#1 Elon Musk: Tesla, SpaceX, & the Quest for a Fantastic Future

**David Senra** (0:00)
I want to tell you about a one-time only limited event that I don't think you're going to want to miss. I am doing a live show with Patrick O'Shaughnessy from the Invest Like the Best podcast in New York City on October 19th. Patrick has interviewed over 300 of the world's best investors and founders for his podcast. I've read over 300 biographies of history's greatest entrepreneurs for my podcast. We'll be talking about what we learned from seven years of podcasting, sharing our favorite ideas and stories, and doing a live Q&A. There will also be special event-only swag. If you live in New York City, I think it's a no-brainer. But if not, I think it's a great excuse to fly in. I've already heard from a bunch of people that bought tickets, they're flying in from other cities. Some people are flying in from other countries. That's setting the bar really high, so I will have at least four shots of espresso or four energy drinks before or during the show so we can make it a night that you'll never forget. If you're interested in attending this unique live event, I will leave a link down below. I highly recommend you get your tickets today, and I hope I get to see you in New York on October 19th. While Musk has been anything but shy about what he was up to, few people outside of his companies got to see the factories, the R&D centers, the machine shops, and to witness the scope of what he was doing firsthand.
Here was a guy who had taken much of the Silicon Valley ethic behind moving quickly and running organizations free of bureaucratic hierarchies and applied it to improving big, fantastic machines and chasing things that had the potential to be the real breakthroughs we've been missing.
By rights, Musk should have been part of the malaise.
He jumped into the.com mania in 1995 when, fresh out of college, he founded a company called Zip2, a primitive Google Maps meets Yelp.
The first venture ended up a big, quick hit. Compaq bought Zip2 in 1999 for $307 million. This is something very few people know about Elon. They know about PayPal, they know about SpaceX, they know about Tesla. Now they know about SolarCity. They didn't know that when he was in his early 20s, he sold a company for $307 million. Musk made $22 million from the deal and poured almost all of it into his next venture, a startup that would morph into PayPal. As the largest shareholder in PayPal, Musk became fantastically well to do when eBay acquired the company for $1.5 billion in 2002 So let's just stop there. 1999, young Elon, for startup, sells it for $307 million. Takes $22 million, doesn't rest on his laurels, could have went to retire somewhere. I mean, what would you have done if you had $22 million in your 20s? He then dumps a bunch of money into the next company. Three years later, that company is sold for $1.5 billion. That's a hell of a three years.
Doesn't stop there, as we're gonna see now. Instead of hanging around Silicon Valley and falling into the same fungus as peers, however, Musk decamped to Los Angeles. The conventional wisdom of the time said to take a deep breath and wait for the next big thing to arrive in due course. Musk rejected that logic by throwing $100 million into SpaceX, $70 million into Tesla, and $10 million into SolarCity.
Short of building an actual money crushing machine, Musk could not have picked a faster way to destroy his fortune. He became a one man, ultra risk taking venture capital shop and doubled down on making super complex physical goods in two of the most expensive places in the world, Los Angeles and Silicon Valley. Whenever possible, Musk's companies would make things from scratch and try to rethink much that the aerospace, automotive, and solar industries had accepted as convention. Okay, it's one thing to sell two software startups and then do a third. Software has a lot less complexity than physical goods. The margins are way better.
The cost to reproduce your software is close to zero. Making one car has a fixed cost, and making another one is still really damn expensive. And then what's interesting is when's the last time you heard of American company that was founded, an automotive company in America, the last one I think they talk about in the book was in Chrysler, I think in the 20s or 30s. So again, he had $170 million. He decided, you know what, I'm gonna keep a couple million dollars and then I'm gonna dump the rest in these three companies. All of which had a very small likelihood at the time of success.