The episode reviews Walter Isaacson's biography of Elon Musk, covering his abusive childhood in South Africa, his intense work ethic in founding Zip2, PayPal, SpaceX, and Tesla, and the "surge" periods of extreme effort that drove innovations despite near-failures. It extracts entrepreneurial lessons like leading by example, hiring top talent, staying curious, and knowing your "why," while strongly recommending the book for its detailed insights into Musk's life and businesses.
In this episode we focus on Walter Isaacson's gripping biography, Elon Musk, a 600+ page exploration of the visionary entrepreneur's life and relentless drive. Drawing from Musk's childhood in South Africa to his groundbreaking ventures, the episode highlights key lessons on innovation, leadership, and resilience that any business owner can apply.
Early Life and Formative Influences
Born in 1971 in Pretoria, South Africa, Musk endured a tough upbringing marked by bullying at school and emotional abuse from his father, Errol. These experiences forged his "emotional shutoff valve," turning him into a bold risk-taker who thrives on chaos. As a voracious reader, Musk immersed himself in encyclopedias, sci-fi novels, and books on rocketry, sparking dreams of space travel and AI. By age 14, he sold computer games for $500, showcasing early entrepreneurial flair. Fleeing family tensions, he moved to Canada at 17 with $2,000, eventually attending Queen's University and the University of Pennsylvania, where he double-majored in physics and economics.
First Ventures: Zip2 and PayPal
Musk's entrepreneurial journey began with Zip2, an online business directory co-founded with brother Kimbal in 1995. Bootstrapping in a tiny Palo Alto office, they slept on floors and showered at the YMCA. Sold for $307 million in 1999, it netted Musk $22 million at age 27. He reinvested $12 million into X.com, a digital banking platform that merged with Confinity to become PayPal. Despite internal coups and his ousting as CEO, PayPal sold to eBay for $1.5 billion in 2002, yielding Musk $180 million post-taxes. Key takeaways: Embrace simplicity (delete unnecessary features) and forgive grudges—Musk reconciled with former colleagues, paving the way for future investments.
SpaceX: Defying the Odds
Inspired by sci-fi and NASA's stagnation, Musk founded SpaceX in 2002 with $100 million from PayPal. Early failures tested the team—three rocket crashes nearly bankrupted the company—but a fourth successful launch in 2008 secured NASA's $1.6 billion contract. Musk's "idiot index" scrutinized costs, while his hands-on leadership (sleeping in factories) drove reusable rockets like Falcon 9. Today, SpaceX has landed rockets 456 times and sent 70+ astronauts to space.
Tesla: From Roadster to Gigafactories
Joining Tesla in 2004 with $6.5 million, Musk became chairman and pushed for premium designs, leading to the Roadster's 2006 unveiling. Facing "production hell" in 2008 (sleeping on factory roofs amid near-bankruptcy), he saved the company with personal funds and secured $465 million in DOE loans. Innovations like the Nevada Gigafactory and Giga Press revolutionized manufacturing, hitting 5,000 Model 3s weekly by 2018. Musk's algorithm—question, delete, simplify, accelerate, automate—remains a blueprint for efficiency.
Later Ventures and Legacy
The book touches on SolarCity, Neuralink, OpenAI, and Musk's 2022 Twitter acquisition (now X), emphasizing his mission to advance humanity. Top lessons include: Reach out curiously, self-educate through reading, lead by example, know your "why," hire A-players, and stay curious—like Musk disassembling a toy car to inspire Tesla's chassis.
This episode is packed with vivid anecdotes, quotes (e.g., "If you're going through hell, keep going"), and actionable insights. If inspired, grab Isaacson's book or grab some coffee and listen to the episode. Rate, review, and share—your feedback fuels the show!
Until next time, stay driven.
Books Mentioned
Elon Musk by Walter Isaacson
My Life & Work – Henry Ford
Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX
Start with Why
Episodes Referenced
#1 Henry Ford
https://deeplydrivenpodcast.com/episodes/1-henry-ford-my-life-and-work-what-i-learned
#2 Ed Throp
https://deeplydrivenpodcast.com/episodes/2-ed-thrope-a-man-for-all-markets-real-life-thriller
#3 Trader Joe
https://deeplydrivenpodcast.com/episodes/3-becoming-trader-joe-business-masterclass-from-a-legend
#4 Jay Gould
https://deeplydrivenpodcast.com/episodes/4-jay-gould-how-jay-gould-dominated-wall-street-railroads
#6 Forrest Mars
https://deeplydrivenpodcast.com/episodes/6-mars-family-domination-of-chocolate
His face got darker, and his pauses took on an ominous feel by 9:00 PM a full moon had risen out of the ocean and it seemed to be transforming him into a man possessed. I had seen Musk get into this demon mode temperament before, so I sensed what it pretended. As often happens at least two or three times a year in a major way.
A compulsion was swelling inside of him to order up a surge, an all in burst of round-the-clock activity like he had done at the Nevada Battery Factory and the Fremont car assembly plant and the autonomous driving team offices and would later do in the craze month after he bought Twitter. The goal was to shake things up and extrude the shit out of the system.
This opening selection, my friend, is from the book that I would like to talk to you about today. It's called Elon Musk, and it was written by Walter [00:01:00] Isaacson, and this opening selection really paints an accurate and a vivid picture of how Musk would operate many of his companies with intense focus, pushing his teams to their maximum limits, driving them to innovate, to test, fail, fast, learn, and make it better, and do so in the shortest period of time possible.
Out of all the entrepreneurs that we've studied on the podcast so far, I have to say that Musk is the most deeply driven and hardworking that we've seen so far.
for example, he would sleep on the factory floors at Tesla and SpaceX during periods of surges when he needed an intense focus and he needed to redefine the manufacturing processes at the Nevada Gigafactory in 2008.
During a time, which he described as production hell, when they were trying to ramp up the Tesla model three production, Musk would actually sleep in a tent on the [00:02:00] factory roof, so he didn't have to waste time commuting and he could remain onsite 24 7
with an all hands on deck approach. And at the time, it was like the 50th richest person in the world. I think it was something like $20 billion to his name. And here he is, he is sleeping on the tent,, on the roof
so that he could pour himself into the company and make it successful. In addition, he would personally rewrite code. He adjusted production line speeds and questions every detail along the way from bolt counts to paint quality
and to top it off. Musk would risk a lot of his personal fortune several times to keep Tesla and SpaceX afloat during critical years. When Minnie said that he was simply doomed to fail, he really believed in his mission and his vision. And there were several occasions when they were just few days away from missing payroll, and he would inject cash into the company [00:03:00] or he would come through with some new line of financing to keep them afloat.
But his unrelenting focus on innovation always pushed him forward, developing, groundbreaking technologies like reusable rockets, full self-driving cars, brain computer interfaces,
Whatever the challenge was, he drove forward and got shit done. I have to say, this is a really fantastic book that'll take you on a journey through Elon Musk life. It gives you a good feel of what makes him the way that he is And his approach to his pioneering business endeavors.
Before we jump into the life of Elon, I just wanted to welcome you to the show today. My goal here is to share with you some of the top things that I learned by reading this book. It's over 600 pages and I certainly can't cover everything today, which is why I highly would suggest picking up a copy of the book.
But I do hope to give you a good feel of how Elon is wired and [00:04:00] what drives him, especially in those early days. I think there's a lot of valuable lessons here that you and I can learn and apply in our businesses. If you like the episode and you do find some value that you could use either in your life for your business, Mimi could just do me a quick favor and take a moment and rate me in iTunes.
It only takes a few seconds. Just click on the five stars and it would help me out. A great, great deal, my friend, and if you feel compelled, you could even write some feedback and I'd love to share some of those highlights on the show with others. Alright, with that, let's jump back in time to the beginning of the book here.
So it says that Elon Musk would be born on June 28th. 1971 to his father, Errol and his mother May Musk. And he was born in Pretoria, South Africa. And as a young boy, his mother would say the following, his mood switched rapidly when he wasn't crying. He was really sweet. [00:05:00] as he started to grow, he quickly develops into a very deep thinker.
