If you can translate that into a product that people can experience and that they
like and that delights them, then that's a good measure of the success of
the product. I really like the fact that when people buy a car that
they experience delight And for many people they've said, they've told me it's like
the best product they've ever bought, and it made them happy. And there
was one person who said, like, whenever they feel sad, they can
just go to the go to their garage and look at the car and it
makes them happy. And that's cool. That's really cool. So what actually
made them happier? That's what they told me? The car? Yeah,
what's your explanation behind this? Why this could make people happier? Pretty,
it's a beautiful car. It does a few things like when you approach,
the car senses that you're coming, and the handles extend and it prepares for
you to come, and it's almost like a pet. But do you still
have that kind of freshness when you use the car yourself or you have been
used to that and lost the excitement. My case, it's a little tricky
because I'm always looking for what's wrong in order to make the car better.
I always have to be thinking. I actually think very critically, and so
when I see the car, I see all the things that I think need
to be fixed to make it better. And so it's certainly it's easy to
lose the sense of wonder or just see the flaws, because it's a difficult
thing to reconcile, because if you want to make something better, then you
must analyze it for the flaws. Yes, but then that kind of prevents
the enjoyment of it. It's a difficult it's a difficult dichotomy. It seems
that you believe in the fact that we're all going to drive electric cars,
and maybe someday only by computers, not by human beings, you still believe
in that. I think it's fairly clear that to me, at least,
that all transport will go fully electric. Better for the world from an environmental
standpoint and from an economic standpoint. If we transition to electric transport sooner,
we'll help with pollution, global warming and all that stuff. And I do
think we're headed towards an age of autonomous transport, where you know, you
just summon the car with your phone or something, and then get in and
you just tell the where you want to go and it takes you there.
It's going to happen very quickly. I think maybe in four or five years.
Yeah, But how do you react to some the public opinions of skepticism
because it seems a lot of people are watching you and say, let's see
how far this kit can go? I suppose the skepticism about anything new that's
normal and not expecting that people just believe me or But I think if you
look at generally my predictions have they are more often correct than not. Really
just talking about five years will have affordable electric cars that go long ranges and
there will be autonomous Please, let's the slag. How do you see that
contradiction? How could you reconcile? Its not exactly contradiction because I always say
it's important for civilization to be a multiplanet species. So it's not like an
escape from Earth and then we all leave Earth and try to go to Mars
or something like that. Why don't we come now saving the planet instead of
having the back door open. I do think at nineteen nine percent of our
efforts should be focused on Earth, and really ninety nine point nine percent of
our effort is focused on Earth. But I do think it's it's worth saying,
Okay, let's take one percent and try to establish a self sustaining city
on Mars and make life multiplanetary. And I think there's a couple of good
reasons for that. First of all, there's always the possibility that there could
be some terrible thing that happens on Earth that we can't and that we maybe
don't anticipate them. If you look at the fossil record and the fact that
there've been five major extinction events in the last five hundred million years, and
what happened to the dinosaurs. They used to be here, they're not around
anymore. So that's the defensive argument. And then there's the what I called
maybe the inspiration argument or the excitement the building a city on Mars would just
be this incredible adventure, that there'll be things in life that are exciting and
inspiring that when you wake up in the morning, you're like, yes,
I'm glad to be alive. And I think having this great adventure would be
like that. So there is a proverb in Chinese called c and yotn which
from two thousand years ago there was a man spend the whole day worrying about
way of the heaven falls down. So everyone laughed at him, said,
why can't you be concerned about something more pragmatic. Basically, so you're the
guy who is worrying about maybe another millennium's way that we need to move to
another planet. Okay, it's not moving to another planet, it's being multiplanet.
We're still going to be on Earth, but we'll have Mars too,
and we want to become a space frank civilization and a multiplanet species and ultimately
be out there exploring the stars. I think that's a much more exciting future
than a future where we're forever confined to Earth until some eventual extinction event.
You basically taught yourself a lot of things in a computer programming as a child,
and after taking physics and economics in college, you taught yourself auto technologies,
and then rocketry, battery technology, and so on and so forth.
