During my January interview with Elon Musk, we got a glimpse inside the mind of this revolutionary entrepreneur. We explored his inspiration for disruptive startups like SpaceX, Tesla Motors and SolarCity; and he gave some advice on how to build, motivate and retain excellent teams; as well as some warnings about the hazards of over-committing and sleep deprivation.
He told me, “I really didn’t want to be CEO of two startups at the same time. It was not appealing. And shouldn’t be appealing by the way, if anyone is thinking that’s a good idea. It’s a terrible idea.”
On how to build, motivate and retain an excellent team (@1.05.00 on video)
“A company is a group of people that are organized to create a product or service. That’s what a company is. So in order to create such a thing, you have to convince others to join you in your effort and so they have to be convinced that it’s a sensible thing, that basically there’s a some reasonable chance of success and if there is success, the reward will be commensurate with the effort involved. And so I think that’s it…getting people to believe in what you’re doing – and in you – is important.”
“In the beginning there will be few people who believe in you or in what you’re doing but then over time, as you make progress, the evidence will build and more and more people will believe in what you’re doing. So, I think it’s a good idea when creating a company to create…to have a demonstration or if it’s a product to have a good mark up or even if it’s software to have good demoware, or to be able to sketch something so people can really envision what’s it’s about. Try to get to that point as soon as possible. And then iterate to make it as real as possible, as fast as possible. I think that makes sense.”
On time management and sleep
“Sleep is really great. I find if I don’t get enough sleep then I’m quite grumpy. Obviously, I think most people are that way. And also I try to figure out what’s the right amount of sleep, because I find I can drop below a certain threshold in sleep and although I’d be awake more hours and I could sustain it, I would get less done…my mental acuity would be affected. So I found generally, the right number for me is around six to six and a half hours on average per night.”
“Having a smart phone is incredibly helpful because that means you can do email during interstitial periods, like if you’re in a car (he has a driver), you’re walking, in the bathroom, everywhere. You can do email practically when you’re awake and so that’s really helpful: to have email for SpaceX, and Tesla integrated on my phone. And then you have to apply a lot of hours to actual working.”
On where his inspiration strikes (hint: not just Burning Man)
“It’s kind of a cliche, but it happens a lot in the shower…I don’t know what it is about showers (laughter)…I kind of stand there in the (long) shower and…not to mention the burning man epiphanies. Those are huge…There are some times. like late at night if I think about something and I can’t sleep and I’ll be up for several hours, sort of pacing around the house, thinking about things and occasionally I’ll sketch something or send myself an email or something like that.”
On keeping it in the family (Musk has five sons, all under 9)
“I do drag them along on a lot of things…they’re remarkably unimpressed. I wish they were more interested…maybe they’ll get more interested later. If they’re really interested in working at Tesla or SpaceX then I’d help them do that. I’m not sure I’d necessarily want to insert them into the CEO role at some point. If the rest of the team and the board felt that they were the right person then that would be fine but I wouldn’t want people to feel that I’d installed my kid there. I don’t think that would be good for the company or the kid really.”
“I was of the school of thought that it’s best to give away 99% or more of one’s assets, the Buffet School of thought. I’m mostly inclined in that direction, but after seeing what happened with Ford, GM and Chrysler, where GM and Chrysler went bankrupt and Ford did not, and Ford seemed to make better long term choices…in part because of the influence of the Ford family, I thought, well OK, there may be some merit in having some longer term family ownership. At least a portion of it. It acts as a positive influence…in the long term interest of the company…so the company does proper long term things. Look at what happened also in Silicon Valley with Hewlett Packard. It’s quite sad. That to some degree is because there was much diminished influence by the Hewlett and Packard families. I think they should have prevailed…when they were opposed to the merger that took place at one point. I think they were right, actually.”
On the likelihood of a SpaceX IPO this year
“No, there’s no IPO planned. I must say, running a public company does have its drawbacks. In the case of Tesla and Solarcity …we had to raise capital and we had a kind of complex equity structure that needed to be resolved by going public. So I thought we kind of needed to do that in those two cases. We don’t have to do that at SpaceX. I think there’s a good chance we will at some point in the future, but SpaceX’s objectives are super longterm and the market is not. So I’m a bit worried that if we did go public, certainly if we went public too soon, that the market pressure would force us to do short term things and abandon longterm projects…(like) going to Mars is very longterm.”
