine asked me what I'm going to do after PayPal.
16:00Elon MuskI said, well, you know, I've always been interested in space, but I don't think there's anything that an individual could do in space because the province of government is usually large government.
16:07Elon MuskBut I'm curious as to when we're going to send somewhere tomorrow. So I went to the NASA website, tried to figure out where's the place that tells you that, and I couldn't find that.
16:16Elon MuskSo either I'm like, bad at looking at the website, or they have a terrible website because surely there must be.
16:21Salman KhanThat should be a big date.
16:22Elon MuskYeah, yeah, this should be on the front page. And then I discovered actually that NASA had no plans to send people to Mars or even really back to the moon.
16:33Elon MuskSo this was really disappointing. I thought, well, maybe this is a question of national will. Do we need to get people excited about space again and try to get NASA a bigger budget and then we would send people to Mars.
16:53Elon MuskAnd so I started researching the area, becoming more familiar with space, reading lots of books, and came up with this idea to do something called Mars Oasis, which was to send a small greenhouse with seeds and dehydrated gel.
17:12Elon MuskUpon landing, you hydrate the gel, you have green plants on a red background, and the public responds to precedents and superlatives. So it would be the first life on Mars, the furthest that life's ever traveled.
17:25Elon MuskAnd you'd have this money shot of green plants in the right background. So that seemed like it would get people pretty excited. So I started getting into this and trying to figure out, ok, well, can I afford to build the spacecraft?
17:42Elon MuskBecause I had some money as a result of PayPal, but it had to fit within that budget. And I figured we had to do two missions because if we only did one and it failed, then it might have the opposite effect.
17:54Salman KhanBut you were willing to bet the farm, so to speak, on this?
17:58Elon MuskYeah, well, yeah, I figured, like, I would. I was willing to spend half the money that I got from PayPal. Yeah. With no expectation of return.
18:06Salman KhanRight.
18:08Elon MuskBecause I thought this was just something that was pretty important. And yeah, I'm like, seemed like it could spend half the money on payfl on this. And it'd be if that got NASA a bigger budget and resulted in us going to Mars, that would be a good, pretty good outcome.
18:22Salman KhanAnd when your friends came or your family came up to you and said, look, there's nations that can't do this. You're a guy, but you have some resources, what did you say or do or think?
18:32Elon MuskWell, I had a lot of friends of mine tried to talk me out of starting a rocket company because they thought it was crazy. And a friend of mine made me watch a video of rockets blowing up.
18:47Elon MuskAnd there were just lots of people that thought it was a really crazy idea. And there was some people that had tried to start rocket companies, not succeeded. And they tried to talk me out of it.
18:55Elon MuskBut the thing is that the premise for talking me out of it was, well, we think you're going to lose the money that you invest. I was like, well, that was my expectation anyway.
19:04Elon MuskSo I don't really mind if I lose. I mean, I might, but I mean, it's not like I was trying to figure out the rank order, best way to invest money on that basis.
19:15Elon MuskYou know, chose space.
19:16Salman KhanRight.
19:17Elon MuskIt's not like that's, you know, I thought, wow, you weren't looking at like
19:20Salman Khanmoney, money market, bonds, triple A bonds, rocket company.
19:24Elon MuskYou weren't like real estate, you know, invest in shoemaking, anything. And whoa, space is the highest roi. That is not what I wasn't the premise. I just thought that it was important that humanity expand beyond Earth.
19:41Elon MuskAnd we weren't doing that. So maybe there was something I could do to kind of spur that on. And then I was able to compress the costs of the spacecraft and everything down to a relatively manageable number.
19:54Elon MuskAnd I got stuck on the rocket. The US rockets were way too expensive. I ended up going to Russia. Flew to Russia three times to negotiate purchase of an ICBM.
20:04Elon MuskI tried to buy two of the biggest ICBM in the Russian fleet in 2001 and 2000, 2002. And I actually negotiated.
20:11Salman KhanI'll just let that statement stand.
20:13Elon MuskI'm not even going to. I mean, that's.
20:17Salman KhanWell, actually, I actually have to. Like, who did you call?
