How Elon Saved SpaceX & Tesla … At The Same Time


SpaceX & Tesla: you would be hard pressed
to find two companies that are more popular today. And yet, in the not too distant past both
companies were basically unknown and were in fact simultaneously on the verge of bankruptcy. Today we’ll learn how Elon Musk did what
no other American CEO had ever done before: he created and then rescued two companies
at the same time and brought them both to multi-billion dollar valuations. This video is brought to you by Audible and
the story presented in it is just one chapter of Elon Musk’s awesome biography, which
you can listen to for free as part of your 30-day free trial if you register with the
link in the description. In the early 2000s Elon Musk achieved what
any entrepreneur would dream of achieving: he successfully sold his company for over
a billion dollars. He personally received $165 million, and now
this is where most people would call it quits, but for Elon this was just the beginning. He wanted to change the world for the better,
and one of his ideas was to send a greenhouse to Mars in order to boost public interest
in space exploration and hopefully increase NASA’s budget. The idea was outlandishly ambitious, especially
because Elon wanted to spend no more than $20 million on it. Now at the time, sending just 500 pounds to
orbit could easily cost upwards of $30 million, but Elon had a plan. He travelled to Russia, where he tried to
buy refurbished Intercontinental Ballistic Missiles. But the lowest price the Russians gave him
was $8 million a piece, about 50% above his budget for the rocket itself. On the way back from Moscow, Elon did some
back-of-the-napkin calculations: he figured out that the raw materials used in the making
of a rocket were only about 3% of the final sales price. Instantly, Elon knew what he had to do: if
he wanted to send anything to Mars, he’d have to build himself a vertically-integrated
rocket company. To that end, he read several books on rocketry
from the Cold War and in June 2002 he incorporated Space Exploration Technologies, or SpaceX
for short. He then set about recruiting the right people
who could make his vision a reality: his ideal candidate was young, single, educated and
ready to give up his social life for SpaceX. Elon’s recruitment strategy was very straightforward:
he’d basically call up anyone fitting that profile, from fresh aerospace graduates to
the rising stars in Boeing and Lockheed Martin. At first people thought Elon was making pranks,
but within a year he had assembled some of the brightest engineers in America. Together they would design almost everything
for SpaceX: from the engines and rocket bodies to even smallest details, like the circuitry. In many cases, the engineers could build stronger
and more lightweight components at just a fraction of the regular price. These components would be used to build the
Merlin engine, which in turn would power Elon’s first rocket, the Falcon 1. Development was far from smooth, of course,
but nevertheless progress was being made. But then, Elon decided to up the ante. In early 2004 he participated in the funding
round of a new electric car company called Tesla. Elon personally invested a little over $6
million and in return became the chairman of the company’s board. Right off the bat Elon began applying his
experience from SpaceX at Tesla. The company’s logo, for example, was created
by the same people that made the logo for SpaceX. And of course, Elon was quick to use the same
aggressive hiring strategy he used to assemble the SpaceX team. This time, however, instead of poaching employees
from Boeing, he was hiring from Apple. Before long, the Tesla team was working on
their first electric car, the Tesla Roadster. Back at SpaceX, engineers were clocking in
60-hour workweeks, while Elon was promising very ambitious timelines. In fact, his original estimate was to launch
the Falcon 1 in November 2003, just 18 months after the company was founded. Of course, that estimate got pushed back,
and the Falcon 1 wouldn’t lift off until March 2006, when it spent a total of 41 seconds
in the air before crashing down violently. Like for SpaceX, 2006 was a big year for Tesla. In July, the Tesla Roadster made its first
