by Ashlee Vance
Valley denizens took very literally the cliché of working as hard as you play. People in their twenties, thirties, forties, and fifties were expected to pull all-nighters. Cubicles were turned into temporary homes, and personal hygiene was abandoned. Oddly enough, making Nothing appear to be Something took a lot of work. But when the time to decompress arrived, there were plenty of options for total debauchery. The hot companies and media powers of the time seemed locked in a struggle to outdo each other with ever-fancier parties. Old-line companies trying to look “with it” would regularly buy space at a concert venue and then order up some dancers, acrobats, open bars, and the Barenaked Ladies. Young technologists would show up to pound their free Jack and Cokes and snort their cocaine in porta-potties. Greed and self-interest were the only things that made any sense back then.
While the good times have been well chronicled, the subsequent bad times have been—unsurprisingly—ignored. It’s more fun to reminiscence on irrational exuberance than the mess that gets left behind.
Let it be said for the record, then, that the implosion of the get-rich-quick Internet fantasy left San Francisco and Silicon Valley in a deep depression. The endless parties ended. The prostitutes no longer roamed the streets of the Tenderloin at 6 A.M. offering pre-commute love. (“Come on, honey. It’s better than coffee!”) Instead of the Barenaked Ladies, you got the occasional Neil Diamond tribute band at a trade show, some free T-shirts, and a lump of shame.
The technology industry had no idea what to do with itself. The dumb venture capitalists who had been taken during the bubble didn’t want to look any dumber, so they stopped funding new ventures altogether. Entrepreneurs’ big ideas were replaced by the smallest of notions. It was as if Silicon Valley had entered rehab en masse. It sounds melodramatic, but it’s true. A populace of millions of clever people came to believe that they were inventing the future. Then . . . poof! Playing it safe suddenly became the fashionable thing to do.
The evidence of this malaise is in the companies and ideas formed during this period. Google had appeared and really started to thrive around 2002, but it was an outlier. Between Google and Apple’s introduction of the iPhone in 2007, there’s a wasteland of ho-hum companies. And the hot new things that were just starting out—Facebook and Twitter—certainly did not look like their predecessors—Hewlett-Packard, Intel, Sun Microsystems—that made physical products and employed tens of thousands of people in the process. In the years that followed, the goal went from taking huge risks to create new industries and grand new ideas, to chasing easier money by entertaining consumers and pumping out simple apps and advertisements. “The best minds of my generation are thinking about how to make people click ads,” Jeff Hammerbacher, an early Facebook engineer, told me. “That sucks.” Silicon Valley began to look an awful lot like Hollywood. Meanwhile, the consumers it served had turned inward, obsessed with their virtual lives.
One of the first people to suggest that this lull in innovation could signal a much larger problem was Jonathan Huebner, a physicist who works at the Pentagon’s Naval Air Warfare Center in China Lake, California. Huebner is the Leave It to Beaver version of a merchant of death. Middle-aged, thin, and balding, he likes to wear a dirt-inspired ensemble of khaki pants, a brown-striped shirt, and a canvas khaki jacket. He has designed weapons systems since 1985, gaining direct insight into the latest and greatest technology around materials, energy, and software. Following the dot-com bust, he became miffed at the ho-hum nature of the supposed innovations crossing his desk. In 2005, Huebner delivered a paper, “A Possible Declining Trend in Worldwide Innovation,” which was either an indictment of Silicon Valley or at least an ominous warning.
Huebner opted to use a tree metaphor to describe what he saw as the state of innovation. Man has already climbed past the trunk of the tree and gone out on its major limbs, mining most of the really big, game-changing ideas—the wheel, electricity, the airplane, the telephone, the transistor. Now we’re left dangling near the end of the branches at the top of the tree and mostly just refining past inventions. To back up his point in the paper, Huebner showed that the frequency of life-changing inventions had started to slow. He also used data to prove that the number of patents filed per person had declined over time. “I think the probability of us discovering another top-one-hundred-type invention gets smaller and smaller,” Huebner told me in an interview. “Innovation is a finite resource.”