20:23Elon MuskYou open the Yellow Pages?
20:24Salman KhanYeah. Like, I mean, how does this. I mean, I don't want to get too much in the wheel, but I am curious. Just this one particular thing. You decide at some point you need to buy an icbm.
20:35Elon MuskYeah. Well, actually, at first I tried to buy just a normal launch vehicle that they used to launch satellites. Those are too expensive.
20:40Salman KhanI see.
20:40Elon MuskI see The Boeing Delta 2 would have cost $65 million each, and so 2 would have been 130. And then I was like, whoa, okay, that breaks my budget right there.
20:51Salman KhanYeah.
20:54Elon MuskAnd I try to negotiate with them. And that was not.
20:56Salman KhanHow much does an ICBM go for? I'm curious, what's the market rate for one of those? Well, this was right after the fall. It might have gone up.
21:04Elon MuskYeah, it's gone up a lot since then. But in 2001, it would have been about $10 million each. So two would have been 20. And then I thought I could get the rest of the mission down to also around 10 per.
21:20Elon MuskSo we'd have a dual mission with, like, two identical launches, two identical spacecraft, and like, roughly $40 million. And so I thought that, okay, I
21:32Salman Khancan do that, but you must have had some, like, rocket scientists advising you at this point. I mean, this sounds like you were serious. I mean, you were.
21:39Elon MuskYeah, yeah. Engaged a bunch of consultants.
21:44Salman KhanRight, right.
21:44Elon MuskAnd kind of started to get familiar with the space industry. But then after the third trip to Russia, I came to realize that I was actually wrong about that on my first premise, that there was a lack of will.
21:58Elon MuskIn fact, I think that there's a tremendous amount of will in the United States for space exploration, because the United States is essentially a nation of explorers. I mean, it's a distillation of the human spirit of exploration.
22:10Elon MuskSo, of course, it was quite silly of me to think that people lack motivation. But what people don't want to think is that, okay, sending people to Mars is going to be so expensive that they'll have to give up, like, health care or something.
22:23Elon MuskRight. They're not going to do that. So it's going to be. It's got to be that going to Mars is not going to cause some meaningful drop in their standard of living.
22:34Salman KhanRight.
22:35Elon MuskSo if it's like maybe a quarter of a or half percent of GDP, something like that is palatable anyway. So I thought, okay, it's not really going to maybe matter that much if I do this mission, because what really matters is having a way.
22:53Elon MuskSo I was wrong. I thought there wasn't enough will, but there actually was plenty of will if people thought there was a way. So then I said, okay, well, I need to work on the way.
23:05Elon MuskHow hard is it really to make a rocket? In history, historically, all rockets have been expensive. So therefore, in the future, all rockets will be expensive. But actually, that's not true.
23:15Elon MuskIf you say, what is a rocket made of? And say, okay, it's made of aluminum, titanium, some copper, carbon fiber, if you want to go that direction. And you can break down and say, what is the raw material cost of all these components?
23:29Elon MuskAnd if you had them stacked on the floor and could wave magic wand so that the cost of rearranging the atoms was zero, then what would the cost of the rocket be?
23:39Elon MuskI was like, wow, okay, it's really small. It's like, you know, 2% of what a robot costs. So clearly in how the atoms are arranged. So you got to figure out sort of, okay, how can we get the atoms in the right shape much more efficiently?
23:58Salman KhanYeah.
23:59Elon MuskAnd so I had a series of meetings on Saturdays with people that were. Some of whom were working at the big aerospace companies, just to try to figure out, is there some catch here that I'm not appreciating?
24:12Elon MuskAnd I couldn't figure out? Doesn't seem to be any catch.
24:14Salman KhanSo started SpaceX and you ended up. You had some failures, but obviously some huge successes. What was the cost that you were able to build this rocket for relative to what they were being built for before?
24:27Elon MuskSo actually, let's see, for the Falcon 1, which is the first rocket we built, and the first three flights did not make it, in fact. Yeah. I mean, we got sort of progressively further.