official appearance and recorded 100 pre-orders in its first day. But, like with the Falcon 1, the actual production
wasn’t going very well. Tesla’s CEO at the time was Martin Eberhard,
and like Elon he was promising unrealistic timeframes. At first, the idea was to deliver the Roadster
in early 2007, but an escalating series of production issues pushed the release date
farther and farther away. In the end, Martin’s mismanagement of the
Roadster project got him ousted from the very company he had founded, leaving Elon in charge
of everything. With full responsibility over both companies,
the stress was starting to pile up. Elon witnessed the second failure of the Falcon
1 rocket, which didn’t complete its only 2007 flight. At Tesla, Elon struggled fixing the mess left
behind by Eberhard, and in fact, the Roadster’s production would not begin until March 2008. But then, things got worse: in August, Elon
launched his third Falcon 1, which never made it to orbit and then just one month later
his wife publicly announced their divorce. Both of Elon’s companies were struggling
to make a viable product and were running out of money fast. In fact, by late October Tesla had only $9
million left to fund the entire company. Salaries were being delayed and Elon was faced
with a choice. He had already spent $70 million on Tesla
and $100 million on SpaceX. With what little he had left, Elon had to
choose whether to fund and secure the future of one company or to risk everything and gamble
on saving both. Fate gave Elon little time to think: the fourth
and potentially final flight of the Falcon 1 was approaching. On September 28th, Elon got ready for his
last chance to survive. He stood in the SpaceX control center in LA
and waited in silence. Then, the rocket took off, and the center
burst out in ecstatic applause. SpaceX had finally delivered a working product:
the Falcon 1 became the first privately-developed rocket to go into orbit around Earth. But Elon wasn’t in the clear just yet: a
working product would mean nothing if the company behind it went bankrupt. In a frantic scramble, Elon had to figure
out funding solutions for both his companies before the end of 2008, and the timing couldn’t
have been worse. One of the largest American banks, Lehman
Brothers, had collapsed and the global economy was heading towards disaster. In the midst of this, Elon was raising all
the personal funds he could to save Tesla: he liquidated his few remaining assets and
even got his cousins to pitch in. But getting investors on board doesn’t happen
overnight, and December was creeping in. Elon had managed to scrape together $20 million
himself, another $20 million from various investors and $50 from the German car company
Daimler. Days before Christmas, it seemed as if only
Tesla was going to make it, but then on December 23 Elon received a very unexpected call: NASA
had awarded SpaceX with a $1.6 billion contract to resupply the International Space Station. Then, on Christmas Eve, the Tesla deal went
through. Elon had successfully saved both companies
from bankruptcy. In later interviews, he’d recall these final
days in December in painful detail: he’d admit that this was the closest he had ever
gotten to a nervous breakdown and honestly, any lesser man would’ve outright given up. So regardless of the struggles Elon might
be facing today, it’s worth knowing that ten years ago he overcame the impossible. Now, this story is just a brief chapter in
the journey of Elon Musk. If you’d like to read the whole thing, you
should check out Elon Musk’s biography, which this video was based on and which you
can listen to for free as part of your 30-day free trial of Audible. Their collection of audiobooks is the biggest
one on Earth and you can gain access to it by registering for a free trial of Audible
at audible.com/businesscasual. You can find the link in the description and
if you wanna get there even faster you can text businesscasual to 500500 to get started. In any case, thanks a lot for watching and
huge thanks to all my patrons on Patreon for supporting me. See you again in two weeks, and until then,
stay smart.

