#74 – Elon Musk – Founders Podcast

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SpaceX began with nothing but an empty factory and a handful of employees. This small group launched its first rocket less than four years later and reached orbit in six.

Recently, I was watching SpaceX's successful completion of the Starship Flight Test #5, where they sent the Super Heavy Booster 12 rocket into orbit, and it came back to Earth to be caught mid-air by two massive arms SpaceX calls “Chopsticks.” It was the first time in history a rocket was sent to orbit and then caught mid-air – a feat akin to catching a small skyscraper.

SpaceX was on the precipice of bankruptcy and destruction. The first three attempts at launching a rocket into orbit failed. The fourth one succeeded. Fast forward almost 20 years, and now they’re catching rockets the size of skyscrapers out of the air.

I told a friend I had always been interested in space, but I didn’t think a private individual could do anything about it. Three decades had passed since Apollo’s heyday, and surely, I thought NASA must be well on its way to going to Mars. Later that day, still thinking about the conversation, Elon checked out NASA’s website. To his surprise, he could not find any plans for sending humans to Mars.

Elon began researching and attending space conferences. Back in California, private groups were trying to conduct interesting space experiments. He started reading everything he could get his hands on. Numerous entrepreneurs had tried their hand at rocket science before, so Musk knew he needed to learn from their mistakes to avoid repeating them. He read everything from old Soviet technical manuals to John Clark’s iconic book on propellants, Ignition. “I began to understand why things were so expensive,” Elon said. “I looked at the horses that NASA had in the stable, and with horses like Boeing and Lockheed, you’re screwed.” He thought they were “lame” because the products they were building kept getting more expensive. Elon’s goal—the reason he started SpaceX—was to make the human species a multiplanetary one. The first step toward solving this problem was bringing down the cost of launches.

If you want humans to live on other planets, the first thing you need to do is lower the price of getting there. The metaphor they often use is this: if a plane ticket cost $1 million or $10 million, very few people would fly.

Elon announced that he wanted to start his own rocket company. I remember a lot of chuckling and laughter—people saying things like, “Save your money, kid, and go sit on the beach.” The kid was not amused. If anything, the doubts expressed at this meeting, and by some of his confidants, energized him even more.

SpaceX was Elon’s response to the stagnation of an existing industry, which is a good way to look for opportunity. He identified an important industry that was moving backward. Companies in the United States and Russia were still using decades-old technology to launch rockets into space, and the costs kept increasing. Things were going in the wrong direction.

This stagnation helped Elon recruit the insane talent he needed. According to the book, relative to other aerospace companies, Musk had a lot to offer prospective employees at SpaceX. New hires could rapidly grow their skills and take on new responsibilities. There was almost no management, and everyone worked directly on the rockets. Musk was a siren, calling brilliant young minds to SpaceX with an irresistible song. He offered a mix of vision, charisma, audacious goals, and resources. When they needed something, Elon wrote a check. In meetings, he helped solve their most challenging technical problems. When the hour was late, he worked alongside them. And when they needed a push, he deployed his sharp words and intense stare.

An early SpaceX employee had a friend who worked at Lockheed Martin on the F-35 stealth aircraft. This part was absolutely incredible. The friend’s job was finding a supplier for a single bolt on the aircraft’s landing gear and ensuring it met all quality specifications. That single bolt was the entirety of his employment. Imagine spending years of your life, and that single bolt is the totality of your work. SpaceX offered the opposite experience. Work was thrilling and all-encompassing. One engineer made an important point: because your work was so varied and the problems you had to solve were so diverse, it actually made you a much better engineer.

Build and test early, find failures, and adapt. This is what SpaceX engineers and technicians did.

Elon personally interviewed the first 3,000 employees at SpaceX, and there are many interesting stories and great ideas about this. He understood he would go nowhere without the right people. Interview by interview, Musk sought out brilliant and creative engineers who would commit themselves wholly to the goal and make the impossible possible. One of Musk's most valuable skills was his ability to determine whether someone would fit this mold. His people had to be brilliant, hardworking, and tolerate no nonsense.

