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Book Title: Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
ISBN: 006230125X
How strongly I recommend it: 4/5
Marked down because the writer flip-flops between Musk’s businesses and resultingly, it is somewhat difficult to keep track of the chronology.
Amazon Page Link: Click Here
How I discovered it? Youtube (credit to Ali Abdaal)
Who should read it? Anyone trying to make sense of Musk’s sometimes erratic behavior. Focused on Musk’s trials and tribulations in his businesses and less his personal relationships.
SUMMARY
The story of how Elon Musk became who he is today.
Most of the book is dedicated to Musk’s experiences with Tesla, SpaceX and Solar City (his three current and largest businesses), but it also covers some of Musk’s early days of moving to the US (along with his brother, Kimbal) and his earlier ventures, Zip2 and Paypal.
In sum, this is a story of how one man, takes a series of high risk (typically all-in), bets and managed to pull it off. It’s refreshing to hear about Musk’s struggles, often under-reported, and how close he actually gets to failure.
KEY TAKE-AWAYS
- If you believe in something, just go for it
Musk pockets $22m from his first venture, Zip2. He puts most of that money into Paypal. He then makes $180m exiting Paypal and puts $100m into SpaceX, $70m into Tesla and $10m into Solar City. At one point, he’s so heavily invested to his companies he’s living off his credit cards.
- No exit without proof of concept
I’ve read too many stories about multi $m exits. Reality is that you need to have proof of concept and scale before that’s even remotely possible.
With Zip2 (Yelp-like business), Musk exited with $22m after about five years. But to get there, he needed VC funding, was actively hiring staff and was still hustling with his brother.
At the time of exit, Zip2 was worth $307m (purchased by Compaq Computers).
- Don’t compromise on vision
Musk was booted from his company’s multiple times. At Zip2, he was replaced as CEO by a VC backed manager. At Paypal, he was booted by Peter Thiel (whilst Musk was on his Honeymoon in Australia).
Since then, Musk remains committed to maintaining control of the ultimate vision of the company and to never lose that.
- Not knowing about a certain industry is often a blessing
Musk knew very little about rockets/space before founding SpaceX. Same for his knowledge of auto manufacturing prior to Tesla. This allowed him to come up with more creative ideas and ask the right questions, like; why did the US rely on the Russian space program to get to space and why can’t you make a car out of Aluminum instead of steel.
- You will hit rock bottom multiple times
Musk went from flying in his private jet, to having to take Southwest commercial flights between LA and SF. He lost a child, got sacked on his honeymoon, got screwed over by investors/friends and was openly mocked for his ideas.
- There are strong network effects in the start up space
A lot of Musk’s success can be attributed to having a good network and a brand image. Any venture he backs today is instantly credible and he’s used his network to further his business interests. Building something small first, makes it more likely that you will be able to build something big later.
FAVORITE QUOTES/STORIES
Buying Russian ICBMs
Musk has $20m to buy three rockets. He goes to Russia to buy ICBM’s (Inter-Continental Ballistic Missiles) to retrofit (with the help of an ex CIA operative). The Russians want $8m each, he offers $8m for two. In the end he storms out, gets on a plane back and then decides he’ll just make the rockets himself. He puts together his own plan and undercuts the market by huge margin.
Tesla bankruptcy Deal
Tesla was on the verge of bankruptcy. One of the main investors, ‘VantagePoint’, would not participate in another round of funding because they felt it undervalued Tesla but in reality, they were hoping it would go bankrupt and they could then sweep in and sell its business segments for a profit. Musk raised as a debt round instead (which Vantage Point could not block), and the deal to raise $40m closes hours before Tesla would have gone bankrupt (on Christmas Eve).
Google takeover (2013)
Tesla built it’s Model S but it wasn’t a huge success as it had multiple operational failures and was expensive to build. Musk makes a huge drive into marketing and convinces everyone at Tesla that they need to start selling more cars. He reaches out to Larry Page (friend) and Google Co-Founder for a buy-out, and Google was set to buy Tesla for $6bn (with Musk remaining in charge for eight years). A few sticking points held up the deal and that gave Tesla just enough time to boost sales…the deal subsequently fell apart. Tesla in May 2021 had an Enterprise Value of $710bn.
Mary Beth Brown story
One of his closest assistants asks for a pay rise (in line with board member pay) because she is working just as hard. Musk ask’s her to go on vacation for a couple weeks so he can understand how taxing her job is. When she comes back, Musk fires her as he realizes he didn’t actually need her services.
Energy inefficiency
Conventional cars are only 10–20% efficient at turning fuel into kinetic energy. EV’s are 60%+.
In one hour, there is enough solar energy pointed at the earth to fuel an entire years worth of energy consumption.