100 thoughts on “How Elon Saved SpaceX & Tesla … At The Same Time

  1. A more hyped and hippie company you mean right? It's like Apple back when Jobs was alive. It's this generation's idol.

  2. I want to became like elon musk
    How dedicated or high dream and ready to face any challenges person
    He knows life is one and he used completely

    I want everyone became like him (deserving respect )
    I can't stop my hand to appreciate him elon musk is the best person and completely mad on his dream

  3. Hahaha and of course there is no special interest backing him. He just competes with oil companies and not getting killed because he is just an entrepreneur^^^

  4. Youtube: (Solving-Apollo-Enigma-1) & (Solving-Apollo-Enigma-2) & Google: ("Solving-Spacex-Enigma") & stop fooling people!!!

  5. So I guess if I want to start my own Space X in India then I need to buy a Missile (Next to Impossible )and get some highly professional engineers (which you will find in every street) ..

  6. With the help of the U.S. government. Just like it helps all of the already wealthy, by taxing the fuck out of and driving deeper into debt the upper lower and lower middle classes, the very backbone of this country. The factory worker, mill worker, carpenters, brick and block layers and especially, the manual laborers. If it weren't for the men and women that eke out a living in these fields this country would come to a grinding halt. Factory and mill workers make the tools, bricks, cinder blocks, lumber, steel etc., the material necessary for the construction workers to erect the buildings that the wealthy, tax break getting fucks have their posh offices and the million dollar homes they go home to every day with no thought given to the manual laborers that fetch the rivets for the iron worker, build the trusses that make up the roof of those million dollar homes, that keep the masons supplied with bricks, blocks and mortar. If it weren't for the lowest paid citizens of this country who live from paycheck to paycheck struggling to make ends meet the rich wouldn't be rich. Shout out to my fellow blue collar brothers doing their best to keep their families heads above water. And a big hardy fuck you to the U.S. Government and the already rich that it makes even richer.

  7. Elon Musk puppet for the puppeteers . I wonder if he will suffer the same fate as the rest of humanities puppets,. Does the twat think he will be spared โ€ฆ Not a chance he will be among all the rest of the deceivers burning first as an example to the rest of the faithful โ€ฆโ€ฆ..

  8. 3:10, elon decided to up the ante, forge his own journey from scratch, no buying rockets from russia, no financial security in his business, but this time he's leaving earth, all leading up to facing one of humanities biggest challanges, becoming an interplanetairy species.

  9. Elon Musk is the living representation of the saying: "if there isn't a way, make one". He literally went against the world and built everything he wanted himself.

  10. Man, and there still people who hate this guy, they think being and entrepreneur or a business man is just being rich and famous, big balls he got here

  11. *when you buy a tesla tryna save the world but pay money to a man fucking it up again with space x ๐Ÿ˜‚

  12. Humans are using Tesla's name in vain. You should all be ashamed. He wanted free energy for all and discovered how to make vehicles without using petroleum or electricity.ย  He certainly did not want to make any money from it all as you greedy humans are.

  13. So you're telling me he read books on rockets and built a very popular and ambitious company off of that? This man is crazily awesomr

  14. Wow an ad for audible which is owned by amazon and amazon is owned by Jeff bezos, founder of blue origin and is one of spacexโ€™s main competitions

  15. 5:33 Rockets engineers casually watching an anime while building a rocket, god bless America! (The anime is re:zero)

  16. And he did it without government subsidizes, illegal stock market manipulation or bald-faced lies to customers and investors! Among other things…a sucker is born every second today!

  17. Hiring from apple lol ๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜›๐Ÿ˜›๐Ÿ˜›๐Ÿ˜›๐Ÿ˜›๐Ÿ˜›๐Ÿ˜›

  18. When going gets tuff, the tuff gets going. I didn't know first falcon was based on merlin1. This is inspirening.

  19. Wow I did not know it was so hard for Elon musk to get real success now I am quite depressed because tesla is my favorite company and I love space x :'(

  20. Elon: crap it's Christmas Eve Tesla is gonna live
    NASA: calls Elon
    Elon: hello?
    NASA: Merry Christmas here's a few billion bucks
    Elon: SWEEET THANKS

  21. Elon must have also founded a new mathematical system in the Russia rocket purchase endeavor. I had no idea that 8 is only 50% more than 4. I coulda swore that 6 is 50% more, and 8 is 100% more. Donโ€™t quit your day job Mr. Narrator, math isnโ€™t your thing.

  22. ๐ŸŒŸHey Elon listen to me. These are the things you need to do.

    1. Create a machine that will lessen pollution and plastic production

    2. Create a telco company that will provide fastest internet around the world using your goddamn satellites

    3. Create a machine that can plant hundreds of trees everyday.

    4. Stop creating spaceships and finding life on Mars the life is here on earth don't be blind.There's a lot people suffering from famine and you keep spending truck loads of cash. Actually this message is not for you alone. I mean all billionaires around the world.

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