What's the motivation behind all this? I just I find that I basically learn
whatever I need to learn to accomplish an objective. And I think actually most
people could do this, but they often self limit pure are capable of more
than they think. But what I found is if you simply read a lot
of books and talk to people. You can learn almost anything. But was
reading also an escape or rescue to you? As a boy in school?
I learned that you're the youngest in the class and bull it sometime, so
what I was reading to you at that time? This is, of course,
back in the days before there were video games, and TV wasn't very
good either, And I was actually for quite a while the youngest and the
smallest in the class. And my parents moved a lot, so I went
through six different schools, so it's difficult to make friends. And then one
year and then you've been in your school. The next books certainly were something
that I found comforting, and I would read all the time, just all
the time morning tonight though, the philosophers and religious texts and that kind of
thing, and a lot of nonfiction as well, read the encyclopedia. And
in fact, I remember when I was just in an elementary school, I
was reading about ion engines and I thought they were super cool. And now
we're launching satellites with ion engines. But how about real figures in history,
Zach Newton or Einstein, so and so forth. Did you make up your
mind to be someone great, someone who can leave a legacy in history for
all humanity. No, I never thought there were no. Actually, when
I was a kid, I didn't know what I would do when I grew
up. I just wanted to be involved in things that were on the cutting
edge, on things that were affecting the future of the world. But I
didn't think anything great would happen at all. Were you certain about what you
would achieve or Oh no? Was there also most like in your future?
No? Inpact, I expected to fail. I expected to fail it still
went ahead and do it. The reason I expected to fail was because most
companies fail. So if ninety percent plus the companies fail and I have no
track record of making companies work, then basically the most likely outcomings failure.
But I didn't think it was super risky because I talked to my professor and
said that I was going to try to start an internet company and that it
would probably not work, and would you mind if I came back to class
if it didn't work. He said, sure, no problem. And where
did the original investment come from? The own pocket money will finance by our
mother? Well, yeah, I had about three thousand dollars and a computer.
And then my brother came and joined and he had about I think five
thousand dollars, and then another friend of ours came he had six thousand dollars,
so we really, this is not a lot. And in the beginning
we were just we didn't have enough money to rent an apartment and an office,
so the office was actually cheaper. We slept in the office, and
we thought maybe it was more impressive to have an office. Can't have people
come to an apartment. But at night we would just sleep on the couch
in the office, and then we would go to the YMCA to shower.
And in the very beginning, we only had one computer, so the website
only worked during the day because at night I was programming software. We were
brother and a friend joined you, but you were ready to fail. How
did you convince them to join you? Oh, they thought it would fail
too. How did that work out? It worked out pretty well. In
the end. We ended up we ended up growing the business, and it
ended up getting sold from three hundred million dollars. So when a young man
someday god ten some millions and then a billion, we were blown away for
a while. At least, Yeah, you bet, absolutely what did you
do with that money? Yeah? For what was it? Like check like
that? Yeah, that was awesome, right. Yeah. In fact,
they mailed a check in. There's not a check in the mail, which
is crazy. It was like this giant check in the mail. Yeah,
that was one of the craziest things you did. Yeah, that was Yeah.
I was with Peter Tiele, one of the co founders of PayPal.
We were actually just driving up Sandy Hill Road. We're going to visit Mike
Moritz at Square Capital, and Peter was asked me, so what can this
car do? And then famous last words, I said, watch this,
and I flowed it and did a lane change and the black wheels broke loose
and the car spun around and then we hit the embankment and knocked the car
into the air, which continued spinning like a discus, like three feet in
the air. Bam landed going the original direction. It was like in a
movie and blew out the suspension and I drove to the side of the road
and I was like, Holy caw, that was crazy. After that,
I took driving lessons on the McLaren because it's like a difficult car to drive.
Are you a very prudent driver. Nowadays, I think I'm not a
I think I'm a fairly prudent driver. I had a tough choice there because
I could either provide all of the money for SpaceX or all of the money
for Tesla and then increase the chance that one of them would survive, or
I have to split the money. But if I split the money, then
maybe both will die. You can imagine. It's almost like if you had
two children and you have only so much food, what do you do?
So what was the choice? I split it? At those closest moment of
a failure, What did you say to yourself? Can I survive this?