Oftentimes he's transfixed on subjects, turning off his outside senses. And he is using his brain to compute information. and this leads him to a peer,socially awkward to other kids that are in his classes, as they would oftentimes like try to jump up and down in front of him, , trying to break him out of this chancethat he was in.
And it says that oftentimes they weren't able to phase him Now in the school yards, that's not gonna play out so well. And a young Elon, he's gonna be subject to a great deal of bullying and torment when he is younger. And from the prologue of the book, the author describes the following. And as a father, this is a little hard to read, but I wanted to include it to give you a little bit of context.
His most searing experiences came at school. For a long time, he was the youngest and smallest student in his class. He had trouble picking up social [00:06:00] cues. Empathy did not come naturally, and he had neither the desire nor the instinct to be ingratiating.
As a result, he was regularly picked on by bullies who would come up and punch him in the face. If you've never been punched in the nose, you have no idea how it affects the rest of your life. He says, and if you look at the picture at the start of the prologue, after reading that excerpt, you see this cute little kid with a crooked smile, and then on one side of his face, it looks swollen and he has these squinting eyes that are projecting a smile.
And it's saying, at least to me anyways, that I'm gonna do great things one day. And of course, he certainly would. At least that's how I saw that image after reading this. Now, in one instance, he would be beaten so badly that he would need to be taken to the hospital. In his face, it would be barely recognizable.
His brother Kimball [00:07:00] says the following. When they got finished, I could not even recognize his face. It was such a swollen ball of flesh that you could barely see his eyes, but that beating is gonna be minor compared to the emotional and the mental pain
that was inflicted by his father, Errol, when he got home. Elon's gonna be berated by his father for more than an hour, and he'd be forced to stand. Errol just yelled at him, called him, names called him worthless, and his father in this instance was taking the side of Elon's abuser.
Now, to be fair in the book, it does say that Elon had called the boy dumb. I think it was on the playground, and that boy's father had just committed suicide a few days before. So I could see why his father, Errol, would be upset with Elon, and he should have told him that that wasn't the proper thing to say to the boy.
But at the same [00:08:00] time, he doesn't have to sit there and berate Elon for more than an hour, making him stand while he is just been abused in the playground.
And if we flip to Elon's shoes, the person who loves you the most in the whole world is choosing the side of the kid that just beat the living shit up outta you. And this is just one example. It says that it was quite common for his father to verbally torture him and his brother Kimball as well. And it would be these early Schoolhood beatings, these punishments by his father that would shape the risk of Elon's future.
In the book, the author references a quote from President Barack Obama, and I just really love this quote. It says the following, someone once said that every man is trying to live up to his father's expectations or make up for his father's mistakes. And I think that is so, so true. And the book would go on to say the following, [00:09:00] in Elon Musk's case, his father's impact on his psyche would linger despite many attempts to banish him, both physically and psychologically.
Elon's moods would cycle through light and dark, intense and goofy, detached and emotional with occasional plunges into what those around him dreaded as demon mode.
This would lead Elon to develop what is described in the book as an emotional shutoff valve. And to others, it really makes him appear very callous and cold. But I really see it as a defense mechanism. It allows him to shut down his fears, and this propels him to be a risk taker, not necessarily from like an adrenaline junkie perspective, but more from like, um, an innovator perspective.
One who was willing to take those bold risk in business. He really thrived on that,
He sees those risks that he takes as a means to drive towards [00:10:00] those deeply rooted beliefs that he holds, which are to propel humanity forward. And at the same time, he shuts down the finer things in life, like joy, success, and empathy. It's described in the book that Elon now almost never takes a vacation of any sorts, and that he can't even really detach and relax for more than a day or two at a time.
He's always needing that constant state of influx in his life to keep him moving and keep him propelling forward. Now as Elon enters into secondary school, he has this really strong aptitude for subjects that are precise, like those of math and physics. And the one thing that I really admire the most is that he has this vivacious need to be reading
He's always been a lifelong reader he would gain much of his knowledge from books and mentally processing that information. And this is so great. So [00:11:00] many of these entrepreneurs that we've studied on the podcast the most successful ones, they've all been readers.
It's a very common theme. I mean, we look back at Henry Ford, at Thorpe, Joe Kalo, Jake Gold, Bo Mars, and now Elon. I believe in that saying that readers are leaders. And we can see that we're developing a pattern here .For you and I, same thing, we should always be reading, building up our library with high quality books.
I mean, for 15 bucks, you get 10, 15 hours of entertainment out of a book. And then more importantly, you'll get all of these valuable learning lessons. I mean, even if you just pick up one or two ideas that you can deploy in your business that can have tremendous, tremendous ROI far and above, beyond the $15 that you pay for any book.
. Let's just see how the author describes Musk's view on reading here as a young boy, Reading remain [00:12:00] Elon's psychological retreat. Sometimes he would immerse himself in books all afternoon in most of the night, nine hours at a stretch.
When the family went to someone's house, he would disappear into the host's library. When they went into town, he would wander off and later be found at a bookstore sitting on the floor in his old world. And then it would go on to say, Musk would read both sets of his father's encyclopedias and become to his mother and sister, a genius boy.
And I just want to ask, is there any books that have changed your life and made an impact on the way that you see the world or helped shape your business in some way? If there is, drop me a quick email and let me know which book it was. You can email me at larry@deeplydrivenpodcast.com, and I'd like to check that out as well.
Maybe I can even cover it on the show here. Now for Musk, there's gonna be a lot of books that have impact in his life, [00:13:00] and there would be one book very early on. This book described inventions of the future, and one of those inventions was a rocket that was propelled by an ion thruster. I don't know if that's sounding a little bit familiar, but, uh, for Elon, he says that he would read this book over and over, and it's what first made him think about going to other planets. And this spurs him into the world of science fiction and thinking deeply about things such as artificial intelligence and concepts about how to extend consciousness beyond where we're at today.
Musk would also start diving deeply into computers and he would start teaching himself languages such as basic Pascal Turbo, c plus plus. And in many instances, he would take these courses that should have been like six weeks and he would just finish them in a couple of days, oftentimes working like 20 hours a day and barely [00:14:00] sleeping.
And right here, this is an early version of what is a compressed timeline, I guess you would say. This is gonna play out in his future career, in his businesses, these compressed timelines. And in the next section of the book here, I found this kind of interesting.
It says, at the age of 14, he would sell several of his computer games to a magazine called PC in Office Tech Magazine, in which he would receive $500. and then they did like this nice little writeup for him as well. I thought that was quite cool that at the age of 14, he's already starting to make some money off of his computer programming skills.
And I think things are starting to look really bright for Elon in the educational front.
But at home, tensions were becoming increasingly worse with his father, and he had this pressing need and desire to escape. So Elon, he decides to head to Canada and he would secure a passport in a visa, and he buys a one-way ticket. [00:15:00] And he would arrive in Montreal in June of 1989, and he would have $2,000 in traveler's checks in his pocket, along with 2000 in cash that his mother had given him.
And then in addition, it says that he also had a list of his mother's relatives that he had never met. So I think for a 17-year-old at the time, that is quite ambitious. I'm not so sure that I personally would've done that myself. But Musk has this really deep desire to explore the world, and he wants to get away from his father at the same time.
And once he arrived in Canada, he would spend a lot of time just kind of traveling around visiting various relatives who let them crash at their houses. Then a short time later, his mother May and his sister Tuka would come to Toronto as well. And they would all live together in a small one bedroom apartment. And it was during this time that he would go work for Microsoft as an [00:16:00] intern and he didn't really have any friends.
So he would just spend a lot of time reading and working on his computer programming. But he soon gets bored. So he enrolls at Queen University where he would live, in the international floor. this is the first time that he gets to meet a lot of other students that had a similar sort of mindset as he did.
So he gets to share his love of computers and board games, and he discovers these strategy games, which he takes on like a super deep passion for because he learns how to collect resources and take over the world in these strategy games. So became really fascinated with them.
