Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (2017)
PAIN, SUFFERING, AND SURVIVAL
AS HE PREPARED TO BEGIN FILMING IRON MAN IN EARLY 2007, the director Jon Favreau rented out a complex in Los Angeles that once belonged to Hughes Aircraft, the aerospace and defense contractor started about eighty years earlier by Howard Hughes. The facility had a series of interlocking hangars and served as a production office for the movie. It also supplied Robert Downey Jr., who was to play Iron Man and his human creator Tony Stark, with a splash of inspiration. Downey felt nostalgic looking at one of the larger hangars, which had fallen into a state of disrepair. Not too long ago, that building had played host to the big ideas of a big man who shook up industries and did things his own way.
Downey heard some rumblings about a Hughes-like figure named Elon Musk who had constructed his own, modern-day industrial complex about ten miles away. Instead of visualizing how life might have been for Hughes, Downey could perhaps get a taste of the real thing. He set off in March 2007 for SpaceX’s headquarters in El Segundo and wound up receiving a personal tour from Musk. “My mind is not easily blown, but this place and this guy were amazing,” Downey said.
To Downey, the SpaceX facility looked like a giant, exotic hardware store. Enthusiastic employees were zipping about, fiddling with an assortment of machines. Young white-collar engineers interacted with blue-collar assembly line workers, and they all seemed to share a genuine excitement for what they were doing. “It felt like a radical start-up company,” Downey said. After the initial tour, Downey came away pleased that the sets being hammered out at the Hughes factory did have parallels to the SpaceX factory. “Things didn’t feel out of place,” he said.
Beyond the surroundings, Downey really wanted a peek inside Musk’s psyche. The men walked, sat in Musk’s office, and had lunch. Downey appreciated that Musk was not a foul-smelling, fidgety, coder whack job. What Downey picked up on instead were Musk’s “accessible eccentricities” and the feeling that he was an unpretentious sort who could work alongside the people in the factory. Both Musk and Stark were the type of men, according to Downey, who “had seized an idea to live by and something to dedicate themselves to” and were not going to waste a moment.
When he returned to the Iron Man production office, Downey asked that Favreau be sure to place a Tesla Roadster in Tony Stark’s workshop. On a superficial level, this would symbolize that Stark was so cool and connected that he could get a Roadster before it even went on sale. On a deeper level, the car was to be placed as the nearest object to Stark’s desk so that it formed something of a bond between the actor, the character, and Musk. “After meeting Elon and making him real to me, I felt like having his presence in the workshop,” Downey said. “They became contemporaries. Elon was someone Tony probably hung out with and partied with or more likely they went on some weird jungle trek together to drink concoctions with the shamans.”
After Iron Man came out, Favreau began talking up Musk’s role as the inspiration for Downey’s interpretation of Tony Stark. It was a stretch on many levels. Musk is not exactly the type of guy who downs scotch in the back of a Humvee while part of a military convoy in Afghanistan. But the press lapped up the comparison, and Musk started to become more of a public figure. People who sort of knew him as “that PayPal guy” began to think of him as the rich, eccentric businessman behind SpaceX and Tesla.
Musk enjoyed his rising profile. It fed his ego and provided some fun. He and Justine bought a house in Bel Air. Their neighbor to one side was Quincy Jones, the music producer, and their other neighbor was Joe Francis, the infamous creator of the Girls Gone Wild videos. Musk and some former PayPal executives, having settled their differences, produced Thank You for Smoking and used Musk’s jet in the movie. While not a hard-drinking carouser, Musk took part in the Hollywood nightlife and its social scene. “There were just a lot of parties to go to,” said Bill Lee, Musk’s close friend. “Elon was neighbors with two quasi-celebrities. Our friends were making movies and through this confluence of our networks, there was something to go out and do every night.” In one interview, Musk calculated that his life had become 10 percent playboy and 90 percent engineer.10 “We had a domestic staff of five; during the day our home transformed into a workplace,” Justine wrote in magazine article. “We went to black-tie fundraisers and got the best tables at elite Hollywood nightclubs, with Paris Hilton and Leonardo DiCaprio partying next to us. When Google cofounder Larry Page got married on Richard Branson’s private Caribbean island, we were there, hanging out in a villa with John Cusack and watching Bono pose with swarms of adoring women outside the reception tent.”
Justine appeared to relish their status even more than Musk. A writer of fantasy fiction novels, she kept a blog detailing the couple’s family life and their adventures on the town. In one entry, Justine had Musk saying that he’d prefer to sleep with Veronica than Betty from the Archie comics and that he’d like to visit a Chuck E. Cheese sometime. In another entry, she wrote about meeting Leonardo DiCaprio at a club and having him beg for a free Tesla Roadster, only to be turned down. Justine handed out nicknames to oft-occurring characters in the blog, so Bill Lee became “Bill the Hotel Guy” because he owns a hotel in the Dominican Republic, and Joe Francis appeared as “Notorious Neighbor.” It’s hard to imagine Musk, who keeps to himself, hanging out with someone as ostentatious as Francis, but the men got along well. When Francis took over an amusement park for his birthday, Musk attended and then ended up partying at Francis’s house. Justine wrote, “E was there for a bit but admitted he also found it ‘kind of lame’—he’s been to a couple of parties at NN’s house now and ends up feeling self-conscious, ‘because it just seems like there are always these skeevy guys wandering around the house trolling for girls. I don’t want to be seen as one of those guys.’” When Francis got ready to buy a Roadster, he stopped by the Musks’ house and handed over a yellow envelope with $100,000 in cash.