Huebner predicted that it would take people about five years to catch on to his thinking, and this forecast proved almost exactly right. Around 2010, Peter Thiel, the PayPal cofounder and early Facebook investor, began promoting the idea that the technology industry had let people down. “We wanted flying cars, instead we got 140 characters” became the tagline of his venture capital firm Founders Fund. In an essay called “What Happened to the Future,” Thiel and his cohorts described how Twitter, its 140-character messages, and similar inventions have let the public down. He argued that science fiction, which once celebrated the future, has turned dystopian because people no longer have an optimistic view of technology’s ability to change the world.
I’d subscribed to a lot of this type of thinking until that first visit to Musk Land. While Musk had been anything but shy about what he was up to, few people outside of his companies got to see the factories, the R&D centers, the machine shops, and to witness the scope of what he was doing firsthand. Here was a guy who had taken much of the Silicon Valley ethic behind moving quickly and running organizations free of bureaucratic hierarchies and applied it to improving big, fantastic machines and chasing things that had the potential to be the real breakthroughs we’d been missing.
By rights, Musk should have been part of the malaise. He jumped right into dot-com mania in 1995, when, fresh out of college, he founded a company called Zip2—a primitive Google Maps meets Yelp. That first venture ended up a big, quick hit. Compaq bought Zip2 in 1999 for $307 million. Musk made $22 million from the deal and poured almost all of it into his next venture, a start-up that would morph into PayPal. As the largest shareholder in PayPal, Musk became fantastically well-to-do when eBay acquired the company for $1.5 billion in 2002.
Instead of hanging around Silicon Valley and falling into the same funk as his peers, however, Musk decamped to Los Angeles. The conventional wisdom of the time said to take a deep breath and wait for the next big thing to arrive in due course. Musk rejected that logic by throwing $100 million into SpaceX, $70 million into Tesla, and $10 million into SolarCity. Short of building an actual money-crushing machine, Musk could not have picked a faster way to destroy his fortune. He became a one-man, ultra-risk-taking venture capital shop and doubled down on making super-complex physical goods in two of the most expensive places in the world, Los Angeles and Silicon Valley. Whenever possible, Musk’s companies would make things from scratch and try to rethink much that the aerospace, automotive, and solar industries had accepted as convention.
With SpaceX, Musk is battling the giants of the U.S. military-industrial complex, including Lockheed Martin and Boeing. He’s also battling nations—most notably Russia and China. SpaceX has made a name for itself as the low-cost supplier in the industry. But that, in and of itself, is not really good enough to win. The space business requires dealing with a mess of politics, back-scratching, and protectionism that undermines the fundamentals of capitalism. Steve Jobs faced similar forces when he went up against the recording industry to bring the iPod and iTunes to market. The crotchety Luddites in the music industry were a pleasure to deal with compared to Musk’s foes who build weapons and countries for a living. SpaceX has been testing reusable rockets that can carry payloads to space and land back on Earth, on their launchpads, with precision. If the company can perfect this technology, it will deal a devastating blow to all of its competitors and almost assuredly push some mainstays of the rocket industry out of business while establishing the United States as the world leader for taking cargo and humans to space. It’s a threat that Musk figur
es has earned him plenty of fierce enemies. “The list of people that would not mind if I was gone is growing,” Musk said. “My family fears that the Russians will assassinate me.”
With Tesla Motors, Musk has tried to revamp the way cars are manufactured and sold, while building out a worldwide fuel distribution network at the same time. Instead of hybrids, which in Musk lingo are suboptimal compromises, Tesla strives to make all-electric cars that people lust after and that push the limits of technology. Tesla does not sell these cars through dealers; it sells them on the Web and in Apple-like galleries located in high-end shopping centers. Tesla also does not anticipate making lots of money from servicing its vehicles, since electric cars do not require the oil changes and other maintenance procedures of traditional cars. The direct sales model embraced by Tesla stands as a major affront to car dealers used to haggling with their customers and making their profits from exorbitant maintenance fees. Tesla’s recharging stations now run alongside many of the major highways in the United States, Europe, and Asia and can add hundreds of miles of oomph back to a car in about twenty minutes. These so-called supercharging stations are solar-powered, and Tesla owners pay nothing to refuel. While much of America’s infrastructure decays, Musk is building a futuristic end-to-end transportation system that would allow the United States to leapfrog the rest of the world. Musk’s vision, and, of late, execution seem to combine the best of Henry Ford and John D. Rockefeller.