And I think this feeds into the next thing that happens here. His brother Kimball would arrive in Canada as well, and he ends up going to Queens University with Elon and they developed this game. And I really just love this. I wanted to share this with you. I found a lot of value here. I [00:17:00] think this is something that you and I can do as well, I think it would yield a lot of great fruit force, my friend and I just wanted to paraphrase a few of the paragraphs here so you can get a feel of how this real life game went, if you will. The brothers developed a routine. They would read the newspaper and pick out a person they found most interesting.
Elon was not one of those eager beaver types who liked to attract and charm mentors. So the more gregarious Kimball took the lead in cold calling the person, if they were able to get through on the phone, they usually would have lunch with us. He says one they picked was Peter Nicholson, the executive in charge of strategic planning at the Bank of Nova Scotia.
At lunch, they discussed philosophy and physics and the nature of the universe. Nicholson offered them summer jobs, inviting Elon to work directly with him on his three person strategic planning. Nicholson, [00:18:00] then 49 and Elon had fun together solving math puzzles and weird equations. I was interested in the philosophical side of physics and how it related to reality.
Nicholson says, I didn't have a lot of other people to talk to about those things. They also discussed what had become Musk passion space travel, and in my book I wrote Great game next to those paragraphs. I wonder who else they were able to connect with. I'd really like to know.
I think that would be interesting to figure out who else they connected with. But this concept, it can be the same for us.
For example, if you see like this interesting article on LinkedIn, reach out to the author and ask some curious questions or provide some additional insights that maybe you got from the article and just see what happens. It also reminds me of Steve Jobs and what we discussed on the last episode about Elon Musk in the early days of SpaceX, where Steve Jobs says the [00:19:00] following, most people never pick up the phone and call.
Most people never ask, and that's what sometimes separates the people who do things from the people who just dream about them. And this was Steve's superpower. He wasn't afraid to ask for help. Ilan, he is the same way, and many times in the book it says that people would be shocked when he would call them out of the blue, or they would get random texts for him asking for help or for information or if they would come to talk to him.
He simply had no fear in asking others those that he deemed of high quality and character to come and help him out.
Now this meeting with Nicholson was gonna lead to him gaining a deeper understanding of the banking systems through the eyes of Scotia Bank. And I hope I'm saying that right. Uh, in this instance, he stumbles across, , a Latin American bond opportunity where he could buy these bonds for 20 cents on the dollar.
And the best thing was that they [00:20:00] were backed up by the US government, and he really believed that the bonds were low worth around 50 cents on the dollar. So he proposes to the CEO of the bank that they should jump on this ride away, and he quickly gets rejected. And this really leads them to believe that this is just dumb for the bank to pass over this super golden opportunity.
So what if they already had a Latin American strategy in his mind? This is something that they should take on immediately as it was a super easy picking. And Nicholson would say the following, it gave him a healthy disrespect for the financial industry and the audacity to eventually start what would become PayPal.
such a super critical learning for Elon at this time.
he would also learn another lesson. Let me just read for you here. Musk also drew another lesson from his time as Cotia Bank. He did not like, nor was he good at working for other people. It was not in his nature to be deferential [00:21:00] or to assume that others might know more than he did.
And right there. That reminds me of Henry Ford in episode one. He also didn't like to give up any control. He had failed twice in business before he figured out that he didn't wanna work for others and that he really wanted to have that complete control over everything. And for Elon, he learns this lesson early in life and this is gonna serve him very well over the duration of his entrepreneurial career.
However, he still has a few more years of schooling to go here. Mosque would soon get bored at Queens University, so he decided it was time to head from the United States and he would enroll at the University of Pennsylvania for his junior year, and it's here. He would double major in physics and economics.
And he had added the business degree after his experience of the bank because he felt that he was gonna be stuck just simply working for someone else if he only had a physics degree [00:22:00] and he didn't want to ever do that again.
I think that was an extremely smart move right there, what he did. Now, if we jump forward just a little bit and look at the next section, something that I found interesting here in one of his close friends at the University of Penn by the name of Robin Ren, he provided a really great summary of Elon's time there, and let me just read for you here what he said.
I think this gives us a good feel for Musk's long-term focus that he's developing.
Musk focused on three areas that would shape his career. One, he would discuss how the laws of physics apply to building rockets. He kept talking about making a rocket that could go to Mars. Of course, I didn't pay much attention because I thought he was fantasizing too.
Musk also focused on electric cars. They would grab lunch from one of the food trucks and sit on the campus lawn where Musk would read academic papers on batteries. California had just passed a requirement [00:23:00] mandating that 10% of vehicles by 2003 had to be electric. I wanna go make that happen. Mus said.
Three. Musk also became convinced that solar power, which in 1994 was just taking off, was the best path towards sustainable energy. His senior paper was titled The Importance of Being Solar. He was motivated not just by the dangers of climate change, but also by the fact that fossil fuel reserves would start to dwindle.
Society will have no option but to focus on renewable power sources. He wrote his final page, showed a power station of the future involving a satellite with mirrors that would concentrate sunlight into solar panels and send the resulting electricity back to earth via a microwave beam. The professor gave him a grade of 98 saying it was very interesting in a well-written paper except the last figure that comes out of the blue.
And that right there. My friend [00:24:00] reminds me of Ed Thorpe from episode two, and he said, the following life is a mixture of chance and choice. Chance is the hand you are dealt. Choice is how you play it. And this overarching philosophy would guide Thorpe along his journey in life.
from his depression era, childhood to the blackjack tables and then to Wall Street. He never let the circumstances dictate the outcomes. He learned. He adapted and he executed this is the same approach that Elon's taking right here, and he's studying his cards very closely.
He's arranging them all in a manner in which he can play them in his future. Musk is a master strategist and he really believed in rockets for Mars, electric cars and solar panels. These are really his primary cards. Life had dealt him a great deal of chance abuses on the playground, [00:25:00] emotional beatings from his father, a deep love of books, science fiction, and the sciences that were precise.
At this point, he's ready to go into battle and to start playing those cards. And upon completion of his dual degrees in physics and economics, his plan was to roll in Stanford University to work on a PhD. And I believe that he did enroll.
And after a couple of days, he either drops out or he takes a permanent leave from the program. And he would say the following about this decision, I figured I could spend several years at Stanford getting a PhD. and my conclusion on capacitors would be that they aren't feasible.
He says Most PhDs are irrelevant. The number that actually move the needle is almost none. And that statement would come while the author was working on the book after Musk, he had already been successful in [00:26:00] SpaceX, Tesla and Solar City. In his views and thinking, here I think they're proper and they align with what you and I have spoke about so many times here on the podcast.
For example, in episode one, when we looked at my life and work by Henry Ford, he said, the following, a real man's education begins after he leaves school. True education is gained through the disciplines of life
and Musk. He's wise, and he realizes that the real education is gonna come from action, from experiences and self-discipline to set your own path in life. Elon, as he builds his various companies, he looks for individuals that really align with his vision, those that have curiosity, and they want to create things that are greater than themselves, helping him to expand humanity.
And he is generally not concerned with the pedigree of school that you went to or to even [00:27:00] what level you reached. The big questions are, do you know the basics? Are you eager and hungry to learn? Those were the traits that he would generally seek out.
All right, at this point in the book, let's take a look at his next steps in life. He's gonna start his first company here, and it would be in the mid nineties that mosque was acutely aware of the internet and how it was starting to change the world. So with his brother Kimball, they would write this software that could combine business listings like, uh, that you might see in a phone book with, , map data and then they would quickly put this, uh, program online, and then they would rent a small office in Palo Alto, and this would basically be their home for the first six months.
They would work there and they would sleep there. Then they would just go to like a nearby, uh, YMCA to shower, and then they would get most of their meals from Jack in the [00:28:00] box as it was open 24 7. And it was cheap. So that was their source of food. And that really makes me smile because they're scrappy.
They don't care about personal comforts. They really focus on business and making it work. They're very deeply driven here. And as they keep moving forward, their father, Errol would give them 28,000 and then their mother may, she would give like 10,000 I believe it was. And then she also let them use her credit card because at the time they couldn't get approved for one just yet.
And this application that Elon wrote that would allow you to use your cursor to zoom in and out, uh, around on this map to see these businesses at the time it was simply mind blowing to us today. This is just a common feature, but you have to remember at the time this didn't exist. So this was starting to catch on with, businesses and with search [00:29:00] engines, and they would call their company zip two as in zip to where you wanted to go.
