Rima M | Rakesh Sharma
Moneycontrol Contributors
There is a prismatic quality to fame when it becomes stratospheric. It breaks up a persona into spectral shards and each one represents just a small fragment of a still developing story.
When we think of Elon Musk, for some of us, he pops up in a little cameo, washing dishes in a soup kitchen on The Big Bang Theory.
Others remember him for his rumoured feuds with the likes of American rapper Azealia Amanda Banks. And his rather befuddling love story with Claire Boucher (or musician Grimes) that ran its course and fizzled out like a social media trend.
Tech writers keenly watch his every step so they can review and take apart every Musk soundbite and tweet, every invention.
The news cycle feeds on his finances, his setbacks and his triumphs, his irreverent weed-smoking during podcasts that trended on Twitter and once sent shockwaves across the Tesla stocks. And Musk himself refuses to comply with people’s perception of him. Remember that infamous tweet in August 2018 where he said, "Am considering taking Tesla private at $420. Funding secured. "? This one tweet unleashed massive controversy and the Securities and Exchange Commission ended up fining Musk and Tesla $20 million each, as well as removing Musk as chairman.
Still trivia buffs continue to rattle off Musk lore about how he taught himself computer programming at the age of 9. And emigrated from South Africa to Canada at age 17 to escape from an abusive father. And how as a brutally bullied young person, he read 60 books a month, memorised two entire encyclopaedias and drew upon The Hitchhiker’s Guide to the Galaxy to sustain hope and dreams. And how studying at the University of Pennsylvania, clarified the direction he wanted to take in the future. And how, from an upstart in the Silicon Valley where he began to create and sell companies, Musk became a one man, multi-billion dollar aspirational/inspirational industry.
Some will quote his mission statement as a teenager, "The only thing that makes sense to do is strive for greater collective enlightenment."
Gaming buffs will thank him for the introduction of TeslAtari, an Easter Egg that allows drivers to play classic Atari games.
Even last year’s breakout star Tiffany Haddish had just one wish. To own a Tesla even though she could not afford to buy one just yet.
One man, many stories. It is after all tough to think of Elon Reeve Musk in the context of all the extraordinary lives he leads as a technology entrepreneur, investor, and engineer, the founder, CEO, and lead designer of SpaceX; co-founder, CEO, and product architect of Tesla, Inc.; co-founder and CEO of Neuralink; and co-founder of PayPal.
On this edition of Digging Deeper (or should we say Boring Deeper) with Moneycontrol, we will try to figure how Musk did not just change his own life with his legendary focus on the big existential stuff but also how he actually managed to changed the world, irrevocably.
But first the big Musk news byte that is creating ripples this week. Because, as someone said once, Elon Musk does not just make news. He is news.
Tesla shares suffer $11b meltdown
On March 6, 2019, The Sydney Morning Herald and many major news outlets reported how this month, Tesla chief Elon Musk caught the world and his employees by surprise with his announcement that the electric-car maker would close most stores and shift to online-only sales.
As The Sydney Morning Herald reported and we quote, “Many sales personnel first found out about the decision when Tesla published a public blog post.” The knee jerk reaction to the post was that the stock dropped as much as 16 per cent, shaving up to $US8 billion ($11.3 billion) from Tesla's market capitalisation. As the paper reported , the abrupt move by Musk, shocked Alex Chalekian, the founder and CEO of Lake Avenue Financial in Pasadena, California. The firm, which manages more than $US150 million in client assets, sold all of the Tesla stock held for advisory clients quickly.
This move is however not atypical of Musk. He is forever creating twists in his own story and by default in the narratives of his global businesses.
So for now, Tesla is closing most of its showrooms around the world as it shifts to online-only sales.
What has brought about this shift?
Analysts say that from talking about expanding stores, to suddenly closing them signals a huge financial concern and a possible cash-flow issue for Tesla.
As The Sydney Morning Herald reported, “Until last week, Tesla's store strategy seemed to be one of expansion. The Palo Alto, California-based company opened 27 new retail and service centers last quarter, boosting its total to 378 locations worldwide, according to its latest letter to shareholders. It was the most openings for a quarter since mid-2017. Tesla also suggested a brick-and-mortar retail strategy was important in its annual report filed February 19, just nine days before Musk announced the pivot to online sales.”
'Amazon of Automotive?’
Musk has already changed the way we transact money worldwide, and how we think of science and innovation, so will this move help him create an online market for the automative industry? According to The Sydney Morning Herald, “One of the key people involved in implementing the online sales strategy is Sanjay Shah, who has taken on additional responsibilities since his arrival from Amazon.com Inc. last summer.” The piece also quotes one of Barclays’ spokespersons who says, “The bull narrative has not shifted to Tesla becoming the Amazon of automotive but it's likelier that the company needs to replenish cash after paying off a $US920 million convertible bond last week and contending with a weak start to the year selling cars in the US.”
