Elon Musk on His Work and the Future

Left, the SpaceX Falcon 9 test rocket lifts off from Cape Canaveral, Fla., on June 4, 2010. Right, President Obama and entrepreneur Elon Musk approach the Falcon 9 rocket on April 15, 2010. John Raoux / AP (left); Alex Brandon / AP

It’s hard to tell if Elon Musk is a brave visionary or a quixotic dreamer. The 39-year-old has used the fortune he made from cofounding PayPal, the online payment operation, to start a commercial space company, called SpaceX. His hope: to create a transport service for NASA’s astronauts to get to and from the International Space Station located 200 miles above the Earth. It sounds wild, but President Barack Obama has already endorsed outsourcing some space transport to commercial companies. And in 2008, SpaceX won a $1.6 billion contract with NASA to deliver cargo to the space station with Musk’s Falcon 9 rockets. Aside from space travel, he also has an electric-car company, Tesla, and a solar-power firm called Solar City. Musk, who serves as CEO of SpaceX and Tesla, spoke with NEWSWEEK’s Joel Schectman about his work, the future, and what he thinks it takes to succeed. Excerpts:

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The recession’s technically over. How do you successfully lead your companies in a post-recession world?

[Actually], all three companies almost died in 2008. With SpaceX, we had a third unsuccessful attempt to reach orbit. With Tesla we had a financing round that fell apart because [of] the economy. And Solar City had a [lease] deal with Morgan Stanley that couldn’t go through because they themselves were in danger of death. Fortunately, for SpaceX, our fourth launch reached orbit and then at the end of 2008, we were awarded the [$1.6 billion] contract. For Tesla, we put together an internal financing round, and Solar City managed to squeak through by shifting its sales away from leases towards cash sales. The key was adapting very quickly to a changing environment. You don’t want to engage in wishful thinking where you just sort of hope that the economy is going to improve. You have to assume its not going to improve, and how do you make it through in a worst-case scenario.

You mentioned those test-flight failures. How do you deal with failure when it happens?

The thing with reaching orbit is that it is an incredibly difficult technical problem and you only know if you got your answers right after launch. You can’t simulate going at 5g’s in a vacuum [here on Earth]. So, it’s important for the leader of a company to have a very detailed understanding of the business and the products. Sometimes I will pick a particular thing and drill deep into that to understand how we are solving issues and [determine whether there are] broader systemic problems.

So what are the biggest challenges facing private commercial space flight?

The holy grail that really needs to get sorted out in space is an orbit-class rocket [that can be used again and again]. The attempt was made [to do that when designing] the space shuttle but that is only partly reusable. The truly reusable orbit-class rocket will be one of the most important inventions in history. It’s the difference between humanity being forever stuck on Earth and humanity being a multiplanetary civilization. That’s what we hope to do at SpaceX, but it’s incredibly difficult; that’s why no one has ever succeeded.

Why colonize other planets?

It’s not to distract from problems on Earth. In fact, Tesla and Solar City are about solving what is probably the biggest problem of the 21st century—sustainable production and consumption of energy. I am quite optimistic about life on Earth. But I think there is a small chance of something happening on Earth which is either a natural disaster or manmade. [So interplanetary travel] is an insurance policy on life as we know it. You don’t buy life insurance because you expect to die. You buy it because you might.

Your companies would have seemed outlandish 15 years ago. How has technological change allowed you to push boundaries?

With Tesla you have this macrotechnological change—the invention of the lithium ion battery. That’s what was key to enabling the electrification of transport. There is no such macrotechnology event in space. We are trying to create that technology.

So what’s the Silicon Valley approach to space innovation?

You have to be very focused on the best ideas. And you have to have a very flat hierarchy. We work in a dense cube environment. I don’t even have an office. I am very focused on the effective flow of communication. As companies get bigger, the production often improves because of greater specialization of labor but then later declines because the chain of communication becomes more complex. You have to go all the way up the management chain and it takes a very long time to get things done and the message often gets lost.

More broadly speaking, what new wave of innovation do you think will help the United States out of this economic slump?

I think the biggest single driver of economic growth will be the sustainable-energy economy. We spend unbelievable amounts on oil and it’s responsible for some huge percent of the economy. We have this massive wealth transfer out of the economy. Once we get sustainable energy, that transfer will stop and that will help the collective wealth. The jobs that will be created will be very significant.

This all has an environmental component. How do you find a balance between being good to the planet and running your business well?

In the case of SpaceX, it’s actually very clean. We have solar panels on the roof and we try to be energy efficient. But when it comes to rockets there is no way to get away from liquid fuels. All forms of transportation will be electric at some point except rockets. I think Tesla and Solar City are far better than carbon offsets. This is the most respectable way for me to achieve good for the environment—by accelerating the adoption of electric cars through Tesla and with Solar City.

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