Elon Reeve Musk was born on June 28, 1971 in Pretoria, Transvaal, South Africa to Maye Musk, a model and dietician from Regina, Saskatchewan, Canada and Errol Musk, a South African electromechanical engineer, pilot, and sailor. He holds South African, Canadian, and U.S. citizenship and is the founder, CEO, and lead designer of SpaceX; co-founder, CEO, and product architect of Tesla, Inc.; co-founder and CEO of Neuralink; and co-founder of PayPal. In December 2016, he was ranked 21st on the Forbes list of The World’s Most Powerful People. As of October 2018, he has a net worth of $22.8 billion and is listed by Forbes as the 54th-richest person in the world.
Born and raised in Pretoria, South Africa, Musk moved to Canada when he was 17 to attend Queen’s University. He transferred to the University of Pennsylvania two years later, where he received an economics degree from the Wharton School and a degree in physics from the College of Arts and Sciences. He began a Ph.D. in applied physics and material sciences at Stanford University in 1995 but dropped out after two days to pursue an entrepreneurial career.
Zip2 and PayPal
Elon and his brother Kimbal decided to rent an office which they used as both house and working space to start their own software company in 1995. Zip2, the name of the company, was founded thanks to the money given by their father Errol and began to develop quickly in those years of computer rise. Zip2 primarily provided and licensed online city guide software to newspapers such as The New York Times and The Chicago Tribune. Elon Musk was appointed the Chief Technology Officer. Zip2 trademarked “We Power the Press” as its official slogan and continued to grow. By 1998, the company had partnered with about 160 newspapers to develop guides to cities, either locally or at full scale. In 1999 it was acquired by Compaq for 307$ million, Musk received 7% of this sale, earning him 22$ million. In the spring of 1999, Elon decided to reinvest 10$ million by co-funding an online financial services and email payment company named X.com. In 2000, they merged with Confinity, a company that provided similar services, and decided to change the focus of the company to only the money transfer service, calling themselves PayPal. It expanded rapidly throughout the year driven mainly by viral marketing campaigns until company executives decided to take PayPal public in 2002. Paypal’s IPO listed under the ticker PYPL at $13 per share and ended up generating over $61 million. Later that year, eBay acquired it for 1.5$ billion and since Musk was the company’s greatest shareholder, he received 165$ million.
The multiplanetary dream After his cash-out from PayPal, Elon Musk was already thinking on what he was going to do next. He had various ideas in mind, many problems that he wanted to solve not for himself, but rather for the whole humankind. He wanted to do something different and not directly related to the internet, his main field, and decide to begin to explore new projects. As he said in a recent interview for Khan Academy, he was in America, the land of explorers and this gave him the spark to reach out of his comfort zone.
He had three main ideas in mind: first he wanted to make people care more for the environment, make them aware and give them the instruments to pollute less; second point is related to the environment but in a different way. Musk wanted to improve the transportation systems, make them more efficient, not dependent from fossil fuel, and so pointing to electric energy. Third point, he firmly believed that humans, proceeding at this tech improvement rate, would necessarily need to become a multiplanetary species, as an important step in expanding, if not preserving, the consciousness of human life and to do so he wanted to reignite space exploration.
So in 2001, Musk conceptualized “Mars Oasis”, a project to land an experimental greenhouse on the surface of Mars in an attempt to regain public interest in space exploration and to increase the budget of NASA. He decided then to travel to Russia with Adeo Ressi, his college partner, and an aerospace expert to begin a series of meetings to buy rocket that would bring the payload to Mars. Musk wasn’t really considered by the companies for his lack of rocket knowledge and so the first meeting ended without any progress. Musk felt that it was his right to be part of this idea, so he read and studied various books on the subject.
In 2002 the group met again with Kosmotras, and were offered one rocket for 8$ million, however, this was seen by Musk as too expensive; Musk consequently stormed out of the meeting. On the flight back from Moscow, Musk realized that he could start a company that could build the affordable rockets he needed.
Using approximately 100$ million from his PayPal cash-out, Musk founded Space Exploration Technologies or simply SpaceX in June 2002. The newly CEO and CTO calculated that the raw materials for building a rocket actually were only 3 percent of the sales price of a rocket at the time. By applying vertical integration and the modular approach from software engineering, SpaceX could cut launch price by a factor of ten and still enjoy a 70-percent gross margin, and vertical integration’s reason was Musk’s belief that reusable rockets couldn’t be built with components from pre-existing aerospace suppliers. The first launch of the Falcon 1, name given to remember the Millennium Falcon from Star Wars, costed just 6$ million, while usually the average cost at that time was about 25$ million. Musk had been able to lower to a quarter of its actual cost the launch by building the smallest useful orbital rocket instead of risking bankruptcy for his company with a more complex rocket that might have failed.
