The Sky's the Limit: Elon Musk Parlays Internet Millions into Space Exploration, Electric Cars and Solar Technologies

By Seemuth, Mike | Success, December 2008 | Go to article overview

The Sky's the Limit: Elon Musk Parlays Internet Millions into Space Exploration, Electric Cars and Solar Technologies


Seemuth, Mike, Success


One day after his 37th birthday, entrepreneur and multimillionaire Elon Musk is talking business. About 10 minutes into the Sunday afternoon telephone interview from his Bel Air, Calif., home, he apologetically ends discussion of his investment and involvement in electric car manufacturing and spacecraft development, promising to call back later. Musk is a busy guy.

But this interruption is for family; "I have to step out to lunch with my wife and kids," he says, referring to novelist wife Justine and their five young boys--twins and triplets. "I'm actually trying to cut down on my work hours. ... I want to spend more time with the kids."

Musk certainly could afford to work less. He made a personal fortune by selling two Internet businesses in the late 1990s and early 2000s. He founded the first company, Zip2, in 1995 when he was 24, right after dropping out of Stanford University's physics graduate program because he thought the Internet held more promise than physics. He pocketed about 7 percent of the $307 million Compaq Computer paid in 1999 for Zip2, which developed software for online content publishing. In 1999, when he was 27, he co-founded X.com, which would become PayPal, and he owned about a tenth of the Internet-based payment-settlement service when it was sold to eBay in 2002 in a stock swap valued at $1.5 billion.

[ILLUSTRATION OMITTED]

In recent years, Musk has invested most of his time and money in high-tech transportation ventures. Since 2003, he has bankrolled and managed the development of electric car manufacturer Tesla Motors, which this year began production of a battery-powered model that accelerates from zero to 60 mph in less than four seconds. He founded Space Exploration Technologies in 2002, and since then SpaceX has become a serious contender to provide replacement spacecraft for the U.S. government's fleet of space shuttles, which are scheduled for retirement in about two years. In addition, Musk guides the growth of a solar-panel installation service he started called SolarCity.

While the sales of PayPal and Zip2 may have left him with the image of a serial entrepreneur, Musk says his commitments to his spacecraft, electric car and solar panel businesses are long term and deeply felt. "I never expect to sort of sell them off and do something else. I expect to be with those companies as far into the future as I can imagine."

His motive is more than just making money. He says he is involved in SolarCity and Tesla Motors "because I'm concerned about the environment," while "SpaceX is about trying to help us work toward extending life beyond Earth on a permanent basis and becoming a multiplanetary species."

At Tesla, production began in March of the first electric car. the Tesla Roadster, which has a base sticker price of $109,000. By midyear, Tesla had opened its first retail sales and service centers in two California markets, Los Angeles and Menlo Park, and was well into its development of a new four-door electric sedan expected to debut in 2010 with a base sticker price around $60,000. Musk is optimistic about his company's chances. "It's a great time to have an electric car company," he says.

It may be a great time to have a spacecraft company, too. Musk worries about the mountain of capital spending that's required to compete. SpaceX burns through plenty of cash to test and refine its booster rockets and other spacecraft systems. But while doing R&D, SpaceX also has been lining up orders from government agencies and private companies that need shuttle services in outer space, such as satellite deployment. "Certainly, the rocket business is a tough one," Musk says. "The capital cost of the whole thing is a very tough problem. But we're doing pretty well."

[ILLUSTRATION OMITTED]

SpaceX has won a major contract from NASA, providing $278 million in funding to the company to demonstrate its Falcon 9 rocket, which would serve as the booster for new spacecraft to replace NASA's space shuttles. …

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