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Elon Musk, Future-of-Travel’s New Disrupter-in-Chief

May 11, 2014 3:00 pm

Skift Take

Elon Musk is disrupting several industries at the same time. Why limit your horizons when you have it all going on.

— Dennis Schaal

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Noah Berger  / Reuters

Tesla Chief Executive Office Elon Musk celebrates at his company's factory in Fremont, California, June 22, 2012, as the car company began delivering its Model S electric sedan. Noah Berger / Reuters


Elon Musk was a nervous wreck.

The entrepreneur many today consider the next Steve Jobs hardly seemed like a visionary genius in 1995 when he stood uninvited in the lobby of Netscape Communications’ headquarters in Mountain View, trying to muster enough courage to launch a career.

Fresh out of college with degrees in physics and economics, the 24-year-old Musk had already tried e-mailing the company his resume. Netscape, makers of the first mass Web browser, never replied. So Musk, who had left his native South Africa to find a tech job, showed up in person. But he was too shy to approach anyone.

“What am I going to say: ‘Please give me a job’?” Musk recently recalled. “They’d be like, ‘Call security — there’s this weird kid here.’ ”

He left empty-handed.

The image of Musk retreating from Netscape seems hard to reconcile with a self-made billionaire who now speaks about colonizing Mars. But success, especially repeated success, has a way of silencing doubt, even among those around you.

“I’ve seen those situations where it makes sense to push people beyond what they think they can do, because usually people can do more than they realize,” Musk said in an interview. “When the company’s life is at stake, everyone has to work as hard as possible. Anything less than that seems crazy to me.”

Musk oversees a trio of companies — Tesla Motors, SpaceX and SolarCity — that sell electric cars to China, ferry supplies to the International Space Station and blanket America’s rooftops with solar panels. His proposed “Hyperloop” would whisk commuters from Los Angeles to San Francisco at 760 mph through tubes along Interstate 5.

The 42-year-old with a soft voice and penetrating stare maintains a grueling schedule.

Fly to the Bay Area Monday night to tend to Tesla, based in Palo Alto. Fly back to Los Angeles on Wednesday night to run SpaceX, the private spacecraft company headquartered in Hawthorne. Reserve weekends for his wife, British actress Talulah Riley, and Musk’s five sons from his first marriage to Canadian novelist Justine Musk, all of whom live in Bel Air, the wealthy in Los Angeles. Oh, and find time to chair board meetings of SolarCity, whose CEO is his cousin Lyndon Rive.

It isn’t simply a matter of allocating hours. Musk, who made his fortune on Internet startups, nearly lost it all trying to keep both SpaceX and Tesla alive. He risked plunging deep into debt if either collapsed. Even Musk doubted their survival.

He did it anyway.

“You can’t expect others to put their assets at risk if you’re not prepared to risk your own,” Musk said. “If the general’s at the front lines, the troops will fight. If the general’s hanging back and making sure he’s safe, the troops are like, ‘I’m not so sure about this.’ ”

Like ‘The Matrix’ hero

Musk can be demanding even with family. Rive likens Musk to the hero of the “Matrix” movies who discovers that the everyday world is a computer simulation made up of endless strings of code.

“You know ‘The Matrix’? You know where Neo can see the zeros and ones? That’s what it’s like working with Elon,” Rive said. “In a board meeting, he’ll see the speed bumps that lie ahead before we even know they’re there and tell us to fix them. And it’s challenging, because sometimes you can’t see it.”

That can be tough on people who take Musk’s critiques personally, Rive said. “If you don’t take offense, he’ll push you to be your best,” he said.

Tesla, which narrowly survived its infancy, now ships Model S sedans to waiting customers across North America, Europe and Asia. The employees and red-armed robots bustling about its Fremont factory crank out more than 600 cars per week and still can’t fill all the backlogged orders. SpaceX has a long-term launch contract with NASA.

“This is a special entrepreneur,” said Steve Westly, the longtime venture capitalist and former California politician who served on Tesla’s board. “He’s brilliant, driving, he’s resourceful, he’s striving and he doesn’t take no for an answer. He’s got the ability to disrupt multiple industries at the same time.”

Disrupter-in-Chief

Tesla’s goal is to speed the transition to electric cars, cut oil use and fight global warming. The popularity of the Model S, which has become the status symbol of choice in California, has already forced other luxury automakers to follow with their own plug-in cars. Meanwhile, SolarCity, which offers homeowners solar power for no money down, threatens the business model of traditional electric utilities.

In the wake of Jobs’ death, Musk has become the country’s Disrupter-in-Chief.

“There’s a change-the-world mentality with both that is almost messianic in its zeal,” said venture capitalist Steve Jurvetson, who once worked for Jobs and now sits on Tesla’s board.

Like Jobs at Apple, Musk at Tesla has focused on crafting sleek pieces of engineering that consumers will crave. Before, electric cars tended to be small, slow and spartan. The Model S is anything but, with Consumer Reports calling it the best car its experts had ever tested. Tesla’s first car, the low-slung Roadster, clocked 0 to 60 mph in 3.7 seconds.