Even if the path was not easy and nearly led the company to failure, in 2006, after Falcon 9, a newly developed rocket, had a successful launch, SpaceX was awarded a contract from NASA to continue the development and test of the SpaceX Falcon 9 vehicle and Dragon spacecraft in order to transport cargo to the International Space Station. In 2008, 1.6$ billions was the reward NASA Commercial Resupply Services program gave to SpaceX for 12 flights of its Falcon 9 rocket and Dragon spacecraft to the Space Station. Musk was living in great distress, working day and night to solve his company’s problems, until with the funds of NASA he was able to focus again of his long term scope, the human colonization of Mars.
On 22 December 2015, SpaceX successfully landed the first stage of its Falcon rocket back at the launch pad. It was the first time in history that such a feat had been achieved by an orbital rocket and it was a significant step towards rocket reusability, lowering the costs of access to space. This first stage recovery was replicated several times in 2016 by landing on an autonomous spaceport drone ship, an ocean based recovery platform. In late 2016 SpaceX intends to launch its Falcon Heavy rocket, which will be the most powerful operational rocket in the world.
In 2015, the company asked permission to the federal government to begin testing for a project that aims to build a constellation of 4000 satellites capable of beaming the Internet to the entire globe, including remote regions which currently have not internet access.
Musk stated in June 2016 that the first unmanned flight of the larger Mars Colonial Transporter (MCT) spacecraft is aimed for departure to the red planet in 2022, to be followed by the first manned MCT Mars flight departing in 2024. He has expressed his interest in someday travelling to the planet, stating ‘I’d like to die on Mars, just not on impact.’ To achieve it, Musk plans to establish cargo flights to Mars, getting the first delivery there by 2018. A rocket every two years or so after that could provide a base for the people arriving in 2025 after a launch in 2024. Musk believes that by 2035 at the latest, there will be thousands of rockets flying a million people to Mars, in order to enable a self-sustaining human colony.
Tesla Motors was founded in 2003 by Martin Eberhard and Marc Tarpenning. The name is of course inspired by Nikola Tesla, a Serbian inventor that wanted to change the world at the beginning of the 20th century.
Elon Musk was the controlling investor in the first financing round in 2004 and became a chairman in the board of directors as well as an fundamental actor in the operations thanks to the 7.5$ million spent in the project. He truly believed in Tesla and wanted to change the public opinion over electric cars. The primary goal was to start with a premium, high-end vehicle, to catalyse the attention and attract affluent investors, as to emulate typical technological-product life cycles and initially enter the automotive market with an expensive. As the company, its products, and consumer acceptance matured, it had to move into larger, more competitive markets at lower price points.
After having consulted on the strategy, there had been other rounds of investment were Musk contributed substantially, always leading in the capital invested and able to attract friends in the tech community as Sergey Brin and Larry Page, but the actual first model wasn’t yet in production. In 2008, following the financial crisis, Musk assumed leadership and became CEO, avoiding bankruptcy by firing 25% of Tesla employees. The Tesla Roadster came out in 2006, but just as a prototype, and finally in 2008 the production began and Musk had decision making for the product design at a detailed level.
The Roadster is an all-electric sports car that was able to raise 187$ million, but wasn’t sold as much as wanted, just 147 cars. The awareness in the market was spread. Many people were finally understanding that electric cars were not just slow and boring cars, but could also attach to their environment-friendly etiquette the emotion that could give a real sports car. Later on in 2009, the next model of Tesla was announced, the Model S, bringing a huge wave of hype for Tesla, so much that Daimler AG decided to acquire 10% of Tesla, giving them the boost needed continue develop the model S.
In June 2009, Tesla had is turnaround. First it was approved the receiving of a low interest loan of 465$ million by the United States government as an incentive to 16 produce non-polluting vehicles and to further develop the battery technology. Then, at the end of the month, the 29th, Tesla Motors launched its initial public offering (IPO) raising 226$ million for the company. After Ford Motor Company in 1956, Tesla was the first American car maker to go public.
It was time for the company of Palo Alto to proceed to the next model in its business strategy. After the low-volume high-price Roadster, it was the Model S time with its mid-volume mid-price. Finally the delivering of cars began in 2012.
Model S was a huge success for Tesla, so much that car market competitors began feel the pressure and began to enter in the alternative-fuel market. They were amazed on how a small Californian start-up, run by people who knew nothing about car business, had such success. In order to allow quick charge for the new Model S, Tesla began to build a network of fast charging stations, that had to be spread all over to allow costumers a quick and efficient way to charge in case of long journeys.