24:38Elon MuskBut, like, the first rocket, like, came and landed maybe a couple hundred yards away from the launch site and tiny fragments. So, yeah. Anyway, that rocket ended up costing around $6 million.
24:58Elon MuskWow. Compared to other rockets in that class, which were about, say, $25 million. Wow.
25:05Salman KhanSo significant.
25:06Elon MuskYeah, like a quarter.
25:07Salman KhanWow.
25:08Elon MuskWow. And, but, but there's an even better step beyond that, which is to make rockets reusable. So right now that is around. Around what? What our comparison price is, excluding the refurbished ICBMs.
25:23Elon MuskSo if you say building a rocket from new, how does the SpaceX rocket compare to. To a rocket from Boeing or Lockheed? It's about a quarter of the price.
25:34Elon MuskHowever, if we make it reusable, then it can be two orders of magnitude cheaper.
25:39Salman KhanTwo orders of magnitude cheaper or 100th the price that's right
25:45Elon Muskfor you.
25:47Salman KhanOnly today, Memorial Day sale,
25:52Elon Muskand I've
25:52Salman Khanseen some y' all are doing like these vertical landings, like literally out of like the 1950s sci fi movies. And that's what you're talking about.
26:01Elon MuskYeah, yeah. Essentially the rocket needs to come back and land at the launch site and then reload propellant, take off again like an airplane.
26:09Salman KhanAnd how far do you think we are from that? Like, when do you think, like, you Know your best guess when we'll actually see that happening.
26:15Elon MuskI'm hopeful we can do it next year.
26:17Salman KhanOh, okay. Yeah, we got some ambitious stuff at Khan Academy for the next year too,
26:22Elon Muskso we can compare.
26:23Salman KhanWe're redesigning the site, you know.
26:26Elon MuskRight. We've been working on it for a long time, I should say. SpaceX has been around for 11 years and thus far we have not recovered any rockets. We've recovered the spacecraft from orbit, so that was great.
26:42Elon MuskBut none of our attempts to recover the rocket stages have been successful. The rocket rocket stages have always blown up, basically on reentry. Now we think we've figured out why that was the case.
26:55Elon MuskAnd it's a tricky thing because Earth's gravity is really quite strong and with an advanced rocket you can do maybe 2 to 3% of your liftoff mass to orbit, typically, and then reusability subtracts 2 to 3% because you have to.
27:13Elon MuskYeah. So then you've got like nothing to orbit or negative. Right. And that's obviously not helpful. And so the trick is to try to shift that from say 2, 3% in an expendable configuration to make the rocket mass efficiency, engine sufficiency and so forth so much better that it moves to around maybe 3.5 to 4% in an expendable configuration.
27:40Elon MuskAnd then try to get clever about the reusability elements and try to drop that to around the 1.5% to 2% level. So you have a net payload to orbit of about 2%, but you're doing
27:50Salman Khanit at two orders of magnitude cheaper.
27:53Elon MuskYeah, absolutely, because our Falcon 9 rocket costs about $60 million. But the propellant cost, which is mostly oxygen, that's 2/3 oxygen, 1/3 fuel is only about $200,000. Wow. It's much like a 747 costs about as much to refuel our rocket as it does to refuel 747.
28:18Elon MuskWithin pretty close, essentially.
28:21Salman KhanSo what? I mean, assuming you all are successful and you all have proven yourself to be successful on kind of these audacious things in the past, I mean, what happens?
28:27Salman KhanI mean, that seems like it's what happens in the next five, 10 years in the space industry, if you all are successful there, I mean, do we get to Mars?
28:35Salman KhanDo we have kind of market forces, Commercialization of space starting to happen.
28:41Elon MuskYeah. See, well, the first step is that we need to earn enough money to keep going as a company. So we have to make sure that we're launching satellites, commercial satellites like broadcast communications, mapping and government satellites that do Scientific missions, Earth based or space based missions, GPS satellites, that kind of thing, and then also servicing the space station, transferring cargo to and from the space station, which we've done a few times, and then taking people to and from the space station.