No? You didn't question yourself. No, No, it's more it was
just the difficulty is that in those situations, there's so much responsibility that you
have to the employees and to the investors who have come along. So it
would have been extremely I would have been really disappointed if I had not been
able to keep my responsibility to have the company survive. You said you almost
had to nervous breakdown. Where did the tenacity or the resilience come from?
But I remember the closest I ever came to a nervous breakdown I never and
I never thought I was someone who I thought nervous breakdowns. That's ridiculous,
who could Why would people have such a thing. But I remember waking up
on the Sunday before Christmas in two thousand and eight and thinking, damn,
this is the closest I've ever gotten, you know, And it was looking
pretty grown because at that point we even though the fourth launch of SpaceX had
succeeded, we were still running out of money because we had three failures and
only one success, still not enough. And then the financing round for Tesla
had not closed, and we had only two days maybe three, I think
it was like two or three days maybe to close it before Christmas. I
was like, man, this is this could be a really bad end of
the year. Maybe both companies will fail screen. I didn't cry apartments,
no, no, I had. My sleep was difficult. I wasn't expecting
to call. I actually thought they were on the case because it was so
close to Christmas. I thought it was less than only a few days before
Christmas, so I thought, there's no way they're going to call them.
They must have gone home for the year. What they called them, They
said that SpaceX had won this one point four billion dollar contract. What was
your reaction to that piece of news. I said, I love you,
which I don't think is normal response for NASA contracting officers. That was good.
And then a few days later we closed the Tesla financing round on the
last hour of the last day when it was possible, which was six pm
Christmas Eve, two thousand and eight. So failure said not the most terrible
things. Whether you have to learn from it and react to it. Yeah,
exactly. When you're building something new, there's going to be mistakes,
and it's important to recognize those mistakes, acknowledge them, and take corrective action.
And the success of the company is very much more about how quick are
you to fix the mistakes, not will you make mistakes or admit mistakes.
Absolutely, and if you see the difference between a startup that is successful and
one that is not, and it's because the successful one they both made mistakes,
but the successful one recognize the mistakes fix them very quickly, and the
unsuccessful one tries to deny that the mistakes exist. Extremely smart people are sometimes
quite arrogant because they believe in what they believe in right, and so when
they face criticism less likely to admit they can make mistakes? Was that in
your case? I learned it when I was doing when I was studying physics.
In physics, you're taught to always question yourself. You're taught to always
assume that you're wrong, not assume that you're right, and you have to
prove yourself not wrong. And so I think that physics framework is really where
I lent it, and it's very effective for uncounterintuitive things that aren't obvious.
So you are very famous in saying that failure is actually an option, and
if you're not failing, that means you're not innovative in that. Yeah,
it's not like I like failure. Who likes failure? Is terrible? But
if you only do things that are certain to succeed, then you're only going
to be doing very obvious things. I know, Matacle, you can tell
where elect always tells you don't are touching up You're being innovative can be very
exciting life, but doing business sometimes persistence sometimes could be very boring. Do
you have the same fun from innovation as from business running a business rather to
be just an innovator, engineer instead of a business owner or runner. I'd
love to just do innovation and just do engineering. But you raise a good
point because a lot of life in general, in any job there is you
have to do your chores. There's nobody else can do that for you.
Yeah, I think to be successful almost anything, you can't. You have
to do the tough stuff and as well as the enjoyable stuff. You have
to do the boring stuff as well as the non boring stuff. And if
you don't do your chores, then bad things will happen. But if they
don't do the things that they don't like to do, then the company will
be in trouble. You have to you Basically, it's more fun to cook
the meal than to clean the dishes. Okay, but you need to clean
the dishes. You need to do both. Yes, you need to do
both exactly. So what are some of the ideas that excites you today?
Because there are so many brilliant ideas around the world, How could you keep
focused on the things you're doing instead of being distracted by so many other good
ideas. There's not a lot of opportunity and electrification of cars, of aircraft
and of boats, And I think there's a particular opportunity for a supersonic vertical
takeover and landing electric jet. That's something I'd love to do at some point
in the future if might time allows. Were you certain about what you would
achieve? Oh? No, I thought it was most likely. And also,
even machines are taking a lot of functions away from us, there are
still functions that we have to deliver ourselves. For example, fatherhood. So
how would you educate your five boys? Actually I created a little school.