The business was running good, Tesla had many collaborations with other car makers (Mercedes, Smart, Toyota) and decided to make available to everyone their patents. The reasons expressed for this stance included attracting and motivating talented employees, as well as to accelerate the mass market advancement of electric cars for sustainable transport. In the same year, Musk reduced his salary to one dollar. And, similar to Steve Jobs and others, the remainder of his compensation was in the form of stock and performance-based bonuses.
In 2015 it was the turn of the Model X to be put in production. Still being a mid-volume mid-price vehicle, but aiming at the SUV market. Well accepted after his first days, Tesla wanted to become a company with almost 100% of vertical integration, controlling all the supplies needed for their cars. That’s why they decided to establish in Nevada, the GigaFactory, an immense industrial site completely focused in the production of batteries. The plant, with the cost of about 5$ billion, would employ 6,500 people and reduce Tesla Battery costs by almost 30%. The state of Nevada helped to make this come true through a 1.3$ billion tax incentive.
17 In March 2016, Tesla revealed his latest model, Model 3, the high-volume low-price car that Musk wanted to be named Model E, but was negated by the fact that Ford already owned that copyright. Musk wanted the first three models to spell S-E-X but settled with ‘S3X”. However, the digit ‘3’ will be stylized like three horizontal bars, making it indistinguishable from the ‘E’ in Tesla’s logo.
Apart from Musk’s strange naming criteria, Model 3 has been the biggest one week launch of any product ever. Tens of thousands of people were reported waiting in lines to reserve their spot. During the Model 3 unveiling event, it was revealed that over 115,000 people had reserved the Model 3 prior to the event. As of April 7, 2016, one week after the unveiling, Tesla Motors reported over 325,000 reservations, more than triple the 107,000 Model S cars sold by the end of 2015.
The cash in of the company has unprecedented records. Musk announced plans for other projects, even in other vehicle categories; he is continuously improving the autonomous driving experience and enlarging his partnership deals with other companies. Up to now Musk owns 22% of Tesla and it is the project that occupies him the most.
In August 2013, Elon Musk revealed a concept he had idealized for some time. His project was about a high speed transportation system that would use pressurized capsules travelling inside tubes with reduced pressure powered by air compressors, similar to the old post office sorting system. The mechanism for releasing the concept was an alpha-design document that, in addition to scoping out the technology, outlined a notional route where such a transport system might be built: between the Greater Los Angeles Area and the San Francisco Bay Area. Musk decided to establish the foundations of his concept and create design competitions for students and others to build Hyperloop. This proposal would make travel cheaper than any other transportation system for long distances. The alpha design was proposed to use a partial vacuum to reduce aerodynamic drag, which it is theorized would allow for high- speed travel with relatively low power, with certain other features like air-bearing skis and an inlet compressor to reduce air drag. The alpha design document estimated the total cost of an LA-to-SF Hyperloop system at about 6$ billion. With the help of engineers of Tesla and SpaceX, the track for testing is under construction.
Developments in high-speed rail have historically been impeded by the difficulties in managing friction and air resistance, both of which become substantial when vehicles approach high speeds. The Hyperloop concept would eliminate these obstacles by employing magnetically levitating trains in evacuated or partly evacuated tubes, allowing for speeds of thousands of miles per hour. Nowadays there are many proposed routes for the Hyperloop system and Musk is working in collaboration with many countries to achieve this goal. Also, as if he didn’t knew it, if Hyperloop would be a success if would also be the perfect transportation system for a future Mars colony.
Solar City and Open AI
Solar City was founded in 2006 by two brothers, Peter and Lyndon Rive, on the suggestion of a concept by Elon Musk, their cousin, now chairman and largest shareholder. They idea was simple: installing solar panels would decrease the effects of global warming, a concept stressed deeply by Musk. The company grew enormously already in the first year thanks to a marketing campaign without equal and to the many advantages offered to the costumer. In 2007 it was already the market leader in California and in 2013 the second largest solar installation company in the United States. Since his three companies were doing so good, Tesla, SpaceX and Solar City, Elon wanted to put them under a save roof with each one covering the shoulders of the other. So in 2016, SpaceX acquires 90$ million of Solar City stock while Tesla formally submitted a merging contract with the reason that integrating Tesla batteries and solar power would be a perfect composition. As of now Musk owns 22% of Solar City.
Open AI is a research company created by Elon Musk in 2015 specialized in the development of artificial intelligence. There is a great concern of Musk about AI because he thinks that it would become a very powerful tool that the humans would probably not be able to counteract unless with specific rules set in the programming of the system. His idea is to make it available to everyone in a safe and beneficial way, without letting privates or governments be able to use it power for illicit tasks.