On the Hyperloop
“I did promise that I’d do some paper on the Hyperloop idea and things got a little hectic toward the end of last year because I’d committed to make these milestones at Tesla to the public market and I had to stay true to that obligation, which required an insane level of work and attention.” Check back soon at Fresh Dialogues for updates on the Hyperloop.
On how the SolarCity IPO got done, “by the skin of its teeth”
Elon Musk: “(It) was a very difficult IPO to get done. That IPO occurred just by the skin of its teeth. It was such a tough one…If it wasn’t in December, it would mean pushing it out quite a bit and the problem is, we’d already pushed it out quite a bit. So if we didn’t go public, we’d have to do a private round and then…the whole thing wouldn’t feel right. It’s like you’re sitting at the altar, and you don’t do the wedding. It’s a bit awkward. So we really needed to do it and I think if we hadn’t done it, people would have looked at it as a failure. It wouldn’t have been good. There have just been too many failures…not enough success, let’s say, in the solar arena. We need to chalk up success…”
Alison van Diggelen: “It was a rare piece of sunshine for the solar industry last year…”
Elon Musk: “Right. Exactly. Ironically for the solar industry doesn’t have a lot of that.”
On why Musk wants to go to Mars before he’s ‘too old’
“I guess I’d like to be able to go to Mars while I’m still able to manage the journey reasonably well. I don’t want to be like 75 and go to Mars…It could be mildly arduous…I’d like to get there ideally in my 50’s. That would be kind of cool. I aspire to make that happen, and I can see the potential for that happening. I’m not saying it will happen, but I think it can happen…I’ll try to make it happen.”
On Tuesday evening, Elon Musk, CEO of Tesla Motors sat down with me at the Computer History Museum in Mountain View to discuss his life’s work. During the hour long interview, he gave a detailed account of Tesla Motors’ early days and how he became the reluctant CEO.
Why reluctant? Well, he was in the throws of getting his other little startup off the ground…the rocket company, SpaceX. If you missed that story, SpaceX has become the de facto replacement for NASA’s space shuttle and serves the International Space Station.
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But back to electric cars…Here’s what Elon said:
“I really didn’t want to be CEO of two startups at the same time. It was not appealing. And shouldn’t be appealing by the way, if anyone is thinking that’s a good idea. It’s a terrible idea.”
And yet, he’s somehow making it work. Tesla’s Model S was picked as Motor Trend’s Car of the Year 2013 and he doesn’t seem quite so reluctant these days. In this transcript excerpt, he also offers this advice to entrepreneurs:
“In the beginning there will be few people who believe in you or in what you’re doing but then over time, as you make progress, the evidence will build and more and more people will believe in what you’re doing… it’s a good idea when creating a company to have a demonstration… a good mark up or if it’s software to have good demoware, or to be able to sketch something so people can really envision what’s it’s about.”
The interview aired this week on KQED radio and the podcast is now available on this page. Or listen here
Here’s a transcript excerpt.
The Reluctant Tesla CEO: Transcript of January 22, 2013 Interview with Elon Musk
Alison van Diggelen: Shortly after founding SpaceX, you then got interested in electric vehicles and I understand you watched the vigils for the death of the EV1, when they were all smashed. Talk about that and why you felt even after founding SpaceX: ‘I have to get involved with Tesla.’
Elon Musk: Yea, well. My interest in electric vehicles goes back a long time…goes back 20 plus years.
Alison van Diggelen: To the dating scene…(Musk refers earlier in the interview to the fact that in his college days, he used to bore dates with his fascination with electric cars and says, ‘it was not a winning combination…but recently it’s been more effective.’
Elon Musk: Exactly and in fact the original reason I came to Silicon Valley was to work on electric vehicle energy storage technology. I thought that big car companies would develop electric cars. It was obviously the right move and I thought that was vindicated when General Motors and Toyota announced…General Motors was doing the EV1, Toyota did the electric RAV 4, the original one. And they made these announcements and brought those to market and I thought: well this is great, we’re going to have electric cars, GM is obviously going to do the EV2 and 3 and then just keep getting better. Everything would be cool.