Regardless of the conflicting narratives, Musk described the winding down of many stores as a cost-cutting move that enables Tesla to offer a long-promised $US35,000 version of the Model 3 sedan, the automaker's first mass-manufactured car. The company said it's able to reduce prices of all its vehicles by an average of about 6 percent by shifting sales online and trimming other expenses.
Knowing Musk, if anyone can sell cars in a virtual realm, vacuum even, he can. Didn’t he send a Tesla roadster to the space? If he can do that, he can do anything! But ideas are one thing, the implementation another, and it is the latter that Musk stumbles often at.
A road map drawn by instinct
Musk is known to befuddle onlookers by not always following a water tight, methodical business brief as when the Wall Street Journal reported in December 2018, that Elon Musk’s rocket company, Space Exploration Technologies Corp., was set to raise $500 million from earlier shareholders at a $30.5 billion valuation and the Scottish money management firm Baillie Gifford & Co, in a bid to help get its internet-service business off the ground.
In January, 2019, though, it was reported that though SpaceX, still hadn’t announced the round, it nevertheless had made things official, and had filed details with the U.S. Securities and Exchange Commission about the fundraise. Though the filing did not confirm investor Baillie Gifford’s involvement, it did show that the company has secured from 8 investors at least $273.2 million toward a planned $500 million round.
This is typical of the way Musk powers through setbacks and what seems to be a lack of foresight to ultimately create circumstances that serve his goals.
As an earlier report by The Wall Street Journal reported, SpaceX’s new round will be used to finance a new satellite internet service, one whose early designs suggest it could be powered by more than 4,000 satellites orbiting the earth at low altitudes. Starlink, as Wall Street journal said, is one of two multibillion-dollar projects at the company, the other involving plans to develop the largest rocket system ever built, the Starship, and its Super Heavy rocket booster.
If that is not a plan to alter the world yet again Musk style, we don’t know what is.
Inventions on a loop
As we said, once before in an earlier podcast , despite financial, legal and personal challenges, Musk keeps coming up with inventions that force the news pundits to stop and catch their breath.
Mid December last year, thousands gathered for the first public viewing of Musk’s ‘loop track’, or a path-breaking Test Tunnel In California or an underground “loop” track that promises to revolutionize transport in the 21st-century city and as The Guardian reported, it turned out to be a grand mixture of imaginative futurism and showbiz razzmatazz, not to mention a showcase for a novel tunnel-boring technology that may be the most significant development of all.
We quote from the entertaining piece, "Whether the technology succeeds in increasing the speed of tunnel construction fifteenfold, as Musk said he hoped it would, or heralds the beginning of a vast underground network of transport channels beneath our cityscapes, is anybody’s guess."
As the piece went on to say, the test tunnel, a 1.1-mile underground track that runs near the headquarters of Musk’s SpaceX company in an unlovely corner of south Los Angeles, was built with relatively conventional tunnel-boring technology for about $10m. But Musk’s underground construction arm, known as the Boring Company, has already envisioned a second- and third-generation technology that would simultaneously dig the hole, move the dirt out, and automatically install the reinforced concrete tunnel walls.
We quote, "The idea is that, one day, cities will have so many underground layers of tunnel networks that a driver of an autonomous electric car could join the loop at any point and be whisked at speeds of up to 150 miles per hour to a destination programmed in advance. Musk said a station could be just a glorified parking spot with an elevator to take the driver down into the system, or something grander with double-helix spiral ramps."
But as is becoming obvious in Musk's case, sometimes, his grand plans outstrip ground realities so as the piece suggests, "Musk was vague about the timeline and vaguer still about the costs. True to his wayward reputation, he suggested at one point that anyone could copy the technology he was developing free of charge because all he cared about was alleviating traffic congestion. At another point he fantasized about building “infinite real estate underground” on Mars."
As the piece pointed out, several cities have expressed strong interest in Musk’s vision – whether to provide a high-speed transportation link or to create a more mundane tunnel network for sewage, electricity and gas lines that could be serviced without the need to break up roads and create more congestion.
But as of now, even Musk does not have all the answers.
The tunnel that wasn’t?
Most of Musk’s ideas have the potential to change the world as we know it, and so was his plan to establish 18-mile-long underground tunnels between Chicago’s Loop and O’Hare International Airport. But one report, on February 26, 2019, said that this idea was never a done deal, and after the February 26 mayoral election, the project may never be realized.
We quote, “On the surface, Musk’s pledge to fund the $1 billion high-speed train system through the Boring Company at no cost to the city seems like a win-win, but as a new report from The Verge revealed, momentum may be building against the O’Hare Express System.” As the Verge noted, Musk had chosen Chicago for the first practical application of Boring Company technology thanks to the permissive regulatory atmosphere. The plan went public in June last year, but no firm details on what the city has agreed on have come out yet and at least one lawsuit has already been filed to release any public records.