29:20Elon MuskSo we've got a service that sort of needs Earth based needs to launch satellites and that pays the bills. But in doing that, keep improving the technology to the point where we can make full reusability work and we have sufficient scale and sophistication to be able to take people to Mars.
29:44Salman KhanWow. So you think this is going to be a reality. What's your best guess when we're going to have someone on Mars?
29:51Elon MuskI think probably about 12 years.
29:54Salman KhanAnd you think it'll be a round trip? It won't just be some type of permanent colony on Mars?
29:59Elon MuskYeah, I think it's probably a round trip.
30:01Salman KhanWow.
30:02Elon MuskSo I mean it's not for sure.
30:05Salman KhanI could talk about this for, I mean people know.
30:07Elon MuskSo the aspiration will be a round trip.
30:08Salman KhanYeah, no, this is mind blowing. And I mean then on Tesla, I mean Tesla is obviously from our, from my huge success. I mean what do you think is in that?
30:22Salman KhanWell one, I mean I'll ask kind of the same question. What did you think? This is something GM and Toyota and these massive multi billion dollar organizations have been trying.
30:31Salman KhanWhat gave you the confidence to kind of pursue it? And now that it seems to be a huge success, where do you think this industry is going to be in the next five, ten years?
30:40Elon MuskYeah, so with Tesla, Tesla, the goal is to try to accelerate the advent of sustainable transport. I think it would happen anyway because it's out of necessity. But because we have an unpriced externality in the cost of gasoline, we weren't pricing in the environmental effects of CO2 in the ocean's atmosphere that's causing the normal market forces to not function properly.
31:06Elon MuskAnd so the goal of Tesla is to try to act as a catalyst to accelerate those sort of normal forces, the normal sort of market reaction that would occur.
31:18Elon MuskWe're trying to have a catalytic effect on that and try to make it happen, I don't know, maybe 10 years sooner than it would otherwise occur. That's the goal of Tesla.
31:30Elon MuskSo that's the reason we're making electric cars and not any other kind of car. And we also supply powertrains to Toyota and to Mercedes and maybe to other car companies in the future to accelerate their production of electric vehicles.
31:49Elon MuskSo that's the sort of goal there. And so far it's working. Out pretty well.
31:53Salman KhanI mean I just saw a news report earlier today that you all are sold more Model S's than you all are leading that segment of the industry. The Mercedes s class, the BMW 7 Series or the Lexus LS400 or whatever it is.
32:06Elon MuskYeah, actually that seems to be the case. And it's. Yeah, I didn't realize they sold so few cars in that segment because we don't sell that many cars. We sell 5,000 a quarter.
32:19Salman KhanWell, out here they seem like every.
32:21Elon MuskYeah, well this is our home. Yeah, yeah, yeah, it's our home team. So we better solve the barriers.
32:29Salman KhanYeah. Otherwise we're like, no, but that's. And well, I mean it's the same similar thing. I mean, how did you start? What gave you the confidence? And I mean, do you see yourselves?
32:38Salman KhanI mean it's kind of a major automotive mainstream brand in 5, 10 years all the way down to kind of the, you know, the competing with the Honda Accords and Civics.
32:47Elon MuskYeah, I mean, I mean our goal is not, it's not sort of to become a big brand or to compete with Honda Civics, but rather to advance the course of electric vehicles.
33:02Elon MuskSo we're just going to keep making more and more electric cars and driving the price point down until the industry is very firmly electric. Maybe half of all cars made are electric or something like that.
33:17Elon MuskWhich is not to say that we expect to make all half of all cars. We want to just have that catalytic effect until at least that occurs. And I think the point which we're approaching half bulk new cars made are electric then I think that's, I would consider that to be kind of the victory condition.
33:32Salman KhanWow.
33:34Elon MuskSo the faster we can bring that day, the better.
33:38Salman KhanWhen would be your guess when that happens?
33:42Elon MuskWell, I made a bet with someone about three years ago that it would be sooner than 20 years. So it's 17 years from now, but that's conservative. I think it's probably.
34:01Elon Musk13 or 14 years, something like that.