I think that was kind of a cool name. even though I think Elon didn't like the name it said in the book. Now, as they started to grow venture capitalists, started to swarm around them and the two brothers, they would create this illusionary way to exaggerate the perceived value of their business for potential investors.
I think it's right here that we get to see Elon's first Marketing brilliance. Let me just read for you what they did.
They bought a big frame for a computer rack and put one of their small computers inside so that visitors think they had a giant server. They named it the machine that goes ping after a Monty Python sketch. Every time investors would come in, we showed them the Tower Kimball says, and we would laugh because it made them think we were doing hardcore stuff.
And that just made me laugh the first time I read that as well. And I'm sure they were just rolling on the [00:30:00] floor so many times and I was imagining like if you were in the office next to them and just several times a day you would hear these two guys going into hysterical laughter as they were rolling on the floor, rolling out this, this prank to investors.
That just makes me laugh.
This would
lead them to a deal with more Dave Doll Ventures, and it says that they would invest around $3 million into the company and they would also help them by hiring some immigration lawyers so that Elon and Kimball could be in the United States and work legally. That doesn't really say in the book, but I'm assuming maybe they were just extending their student visas.
Possibly. But regardless it would be at this point that we see Elon's core business philosophies starting to develop, and I just wanted to spend a few minutes here because they're important for you and I, and they really show up at every company that he would operate. The first is going hardcore, and I also see [00:31:00] this as leading by example or setting the pace for your team.
The author says the following as zip two, in every subsequent company, he drove himself relentlessly all day and through much of the night without vacations, and he expected others to do the same. His only indulgence was allowing breaks for tense video game binges. And that really reminds me of what Simon Sinek says here.
People don't listen to what leaders say. They watch what they do. If a leader wants a culture of trust, accountability, or innovation, they must embody those values daily. And Musk really wanted this hardcore culture,
and he was a prime example of this, sleeping under his desk, working 20 hours a day and really just modeling the behavior that he wanted to see. And this feeds into his next managerial expectation that of driving your team just as hard, [00:32:00] expecting high quality work. But with Elon, we also see a lack of empathy that's combined here.
And let me just read for you what it says from the book. When the other engineers went home, Musk would sometimes take the code they were working on and rewrite it with his weak empathy gene. He didn't realize or care that correcting someone publicly or as he put it, fixing their effing stupid code was not a path to endearment.
Like Steve Jobs, he generally did not care if he offended or intimidated the people he worked with. As long as he drove them to accomplish feats, they thought were impossible.
Now, it wouldn't be long after their initial funding that Musk comes to the realization that he hates working for these outside investors. And he generally says that they don't have any creativity, they don't have any insights and they can't really do anything to help [00:33:00] with real innovation. They would continue to grow the company, but the brothers, they're getting more annoyed and pissed off each day with these quote unquote professional managers that had been brought in to help them run and grow the company.
So it would be in January of 1999, that comp makes an offer to buy out the company for $307 million in cash. And in the end, Elon's gonna end up walking away with about 22 million and it says Kimball would put, uh, 15 million in his pocket. And that's not a bad payday for what four years worth of work, I would say, and all those valuable lessons that they learned along the way.
And this next statement from Elon really makes me feel happy for what he was able to achieve. He says, my bank account went from like 5,000 to 22,005,000, he says, and just imagine at the age of [00:34:00] 27 that that had happened in your life.
Now, Elon, he's gonna make a few indulgences. He goes out and buys a condo and he drops a million dollars on a McLaren F1 sports car. But when asked what he was gonna do with the money, he says, I'm gonna put almost all of it back into a new game. And as we know from earlier, Elon really loves these strategy games and trying to figure out ways to collect resources and build his empire and try to take over the world.
and as we follow along in the book, the next company that we're gonna see Elon start is that of x.com.
and he would take more than $12 million and put it into the company to get things started because
He had this really grand vision about a one stop shop for all of your financials, everything from your banking to your digital goods, checking credit cards, loans, investments, everything. And in part of his vision was that it would all be handled instantly [00:35:00] online, no waiting in lines, no processing times, no physical banks.
If you wanted money, you just went to the ATM and pulled it out. And this was really revolutionary at the time. No one else was doing this. So Musk, he's gonna dive in super hardcore. He would work all night on coding binges, and this would be combined with a healthy mix of rudeness and detachment towards his co-founder Harris Fricker.
In addition, he's gonna convinced the head of Sequoia Capital, who was Michael Moritz, to make an investment into X.
And then Moritz would also help them find a charter bank so that they were able to offer mutual funds and then they could be FDIC insured as well. This gave them legitimacy as a bank and it fueled Musk even harder.
And this is where we see that concept of delete, delete, delete, starting to become implemented in as business vocabulary.
And I think it's one that's [00:36:00] important for you and I as well in business, that we need to pay really close attention to our products and our services and our processes. And is there anything that we can remove and still be viable? And as I read the following, just take a moment to think about how this concept could possibly apply to your business, how it might make it better.
Would it help the customers you service at the end of the day? Let me just read here. Like Steve Jobs, I. He had a passion for simplicity when it came to designing user interface screens. I honed the user interface to get the fewest number of keystrokes to open an account. He says, originally there were long forms to fill out, including providing social security numbers and home addresses.
Why do we need that? Musk kept asking, delete. One important little breakthrough was that a customer didn't need to have usernames. Their email address served that purpose. Does this sound familiar? one [00:37:00] driver of growth was a feature that they originally thought was no big deal.
The ability to send money by email. That became wildly popular, especially on the auction site, eBay, where users were looking for an easy way to pay strangers for purchases.
this concept of simplicity, deleting and deleting more is what drove Elon and Steve Jobs Elon often says that if you don't add back 10% of what you deleted, you didn't delete enough stuff. So with all of this hard work. Musk is gonna soon run into a gentleman by the name of Peter Thiel who had a similar type of company that offered person to person payments and he was calling it PayPal at the time.
So rather than being competitors against one another, they would end up merging their companies. They were both about the same size. I think they had around a hundred thousand customers each. and Musk, he's gonna come out as the largest shareholder after they merge and he would take over [00:38:00] as the chairman and the CEO of the company.
However, this is really gonna last that long as he has constant battles with the co-founders over strategy and what it is they should be doing. And the founders of the company, they really wanted him. Out. So what would happen is that Musk, he had been married about eight months before to his first wife, Justine, and they didn't have any time to take a honeymoon.
So they finally take one in September of 2000. And while he was in Australia, the other partners of PayPal, including Teal, they're gonna form a coup and they would have him removed from the company as the CEO, but it would be not long after that. That PayPal is gonna be sold to eBay in 2002 for billion and a half dollars.
And I think this would put something like 180 million bucks into Elon's bank account after he paid all of the necessary [00:39:00] taxes. And there's one observation here that I found quite admirable. After that PayPal transaction had settled, Musk calls all of the board members that had ousted him and basically just airs out his laundry, and he decides to put things in the rear view mirror and forgive them all.
I mean, he could have just harbored resentments here for the rest of his life, but instead he would go on and say, the following life is too short. Let's just move on. Short and sweet. I like it. And it takes really big shoes and a lot of strength to do that. And I believe it's an important lesson for you and I both, that if we harbor resentments, those things are just gonna hold us back in business and in life as well.
And we really have to move on. We need to stay positive, my friend,
and that's gonna serve us very well. And we're gonna see here in the near future, it's gonna serve Musk well also. [00:40:00] Alright, uh, let's keep going. In the book here, the next major act for Musk is gonna be the formation of SpaceX. And in the last episode, uh, you and I spoke about the early days of SpaceX and we highlighted several important learning lessons.
And for all those full details, I would highly suggest listening to that episode. And I'll leave a link in the show notes for you. And that episode was based off the book Liftoff by Eric Berger. And it's also an excellent read. ,
And if I look at the notes section of this book,
it has references to liftoff as a source for several of the chapters, and they do read very similar in a lot of sections. So what I'll do here is I'll just walk us through the high level events and call out the most important lessons that we can learn.