And then when California relaxed its regulations on electric cars, GM recalled all of the EV1s and crushed them into little cubes, which seemed kind of nutty. So in fact, the people didn’t want their EV1s recalled…
Alison van Diggelen: Yes…
Elon Musk: In fact they tried court orders to stop the cars from being recalled. They held a candlelit vigil, OK in the yard where the cars were crushed…now…
Alison van Diggelen: Did you attend that vigil?
Elon Musk: No, I did not.
Alison van Diggelen: You’re moved by it.
Elon Musk: Well certainly, I mean, it’s crazy…When was the last time you heard about any company… customers holding a candlelight vigil for the demise of their product? Particularly a GM product? (laughter) I mean what bigger wake up call do you need? Like hello! The customers are really upset about this. They’d really prefer if it didn’t get recalled. So that kind of blew my mind. So it was like ‘wow.’
And then we had the advent of lithium ion batteries which really is one of the key things to make electric cars work, but it’s still nothing. And so in 2003, I actually had lunch with one of the other cofounders of the company JB Straubel (now CTO of Tesla Motors) who was actually working on a hydrogen airplane or something. He mentioned to me the tzero car that was done by AC Propulsion.
AC Propulsion are the sort of guys who had actually been on the EV1 program and they took a gasoline sports car, a kit car and outfitted it with lithium ion batteries, consumer grade cells, and they created a car which was essentially the precursor of the (Tesla) Roadster, and had very similar specifications: sub 4 seconds zero to 60 mph, 250 mile range and also a two-seater sports car. But it was quite primitive. It didn’t have a roof for one thing. At all. And none of them had doors. But it didn’t have any safety system at all, no air bags, it wasn’t homologated, so you couldn’t sell it. So in order to sell that car, in order to create a commercial version of that car, there was a fair bit of work that was required.
I kept trying to get AC Propulsion to commercialize the tzero, and I said: ‘Look, I’ll fund the whole effort, we really need to do this.’
But they just refused to do it. They wanted to make an electric Scion. Which in principle sounds good, but in fact it would have cost $75,000 and nobody wants to buy a $75,000 Scion.
The technology was just not ready. There was just no way to make a good value proposition.
Alison van Diggelen: What was it that compelled you to say: ‘I have to be CEO here and lead this company.’ Why not just say: ‘I’ll help you JB and get this rolling’?
Elon Musk: Well I really didn’t want to be CEO of two companies. I tried really hard not to be actually. Yes. So AC Propulsion finally said…I told AC Propulsion: ‘If you’re not going to do this, I’m going to create a company to do this.’
And they said well, there’s some other guys who’re also interested in doing that and you guys should combine efforts and create a company. And that’s basically how Tesla came together.
And then we had a lot of drama (laughter). But since I’d provided like 95% of the money, so I could have been the CEO from day one… but I really didn’t want to be CEO of two startups at the same time. It was not appealing. And shouldn’t be appealing by the way, if anyone is thinking that’s a good idea. It’s a terrible idea.
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Alison van Diggelen: It’s one thing to have all those wonderful ideas in the shower and at Burning Man, but it’s another thing to build, motivate and retain a team of excellent people. Can you talk about some tips and some things you’ve learned that obviously work for you?
Elon Musk: Yeah. Well a company is a group of people that are organized to create a product or service. That’s what a company is. So in order to create such a thing, you have to convince others to join you in your effort and so they have to be convinced that it’s a sensible thing, that basically there’s a some reasonable chance of success and if there is success, the reward will be commensurate with the effort involved. And so I think that’s it…getting people to believe in what you’re doing – and in you – is important.
In the beginning there will be few people who believe in you or in what you’re doing but then over time, as you make progress, the evidence will build and more and more people will believe in what you’re doing. So, I think it’s a good idea when creating a company to create…to have a demonstration or if it’s a product to have a good mark up or even if it’s software to have good demoware, or to be able to sketch something so people can really envision what’s it’s about. Try to get to that point as soon as possible. And then iterate to make it as real as possible, as fast as possible. I think that makes sense.
