Elon Musk book: How SpaceX and Tesla’s fates were linked

A couple of days ago, some quotes. Now there’s more from the upcoming book about Elon Musk — the closest thing Silicon Valley has to a rock star.

He’s not just the valley’s rock star, though. Many people might think of Musk first and foremost as the CEO of Palo Alto-based Tesla, the electric-car maker with a factory in Fremont. But before Tesla there was SpaceX, Musk’s rocket company, which is now based in Hawthorne, near the Los Angeles International Airport.

SpaceX, born in 2002, came out of Musk’s fascination with Mars. (We’ve talked about this fascination — he wants humans to have options in case Earth doesn’t work out.)

The excerpt from the book, written by journalist Ashlee Vance, is on Bloomberg.com. It shows how the history of SpaceX and Tesla are intertwined, and how Musk willed them both into success.

Here’s a passage talking about a time in 2008, when the economy was tanking and both companies were in danger:

When Musk looked at the numbers, it looked like only one company would survive. “I could either pick SpaceX or Tesla or split the money I had left between them,” Musk said. “That was a tough decision. If I split the money, maybe both of them would die. If I gave the money to just one company, the probability of it surviving was greater, but then it would mean certain death for the other company. I debated that over and over.”

But Musk was resourceful. He found the money. He secured investments from wealthy people such as Google’s Sergey Brin. And SpaceX won a NASA contract. From the book:

In December 2008, Musk heard a rumor that NASA was on the verge of awarding a contract to resupply the space station. SpaceX’s fourth launch had put it in a position to receive some of this money, which was said to be in excess of $1 billion. Musk reached out through back channels in Washington and found out that SpaceX might even be a front-runner for the deal.

As for Tesla, Musk made a last-ditch effort to raise all the personal funds he could. He took out a loan from SpaceX, which NASA approved—Musk did not want to mess up his chance for a contract—and earmarked the money for Tesla. He went to the secondary markets to try to sell some of his shares in SolarCity, a solar panel installer where he served as chairman. He lucked into about $15 million that came through when Dell acquired a data center software startup called Everdream, founded by Musk’s cousins, in which he had invested.

And here’s testimony that Musk is a real-life Iron Man. (Musk inspired Robert Downey Jr., the actor who plays Iron Man.)

Antonio Gracias, a Tesla and SpaceX investor and one of Musk’s closest friends, had watched all of this transpire; 2008 told him everything he would ever need to know about Musk’s character. “He has the ability to work harder and endure more stress than anyone I’ve ever met,” Gracias said. “What he went through in 2008 would have broken anyone else. Most people who are under that sort of pressure fray. Their decisions go bad. Elon gets hyperrational. He’s still able to make very clear, long-term decisions. The harder it gets, the better he gets.”

There’s plenty more, including a peek into how SpaceX came to be — thanks to some uncooperative Russians who wouldn’t sell Musk the rockets he wanted, Musk’s ability to bring the brightest minds on board, and good old-fashioned hard work. Lots of it.

To date, SpaceX has flown satellites for Canadian, European, and Asian customers and completed about two dozen launches. Its launch manifest stretches out for a number of years, and SpaceX has more than 50 flights planned, which are all together worth more than $5 billion. The company remains privately owned, with Musk as the largest shareholder. SpaceX is profitable and is estimated to be worth $12 billion.

“Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future” comes out May 19.

 

Photo: Elon Musk in 2013. (Nhat V. Meyer/Mercury News archives)

 

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