For a while, the blog provided a rare, welcome glimpse into the life of an unconventional CEO. Musk seemed charming. The public learned that he bought Justine a nineteenth-century edition of Pride and Prejudice, that Musk’s best friends gave him the nickname “Elonius,” and that Musk likes to place one-dollar wagers on all manner of things—Can you catch herpes from the Great Barrier Reef? Is it possible to balance two forks with a toothpick?—that he knows he will win. Justine told one story about Musk traveling to Necker Island, in the British Virgin Islands, to hang out with Tony Blair and Richard Branson. A photo of the three men appeared later in the press that depicted Musk with a vacant stare. “This was E’s I’m-thinking-about-a-rocket-problem stance, which makes me pretty sure that he had just gotten some kind of bothersome work-related e-mail, and was clearly oblivious to the fact that a picture was being taken at all,” she wrote. “This is also the reason I get suck [sic] a kick out of it—the spouse the camera caught is the exact spouse I encountered, say, last night en route to the bathroom, standing in the hallway frowning with his arms folded.” Justine letting the world into the couple’s bathroom should have served as a warning of things to come. Her blog would soon turn into one of Musk’s worst nightmares.
The press had not run into a guy like Musk for a very long time. His shine as an Internet millionaire kept getting, well, shinier thanks to PayPal’s ongoing success. He also had an element of mystery. There was the weird name. And there was the willingness to spend vast sums of money on spaceships and electric cars, which came across as a combination of daring, flamboyant, and downright flabbergasting. “Elon Musk has been called ‘part playboy, part space cowboy,’ an image hardly dispelled by a car collection that has boasted a Porsche 911 Turbo, 1967 Series 1 Jaguar, a Hamann BMW M5 plus the aforementioned McLaren F1—which he has driven at up to 215mph on a private airstrip,” a British reporter gushed in 2007. “Then there was the L39 Soviet military jet, which he sold after becoming a father.” The press had picked up on the fact that Musk tended to talk a huge game and then struggle to deliver on his promises in time, but they didn’t much care. The game he talked was so much bigger than anyone else’s that reporters were comfortable giving Musk leeway. Tesla became the darling of Silicon Valley’s bloggers, who tracked its every move and were breathless in their coverage. Similarly, reporters covering SpaceX were overjoyed that a young, feisty company had arrived to needle Boeing, Lockheed, and, to a large extent, NASA. All Musk had to do was eventually bring some of these wondrous things he’d been funding to market.
While Musk put on a good show for the public and press, he’d started to get very worried about his businesses. SpaceX’s second launch attempt had failed, and the reports coming in from Tesla kept getting worse. Musk had started these two adventures with a fortune nearing $200 million and had chewed through more than half the money with little to show for it. As each Tesla delay turned into a PR fiasco, the Musk glow dimmed. People in Silicon Valley began to gossip about Musk’s money problems. Reporters who months earlier had been heaping adulation on Musk turned on him. The New York Times picked up on Tesla’s transmission problems. Automotive websites griped that the Roadster might never ship. By the end of 2007, things got downright nasty. Valleywag, Silicon Valley’s gossip blog, began to take a particular interest in Musk. Owen Thomas, the site’s lead writer, dug into the histories of Zip2 and PayPal and played up the times Musk was ousted as CEO to undermine some of his entrepreneurial street cred. Thomas then championed the premise that Musk was a master manipulator who played fast and loose with other people’s money. “It’s wonderful that Musk has realized even a small part of his childhood fantasies,” Thomas wrote. “But he risks destroying his dreams by refusing to reconcile them with reality.” Valleywag anointed the Tesla Roadster as its No. 1 fail of 2007 among technology companies.
As his businesses and public persona suffered, Musk’s home life degraded as well. His triplets—Kai, Damian, and Saxon—had arrived near the end of 2006 and joined their brothers Griffin and Xavier. According to Musk, Justine suffered from postpartum depression following the birth of the triplets. “In the spring of 2007, our marriage was having real issues,” Musk said. “It was on the rocks.” Justine’s blog posts back up his sentiments. She described a much less romantic Musk and felt people treated her as “an arm ornament who couldn’t possibly have anything interesting to say” rather than as an author and her husband’s equal. During one trip to St. Barts, the Musks ended up sharing dinner with some wealthy, influential couples. When Justine let out her political views, one of the men at the table made a crack about her being so opinionated. “E chuckled back, patted my hand the way you pat a child’s,” Justine wrote on her blog. From that point on, Justine ordered Musk to introduce her as a published novelist and not just his wife and mother of his children. The results? “E’s way of doing this throughout the rest of the trip: ‘Justine wants me to tell you that she’s written novels,’ which made people look at me like oh, that’s just so cute and didn’t really help my case.”
As 2007 rolled into 2008, Musk’s life became more tumultuous. Tesla basically had to start over on much of the Roadster, and SpaceX still had dozens of people living in Kwajalein awaiting the next launch of the Falcon 1. Both endeavors were vacuuming up Musk’s money. He started selling off prized possessions like the McLaren to generate extra cash. Musk tended to shield employees from the gravity of his fiscal situation by always encouraging them to do their best work. At the same time, he personally oversaw all significant purchases at both companies. Musk also trained employees to make the right trade-offs between spending money and productivity. This struck many of the SpaceX employees as a novel idea, since they were used to traditional aerospace companies that had huge, multiyear government contracts and no day-to-day survival pressure. “Elon would always be at work on Sunday, and we had some chats where he laid out his philosophy,” said Kevin Brogan, the early SpaceX employee. “He would say that everything we did was a function of our burn rate and that we were burning through a hundred thousand dollars per day. It was this very entrepreneurial, Silicon Valley way of thinking that none of the aerospace engineers in Los Angeles were dialed into. Sometimes he wouldn’t let you buy a part for two thousand dollars because he expected you to find it cheaper or invent something cheaper. Other times, he wouldn’t flinch at renting a plane for ninety thousand dollars to get something to Kwaj because it saved an entire workday, so it was worth it. He would place this urgency that he expected the revenue in ten years to be ten million dollars a day and that every day we were slower to achieve our goals was a day of missing out on that money.”