So the legend starts when Musk would find himself on the Long Island Expressway with his friend Aade Resi. And this would be on Labor Day weekend of [00:41:00] 2001. And he would be asked the legendary question, what do you wanna do next? and this question comes after he had been booted from PayPal, and he's gonna respond with a following. I've always wanted to do something in space. He told Russy, but I don't think there's anything that an individual can do.
We already know from earlier that Musk had those early seeds as a kid about exploring space, and then from his college days, verbally stating to his friend about building rockets that could go to Mars. Now, later on in the day, he searches the NASA website and he sees that they don't have any plans about going to Mars, and he's kind of astonished by that.
And he believes that maybe it's just a bad website design. So he searches further and nope, they don't have any plans to go to Mars. So what are his first steps after this then? Well, that's a great question.
He would quickly start joining various organizations such as the Mar [00:42:00] Society, and he would engross himself in books about rocket engineering. and he would start calling experts in the field asking if he could borrow their old engine manuals. And he dives in super deep here, just educating himself and learning as much as he could.
These are habits he had formed as a youth to read and pick up the phone and call people outta curiosity. And it's a great lesson that we can develop habits like this as well. These are gonna serve us later in life. And then in the book, the author does a really great job of outlining this big question, the question of why?
Why space? And I just wanted to highlight the three primary reasons. These were the ultimate driving force. One, he found it surprising and frightening that technological process was not inevitable. Basically, man had landed on the moon and then they stopped.
Why are we going backwards? This should not be the case, so we [00:43:00] should always be moving forward. Two, colonizing other planets would help ensure the survival of human civilization and consciousness in case something happened to our fragile planet. And then three.
This one was inspirational. He would say to have a base on Mars would be incredibly difficult, and people will probably die along the way, just as happened in the settling of the United States. But it will be incredibly inspiring. We must have inspiring things in the world. Life cannot be merely about solving problems.
He felt it also had to be about pursuing great dreams. That's what can get us up in the morning. And then from the book, liftoff, Musk is gonna say the following about NASA in their support structure. And this is one of my favorite quotes from around the time that he formed SpaceX. He says, the following, I looked at the horses that NASA had in the stable.
And with horses like Boeing and Lockheed, you're [00:44:00] screwed. Those horses are lame So with this, Elon's gonna come up with the idea of what's called Mars oasis. And this would be a little greenhouse that he would send to Mars on a rocket, and then he would use a webcam to broadcast life growing on Mars.
And he really felt that this would be incredibly inspiring to the general public, and it would help foster a great deal of support that would lead to more funding for NASA and Musk. He had earmarked around $30 million for this plan, and he felt that he could go out and buy a used Russian rocket to help him accomplish this goal, but he is gonna soon find out that they didn't have any respect for him, and they just offered him really high prices on these used rockets.
I believe they started around $18 million a piece, and then over time they just kept going up to like 21 million and this just outrageous Musk. [00:45:00] So instead of abandoning this idea, what he does is he dives in even deeper.
He looks at the first principles and he develops what is called an idiot index. and I think it's really an important lesson and helps us understand how Musk operates a lot of his companies, basically the idiot index works like this.
The more complex a finished good is a rocket. In this case, the greater the markup for the product based upon the raw materials. Now, Elon had calculated the markup of a rocket to be about 50 times more than the basic elements that went into building it. So that $18 million rockets that the Russians had, he thought could be made for something around $360,000 according to the index.
And it would be soon after this that he would actually form SpaceX and many of his friends are gonna [00:46:00] warn him heavily not to do this. They're gonna tell him it's a really bad idea. And Musk, he already knows this. He would say the following, if you're trying to convince me this had a high probability of failure, I'm already there.
He told Russi, the likeliest outcome is that I will lose all of my money. But what's the alternative? That there be no progress in space exploration. We've gotta give this a shot or we're stuck on earth forever.
And those words alone reinforce why he started SpaceX. When you understand the why, it gives you fuel. That is your purpose for existing. I love what Simon Sinek says. He says, people don't buy what you do. They buy why you do it. And this is the guiding force right here. This is why as engineers by the thousands would join SpaceX, the pain was lower and the hours were exceedingly long.
Elon was super [00:47:00] demanding, but they believed in something greater than themselves, the possibility to be part of a driving force that would change the shape of humanity and transport human consciousness off planet Earth. And on de Mars for the first time in more than four and a half billion years.
And I asked my friend, what is your why? What propels you each day in business? For me here on the podcast, it's about for fulfilling my curiosity to learn from the best entrepreneurs that ever existed, And then delivering those learnings in a format that's beneficial for you and I and the customers that we service at the same time.
That is my driving force. Now, Elon, he follows his why very strongly, and he's gonna dump more than a hundred million dollars into the company with most of it going towards the Falcon One Rocket development.
His first [00:48:00] hire would be that of Tom Moeller, who would be the VP of propulsion, and Tom brought with him a deep level of knowledge about the design of rocket engines, and he would come up with a Merlin engine. This would be used to power the Falcon one rocket, and later the Falcon nine Musk would go and lease a 30,000 square foot building in El Segundo, and this would serve as their office in their factory.
Now, one smart move that I think makes tremendous sense is that Musk would put the design, engineering, and the manufacturing departments together as he felt this created an immediate feedback loop, and it helped them increase their speed in developing those early engines, getting them ready for test fire, and then also developing their rocket designs.
And this is something that we could also do in our business. Look at your various departments and how everyone's interacting. Are there any delays that are in the process flow? [00:49:00] And how might you overcome these challenges with your team simply by moving people around and putting them together. In the book, Musk shares a really great analogy that I like.
He says, if your hand is on the stove and it gets hot, you'll pull it off right away. But if someone else's hand is on the stove, it'll take you longer to do something. And what are a few things that you could do here, my friend, to help the way your company presses for speed and production, perhaps open the lines of communication, move some people around in the organization, create a little bit of friction here.
The concept for Musk gets deeper. He really wanted people who could get shit done quickly. He didn't want any negative attitudes, and he didn't accept any delays, especially if you came from a different company and you tried to pull out some bureaucratic bullshit. Musk would say the following, you don't work for Boeing anymore.
I never want to hear that [00:50:00] again. You work at SpaceX now and he drives his team just super hard and he demonstrates his hardcore dedication. He's gonna sit in the cubicle farm with the designers and the engineers. He was always on the manufacturing floor, looking at every step in the process, questioning every little action.
he would hold meetings almost every day to help them overcome challenges. He wanted his team to email him directly, day or night with issues that came up, and he would normally respond within minutes because he wanted a chance to solve things, and he believed in propelling things forward rapidly.
After a long day of work, he would blow off steam with a team. They would play these first person shooter games in the office together sometimes until three in the morning. And Musk would be right there with him in the trenches leading the charge. And I believe that this is really the power of leading by example and setting the pace for your [00:51:00] team.
Now, imagine with me for a moment that he had just constructed this big fancy office way off in the corner of the factory and he came in around noon. He sat in the office each day, left around four and never really interacted with anyone. Maybe he just had a meeting here or there in his team. They're gonna see this and what do you think they're gonna do?
They're not gonna work that hard. They're probably gonna be a hell of a lot more rigid about these ideas that came with them from past companies. They're gonna put in the normal eight hour day poking along at a turtle's pace, and then when Musk wanted them to do something, you think they're gonna take him serious?
Probably not, or it's gonna take him forever to get something implemented. And I think his a hundred million dollars probably would've been burned up super fast with very little to show. And they probably would've just been another one of those dozens of private aerospace companies that followed along the way.
Now, thankfully, that's [00:52:00] just imaginary alternative for SpaceX in something that he could have done. But instead, he drives hard and he leads by example. And for you and I in our businesses here, it's one of the most important lessons that must can teach us that more is caught than taught. when we set the pace for our teams, they're gonna follow the decision is really ours.
are we gonna work our asses off and hire top tier talent? And set a solid example of what it is you should expect? Or are you gonna hire some B and C level players? Show up at noon, punch out at four, and let some donkeys run your operation. Be an A player my friend, and lead by example.