“If it weren’t for the success of Tesla, I think the electric vehicle market would have pulled back substantially,” said California Lt. Gov. Gavin Newsom, who owns both a Roadster and a Model S. “You had a lot of people playing in the electric vehicle space but not really capturing people’s imagination. And Musk came in and went in the exact opposite direction.”

Also like Jobs, Musk doesn’t accept excuses or half-baked answers, associates say.

“One thing Elon is great at is he asks, ‘Why?’ in a very compelling way,” said Marc Tarpenning, one of Tesla’s founders. “You think you know the answer, but when he really pushes on it, you realize you don’t. Sometimes the person really can’t answer, because it’s just always been that way. And that’s not good enough.”

But Tarpenning too sees that relentless questioning as one of the reasons Tesla and SpaceX survived.

“Maybe you have to be like that,” says Tarpenning, who left Tesla in 2008 and now serves on the Woodside Elementary School District board. “Getting into space? There’s just a handful of nation-states that can do it — and Elon.”

Musk spent his childhood in South Africa immersed in comic books and video games, playing soccer with friends and launching model rockets with his father, Errol.

At age 10, he spotted a computer at an electronics store in Johannesburg. The Commodore Vic 20 contained less memory than a modern toaster oven. To the young Musk, the machine suggested incredible possibilities.

“I was like, ‘Whoa, I mean, you can actually write games and programs?’ ” he said. “It seemed like the most amazing thing.”

Musk saved up his allowance for months before finally persuading Errol to cover half of the computer’s cost. The machine came with a book on programming, which Musk consumed. He soon found others.

Left South Africa at 17

At age 17, Musk left South Africa — first for his mother’s home country of Canada, then the United States a few years later — to join the young tech industry. He followed two years at Queen’s University in Kingston, Ontario, with a transfer to the University of Pennsylvania, earning bachelor’s degrees in both physics and economics.

“I basically just wanted to work on technology that I thought was interesting and seemed kind of magical and could have a big effect on the world,” Musk said.

When Musk didn’t land a job at Netscape, he kept writing code and generating patents. He had been accepted to a doctorate program at Stanford University, but decided to focus on his software instead. And those patents — for delivering maps, directions and phone directory information on the Internet — formed the basis of a company, Zip2, that he launched with his younger brother Kimbal.

Compaq bought it in 1999 for $307 million in cash and $34 million in stock options, with Musk netting $22 million. That same year, Musk co-founded a startup that merged with another and became PayPal, the online payment system. In 2002, eBay bought it for $1.5 billion in stock. Musk’s share: $165 million.

Musk plowed the proceeds into SpaceX, founded in 2002, and Tesla, born the following year. Each flowed from one of his long-term passions. Space had fascinated him since childhood. He had been talking about electric cars since college, convinced the world needed them to fight climate change.

And yet, at times he thought both companies would fail. They were, at the very least, long shots.

“I didn’t know how to build rockets, or build anything really,” Musk said in February, at a forum in San Francisco on innovation. “What are the odds of a new car company succeeding? Pretty darn low.”

The first three rockets launched by SpaceX failed. Tesla, meanwhile, got caught in the financial collapse of 2008, which hit just as the company was seeking money to open a factory for what would become the Model S. By year’s end, Musk faced a stark choice: sink what was left of his capital into Tesla and SpaceX, or let both companies die. Complicating matters, he was in the midst of a painfully public divorce from his first wife, Justine Musk, whom he had met and pursued at Queen’s University.

Musk decided to double down, going into debt to raise money for Tesla.

“In a sense, he bet the house,” Jurvetson said. “Tesla Motors would not exist today if Elon Musk did not personally save it in the bravest, boldest step I’ve seen an entrepreneur take, bar none.”

Musk now calls the decision “a no-brainer,” although failure would have wiped him out. The real decision, he said, was whether to split his capital between Tesla and SpaceX, or try to save one company while watching the other die. He chose the split.

“Both companies narrowly made it, but it could easily have been the case that both companies starved to death,” Musk said.

Government aid

In each case, the federal government helped. SpaceX won a $1.6 billion NASA contract to launch supplies to the International Space Station. Tesla landed $465 million in federal stimulus loans to open its Model S factory. Republicans fumed that Musk was taking taxpayer money to build novelty cars for the rich, complaints that finally subsided when Tesla paid back the loan nine years early.

Tesla is developing its next car — the Model X crossover, due next year — and will build a $5 billion factory to produce lithium-ion batteries. The first manned flight of a SpaceX spacecraft may come next year. SolarCity, growing at breakneck speed, is testing energy storage devices for homes and business — using batteries from Tesla.

And there remains the challenge of settling Mars, a goal big enough to occupy anyone for a lifetime. But some people who know Musk suspect he will find other ideas to pursue.

“I hope he does not, but I think he will,” Rive said.

David R. Baker is a San Francisco Chronicle staff writer. E-mail: dbaker@sfchronicle.com Twitter:@DavidBakerSF ___

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