Musk had become all consumed with Tesla and SpaceX out of necessity, and there can be no doubt that this exacerbated the tensions in his marriage. The Musks had a team of nannies to help with their five children, but Elon could not spend much time at home. He worked seven days a week and quite often split his time between Los Angeles and San Francisco. Justine needed a change. During moments of self-reflection, she felt sickened, perceiving herself a trophy wife. Justine longed to be Elon’s partner again and to feel some of that spark from their early days before life had turned so dazzling and demanding. It’s not clear how much Musk let on to Justine about his dwindling bank account. She has long maintained that Musk kept her in the dark about the family’s financial arrangements. But some of Musk’s closest friends did get a glimpse into the worsening financial situation. In the first half of 2008, Antonio Gracias, the founder and CEO of Valor Equity, met Musk for dinner. Gracias had been an investor in Tesla and had become one of Musk’s closest friends and allies, and he could see Musk agonizing over his future. “Things were starting to be difficult with Justine, but they were still together,” Gracias said. “During that dinner, Elon said, ‘I will spend my last dollar on these companies. If we have to move into Justine’s parents’ basement, we’ll do it.’”
The option of moving in with Justine’s parents expired on June 16, 2008, when Musk filed for divorce. The couple did not disclose the situation right away, although Justine left hints on her blog. In late June, she posted a quotation from Moby without any additional context: “There’s no such thing as a well-adjusted public figure. If they were well adjusted they wouldn’t try to be a public figure.” The next entry had Justine house hunting for undisclosed reasons with Sharon Stone, and a couple of entries later she talked about “a major drama” that she’d been dealing with. In September, Justine wrote her first blog post explicitly about the divorce, saying, “We had a good run. We married young, took it as far as we could and now it is over.” Valleywag naturally followed with a story about the divorce and noted that Musk had been seen out with a twenty-something actress.
The media coverage and divorce freed Justine to write about her private life in a much more liberated way. In the posts that followed, she gave her account of how the marriage ended, her views on Musk’s girlfriend and future second wife, and the inner workings of the divorce proceedings. For the first time, the public had access to a deeply unpleasant portrayal of Musk and received some firsthand accounts—albeit from an ex-wife—of his hardline behavior. The writing may have been biased, but it provided a window into how Musk operated. Here’s one post about the lead-up to the divorce and its rapid execution:
Divorce, for me, was like the bomb you set off when all other options have been exhausted. I had not yet given up on the diplomacy option, which was why I hadn’t already filed. We were still in the early stages of marital counseling (three sessions total). Elon, however, took matters into his own hands—he tends to like to do that—when he gave me an ultimatum: “Either we fix [the marriage] today, or I will divorce you tomorrow.”
That night, and again the next morning, he asked me what I wanted to do. I stated emphatically that I was not ready to unleash the dogs of divorce; I suggested that “we” hold off for at least another week. Elon nodded, touched the top of my head, and left. Later that same morning I tried to make a purchase and discovered that he had cut off my credit card, which is when I also knew that he had gone ahead and filed (as it was, E did not tell me directly; he had another person do it).
For Musk, each online missive from Justine created another public relations crisis that added to the endless stream of issues faced by his companies. The image he’d sculpted over the years appeared ready to crumble alongside his businesses. It was a disaster scenario.
Soon enough, the Musks had achieved celebrity divorce status. Mainstream outlets joined Valleywag in poring over court filings tied to the breakup, particularly as Justine fought for more money. During the PayPal days, Justine had signed a postnuptial agreement and now argued that she didn’t really have the time or inclination to dig into the ramifications of the paperwork. Justine took to her blog in an entry titled “golddigger,” and said she was fighting for a divorce settlement that would include their house, alimony and child support, $6 million in cash, 10 percent of Musk’s Tesla stock, 5 percent of Musk’s SpaceX stock, and a Tesla Roadster. Justine also appeared on CNBC’s show Divorce Wars and wrote an article for Marie Claire titled “‘I Was a Starter Wife’: Inside America’s Messiest Divorce.”
The public tended to side with Justine during all of this and couldn’t quite figure out why a billionaire was fighting his wife’s seemingly fair requests. A major problem for Musk, of course, was that his assets were anything but liquid with most of his net worth being tied up in Tesla and SpaceX stock. The couple eventually settled with Justine getting the house, $2 million in cash (minus her legal fees), $80,000 a month in alimony and child support for seventeen years, and a Tesla Roadster.*
Years after the settlement, Justine still struggled to speak about her relationship with Musk. During our interview, she broke down in tears several times and needed moments to compose her thoughts. Musk, she said, had hidden many things from her during their marriage and ultimately treated her much like a business adversary to be conquered during the divorce. “We were at war for a while, and when you go to war with Elon, it’s pretty brutal,” she said. Well after their marriage ended, Justine continued to blog about Musk. She wrote about Riley and provided commentary on his parenting. One post gave Musk a hard time for banning stuffed animals from the house when their twins turned seven. Asked about this, Justine said, “Elon is hard-core. He grew up in a tough culture and tough circumstances. He had to become very tough to not only thrive but to conquer the world. He doesn’t want to raise soft overprivileged kids with no direction.” Comments like these seemed to indicate that Justine still admired or at least understood Musk’s strong will.*
In the weeks after he first filed for divorce in mid-June of 2008, Musk tumbled into a deep funk. Bill Lee started to worry about his friend’s mental state and, as one of Musk’s more free-spirited friends, wanted to do something to cheer him up. Now and again, Musk and Lee, an investor, would take trips overseas and mix business and pleasure. The time was right for just such a journey, and they set off for London at the start of July.