Your employees will follow. If you're working for a company as a manager or an individual contributor, I believe the same philosophy applies lead by example. be the [00:53:00] first one in the office in the lastlead charge forward hard. Be learning and growing. Share as much as possible, and most importantly, stay curious.
Others will take notice. I believe that actions, they speak louder than words, my friend. Now speaking of hiring Musk, he believed it was critically important to hire the right people for the mission. He would personally hire the first 3000 employees at SpaceX, interviewing them all. It was a long, tedious job.
And if he hired 3000 people, I can only imagine how many people he would've interviewed. Let's say he hired what, one outta 10. That would be more than 30,000 interviews. That is just insane. But look at SpaceX today. They're doing things in the aerospace industry that no other company is doing.
I saw just the other day that one of their Falcon nine rockets [00:54:00] had just made its 29th flight into space. I mean, that's incredible. No other company has ever done that, and it's just a critical lesson for us to really focus on hiring the best humans you can find for your business or the company that you're working for.
It's one thoroughbred player that can do the work of many average workers and at the same time, help elevate your team. Your job is to seek out the best lead by example and empower them to grow. We see this in so many great entrepreneurs that we've studied on the show.
Just as an example, ed Thorpe in episode two and Joe Kalo on episode three, they both paid super high wages for talent, but this talent made them both successful and they both said it was one of the most important business decisions they ever made to pay. Well, I believe it's just super important.
Alright, [00:55:00] let me get off my soapbox here and let's head back to the book. So SpaceX would launch its first, uh, Falcon One rocket from this small island by the name of Orek. And this was located in the middle of the Pacific Ocean, near the equator. Now, they had had some troubles at the Vandenberg Air Force Base earlier that year.
So they had to make this sudden move out to the middle of the ocean and the first rocket would take off, and about 30 seconds into the flight, it would become obvious that it was gonna fail when the engine caught fire and it would come crashing back to earth. Now,
this failure would be blamed on a bee nut that had cracked on one of the fuel lines. And this was because the rocket had set outside for a long period of time getting exposed to sea salt spray, and this caused a corrosion and cracking, and then that caused the fuel line to leak, and then it caused the fire, obviously.
[00:56:00] And Musk would say the following, after the failure when we started, we all knew we could fail on the first mission. He said, but we will build another rocket and try again
As part of their iterative design process, they're gonna examine every failure. And then they would treat it as a learning lesson, and then they would apply this to the new design. And this just made them stronger each time. So their second attempt would come about a year later in March of 2007.
And in this instance, they're actually gonna reach space. But this is when things would take a turn for the worse when the second stage started to spin out of control, and it wouldn't fully reach orbit and it would come crashing back to earth along with the first stage.
And in this case, they were so, so close. And this particular failure, uh, it would be blamed on Slosh that started in the tank of the second stage. [00:57:00] And this caused it to spin out of control. Now, this was a known risk. In fact, it was number 11 on the list. And they could have prevented this by adding Slosh baffles into the tank.
But this would've added weight in additional cost to the design. And these were two elements that went against Elon's design principles. And so like they did for the first attempt, they would take these learning lessons and put them back into the design to improve.
And to this day, Musk, he asked to see the list of top 11 risk for rocket launches, which I think is a really wise move and also demonstrates that they truly are learning from their failures. So with all these learnings, they gear up for flight three. This happens August 3rd of oh eight .
They reach space and everyone's amped up and they're celebrating 'cause they had made it. And as the first stage started to fall away from the second stage, it [00:58:00] snapped back and banged into the second stage. And this would send both of the stages outta control, again, crashing back to earth. And if you didn't listen to the last episode, you might be wondering, well, what happened?
And in this instance, they had redesigned their Merlin engine to use a different type of cooling. So when the engine shut off, there was some residual fuel that was left over, and this fuel would still burn off, and it caused just enough thrust to bang into the second stage. And this was something that they had to miss during their testing.
Now it was a simple fix. They just had to modify the computer code to add four extra seconds between stage separations so that that fuel could burn off. But the big question, is there gonna be a fourth launch? So many private companies had died after three failures Musk. had planned for three attempts with either like the second or [00:59:00] the third being successful.
So what is he gonna do? I mean, SpaceX at this point, they're basically outta money. It says they had about a month worth of reserves in the bank. And let's just jump into the book here and see what happens. Musk told them that there were components for a fourth rocket in the Los Angeles factory. Build it, he said, and transport it to Quas as soon as possible.
He gave them a deadline that was barely realistic. Launch it in six weeks, a jolt of optimism spread through the headquarters. I think most of us would've followed him to the gates of hell carrying suntan oil after that says Dolly Singh, the human resources director. Within moments, the energy of the building went from despair and defeat to a massive buzz of determination.
And remember, Musk, he has no sense of risk and he really thrives on this turmoil and he thrust himself into the deep end time and time [01:00:00] again. His employees, they really believe in his mission and Musk. He has this ability to transfer his deeply driven passion into his employees, probably like no one else in his industry or maybe any other industry at that manner.
Now, if we flash back real quick, remember how Musk had called all of those people who ousted him at PayPal, any repaired relations? Well, that's gonna pay off really big right here because Peter Thiel and the Founder's Fund, they would invest $20 million into SpaceX in August of oh eight. And without this, they would've died.
SpaceX wouldn't have had enough funding to keep driving forward for that fourth attempt. And it just adds context to the lesson of not holding grudges against others and try to clear the air and move on, because you never know when you're gonna cross paths again.
so, it just adds to the learning, my [01:01:00] friend. So it would be about eight weeks later on September 28th, that they would be back on the launchpad. In this time, the Falcon One rocket would reach space. They would have a successful stage separation. The second stage would push their simulated payload into orbit.
And SpaceX, they had just become the first private company to reach orbit. So the entire company would be all amped up and they would celebrate the success
it really helps solidify SpaceX as a true aerospace company in the industry. Now, a few short months later, Musk would get a call on his cell phone from NASA in December, and he would be advised that they had been awarded a $1.6 billion contract to carry supplies to the International Space Station.
And up to this point, even after the successful fourth attempt, they were still walking a high wire financially. They didn't know if they were gonna [01:02:00] survive, and it was really this NASA contract that helped remove them from life support and would help them shift their focus over to the Falcon Nine Rocket, and then also the development of the Dragon Payload module.
spoken about Tesla just yet, and I think this would be a good place to pivot and see what's going on over there.
In 2004, Musk would join part of Tesla and help lead the financial round with about six and a half million dollars of his own money from PayPal, and he would become the chairman of the company. Now, Tesla had been around for a little while and
their initial car would be that of the Roadster in which they would contract most of the car parts from Lotus, and then they would fit it with an electric engine in a power train from AC propulsion. As things started to develop here, this really inspires Elon even further, so he would invest in another $9 million into the company to help keep it moving [01:03:00] forward.
But it's not long after this that he's gonna start dictating design decisions to improve the car. and this really upsets a lot of the co-founders because these design modifications would eventually end up costing them millions of dollars in changes. But Musk, he doesn't really care.
let's just see what he says in the book about this. At one of the review meetings, Musk face darkened, his stare turned cold, and he declared that the car looked cheap and ugly. We couldn't have a crappy looking car and sell it for around a hundred thousand dollars.
Musk argued. And the only way to jumpstart Tesla was to roll out a Roadster. we only get to release our first car once, so we want it to be as good as it can be. And Musk would use a lot of that design expertise from SpaceX. And in addition, he would bring in engineers to help out with these designs.
and the Roadster prototype would be unveiled in 2006. this attracted high profile [01:04:00] celebrities like Governor Schwarzenegger, George Clooney, and Steve Jobs, all of whom would put down a hundred thousand dollars for deposits for future cars.
But however, with all the design changes that Elon had made to the car, the cost of manufacturing goes up quite significantly from like 50 grand to over $110,000. And at this point, Tesla was rapidly running towards a financial shortfall disaster. And his second wife, Tallulah, is gonna say the following in the book, and it really comes from one of the most difficult times in Elon's life.
This is a time when SpaceX and Tesla, they were both close to failure in 2008. Tallulah would say
Musk, had mumbling conversations with himself, sometimes failing his arms and screaming. I kept thinking he was gonna have a heart attack. She says he was having night terror and just screaming into his sleep and clawing at me.