With SolarCity, Musk has funded the largest installer and financer of solar panels for consumers and businesses. Musk helped come up with the idea for SolarCity and serves as its chairman, while his cousins Lyndon and Peter Rive run the company. SolarCity has managed to undercut dozens of utilities and become a large utility in its own right. During a time in which clean-tech businesses have gone bankrupt with alarming regularity, Musk has built two of the most successful clean-tech companies in the world. The Musk Co. empire of factories, tens of thousands of workers, and industrial might has incumbents on the run and has turned Musk into one of the richest men in the world, with a net worth around $10 billion.
The visit to Musk Land started to make a few things clear about how Musk had pulled all this off. While the “putting man on Mars” talk can strike some people as loopy, it gave Musk a unique rallying cry for his companies. It’s the sweeping goal that forms a unifying principle over everything he does. Employees at all three companies are well aware of this and well aware that they’re trying to achieve the impossible day in and day out. When Musk sets unrealistic goals, verbally abuses employees, and works them to the bone, it’s understood to be—on some level—part of the Mars agenda. Some employees love him for this. Others loathe him but remain oddly loyal out of respect for his drive and mission. What Musk has developed that so many of the entrepreneurs in Silicon Valley lack is a meaningful worldview. He’s the possessed genius on the grandest quest anyone has ever concocted. He’s less a CEO chasing riches than a general marshaling troops to secure victory. Where Mark Zuckerberg wants to help you share baby photos, Musk wants to . . . well . . . save the human race from self-imposed or accidental annihilation.
The life that Musk has created to manage all of these endeavors is preposterous. A typical week starts at his mansion in Bel Air. On Monday, he works the entire day at SpaceX. On Tuesday, he begins at SpaceX, then hops onto his jet and flies to Silicon Valley. He spends a couple of days working at Tesla, which has its offices in Palo Alto and factory in Fremont. Musk does not own a home in Northern California and ends up staying at the luxe Rosewood hotel or at friends’ houses. To arrange the stays with friends, Musk’s assistant will send an e-mail asking, “Room for one?” and if the friend says, “Yes,” Musk turns up at the door late at night. Most often he stays in a guest room, but he’s also been known to crash on the couch after winding down with some video games. Then it’s back to Los Angeles and SpaceX on Thursday. He shares custody of his five young boys—twins and triplets—with his ex-wife, Justine, and has them four days a week. Each year, Musk tabulates the amount of flight time he endures per week to help him get a sense of just how out of hand things are getting. Asked how he survives this schedule, Musk said, “I had a tough childhood, so maybe that was helpful.”
During one visit to Musk Land, he had to squeeze our interview in before heading off for a camping trip at Crater Lake National Park in Oregon. It was almost 8 P.M. on a Friday, so Musk would soon be piling his boys and nannies into his private jet and then meeting drivers who would take him to his friends at the campsite; the friends would then help the Musk clan unpack and complete their pitch-black arrival. There would be a bit of hiking over the weekend. Then the relaxation would end. Musk would fly with the boys back to Los Angeles on Sunday afternoon. Then, he would take off on his own that evening for New York. Sleep. Hit the morning talk shows on Monday. Meetings. E-mail. Sleep. Fly back to Los Angeles Tuesday morning. Work at SpaceX. Fly to San Jose Tuesday afternoon to visit the Tesla Motors factory. Fly to Washington, D.C., that night and see President Obama. Fly back to Los Angeles Wednesday night. Spend a couple of days working at SpaceX. Then go to a weekend conference held by Google’s chairman, Eric Schmidt, in Yellowstone. At this time, Musk had just split from his second wife, the actress Talulah Riley, and was trying to calculate if he could mix a personal life into all of this. “I think the time allocated to the businesses and the kids is going fine,” Musk said. “I would like to allocate more time to dating, though. I need to find a girlfriend. That’s why I need to carve out just a little more time. I think maybe even another five to ten—how much time does a woman want a week? Maybe ten hours? That’s kind of the minimum? I don’t know.”