The decompression program began poorly. Musk and Lee visited the headquarters of Aston Martin to see the company’s CEO and get a tour of his factory. The executive treated Musk like an amateur car builder, talking down to him and suggesting that he knew more about electric vehicles than anyone else on the planet. “He was a complete douche,” as Lee put it, and the men did their best to make a hasty exit back to central London. Along the way, Musk had a nagging stomach pain turn severe. At the time, Lee was married to Sarah Gore, the daughter of former vice president Al Gore, who had been a medical student, and so he called her for advice. They decided that Musk might be suffering from appendicitis, and Lee took him to a medical clinic in the middle of a shopping mall. When the tests came back negative, Lee set to work trying to goad Musk into a night on the town. “Elon didn’t want to go out, and I didn’t really, either,” Lee said. “But I was like, ‘No, come on. We’re all the way here.’”
Lee coaxed Musk into going to a club called Whisky Mist, in Mayfair. People had packed the small, high-end dance spot and Musk wanted to leave after ten minutes. The well-connected Lee texted a promoter friend of his, who pulled some strings to get Musk escorted into the VIP area. The promoter then reached out to some of his prettiest friends, including a twenty-two-year-old up-and-coming actress named Talulah Riley, and they soon arrived at the club as well. Riley and her two gorgeous friends had come from a charity gala and were in full-length, flowing gowns. “Talulah was in this huge Cinderella thing,” Lee said. Musk and Riley were introduced by people at the club, and he perked at the sight of her dazzling figure.
Musk and Riley sat at a table with their friends but immediately zeroed in on each other. Riley had just hit it big with her portrayal of Mary Bennet in Pride and Prejudice and thought of herself as quite the hotshot. The older Musk, meanwhile, took on the role of the soft-spoken, sweet engineer. He whipped out his phone and displayed photos of the Falcon 1 and Roadster, although Riley thought he had just done some work on these projects and didn’t realize he ran the companies building the machines. “I remember thinking that this guy probably didn’t get to talk to young actresses a lot and that he seemed quite nervous,” Riley said. “I decided to be really nice to him and give him a nice evening. Little did I know that he’d spoken to a lot of pretty girls in his life.”* The more Musk and Riley talked, the more Lee egged them on. It was the first time in weeks that his friend appeared happy. “His stomach didn’t hurt; he’s not bummed, this is great,” Lee said. Despite being dressed for a fairy tale, Riley didn’t fall in love with Musk at first sight. But she did become more impressed and intrigued as the night went on, particularly after the club promoter introduced Musk to a stunning model, and he politely said “Hello” and then sat right back down with Riley. “I figured he couldn’t be all bad after that,” said Riley, who then allowed Musk to place his hand on her knee. Musk asked Riley out to dinner the next night, and she accepted.
With her curvy figure, sultry eyes, and playful good-girl demeanor, Riley was a budding film star but didn’t really act the part. She grew up in the idyllic English countryside, went to a top school, and, until a week before she met Musk, had been living at home with her parents. After the night at Whisky Mist, Riley called her family to tell them about the interesting guy she had met who builds rockets and cars. Her father used to head up the National Crime Squad and went straight to his computer to conduct a background check that illuminated Musk’s resume as a married international playboy with five kids. Riley’s father chided his daughter for being a fool, but she held out hope that Musk had an explanation and went to dinner with him anyway.
Musk brought Lee to the dinner, and Riley brought her friend Tamsin Egerton, also a beautiful actress. Things were cooler throughout the meal as the group dined in a depressingly empty restaurant. Riley waited to see what Musk would bring up on his own. Eventually, he did announce his five sons and his pending divorce. The confession proved enough to keep Riley interested and curious about where things would lead. Following the meal, Musk and Riley broke off on their own. They went for a walk through Soho and then stopped at Cafe Boheme, where Riley, a lifelong teetotaler, sipped an apple juice. Musk kept Riley’s attention, and the romance began in earnest.
The couple had lunch the next day and then went to the White Cube, a modern art gallery, and then back to Musk’s hotel room. Musk told Riley, a virgin, that he wanted to show her his rockets. “I was skeptical, but he did actually show me rocket videos,” she said. Once Musk went back to the United States,* they kept in touch via e-mail for a couple of weeks, and then Riley booked a flight to Los Angeles. “I wasn’t even thinking girlfriend or anything like that,” Riley said. “I was just having fun.”
Musk had other ideas. Riley had been in California for just five days when he made his move as they lay in bed talking in a tiny room at the Peninsula hotel in Beverley Hills. “He said, ‘I don’t want you to leave. I want you to marry me.’ I think I laughed. Then, he said, ‘No. I’m serious. I’m sorry I don’t have a ring.’ I said, ‘We can shake on it if you like.’ And we did. I don’t remember what I was thinking at the time, and all I can say is that I was twenty-two.”