It was [01:05:00] horrendous. I was really scared and he was just desperate. Sometimes he would go to the bathroom and start vomiting. It would go to his gut and he would be screaming and retching. She says, I would stand by the toilet and hold his head, That is quite vivid. I could only imagine the mental and the physical torment that he's suffering.
as 2008 was coming to a close, Musk was facing a situation where he really needed to choose between SpaceX and Tesla, his money was almost gone, and if he continued to put resources into both,
they were probably both doomed to fail. But we have to remember that Musk, thrives on high pressure situations and he sees value in both missions.
Let's just read from the book yard for me emotionally. This was like you've got two kids and you're running out of food. He says you can give half to each kid, in which case they might both die, or you can give all the food to one kid and [01:06:00] increase the chance that at least one kid survives. I couldn't bring myself to decide the one that was going to die, so I decided I had to give my all to save both.
And just mad respect for Elon about making this bold decision. He really puts everything on the line. His cards are lined up in front of him, and he knows exactly how he wants to play his hand. It's a super bold decision that he makes, and he makes it without conviction. He knows this is the right path for the environment and also for humanity.
And it would be in December of oh eight that Musk had gotten the good news about NASA and the award for SpaceX. But Tesla on the other hand, they're just three days away from missing payroll and probably having to declare bankruptcy. And it would be on Christmas Eve that Elon would be able to scare an additional $20 million of new [01:07:00] funding.
And this gave them life to move into the future, and it gave them a little bit of breathing room. Now as Tesla moves into 2009, they would secure another $50 million from Daimler to help them develop battery packs and also power terrains for their cars. And then they would go and secure another $465 million in loans from the Department of Energy.
And that was part of the Troubled Asset Relief program that had been developed to help those automobile companies recover from the financial crisis of 2008. And this leads Tesla into the development of their Model S, which would be their first consumer grade car. and they make another smart move here, instead of outsourcing most of their manufacturing musk, he wanted to bring it in house.
This was similar to what he did at SpaceX, and he really wanted to have control over the entire production of the car. [01:08:00] Now listen to this. Let's just jump into the book for a second. Toyota was looking to sell a factory. It had once shared with GM in Fremont, California on the fringe of Silicon Valley, a half hour drive from Tesla's headquarter in Palo Alto Musk invited Toyota's president Akio Toyota to his Los Angeles home, and drove him around in the Roadster.
they were able to get the Mothball factory, which at one point had been worth 1 billion for 42 million. In addition, Toyota agreed to invest 50 million in Tesla. And I think that is so brilliant. He secures a factory and then at the same time an investment.
Musk really starts to ramp things up here quickly and he deploys a similar approach as he had done over at SpaceX. he would put his designers and his engineers right next to the assembly line so that they could see all the issues and make immediate changes. And the author says the following [01:09:00] Musk often corralled the engineers to walk up and down the lines with him.
His own open desk was in the middle of it all with no walls around him and it had a pillow underneath so he could spend the night when he wanted. Again, right here he is in the trenches. He's not sitting on his high horse in some fancy office. It's gonna be shortly after this time that he's gonna take Tesla public.
And this would make them the first IPO of an American car company since Ford in 1856. And this also allows them to secure another $266 million. I believe it was two years before they were almost dead. Now they're a public company. I think that's quite amazing. And it just goes to show what a hardcore drive and determination can do in business for us.
Now as things ramp up at Tesla, it becomes clear that they really needed to mass produce batteries because the Model [01:10:00] S at the time was taking up something like 10% of the world's supply of batteries. And they were also projecting that the SUV and the cheaper model are gonna require like 10 times more than what they were currently doing.
So it would be in 2013 that Musk would turn his sites to the Nevada Gigafactory, and this factory is like 10 million square feet and it was gonna cost something like $5 billion to build it. And he wanted their partner, Panasonic to invest $2 billion to help them build, battery cells on site. And then Tesla would take those cells and turn them into battery packs.
But Panasonic, they were kind of hesitant because they had never really done partnerships like that before. And they also knew this reputation that Musk had. With his partners and they're not quite sure. Now, in the next couple of paragraphs in my book, I wrote Brilliant Sales [01:11:00] Strategy next to it.
And let me just read for you how Musk got Panasonic over the line. I think this is clever. Musk and Straw came up with a charade at a site near Reno, Nevada. They set up lights and sent in bulldozers to start prepping for construction. Then straw invited, his counterpart at Panasonic to join him on a viewing platform to watch the work.
The message was clear, tesla was forging ahead with the factory. did Panasonic want to be left behind? And to answer the question, of course not. They're gonna take like a 40% ownership here in the Gigafactory. And I think this was a truly brilliant move by Elon to draw them into his way of thinking and help them see the future.
Now at this point in the book, I just wanted to jump forward a little bit to 2017 and take a look at a period of time that Musk would describe as the most hellacious [01:12:00] time in his life. This was when the model three was starting to roll off the line in Fremont and really needed to produce around 5,000 cars a week to stay alive.
And at the time, they were doing something like 1800 cars a week. So they're way short. And if we jump back in the book here, we can get a feel for how things were. Uh,
the major challenge for us over the next six to nine months is how do we build a huge number of cars? He said, haltingly, frankly, we're gonna be in production. Hell, then he started giggling Maniacally, welcome, welcome, welcome to Production Hell. That's where we're gonna be for at least six months.
That prospect, like the Helles dramas, seem to fill him with dark energy as the saying goes, if you're going through, hell just keep going. He was, and he did in times of emotional darkness, Musk throws himself into his work [01:13:00] maniacally. He had one primary focus wrapping up production, so that Tesla was churning out 5,000 model threes per week.
He installed monitors at the factory showing up to the minute output of cars and components. Reaching 5,000 cars per week would be a huge challenge. By the end of 17, Tesla was making cars at only half that rate. Musk decided he had to move himself literally to the factory floors and lead an all-in surge. It was a tactic, personally surging the breach 24 7 with an all hands on deck charade of fellow fanatics that came to define the maniacal intensity that he demanded at his companies.
And right here, Musk is gonna personally oversee all of the workstations. He's gonna ask a lot of questions and he's gonna get his hands dirty. He's gonna sleep in a tent on the factory [01:14:00] roof so that he could stay on site. after several months of this, the battery factory would actually be producing way more than 5,000 units a week.
And his next focus would be that on the Fremont manufacturing facility where they were actually making the cars, and he's gonna take a similar approach, he's gonna sleep at the factory. And then at each workstation, he installed these green and red lights to indicate if things were flowing properly.
And when there was a red light, he would dispatch to the trouble spot and try to zero in on the issues and work out a solution and get things figured out. one of his top executives would say, the following,Elon, was going completely ape shit. Marching from station to station. Says J Casa must calculated that on a good day, he made a hundred command decisions as he walked the floor
At least 20% are gonna be wrong and we're gonna alter them later. He said, but if I don't make decisions, we [01:15:00] die.
This would lead Musk to develop his five step algorithm.
And I think this is valuable for us. And I just wanted to highlight the concepts real quick for you. One question. Every requirement a person's name should be associated so that you can question them later on. Requirements from smart people can be dangerous because people are less likely to question them. We must question two. Delete any part of the process. You can
if you don't end up adding 10% back later on, you didn't delete enough. And I think that one is my personal favorite, right there. Three. Simplify and optimize. This comes after step two. A common mistake is to simplify and optimize a part or process that should not exist. Four. Accelerate cycle time. This is done after the first three steps.
Five, automate. This is the last step. [01:16:00] Decide if the process should be done by humans or machines. It would be with this algorithm that in just six months he was able to personally revamp the battery and the auto plants and he would push them past 5,000 cars a week in July of 2018, exiting them from production hell, if you will.
Past this point, there would be a lot of developments for Tesla. They're gonna start selling cars in China at the end of 19, and this is going to account for more than half of their overall sales. Then they would develop the cyber truck towards the end of 19, and then moving into 2020, they would build the Giga Texas factory and that would see cars rolling off the line starting in 21.