34:03Salman KhanRight about the time Right when we're going to Mars.
34:05Elon MuskRight.
34:07Salman KhanIt'll be exciting times.
34:08Elon MuskYeah, absolutely true. It just could. Yeah, exactly. As I was thinking about that, it was like, oh, those type K frames are kind of coincident. Yeah. I mean the nature of new technology adoption is it tends to follow an S curve.
34:24Elon MuskSo what usually happens is people under predict it in the beginning because people tend to extrapolate on a straight line and then they'll over predict it kind of at the midpoint because there's late adopters and then it'll actually take longer than people think at the midpoint, but much shorter than people think at the beginning.
34:41Salman KhanYeah, yeah.
34:43Elon MuskAnd, yeah. But I'm pretty excited about how things are going. In fact, I think that the pace of technology improvement is in energy storage. Electric energy storage is really moving faster than anyone thinks.
34:56Salman KhanWow.
34:57Elon MuskWow.
34:58Salman KhanI got one more. What are we doing on time?
35:00Elon MuskWhere's after 9 o'? Clock?
35:01Salman Khan9 o'.
35:02Elon MuskClock.
35:02Salman KhanSo how much time do you have? I want to make sure people.
35:04Elon MuskI guess we have another 15 minutes.
35:05Salman KhanOh, OK. OK. So I'll finish with one last question and then we'll open it up. I mean, what advice do you have for us at Khan Academy?
35:12Elon MuskI guess you're doing really great. I was wondering if you had advice for me.
35:16Salman KhanOh, no. Well,
35:20Elon Muskyeah, I mean, it seems like you're doing an amazing job of really super leveraged. I mean, obviously a small team and you're having a dramatic effect on half
35:29Salman Khanthese people don't even work here, so it's even.
35:31Elon MuskYeah, right, right. So it's, I think, very impressive thing you're doing to spread knowledge and understanding
35:41Salman Khanthroughout the world, the universe soon, if you hold up your end of the bargain.
35:48Elon MuskI mean, it's actually kind of funny if you think of what is education. You're basically downloading data and algorithms into your brain. And it's actually amazingly bad in conventional education because it shouldn't be this huge choreography.
36:05Elon MuskSo you're making it way, way better. But, I mean, I think a lot of the things that I would say you've probably heard 100 times and in fact are, if not doing, like, the more you can gamify the process of learning, the better for my kids.
36:26Elon MuskI do not have to encourage them to play video games, pry them from their hands. Like crack. It's like, drop that crack needle.
36:34Salman KhanYeah, yeah. You have that problem at your house, too. Yeah, exactly. The crack is addictive.
36:43Elon MuskTo the degree that you can make somehow learning like a game, but then it's better. And I think, unfortunately, a lot of education is very vaudevillian. You've got someone's standing up there kind of lecturing at people, and they've done the same lecture 20 years in a row and they're not very excited about it.
37:02Elon MuskAnd that lack of enthusiasm is conveyed to the students that they're not very excited about it. They don't know why they're there. Like, why are we learning this stuff?
37:11Elon MuskWe don't even know why. In fact, I think a lot of things people learn are probably there's no point in learning them because they never use them in the future because who's
37:19Salman Khangoing to launch a rocket into space? I mean, that's just like.
37:21Elon MuskYeah, exactly.
37:22Salman KhanThat never happens.
37:25Elon MuskWell, you have to say, people, I think, don't stand back and say, well, why are we teaching people these things? And we should tell them probably why we're teaching these things.
37:33Elon MuskBecause a lot of kids just in school kind of puzzled as to why they're there. I think if you can explain the why of things, then that makes a huge difference to people's motivation and they understand purpose.
37:51Elon MuskSo I think that's pretty important and just make it entertaining. But I think just in general, conventional education should be massively overhauled. And I'm sure you very much agree with that.
38:01Elon MuskI mean, the analogy I sometimes use is you've seen like Batman, like the Chris Nolan movie, like the recent one, and it's pretty freaking awesome, right? And you've got incredible special effects, great script, multiple takes, amazing actors and good sound and it's very engaging.