Riley had been a model daughter up to that point, never giving her parents much of anything to worry about. She did well at school, had scored some tremendous acting gigs, and had a soft, sweet personality that her friends described as Snow White brought to life. But there she was on the hotel’s balcony, informing her parents that she had agreed to marry a man fourteen years her senior, who had just filed for divorce from his first wife, had five kids and two companies, and she didn’t even see how she could possibly love him after knowing him for a matter of weeks. “I think my mother had a nervous breakdown,” Riley said. “But I had always been highly romantic, and it actually didn’t strike me as that strange.” Riley flew back to England to gather her things, and her parents flew back with her to the United States to meet Musk, who belatedly asked Riley’s father for his blessing. Musk did not have his own house, which left the couple moving into a home that belonged to Musk’s friend the billionaire Jeff Skoll. “I had been living there a week when this random guy walked in,” Riley said. “I said, ‘Who are you?’ He said, ‘I am the homeowner. Who are you?’ I told him, and then he just walked out.” Musk later proposed to Riley again on the balcony of Skoll’s house, unveiling a massive ring. (He has since bought her three engagement rings, including the giant first one, an everyday ring, and one designed by Musk that has a diamond surrounded by ten sapphires.) “I remember him saying, ‘Being with me was choosing the hard path.’ I didn’t quite understand at the time, but I do now. It’s quite hard, quite the crazy ride.”
Riley experienced a baptism by fire. The whirlwind romance had given her the impression that she was engaged to a world conquering, jet-setting billionaire. That was true in theory but a murkier proposition in practice. As late July rolled around, Musk could see that he had just enough cash on hand to scrape through to the end of the year. Both SpaceX and Tesla would need cash infusions at some point just to pay the employees, and it was unclear where that money would come from with the world’s financial markets in disarray and investments being put on hold. If things had been going more smoothly at the companies, Musk could have felt more confident about raising money, but they were not. “He would come home every day, and there would be some calamity,” Riley said. “He was under immense pressure from all quarters. It was horrendous.”
SpaceX’s third flight from Kwajalein jumped out as Musk’s most pressing concern. His team of engineers had remained camped out on the island, preparing the Falcon 1 for another run. A typical company would focus just on the task at hand. Not SpaceX. It had shipped the Falcon 1 to Kwaj in April with one set of engineers and then put another group of engineers on a new project to develop the Falcon 9, a nine-engine rocket that would take the place of the Falcon 5 and serve as a possible replacement to the retiring space shuttle. SpaceX had yet to prove it could get to space successfully, but Musk kept positioning it to bid on big-ticket NASA contracts.*
On July 30, 2008, the Falcon 9 had a successful test fire in Texas with all nine of its engines lighting up and producing 850,000 pounds of thrust. Three days later, in Kwaj, SpaceX’s engineers fueled up the Falcon 1 and crossed their fingers. The rocket had an air force satellite as its payload, along with a couple of experiments from NASA. All told, the cargo weighed 375 pounds.
SpaceX had been making significant changes to its rocket since the last, failed launch. A traditional aerospace company would not have wanted the added risk, but Musk insisted that SpaceX push its technology forward while at the same time trying to make it work right. Among the biggest changes for the Falcon 1 was a new version of the Merlin 1 engine that relied on a tweaked cooling system.
The first launch attempt on August 2, 2008, aborted at T minus zero seconds. SpaceX regrouped and tried to launch again the same day. This time everything seemed to be going well. The Falcon 1 soared into the sky and flew spectacularly without any indication of a problem. SpaceX employees watching a webcast of the proceedings back in California let out hoots and whistles. Then, right at the moment when the first stage and second stage were to separate, there was a malfunction. An analysis after the fact would show that the new engines had delivered an unexpected thrust during the separation process that caused the first stage to bump up into the second stage, damaging the top part of the rocket and its engine.*
The failed launch left many SpaceX employees shattered. “It was so profound seeing the energy shift over the room in the course of thirty seconds,” said Dolly Singh, a recruiter at SpaceX. “It was like the worst fucking day ever. You don’t usually see grown-ups weeping, but there they were. We were tired and broken emotionally.” Musk addressed the workers right away and encouraged them to get back to work. “He said, ‘Look. We are going to do this. It’s going to be okay. Don’t freak out,’” Singh recalled. “It was like magic. Everyone chilled out immediately and started to focus on figuring out what just happened and how to fix it. It went from despair to hope and focus.” Musk put up a positive front to the public as well. In a statement, he said that SpaceX had another rocket waiting to attempt a fourth launch and a fifth launch planned shortly after that. “I have also given the go-ahead to begin fabrication of flight six,” he said. “Falcon 9 development will also continue unabated.”
In reality, the third launch was a disaster with cascading consequences. Since the second stage of the rocket did not fire properly, SpaceX never got a chance to see if it had really fixed the fuel-sloshing issues that had plagued the second flight. Many of the SpaceX engineers were confident that they had solved this problem and were anxious to get to the fourth launch, believing that they had an easy answer for the recent thrust problem. For Musk, the situation seemed graver. “I was super depressed,” Musk said. “If we hadn’t solved the slush coupling problem on flight two, or there was just some random other thing that occurred—say a mistake in the launch process or the manufacturing process unrelated to anything previous—then game over.” SpaceX simply did not have enough money to try a fifth flight. He’d put $100 million into the company and had nothing to spare because of the issues at Tesla. “Flight four was it,” Musk said. If, however, SpaceX could nail the fourth flight, it would instill confidence on the part of the U.S. government and possible commercial customers, paving the way for the Falcon 9 and even more ambitious projects.
Leading up to the third launch, Musk had been his usual ultra-involved self. Anyone at SpaceX who held the launch back went onto Musk’s critical-path shit list. Musk would hound the person responsible about the delays but, typically, he would also do everything in his power to help solve problems. “I was personally holding up the launch once and had to give Elon twice-daily updates about what was going on,” said Kevin Brogan. “But Elon would say, ‘There are five hundred people at this company. What do you need?’” One of the calls must have taken place while Musk courted Riley because Brogan remembered Musk phoning from the bathroom of a London club to find out how welding had gone on a large part of the rocket. Musk fielded another call in the middle of the night while sleeping next to Riley and had to whisper as he berated the engineers. “He’s giving us the pillow talk voice, so we all have to huddle around the speakerphone, while he tells us, ‘You guys need to get your shit together,’” Brogan said.