The "cool kids" were not into space anymore; they were drawn to medicine, investment banking, or tech. Brian, an early hire, talked about why he chose to leave a comfortable job and a more balanced life. He knew SpaceX would strip all of that away. His friend, already working there, told him about SpaceX's intense environment. Brian knew coming to work for Elon would turn his life upside down, and Musk could offer no guarantees of success. How could a small team build a rocket capable of reaching orbit, anyway? No privately funded company had ever succeeded at this before, and many had failed trying.

A few days after the interview, Brian received an email from Elon’s assistant at 1 a.m. asking if he wanted the job. Brian realized this company operated at its own speed. The offer appealed to his sense of adventure, and he seized the chance, becoming employee #14 at SpaceX.

There’s a great description of how relentless Elon could be once he identified someone he wanted to hire. A talented young engineer from Turkey, living in San Francisco, was reluctant to move to Los Angeles because his wife worked at Google. During the interview, Elon told him he had already solved the problem. Musk had called Larry Page, co-founder of Google, and arranged for his wife to be transferred to Los Angeles. Stunned, the engineer replied, "Given all that, I suppose I’ll come work for SpaceX."

“I’ve never met a man so laser-focused on his vision,” said one person. “He’s very intense and intimidating.”

A scientist running a graduate program in space engineering at the University of Michigan, one of the best in the country, made a list of his 10 best students of all time. Researching their careers, he was shocked to find that five out of the 10 were working at SpaceX. This was before SpaceX was successful. When he interviewed these former students, he discovered they had joined because they believed in the mission. Many had even taken pay cuts. Later, Elon visited this professor and requested a meeting. During the meeting, Musk asked just one question: “Who are the other five students?” The professor realized the meeting wasn’t about him—Elon wanted to recruit the other five.

Musk’s in-your-face management style came with benefits. He empowered his people to bypass the bureaucratic processes required at other companies. At SpaceX, if engineers convinced the company’s chief engineer—Elon himself—they automatically gained approval from the chief financial officer, as Elon held both roles.

The faster you can make decisions, the more iterations you can do. The more iterations you do, the more you learn. The more you learn, the greater SpaceX's success and capability.

Elon had a knack for inspiring engineers to achieve what seemed beyond their abilities and then push toward the next goal. SpaceX had immense talent. Musk’s primary skill was evaluating people quickly and selecting the right ones. He combined this with being deeply involved. Musk was there every step of the way. He made difficult decisions when necessary and kept the team focused on the vision.

He didn’t want to fail, but he wasn’t afraid of it.

Failure was an option at SpaceX because Musk often asked for the impossible. In meetings, when engineers protested that something was impossible, Elon would ask, “What would it take?” He wanted solutions, not limitations.

The speed at which SpaceX worked compared to its peers was shocking. After working at NASA, Brian experienced a culture shock at SpaceX. At NASA, he had to undergo detailed security screenings, orientations, and days of training to operate machines. At SpaceX, there was none of that. On his first day, he showed up to find the door unlocked and no receptionist. Hans, a team member, handed him a packet with materials about benefits and gave him his assignments. Orientation done. The team was so small that everyone knew each other, and each employee helped other departments as needed. Everyone was expected to carry their weight—and more. In SpaceX’s early years, the company had no support staff beyond Elon’s assistant.

You can drive away great people by making the speed of decision-making too slow. Why would great people stay in an organization where they can't get things done? They eventually look around and say, "I love the mission, but I can't get my job done because our decision-making is too slow." The opposite of that is Elon in the early days of SpaceX.

Elon wants to get things done. He cannot stand a liar and hates a thief. If you say you can do something, you better fucking do it.