38:24Elon MuskBut if you would instead say, okay, even if you had the same script, so at least it's the same script. And you said, okay, now that script, instead of having movies, we're going to have that script performed by the local town troupe, okay?
38:37Elon MuskAnd so in every small town in America, if movies didn't exist, they would have to then recreate the Dark Knight with home sewn costumes and jumping across the stage and not getting their lines quite right and not really looking like the people in the movie.
38:56Elon MuskAnd no special effects. I mean, that would suck. That would be terrible.
39:04Salman KhanThat's right.
39:06Elon MuskThat's education.
39:10Salman KhanSo with that, and I apologize to all of you guys for hogging up all of the time because obviously I could talk for hours about this stuff, but we do have time, I think five or 10 minutes for a handful of questions if none of you all have any.
39:20Salman KhanI have about nine more, but yes,
39:23Elon Muskso I noticed I picked up two kind of themes from what you were discussing. One was somewhat audacious goals and the other was. I don't think I heard you use the word profit in anything that you spoke about.
39:36Elon MuskYou seem to be. Each thing is pointed at like reinvigorating industry or bringing back space missions. How much of your success do you attribute to having really audacious goals or versus just not being focused on the short term money coming in or investors?
39:59Elon MuskUnfortunately, one does have to be focused on the short term and money coming in when creating a company because otherwise the company company will die. A lot of times people think creating companies going to be fun, I would say it's really not that fun.
40:17Elon MuskI mean, there are periods of fun and there are periods where it's just awful. And particularly if you're the CEO of the company, you actually have a distillation of all the worst problems in the company.
40:31Elon MuskThere's no point in spending your time on things that are going right. So you only spend your time on things that are going wrong. And there are things that are going wrong that other people can't take care of.
40:41Elon MuskSo you have like the worst. You have a filter for the crappiest problem in the company, the most pernicious and painful problem. So I wouldn't say, I think you have to feel quite compelled to do
40:54Salman Khanit
40:57Elon Muskand have a. A fairly high pain threshold. And there's a friend of mine who says, like, starting a company is like staring into the abyss and eating glass. And there's some truth to that.
41:10Elon MuskThe staring at the abyss part is that you're going to be constantly facing the extermination of the company because most startups fail. It's like 90%, arguably 99% of startups fail.
41:24Elon MuskSo that's the staring into the abyss part. You're constantly saying, okay, if I don't get this right, the company will die. Should be quite stressful. And then the eating glass part is you've got to do the problems.
41:44Elon MuskYou've got to work on the problems that the company needs you to work on, not the problems you want to work on. And. And so you end up working on problems that you really wish you weren't working on.
41:55Elon MuskAnd so that's the eating glass part. And that goes on for a long time. So how do you keep your focus on the big picture when you're constantly faced with, we could be out of business in a month.
42:09Elon MuskWell, it's just a very small percentage of mental energies on the big picture, like, you know where you're generally heading for, and the actual path is going to be some sort of zigzaggy thing in that direction and try not to deviate too far from the path that you want to be on.
42:28Elon MuskBut you're going to have to do that to some degree. But I don't want to diminish the. I mean, I think the profit motive is a good one. If the rules of an industry are properly set up.
42:40Elon MuskThere's nothing fundamentally wrong with profit. In fact, profit just means that people are paying you more for whatever you're doing than you're spending to create it. That's a good thing.
42:52Elon MuskAnd if that's not the case, then you'll be out of business and rightfully so. You're not adding enough value. Now there are cases, of course, where people will do bad things in order to achieve profit.
43:09Elon MuskBut. But that's actually quite unusual because usually the rules are set up mostly correctly. Like not completely, but mostly correctly.
43:20Salman KhanI think we have time for one more question. Joel.
43:23Elon MuskYeah, I have an important one.
43:24Salman KhanOk, very good.
43:25Elon MuskYes, please. Ok, so a few months ago you teased hyperloop and we haven't heard anything since. So first of all, a few of us engineers were talking about it.