With the fourth launch, the demands and anticipation had ratcheted to the point that people started making silly mistakes. Typically, the body of the Falcon 1 rocket traveled to Kwaj via barge. This time Musk and the engineers were too excited and desperate to wait for the ocean journey. Musk rented a military cargo plane to fly the rocket body from Los Angeles to Hawaii and then on to Kwaj. This would have been a fine idea except the SpaceX engineers forgot to factor in what the pressurized plane would do to the body of the rocket, which is less than an eighth of an inch thick. As the plane started its descent into Hawaii, everyone inside of it could hear strange noises coming from the cargo hold. “I looked back and could see the stage crumpling,” said Bulent Altan, the former head of avionics at SpaceX. “I told the pilot to go up, and he did.” The rocket had behaved much like an empty water bottle will on a plane, with the air pressure pushing against the sides of the bottle and making it buckle. Altan calculated that the SpaceX team on the plane had about thirty minutes to do something about the problem before they would need to land. They pulled out their pocketknives and cut away the shrink wrap that held the rocket’s body tight. Then they found a maintenance kit on the plane and used wrenches to open up some nuts on the rocket that would allow its internal pressure to match that of the plane’s. When the plane landed, the engineers divvied up the duties of calling SpaceX’s top executives to tell them about the catastrophe. It was 3 A.M. Los Angeles time, and one of the executives volunteered to deliver the horrific news to Musk. The thinking at the time was that it would take three months to repair the damage. The body of the rocket had caved in in several places, baffles placed inside the fuel tank to stop the sloshing problem had broken, and an assortment of other issues had appeared. Musk ordered the team to continue on to Kwaj and sent in a reinforcement team with repair parts. Two weeks later, the rocket had been fixed inside of the makeshift hangar. “It was like being stuck in a foxhole together,” Altan said. “You weren’t going to quit and leave the person next to you behind. When it was all done, everyone felt amazing.”
The fourth and possibly final launch for SpaceX took place on September 28, 2008. The SpaceX employees had worked nonstop shifts under agonizing pressure for six weeks to reach this day. Their pride as engineers and their hopes and dreams were on the line. “The people watching back at the factory were trying their best not to throw up,” said James McLaury, a machinist at SpaceX. Despite their past flubs, the engineers on Kwaj were confident that this launch would work. Some of these people had spent years on the island going through one of the more surreal engineering exercises in human history. They had been separated from their families, assaulted by the heat, and exiled on their tiny launchpad outpost—sometimes without much food—for days on end as they waited for the launch windows to open and dealt with the aborts that followed. So much of that pain and suffering and fear would be forgotten if this launch went successfully.
In the late afternoon on the twenty-eighth, the SpaceX team raised the Falcon 1 into its launch position. Once again, it stood tall, looking like a bizarre artifact of an island tribe as palm trees swayed beside it and a smattering of clouds crossed through the spectacular blue sky. By this time, SpaceX had upped its webcast game, turning each launch into a major production both for its employees and the public. Two SpaceX marketing executives spent twenty minutes before the launch going through all the technical ins and outs of the launch. The Falcon 1 was not carrying real cargo this time; neither the company nor the military wanted to see something else blow up or get lost at sea, so the rocket held a 360-pound dummy payload.
The fact that SpaceX had been reduced to launch theater did not faze the employees or dampen their enthusiasm. As the rocket rumbled and then climbed higher, the employees back at SpaceX headquarters let out raucous cheers. Each milestone that followed—clearing the island, engine checks coming back good—was again met with whistles and shouts. As the first stage fell away, the second stage fired up about ninety seconds into the flight and the employees turned downright rapturous, filling the webcast with their ecstatic hollering. “Perfect,” said one of the talking heads. The Kestrel engine glowed red and started its six-minute burn. “When the second stage cleared, I could finally start breathing again and my knees stopped buckling,” said McLaury.
The fairing opened up around the three-minute mark and fell back toward Earth. And, finally, around nine minutes into its journey, the Falcon 1 shut down just as planned and reached orbit, making it the first privately built machine to accomplish such a feat. It took six years—about four and half more than Musk had once planned—and five hundred people to make this miracle of modern science and business happen.
Earlier in the day, Musk had tried to distract himself from the mounting pressure by going to Disneyland with his brother Kimbal and their children. Musk then had to race back to make the 4 P.M. launch and walked into SpaceX’s trailer control room about two minutes before blastoff. “When the launch was successful, everyone burst into tears,” Kimbal said. “It was one of the most emotional experiences I’ve had.” Musk left the control room and walked out to the factory floor, where he received a rock star’s welcome. “Well, that was freaking awesome,” he said. “There are a lot of people who thought we couldn’t do it—a lot actually—but as the saying goes, ‘the fourth time is the charm,’ right? There are only a handful of countries on Earth that have done this. It’s normally a country thing, not a company thing. . . . My mind is kind of frazzled, so it’s hard for me to say anything, but, man, this is definitely one of the greatest days in my life, and I think probably for most people here. We showed people we can do it. This is just the first step of many. . . . I am going to have a really great party tonight. I don’t know about you guys.” Mary Beth Brown then tapped Musk on the shoulder and pulled him away to a meeting.