This month, I moderated a panel of green jobs experts for the Commonwealth Club Silicon Valley. Experts included: Parag Chokshi, Clean Energy Public Affairs Manager, Google; Josh Green, General Partner, Mohr Davidow Ventures; Linda Keala, Vice President Human Resources, SolarCity and Nanci Klein, Deputy Director, Office of Economic Development, City of San Jose.
The panel shared insights about the green economy, as well as tips for finding and securing green investments and green jobs. Here are highlights of our conversation (edited for space and clarity).
What are hot sectors in the green economy?
Josh Green, Mohr Davidow Ventures: “In the current environment, we’re looking for less capital intensive deals (energy efficiency, LED lighting and building management systems), so that means we’re on the side of energy demand much more than energy production. People call this cleantech IT – Information Technology. I’m an investor in Xicato, an LED module company. The LED convergence will happen…the payback is less than two years and (it’s) equivalent to halogen light. You don’t have to replace them for ten years or more and especially in a commercial settings, you end up lowering your maintenance costs.”
On cleantech growth sectors in Silicon Valley
Nanci Klein, Office of Economic Development, City of San Jose: “People say manufacturing has left the US…but manufacturing is very exciting here. When you talk about innovation and commercialization, Silicon Valley is a hub around new product introduction. Contract manufacturers will take a low volume, high mix of products. …the ten largest in the world – Tier One contract manufacturers – are all here in Silicon Valley, six of them in San Jose. They’re like a secret weapon resource. We try to link baby investors to these companies. You take someone with a hot idea and you put them with all of the accelerated services…if the product is good you can have a rocket in terms of acceleration.”
Josh Green, Mohr Davidow Ventures: “The loan guarantee program is operating well within the loan loss reserves. Certain loans are going to fail…The Solyndra mess became a big political football…the good news is that we’ve passed the half life…Congress officially stopped all its hearings. There will be continued efforts to end the loan guarantee program…but Solyndra itself: it’s over in terms of an issue. As investors, it never was an issue, it was a company that was not successful…I’ve got a portfolio with lots of companies that are not successful. Out of 100 investments, if you have 10 that meet your investment objectives (10x your money or better) then you’re ‘wildly’ successful, that makes you a top venture capitalists. That means you have a 90% – under your expectations success – rate.”
Tips on getting a green job
Linda Keala, Director of HR, SolarCity:
1. “A background in cleantech is not a prerequisite.”
2. “Differentiate yourself – what about the job (post) got you inspired? What resonated about the company?”
3. “I love getting handwritten letters. A personalized message tells me this is who I am, this is what I can bring to the company. Sometimes I get them in little pink envelopes…”
4. “Touch a spot in our hearts and we’ll take a close look at that resume.”
Josh Green, Mohr Davidow Ventures: “Have passion to change the world.”
How to get a job in Google’s Green Team (there are currently seven openings in the sustainability/green team areas)
Parag Chokshi, Clean Energy Public Affairs Manager at Google:
Here are the qualities Google looks for:
1. “Be a self starter, work independently and drive forward a project.”
2. “Think about creative solutions. We value innovation and creativity.”
3. “Show passion and new ways of thinking about things…that is very valuable.”
How is the City of San Jose helping entrepreneurs in Silicon Valley and beyond?
Nanci Klein, Office of Economic Development, City of San Jose: Here are some of the resources available – The Entrepreneur Center in downtown San Jose; Business Owner Space; Opportunity Fund. Check out SJEconomy.com. She also recommends the Cleantech Open competition and SolarTech an association for those in solar and financing sectors. The City of San Jose is working in partnership with Lawrence Berkeley Lab and others to create Prospect Silicon Valley, a demonstration and commrecialization center for cleantech startups.
On storage and battery technology
Josh Green, Mohr Davidow Ventures: “Storage is the most important development that could happen for our grid at the utility scale storage level as well as the emerging EV market to encourage the widespread adoption of EVs. ON the grid side, there is NO storage…the second you produce an electron it has to be consumed…this results in the creation of “Peaker Plants” used for 5-15 hours a year (especially in August). Storage has the greatest potential to unlock value.