43:35Elon MuskI think we have a few ideas if you need help. But if you feel comfortable, maybe you could tell us a little bit more. I was reading about the California high speed rail and it was quite depressing because California taxpayers are going to be on the hook to build the most expensive high speed rail per mile in the world.
43:59Elon MuskAnd the slowest, which is. Those are not the superlatives you want. And it's like, damn, we're in California, we make super high tech stuff. Why are we going to be spending.
44:14Elon MuskNow the estimates are around $100 billion for something that will take two hours to go from LA to San Francisco. I'm like, OK, well I can get on a plane and do that in 45 minutes.
44:26Elon MuskIt doesn't make much sense. And isn't there some better way to do it than that? So if you just say, okay, well what would you ideally want in a transportation system?
44:41Elon MuskYou'd say, okay, well you'd want something that relative to existing modes of transportation is faster, let's say twice as fast, costs half as much per ticket, can't crash, is immune to weather, and you can make the whole thing like self powering with like solar panels or something like that.
45:00Elon MuskThat would be pretty. That'd be great, a good outcome. Yes. And so what would do that and what's the fastest way, short of inventing teleportation, that you could do something like that.
45:13Elon MuskAnd some of the elements of that solution are fairly obvious and some of them are not so obvious. And then the details, the devil's in the details of actually making something like that work.
45:25Elon MuskBut I came to the conclusion that there is something like that that could work and would be practical.
45:32Salman KhanIs this around the evacuated tubes, the vacuum tubes at the old bank?
45:39Elon MuskSomething like that? Yeah.
45:41Salman KhanBut you haven't been more public with what this is.
45:44Elon MuskNo. Although I did say that once Tesla was profitable that I would talk more about it. But we haven't done an earnings call yet. So I think I should probably do it after the earnings call.
45:58Elon MuskAnd the thing is, I kind of strung out on the things that I'm doing, so. Adding another thing. Yeah.
46:07Salman KhanLearning the guitar.
46:09Elon MuskYou could pick up all sorts of things, right? I tried learning the violin. That's by the way, a hard thing to learn.
46:16Salman KhanYeah. Launching rockets, electric cars, revolutionizing transportation.
46:21Elon MuskI cannot play the violin at all. Very horrible. If you think about the future, you want a future that's better than the past. And so if we had something like the Hyperloop, that would be like cool.
46:33Elon MuskYou'd look forward to the day that that was working and something like that. Even if it were only was in one place from LA, San Francisco or New York to D.C.
46:46Elon Muskor something like that, then it would be cool enough that it would be like a tourist attraction, like a ride or something. So even if some of the initial assumptions didn't work out and economics didn't work out quite as one expected, it would be cool enough.
47:01Elon MuskI want to journey that place just to ride on that thing. That would be pretty cool. And so that's, I think, how if you come up with a new technology, it should feel like that you should really, if you told it to an objective person, would they look forward to the day that that thing became available?
47:18Elon MuskAnd like, it would be pretty exciting to do something like that, or an aircraft. Like I thought it was really disappointing when the Concorde was taken out of commission and there was no supersonic transport available.
47:31Elon MuskAnd of course the 787 has had some issues.
47:38Elon MuskBut the thing is, the 787, even in the best case scenario, is only a slightly better version of the 777. And it's like, okay, not that exciting.
47:47Salman KhanSo this is something that you are working on. And one day in the not too far future, or there's some plans or consultants involved or something, Russia made some
47:59Elon Muskphone calls to Russia every now and then like this. Like it's sort of percolating away and then I'm not actively thinking about it. But then there'll be some new elements of that.
48:07Elon MuskI'll think, oh, well, you know, this would make it better. Fascinating.
48:11Salman KhanNo? Well, I mean, I think I'm speaking for everyone. This is like the most epic possible conversation one could have over about the course of an hour. And I think all of us would love to chat with you for hours on end.
48:23Salman KhanBut thank you so much. I mean, I know you have a lot of free time, so it probably wasn't that big of a deal for you to come here, but, yeah, it was a huge honor, and I think it's inspired all of us to go out and change the world and the universe.
48:33Elon MuskCool.
48:34Salman KhanThank you very much.