Having experienced firsthand how hard it is to reach orbit, I have a lot of respect for those who persevered to produce the vehicles that are mainstays of space launches today. SpaceX is in this for the long haul, and come hell or high water, they're going to make it work.

He did not care about plans—just get on with the job. Her response to this approach was perfect: "Oh, this is refreshing. I don't have to write up a damn plan." This was her first real taste of Elon's management style: do not talk about doing things, just do them.

A huge benefit to SpaceX is the fact that the lead engineer and the head of finance are the same person—Elon. He said, “I make the spending decisions and the engineering decisions in one head,” which allows decisions to be made much faster.

They needed to build a rocket to reach orbit successfully, sell it successfully, and fight corruption. Elon knew that if SpaceX was going to survive, NASA had to play an important role. They needed NASA's contract.

Something crazy happened: a rocket company called Kistler went bankrupt. Its chief executive, George Mueller—one of the heroes from NASA's Apollo program—was 85 years old at the time. A year after Kistler went bankrupt, NASA announced a $227 million contract with them. Elon was outraged and did what everyone advised against: he protested to the Government Accountability Office, arguing the bid should go out for competition.

Elon described his thinking: "I was told by many people not to protest. They said I had a 90% chance of losing and could make a potential customer angry. But I thought, if we don’t fight this, we’re doomed. Our chances of success would be dramatically lowered. NASA, being one of the biggest customers for space launch, would be cut off from us. I had to protest.”

The result? SpaceX won. After learning that the Government Accountability Office would rule in favor of SpaceX on the issue of fairness, NASA pulled the award from Kistler.

In 2005, the U.S. share of the global market for commercial launches—like launching large satellites for television and communications—fell near zero. By 2023, the U.S. had a 54% share of global commercial launch revenues, with SpaceX’s Falcon 9 responsible for most of it.

Within its first three years, SpaceX had sued three of its biggest rivals in the launch industry, gone against the Air Force over the proposed United Launch Alliance merger, and protested a NASA contract. Elon was not walking on eggshells on the way to orbit—he was breaking a lot of eggs, and he was right.

It’s not like other rocket scientists were idiots who wanted to throw their rockets away. It’s incredibly hard to make something like this. One of the hardest engineering problems is making a reusable orbital rocket. Nobody had succeeded for a good reason. Our gravity is heavy—on Mars, this would be no problem; on the Moon, a piece of cake. On Earth, it’s just barely possible. It’s stupidly difficult to have a fully reusable orbital system. It would be one of the biggest breakthroughs in history. That’s why it’s hard—fucking hard.

Elon's willingness to jump into the fray and get his hands dirty won him admiration as a leader.

After sinking six years and $100 million into SpaceX, Elon finally had a real rocket. When Flight 4 launched, the company’s payroll exceeded 500 people, but SpaceX's finances were dire. Elon looked like death itself, describing waking up from nightmares screaming and in physical pain.

Finally, on a Monday morning, December 22, 2008, the answer came. Elon said, "They just called my cell phone out of the blue, right before Christmas." NASA told him SpaceX had won one of two contracts. Musk couldn’t believe it. He told them, “I love NASA. You guys rock.” After the call, Elon asked Gwynne Shotwell to immediately sign whatever deal NASA offered, fearing the agency might change its mind. Without the CRS contract, SpaceX would have gone down as the company that made it to orbit—and then died. The contract was worth $1.6 billion.

Nearly two decades have passed since Elon first began thinking seriously about Mars. During an interview in early 2020, he reflected on his first impulse to enter the space business. He remembered a gray, rainy day on the Long Island Expressway with his friend Adeo Ressi and later his frustration upon visiting NASA’s website and finding no plans. He could not understand why humans remained stuck in low Earth orbit since Apollo.

That moment led to a life-changing decision to commit himself to the goal of Mars—a commitment that has only grown stronger over time. "That’s 19 years ago, and we’re still not on Mars,” Elon said. “Not even close. It’s a goddamn outrage.” This passion is what drives Elon Musk.


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