Space-Age Risks and Profound Effects on Humanity: Why Elon Musk is Thinking Bigger than the Internet

By Erin Griffith , written on July 12, 2012

From The News Desk

Elon Musk made $180 million from the sale of PayPal. He ended up investing all of it into Tesla, Solar City and SpaceX, each company sopping up double the capital he had planned to invest. He had to borrow money to pay his rent.

Musk knew his post-PayPal endeavors would be far riskier than an online payments company, and that's partly why he didn't take outside investment at first.

“I did have to show that I could actually make stuff. I’ve never actually made physical stuff before SpaceX, let alone rockets. The probability of success was low," said Musk at PandoMonthy in LA. "In fact, when I started SpaceX, I thought that the most likely outcome was failure. And I think to have any other expectation would have been irrational.”

One of the toughest calls Musk has ever had to make came in 2008, when he had to decide between the survival of Tesla, SpaceX, and feeding his kids. Both companies were teetering on the verge of failure -- SpaceX had had several failed launches, and a big round of financing for Tesla fell through as the automakers were facing bankruptcy. Musk was getting battered in the press.

He decided to commit all of his reserve capital to Tesla. It was a "super not fun time," he said. To his surprise, both companies managed to survive.

Even though the risk is lower, Musk said he won't go back to building Internet companies again, because he believes in what he's building. "[It's] not because I find the Internet boring... I dont want to be the grandpa that doesn't do email," he said.

But there isn't a lot of investment activity supporting space, solar power, and electric cars. They're also super capital-intensive businesses to start. He hopes his successes will drive innovation there. "I'm trying to allocate my efforts to that which would most effect humanity in the most profound way," he says.

Fast forward to now, and SpaceX has done five successful launches and is capital positive. It could go public whenever it wants, he said. Tesla has raised enough capital to be able to produce the Model S and do an IPO. "I can go from every waking hour being spent on the companies to 90 percent, which is a big difference actually," he said.

Musk said he expects to run both Tesla and SpaceX for the forseeable future. He's got plenty of ideas for new companies, including a new mode of transportation called the Hyperloop, but doesn't see himself starting a new one anytime soon.