During tonight’s PandoMonthly fireside chat with PayPal, SpaceX, and Tesla motors co-founder Elon Musk, our Sarah Lacy asked the uber-entrepreneur about the reason he has succeeded in cleantech where so many others have failed. Both SpaceX and Tesla are multi-billion dollar companies in the sector. Musk collaborated early in a third success, Solar City, but declines to accept co-founder status.
“When you were getting started with Tesla, the Valley was trying to take a turn to get back to science,” says Lacy. “Why did cleantech not work for the Valley?”
Before getting into his success story, Musk hedged, saying, “I think the jury is still out on cleantech. Although I prefer ‘sustainable energy.’ I think that’s a better vernacular, although it’s a mouthful.”
Musk was adamant that the focus of any valuable company, sustainable energy or otherwise, has to be solving really difficult technical problem. Those who focus on design, such as his example of Fisker, are less likely to have an impact. Tesla is certainly this type of company, as is SpaceX. As Musk says, in goes steel and out come cars and rocket ships. This is real hardcore manufacturing.
“In each industry, there’s only a few winners,” Musk says. “It’s not easy. If it were, Toyota and Daimler would do it themselves instead of buying electric powertrains from us.”
Musk thinks that Tesla is going to be an extremely valuable company, buy it wasn’t always easy. in the early days with Tesla, Musk planned on investing $25 million to $30 million of his own money. He ended up putting in more than double that. Worse, there was a time in 2008 when he thought all three of his companies might fail, simultaneously, while he was simultaneously going through a divorce. In a dramatic understatement, he called it a low point and one of the hardest periods of his life.
Musk didn’t expect to be the CEO of both Tesla and SpaceX. But he feels committed to people at both companies and expects to remain in both roles for the foreseeable future. The one he’s likely to leave first is Tesla, not because he is less inspired, but because he thinks he can accomplish his mission sooner.
“The fundamental good Tesla is trying to accomplish is to be a catalyst for sustainable transport,” says Musk. “At some point, when most cars being manufactured are electric, the catalytic value of Tesla will be realized, and there will be diminishing returns in that regard, and I would not need to run the company. When that’s been accomplished, I can move on.”
Turning to the scoreboard, Tesla is a public company with a $3.4 billion market cap. SpaceX is a closely held private company with a “multi-billion” valuation in Musk’s words. And SolarCity is likely to go public in the next year. There’s no question that Musk plays the entrepreneurial game like no one else.
[For a video livestream of PandoMonthly with Elon Musk go here]