Musk rarely finds time to decompress, but when he does, the festivities are just as dramatic as the rest of his life. On his thirtieth birthday, Musk rented out a castle in England for about twenty people. From 2 A.M. until 6 A.M., they played a variation of hide-and-seek called sardines in which one person runs off and hides and everyone else looks for him. Another party occurred in Paris. Musk, his brother, and cousins found themselves awake at midnight and decided to bicycle through the city until 6 A.M. They slept all day and then boarded the Orient Express in the evening. Once again, they stayed up all night. The Lucent Dossier Experience—an avant-garde group of performers—were on the luxurious train, performing palm readings and acrobatics. When the train arrived in Venice the next day, Musk’s family had dinner and then hung out on the patio of their hotel overlooking the Grand Canal until 9 A.M. Musk loves costume parties as well, and turned up at one dressed like a knight and using a parasol to duel a midget wearing a Darth Vader costume.
For one of his most recent birthdays, Musk invited fifty people to a castle—or at least the United States’ best approximation of a castle—in Tarrytown, New York. This party had a Japanese steampunk theme, which is sort of like a sci-fi lover’s wet dream—a mix of corsets, leather, and machine worship. Musk dressed as a samurai.
The festivities included a performance of The Mikado, a Victorian comic opera by Gilbert and Sullivan set in Japan, at a small theater in the heart of town. “I am not sure the Americans got it,” said Riley, whom Musk remarried after his ten-hour-a-week dating plan failed. The Americans and everyone else did enjoy what followed. Back at the castle, Musk donned a blindfold, got pushed up against a wall, and held balloons in each hand and another between his legs. The knife thrower then went to work. “I’d seen him before, but did worry that maybe he could have an off day,” Musk said. “Still, I thought, he would maybe hit one gonad but not both.” The onlookers were stunned and frightened for Musk’s safety. “That was bizarre,” said Bill Lee, a technology investor and one of Musk’s good friends. “But Elon believes in the science of things.” One of the world’s top sumo wrestlers showed up at the party along with some of his compatriots. A ring had been set up at the castle, and Musk faced off against the champion. “He was three hundred and fifty pounds, and they were not jiggly pounds,” Musk said. “I went full adren
aline rush and managed to lift the guy off the ground. He let me win that first round and then beat me. I think my back is still screwed up.”
Riley turned planning these types of parties for Musk into an art. She met Musk back in 2008, when his companies were collapsing. She watched him lose his entire fortune and get ridiculed by the press. She knows that the sting of these years remains and has combined with the other traumas in Musk’s life—the tragic loss of an infant son and a brutal upbringing in South Africa—to create a tortured soul. Riley has gone to great lengths to make sure Musk’s escapes from work and this past leave him feeling refreshed if not healed. “I try to think of fun things he has not done before where he can relax,” Riley said. “We’re trying to make up for his miserable childhood now.”
Genuine as Riley’s efforts might have been, they were not entirely effective. Not long after the Sumo party, I found Musk back at work at the Tesla headquarters in Palo Alto. It was a Saturday, and the parking lot was full of cars. Inside of the Tesla offices, hundreds of young men were at work—some of them designing car parts on computers and others conducting experiments with electronics equipment on their desks. Musk’s uproarious laugh would erupt every few minutes and carry through the entire floor. When Musk came into the meeting room where I’d been waiting, I noted how impressive it was for so many people to turn up on a Saturday. Musk saw the situation in a different light, complaining that fewer and fewer people had been working weekends of late. “We’ve grown fucking soft,” Musk replied. “I was just going to send out an e-mail. We’re fucking soft.” (A word of warning: There’s going to be a lot of “fuck” in this book. Musk adores the word, and so do most of the people in his inner circle.)