In the transportation sector, lithium ion batteries are the lightest batteries and they still weigh about 1400 lbs in the new Tesla Model S. To the extent that you can get these to be a smaller battery pack you can unlock incredible advantages.
For the next 10 years, lithuim ion technologies are going to be where batteires and storage are focused. There are about 50-60 venture backed companies in the Bay Area, working on advanced battery technology. Mohr Davidow has invested in extracting lithium from geothermal brine at goethermal plants in Southern California. Its the lowest cost producer in the world with the best environmental footprint. We believe that lithium will help fuel the storage revolution.“
Last night, President Obama addressed the nation for the first time from the Oval office. His subject: the BP oil spill disaster. Although some say he was “vapid”, Obama seized the opportunity to call for a clean energy future and end our addiction to fossil fuels. He underlined China’s massive investment in clean energy jobs and industries (subtext: just like the Space Race in the 50’s & 60’s, the race for Clean Energy has begun, and the U.S. is falling behind); and reminded us that we send almost ONE BILLION DOLLARS EACH DAY to foreign countries for their oil.
“The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.” President Obama.
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In this week’s Fresh Dialogues, we look at the advice gleaned recently from a panel of clean tech experts in Silicon Valley. If the Obama administration is serious about unleashing America’s innovation and creating a clean energy future, it would do well to take note.
From the Fresh Dialogues archives: The Obama administration ought to have sent an envoy to the FountainBlueState of Clean Green Conference this year. A panel of Silicon Valley clean tech experts had much to share on this question: how can Obama better jumpstart the clean tech economy?
Tim Woodward, Managing Director, Nth Power said the government needs to create market demand, and recommends that every government building should have solar power and be retrofitted for energy efficiency; but he warned,
“There’s a little too much of a ‘large check mandate’ in the Federal Government that picks technologies and stifles innovation at lower levels: figure out how to get smaller dollars into the innovation engine of smaller companies.”
“I look at the pricing and incentivizing through market pricing. We’re still subsidizing imported oil without putting the investment into alternative energies…I think we should put a tax on imported oil and use it to help pay off some of the defense spending we’re using to protect the transmission of that oil. We need to forge ahead with cap and trade legislation… until we have a price on carbon it’s hard for the markets to plan and have any certainty.”
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Elise Zoli, Partner and Chair, Energy Practice, Goodwin Procter said that the Department of Energy needs to improve the low commercialization rate of national labs and is excited about a new national initiative to create virtual access to all the labs’ technology… “so you can see the technology, acquire it and begin to commercialize it.”
“The DoE has a fantastic lab structure, producing some really innovative technologies… (we need to ) leave them there and help them – through public/private partnerships – and take that technology out of the labs…”
But
“There are things they (the DoE) do terribly and being a bank is one of them.”
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And Elise has one last piece of advice if you have a green energy technology you think the Feds can use, contact Richard Kidd at the Federal Energy Management Program: ”Richard Kidd will not know you exist unless you call him…send an email to Richard’s team and use my name!”
Other panelists included Dan Adler, President, California Clean Energy Fund, and Matt Maloney, Head of Relationship Management, Silicon Valley Bank. The interview was recorded at Fountain Blue’s Conference on January 29, 2010.
The Obama administration ought to have sent an envoy to the FountainBlueState of Clean Green Conference on January 29, 2010. A panel of Silicon Valley clean tech experts had much to share in response to Moderator Greentech Media’sEric Wesoff’s question…if you had Department of Energy Secretary, Steve Chu’s job, what would you do? In other words, how can Obama better jumpstart the clean tech economy?
Tim Woodward, Managing Director, Nth Power said the government needs to create market demand, and recommends that every government building should have solar power and be retrofitted for energy efficiency; but warned,
“There’s a little too much of a ‘large check mandate’ in the Federal Government that picks technologies and stifles innovation at lower levels: figure out how to get smaller dollars into the innovation engine of smaller companies.”
“I look at the pricing and incentivizing through market pricing. We’re still subsidizing imported oil without putting the investment into alternative energies…I think we should put a tax on imported oil and use it to help pay off some of the defense spending we’re using to protect the transmission of that oil. We need to forge ahead with cap and trade legislation… until we have a price on carbon it’s hard for the markets to plan and have any certainty.”
On Solyndra