The afterglow of this mammoth victory faded soon after the party ended, and the severity of SpaceX’s financial hell became top of mind again for Musk. SpaceX had the Falcon 9 efforts to support and had also immediately green-lighted the construction of another machine—the Dragon capsule—that would be used to take supplies, and one day humans, to the International Space Station. Historically, either project would cost more than $1 billion to complete, but SpaceX would have to find a way to build both machines simultaneously for a fraction of the cost. The company had dramatically increased the rate at which it hired employees and moved into a much larger headquarters in Hawthorne, California. SpaceX had a commercial flight booked to carry a satellite into orbit for the Malaysian government, but that launch and the payment for it would not arrive until the middle of 2009. In the meantime, SpaceX simply struggled to make its payroll.
The press did not know the extent of Musk’s financial woes, but they knew enough to turn detailing Tesla’s precarious financial situation into a favored pastime. A website called the Truth About Cars began a “Tesla Death Watch” in May 2008 and followed up with dozens of entries throughout the year. The blog took special pleasure in rejecting the idea that Musk was a true founder of the company, presenting him as the moneyman and chairman who had more or less stolen Tesla from the genius engineer Eberhard. When Eberhard started a blog detailing the pros and cons of being a Tesla customer, the auto site was all too happy to echo his gripes. Top Gear, a popular British television show, ripped the Roadster apart, making it look as if the car had run out of juice during a road test. “People joke about the Tesla Death Watch and all that, but it was harsh,” said Kimbal Musk. “One day there were fifty articles about how Tesla will die.”
Then, in October 2008 (just a couple weeks after SpaceX’s successful launch), Valleywag appeared on the scene again. First it ridiculed Musk for officially taking over as CEO of Tesla and replacing Drori, on the grounds that Musk had just lucked into his past successes. It followed that by printing a tell-all e-mail from a Tesla employee. The report said that Tesla had just gone through a round of layoffs, shut down its Detroit office, and had only $9 million left in the bank. “We have over 1,200 reservations, which manes [sic] we’ve taken multiples of tens of millions of cash from our customers and have spent them all,” the Tesla employee wrote. “Meanwhile, we only delivered less than 50 cars. I actually talked a close friend of mine into putting down $60,000 for a Tesla Roadster. I cannot conscientiously be a bystander anymore and allow my company to deceive the public and defraud our dear customers. Our customers and the general public are the reason Tesla is so loved. The fact that they are being lied to is just wrong.”*
Yes, Tesla deserved much of the negative attention. Musk, though, felt like the 2008 climate with the hatred of bankers and the rich had turned him into a particularly juicy target. “I was just getting pistol-whipped,” Musk said. “There was a lot of schadenfreude at the time, and it was bad on so many levels. Justine was torturing me in the press. There were always all these negative articles about Tesla, and the stories about SpaceX’s third failure. It hurt really bad. You have these huge doubts that your life is not working, your car is not working, you’re going through a divorce and all of those things. I felt like a pile of shit. I didn’t think we would overcome it. I thought things were probably fucking doomed.”
When Musk ran through the calculations concerning SpaceX and Tesla, it occurred to him that only one company would likely even have a chance at survival. “I could either pick SpaceX or Tesla or split the money I had left between them,” Musk said. “That was a tough decision. If I split the money, maybe both of them would die. If I gave the money to just one company, the probability of it surviving was greater, but then it would mean certain death for the other company. I debated that over and over.” While Musk meditated on this, the economy worsened quickly and so too did Musk’s financial condition. As 2008 came to an end, Musk had run out of money.
Riley began to see Musk’s life as a Shakespearean tragedy. Sometimes Musk would open up to her about the issues, and other times he retreated into himself. Riley spied on Musk while he read e-mail and watched him grimace as the bad news poured in. “You’d witness him having these conversations in his head,” she said. “It’s really hard to watch someone you love struggle like that.” Because of the long hours that he worked and his eating habits, Musk’s weight fluctuated wildly. Bags formed under his eyes, and his countenance started to resemble that of a shattered runner at the back end of an ultra-marathon. “He looked like death itself,” Riley said. “I remember thinking this guy would have a heart attack and die. He seemed like a man on the brink.” In the middle of the night, Musk would have nightmares and yell out. “He was in physical pain,” Riley said. “He would climb on me and start screaming while still asleep.” The couple had to start borrowing hundreds of thousands of dollars from Musk’s friend Skoll, and Riley’s parents offered to remortgage their house. Musk no longer flew his jet back and forth between Los Angles and Silicon Valley. He took Southwest.
Burning through about $4 million a month, Tesla needed to close another major round of funding to get through 2008 and stay alive. Musk had to lean on friends just to try to make payroll from week to week, as he negotiated with investors. He sent impassioned pleas to anyone he could think of who might be able to spare some money. Bill Lee invested $2 million in Tesla, and Sergey Brin invested $500,000. “A bunch of Tesla employees wrote checks to keep the company going,” said Diarmuid O’Connell, the vice president of business development at Tesla. “They turned into investments, but, at the time, it was twenty-five or fifty thousand dollars that you didn’t expect to see again. It just seemed like holy shit, this thing is going to crater.” Kimbal had lost most of his money during the recession when his investments bottomed out but sold what he had left and put it into Tesla as well. “I was close to bankruptcy,” Kimbal said. Tesla had set the prepayments that customers made for the Roadsters aside, but Musk now needed to use that money to keep the company going and soon those funds were gone, too. These fiscal maneuvers worried Kimbal. “I’m sure Elon would have found a way to make things right, but he definitely took risks that seemed like they could have landed him in jail for using someone else’s money,” he said.