Yeah, what kind of school could you describe to us? Sure, it's
small, it's only got fourteen kids now and it'll have twenty kids in September.
It's called ad Astra, which means to the stars. That's maybe a
bit different from most other schools is that there aren't any grades. There's no
like grade one, grade two, grade three type of thing, and making
all the children go in the same grade at the same time like an assembly
line. I know. Because some people love English or languages, some people
love math, some people love music and different abilities at different times, it
makes more sense to cater the education to match their aptitudes and abilities like That's
one principle. Another is that it's important to teach teach problem solving or teach
to the problem, not to the tools. So this would be like,
let's say you're trying to teach people about how engines work, or you could
start by a more traditional approach would be to say, we're going to teach
you all about screwdrivers and wrenchers, and you're going to have a course on
screwdrivers, a course on wrenches and all these things, and it's a very
difficult. A much better way would be like, here's the engine. Now
let's take it apart. How are we going to take it apart? Oh,
you need a screwdriver. That's what the screw driver's for. You need
a wrench, That's what the wrench is for. And then a very important
thing happens, which is that the relevance of the tools becomes a aren't so
your five boys are in that school and two when this is from school,
they like it. They like it? Yeah, and you want to keep
them away from regular schools. No, I just didn't see that the regular
schools. They weren't doing the things that I thought should be done those two
principles. They weren't adhering to those principles. I thought, let's see what
we can do, maybe creating a school will be better, and actually hired
a teacher from the school they were at who also agreed with me that there
was a better way to do it. Have they surprised you in a way
of their innovative thinking. Yeah, it seems to be going pretty well.
The kids really loved going to school. I think that's a good sign.
I hated going to school when Isaac kid it was torture. The fact that
they actually think vacations are too long. They want to go back to school.
Yeah, exactly. There are so many young people, the millennium generation
who wants to start up their own company with all these accessibility of the internet
and such a big market. What's your advice for them, because sometimes they
may easily go to the day dreaming part or the wish for thinking part.
What's the balance between imagination and pragmatism? Basically, I do think that in
terms of creating a company, what Edison said, which was like, it's
one percent inspiration nineteen nine percent perspiration, is true. A lot of it
in creating a company is execution. You start off with an idea, and
that idea is mostly wrong, and then you adapt that idea and keep refining
it, and you listen to criticism. Some criticism you discard, you try
to discard the wrong criticism, try to listen to the correct criticism, and
then engage in for self improvement and constantly refining it and making it better.
And you have to work super hard, and that's very important. And then
just keep making keep iterating on a loop which says, am I doing something
useful for other people? Because that's what a company is supposed to do.
A company is just a group of people gathered together to produce a product or
service, and a company should only exist if that product or service is truly
useful to customers. Al Masaco, we should you come way show, But
you're not going to be running Tesla all the time, or what's the next
step for you? I certainly I'll be running Tesla and SpaceX into the foreseeable
future. And a key goal with space with, a key go with Tesla
is to be able to make an affordable, great electric car, a sort
of third generation car, because you can only change the world for electric cars
if people can afford to buy a great electric car. The affordable electric cars
are not great, and the great electric cars not affordable. We need them
great electric cars that are affordable. So that's the goal with SpaceX with Tesla.
Now with SpaceX, that's a bit of a longer term goal because we
need to make reusability work with rockets. That's fundamental to improving the cost of
spaceflight by a factor of one hundred. And then we need to make the
rockets really big and be able to send large amounts of people in cargo to
Mars. And right now nobody's been to Mars. This is a very tall
Hilty client. Do you want to be one of those to try the trip?
I'd like to. I'll go as long as I think SpaceX will be
okay without me, then I'll go to Mars. So do you feel there
is a kind of destiny for you? No, I feel, but I
don't know if there's any merit to that feeling. What are the rules that
you want to live by? Because it seems that you have broken many rules,
But what are some of the rules that you would buy by. I
want to be useful and I want to be able to look back and say
that my actions had a good effect on the world. Wonderful. Thank you
so much for a time. Yeah, thanks for having me. I really
enjoyed the conversation