Now there's one thing that I found really interesting here and it kind of reminds me of Henry Ford where Ford was at a automobile race and there had been a [01:17:00] wreck and he reaches down and picks up this piece of foreign steel and he doesn't really know what type of steel it is.
So he asks his team to analyze it it was this, v diem steel. And this steel would eventually help him make a lot of the parts on the model T significantly stronger. Uh, they would be corrosion resistant and much lighter. In this case, Ford a huge, distinct competitive advantage against many of the upcoming car companies at the time.
And this concept falls into the category of always staying curious. At least that's how I see it. So Musk had this little toy car of a Tesla model S on his desk, and one day he decides to take it apart. And he sees that the underbody of the car is just die cast from one piece of metal. So he presents this to his engineers and he wants them to make a real car in a similar way.
And he would get a lot of [01:18:00] pushback saying, well, obviously that's just a toy. We can't make a car like that. And Musk, he would respond and he would say, well, it doesn't break the laws of physics. And again, here he goes back to his first principles way of thinking and he tells his team to go figure it out.
So they start calling all of the major casting companies looking for a machine, and they get turned down by all of them except one who would develop the world's largest casting machine. Now this machine was massive, weighing more than six tons, and let's just jump into the book and see what it says about the giga press.
the machine injects burst of molten aluminum into a cold casting mt, which can spit out in just 80 seconds an entire chassis that used to contain more than a hundred parts that had to be welded, riveted, or bonded together. The old process produced gaps, rattles, and leaks, so it went from a horrible nightmare to something [01:19:00] that is crazy cheap and easy and fast.
Must says. And I wonder what Ford would've thought of that. I have to believe that he would've loved it. And I really think it's important for you and I right here to keep our eyes and our ears, and our minds and our hearts open and curious to the possibilities. It's when we least expected in life that we're gonna be presented with a new card to play.
And it can be really easy just to toss cards aside and not really consider the possibilities, especially if we've become comfortable with our existing hand. Stay curious, my friend, like a child, always asking questions and thinking about how can you apply new concepts in your business.
I think that's incredibly important. Now, at this point, I just wanted to take a couple minutes and jump back and take a quick look at SpaceX and their progress since we last spoke about them over at SpaceX. Musk is gonna push forward [01:20:00] with a rapid design of the Falcon Nine Rocket. And then they also would develop the payload module that they called Dragon as in Puff, the Magic Dragon.
And then they would build out the famous Launchpad 39 A at the Kennedy Space Center in Cape Canaveral. This was the same one that the Apollo 11 missions used to send astronauts to the moon. the Falcon nine is gonna be wildly successful. It carries something like 32 supply missions between 2012 in our current time.
it would also put up something like 7,500 starlink satellites into low earth orbit for internet.
In 2015, Musk and his engineers were able to vertically land a rocket back onto the launchpad, making his vision of reusable rockets become a reality. And this is the first time that it had ever been accomplished by an [01:21:00] aerospace company and not even nation states that have been able to make this happen.
And today, this is awesome. They have had 456 reuse landings. That is amazing. When I look this up, . More than 97% were successful. Re landings, quite, quite, quite impressive. Let's see, in 2020, SpaceX is gonna take their first astronauts into space. Since then, they've completed like 17 additional missions bringing something like 70 humans, either to the space station or to low earth orbit.
and it was really these early learnings by Musk and the SpaceX engineers that propelled the company forward in this aggressive manner using an iterative design approach to fail fast learn. Try again. this maniacal sense of urgency to always press hard in [01:22:00] the face of being scrappy and resourceful to slash costs and make components in house.
It serve them very well. Another point that I wanted to call out here was that Musk acted as the chief engineer and financial officer, so that allowed him to make decisions super quick These are all just valuable insights and learnings that you and I can deploy in our businesses and in our lives.
am excited to see where SpaceX will go in the future. I really hope that they can bring humanity to Mars.
now, I debated about Musk and the acquisition of Twitter here at the time of the acquisition. Musk is really wildly successful. And for the focus of the show and this episode, my intention is to really dig in deep and understand why or how or what gives someone their purpose in life and then how they're deeply driven by that purpose to build [01:23:00] something amazing.
And it's really those early years where they struggle and they learn and they grow that are simply fascinating. And I believe those are where the real valuable lessons come from. Those are the practical applications that you and I can explore and apply in our lives, into our businesses, into those clients and customers that we service.
The acquisition of Twitter is super fascinating and it takes up like a hundred pages or so in the book, and I would highly, highly suggest that you pick up a copy of the book for all of the details around why this took place and what happened. There's so much more in the book. The author goes into Elon's marriages, covers the sad death of his first son, Nevada, and looks at the birth of his next 10 kids, and there's a lot of coverage in there on his other businesses, including Solar City Neuralink, his involvement with open ai, his insights [01:24:00] into AI positioning in the advancements in autonomous driving that are used in Tesla.
It's simply a fantastic read, and I really highly recommend the book. there were a few days that I read over a hundred pages just in a single sitting. And if you'd like to check it out, I'll certainly leave a link in the show notes for you.
At this point, I'd like to pivot us towards a recap of the top lessons that we learned along the way. I do believe in taking some time to reflect. It helps us build those deeper connections in life.
These are the items that I really think could help you in your business in some way, whether that be in full or even just a partial idea. The first lesson was reaching out to others for help or with a mindset of curiosity when you wanna learn.
We saw Elon and Kimball. They both did this when they met with the banker, Peter or Nicholson, who gave Elon a job. And this is where he discovers the flawed ways of the bank, giving him the fuel for PayPal. We also saw that Steve [01:25:00] Jobs, he was notorious for this picking up the phone and asking for help when needed.
In fact, it was his superpower. And if it worked for Elon and Steve. It will work for us. Uh, the second important lesson was this concept around self-education. Musk is and was an avid reader, and he would dive in deep when he wanted to educate himself on business rockets or the auto industry. And he also drew from sci-fi concepts as well.
Readers are leaders, my friend, always be reading. We can't afford to not be reading. The third lesson that we learned here was leading your team by example. Musk was in the cube farm with his team. They saw him working 16, 18, 20 hours a day. He was out on the factory floor questioning the processes, making hundreds of decisions a day.
He was ingrained and involved. one of his [01:26:00] philosophies from the book says, never ask your team to do something that you would not do yourself. And that is so wise. Remember, my friend more is caught than taught. The fourth lesson we saw today was to understand your products.
Musk, along with Steve Jobs, they were both masters at Simplicity, and we can learn from both of these entrepreneurs.
How might you apply some of this thinking in your business? The fifth lesson, and perhaps this should be lesson number one, was that of know your why. Why do you exist in business? Simon Sinek taught us that people don't buy what you do. They buy why you do it. Once you know your why, work simply becomes play.
My friend. I ask, what is your why? The sixth lesson that we learned today, one that we've seen so many times on the show, is to hire the best talent that you can find personally. [01:27:00] Interview those potential employees. We saw that Musk hired the first 3000 employees at SpaceX. It took a lot of time and dedication, but he felt that it was important.
Seek out and look for those A plus players that will elevate your business. And then the seventh and final lesson here is be curious, my friend, just like Henry Ford was with the steel alloys
and Musk by taking apart that toy car and modeling the Tesla chassis off of it. These basic curiosities drive major innovations in every industry. What are you curious about? I would encourage you to write down just a couple of things that make you curious and then seek out answers. I think you'll be really amazed at what you find and how it makes you feel.
Those were my top lessons from the episode today. I really hope you enjoyed the show, and I just thank you for listening. I know your time is valuable [01:28:00] and my goal here is to really deliver important lessons that can help you in your business career or even in your life. And if you could just do me a quick favor.
If you liked the episode, if you could leave me some quick feedback or even just possibly share the show with a friend. I thank you in advance. I've put a lot of time and work into the show and I'd really like to reach more listeners who might find some value here. I've learned so much by listening to podcasts over the last 10 years and I find this a very creative and fun way to give back to the community, and I really wanna develop and grow and make things better in the long run.
Alright, with that, thank you for listening. Until next time, make it a beautiful day in the neighborhood, my friend.