In December 2008, Musk mounted simultaneous campaigns to try to save his companies. He heard a rumor that NASA was on the verge of awarding a contract to resupply the space station. SpaceX’s fourth launch had put it in a position to receive some of this money, which was said to be in excess of $1 billion. Musk reached out through some back channels in Washington and found out that SpaceX might even be a front-runner for the deal. Musk began doing everything in his power to assure people that the company could meet the challenge of getting a capsule to the ISS. As for Tesla, Musk had to go to his existing investors and ask them to pony up for another round of funding that needed to close by Christmas Eve to avoid bankruptcy. To give the investors some measure of confidence, Musk made a last-ditch effort to raise all the personal funds he could and put them into the company. He took out a loan from SpaceX, which NASA approved, and earmarked the money for Tesla. Musk went to the secondary markets to try to sell some of his shares in SolarCity. He also seized about $15 million that came through when Dell acquired a data center software start-up called Everdream, founded by Musk’s cousins, in which he had invested. “It was like the fucking Matrix,” Musk said, describing his financial maneuvers. “The Everdream deal really saved my butt.”
Musk had cobbled together $20 million, and asked Tesla’s existing investors—since no new investors materialized—to match that figure. The investors agreed, and on December 3, 2008, they were in the process of finalizing the paperwork for the funding round when Musk noticed a problem. VantagePoint Capital Partners had signed all of the paperwork except for one crucial page. Musk phoned up Alan Salzman, VantagePoint’s cofounder and managing partner, to ask about the situation. Salzman informed Musk that the firm had a problem with the investment round because it undervalued Tesla. “I said, ‘I’ve got an excellent solution then. Take my entire portion of the deal. I had a real hard time coming up with the money. Based on the cash we have in the bank right now, we will bounce payroll next week. So unless you’ve got another idea, can you either just participate as much as you’d like, or allow the round to go through because otherwise we will be bankrupt.’” Salzman balked and told Musk to come in the following week at 7 A.M. to present to VantagePoint’s top brass. Not having a week of time to work with, Musk asked to come in the next day, and Salzman refused that offer, forcing Musk to continue taking on loans. “The only reason he wanted the meeting at his office was for me to come on bended knee begging for money so he could say, ‘No,’” Musk theorized. “What a fuckhead.”
VantagePoint declined to speak about this period, but Musk believed that Salzman’s tactics were part of a mission to bankrupt Tesla. Musk feared that VantagePoint would oust him as CEO, recapitalize Tesla, and emerge as the major owner of the carmaker. It could then sell Tesla to a Detroit automaker or focus on selling electric drivetrains and battery packs instead of making cars. Such reasoning would have been quite practical from a business standpoint but did not match up with Musk’s goals for Tesla. “VantagePoint was forcing that wisdom down the throat of an entrepreneur who wanted to do something bigger and bolder,” said Steve Jurvetson, a partner at Draper Fisher Jurvetson and Tesla investor. “Maybe they’re used to a CEO buckling, but Elon doesn’t do that.” Instead, Musk took another huge risk. Tesla recharacterized the funding as a debt round rather than an equity round, knowing that VantagePoint could not interfere with a debt deal. The tricky part of this strategy was that investors like Jurvetson who wanted to help Tesla were put in a bind because venture capital firms are not structured to do debt deals, and convincing their backers to alter their normal rules of engagement for a company that could very well go bankrupt in a matter of days would be a very tough ask. Knowing this, Musk bluffed. He told the investors that he would take another loan from SpaceX and fund the entire round—all $40 million—himself. The tactic worked. “When you have scarcity, it naturally reinforces greed and leads to more interest,” Jurvetson said. “It was also easier for us to go back to our firms and say, ‘Here is the deal. Go or no go?’” The deal ended up closing on Christmas Eve, hours before Tesla would have gone bankrupt. Musk had just a few hundred thousand dollars left and could not have made payroll the next day. Musk ultimately put in $12 million, and the investment firms put up the rest. As for Salzman, Musk said, “He should be ashamed of himself.”
At SpaceX, Musk and the company’s top executives had spent most of December in a state of fear. According to reports in the press, SpaceX, the onetime front-runner for the large NASA contract, had suddenly lost favor with the space agency. Michael Griffin, who had once almost been a cofounder of SpaceX, was the head of NASA and had turned on Musk. Griffin did not care for Musk’s aggressive business tactics, seeing him as borderline unethical. Others have suggested that Griffin ended up being jealous of Musk and SpaceX.* On December 23, 2008, however, SpaceX received a shock. People inside NASA had backed SpaceX to become a supplier for the ISS. The company received $1.6 billion as payment for twelve flights to the space station. Staying with Kimbal in Boulder, Colorado, for the holidays, Musk broke down in tears as the SpaceX and Tesla transactions processed. “I hadn’t had an opportunity to buy a Christmas present for Talulah or anything,” he said. “I went running down the fucking street in Boulder, and the only place that was open sold these shitty trinkets, and they were about to close. The best thing I could find were these plastic monkeys with coconuts—those ‘see no evil, hear no evil’ monkeys.”
For Gracias, the Tesla and SpaceX investor and Musk’s friend, the 2008 period told him everything he would ever need to know about Musk’s character. He saw a man who arrived in the United States with nothing, who had lost a child, who was being pilloried in the press by reporters and his ex-wife and who verged on having his life’s work destroyed. “He has the ability to work harder and endure more stress than anyone I’ve ever met,” Gracias said. “What he went through in 2008 would have broken anyone else. He didn’t just survive. He kept working and stayed focused.” That ability to stay focused in the midst of a crisis stands as one of Musk’s main advantages over other executives and competitors. “Most people who are under that sort of pressure fray,” Gracias said. “Their decisions go bad. Elon gets hyperrational. He’s still able to make very clear, long-term decisions. The harder it gets, the better he gets. Anyone who saw what he went through firsthand came away with more respect for the guy. I’ve just never seen anything like his ability to take pain.”