The red tape as of now has caught up with Musk and according to the piece, public communication on the project has gone silent, and an official contract between the Boring Company and nonprofit Chicago Infrastructure Trust—a body created to facilitate public-private partnership projects—has yet to materialize. The Boring Company can’t sign a contract with the city until a National Environmental Policy Act review is complete, but the review can’t commence unless the Boring Company releases concrete project details.
We quote, “Many of the concerns were about the untested nature of the technology being used, as the Boring Company has only completed one test tunnel thus far, as well as cost and density concerns. While electrically-powered shuttles would be able to move people downtown at 150-miles-per-hour and cut transit times from Block 37 in the Loop to O’Hare to only 12 minutes, the system would only be capable of moving 1,900 people per hour. Tickets could cost up to $25. For comparison, the Blue Line is able to move twice as many people per hour along that same route for only $5.”
What did we say about Musk’s instinctive rather than methodical breaking of new ground? But if you go by his past record, the successes far outstrip the setbacks.
The world that Musk changed
When you are Elon Musk, you can reimagine the world and present your own version of reality regardless of what is going on around you. As we told you in an earlier podcast, Catherine Clifford reported on CNBC how Musk presented his version of the world during the unveiling event of the test tunnel in 2018. He said that he looks at the future from the standpoint of probabilities, and based on them, made three predictions for the future. He believes that In 7 to 10 years, the first humans will colonize Mars. In a Twitter conversation, he has also mentioned that it will be "engineers, artists and creatives of all kinds" who will go to Mars first.
SpaceX hopes to get an unmanned cargo rocket to Mars in 2024.
According to CNBC, Musk believes, you will be able to connect your brain to computers in 10 years and Musk's company, Neuralink is developing ultra high bandwidth brain-machine interfaces to connect humans and computers.
Musk told Axios and we quote, "The long-term aspiration with Neuralink would be to achieve a symbiosis with artificial intelligence… to achieve a sort of democratization of intelligence, such that it is not monopolistically held in a purely digital form by governments and large corporations. That will be done by connecting computer electrodes to neurons in your brain — "a chip and a bunch of tiny wires" that will be "implanted in your skull."
And Musk is not done yet. Tesla's 'cyberpunk' pickup truck prototype is expected to be here in 2019.
He also believes that Robots will be able to do everything better than us in the very near future. (We could have told you that!)
Some big Musk discoveries
It is common currency now that Musk birthed a brave new world of e-commerce by co-founding the online financial services company X.com in 1999. As Live Science reported in August, 2013, sometime in 2000, X.com merged with Confinity, which had developed an online payment system called PayPal. Though the combined firm at first retained the X.com moniker, it changed its name to PayPal in early 2001. PayPal, which normalised the once unthinkable idea of Internet payments and money transfers , grew like a dream and was acquired by eBay in October 2002.
As an Investopedia piece published in October, 2018, put it and we quote, “PayPal has revolutionized the way we make payments. One can transfer money to one's brother that paid for dinner last night. One can purchase an item from a manufacturer in China. One can type in one's PayPal details at Home Depot and not even worry about bringing a credit card to the store. In short: PayPal has taken over the digital currency world and has already become so ingrained in our minds that we don’t even remember a world without it.”
Musk likes to boldly go where no man has gone before and in 2002, he decided, space was not going to be just the final frontier for astronauts but for you and me. Hence came the astral projection about a private spaceflight.
As Investopedia informs, after selling off PayPal for $1.5 Billion to eBay.com, Musk founded SpaceX.
We quote, “Ten years after founding the company, SpaceX’s Dragon capsule was sent to the International Space Station. But SpaceX has never been about cargo runs. Musk’s original plan was to send people to space to colonize other planets. He wants to make sure that Mars is inhabitable in case the earth is no longer a viable option.”
SpaceX incidentally is the first private company to deliver a spacecraft to the International Space Station. As Live Science reported, SpaceX’s unmanned Dragon capsule first visited the orbiting lab on a demonstration mission in May 2012 and the company went on to ink a $1.6 billion contract with NASA to make 12 such flights with Dragon and its Falcon 9 rocket. SpaceX, even in its infancy, aspired to develop a crewed version of Dragon and a prototype reusable rocket called Grasshopper, to make spaceflight far cheaper and more efficient.
As Musk has often said, he founded SpaceX to help humanity become a multiplanet species.
One man and his flying machines and electric roadsters
As we have mentioned before, Musk thinks Mars could be the next big destination for human kind and if we go by his vision, a huge Red Planet colony could one day support up to 80,000 people.
The Live Science piece noted that Musk hopes SpaceX can help get the ball rolling toward such a settlement by ferrying explorers to the Red Planet for perhaps $ 500,000 per trip.
Trust Musk to say things like these in the course of a day’s work, "Our ultimate objective is Mars, and it always has been."
And as Tiffany Haddish will tell you, few things in the world have as much aspirational value as a Tesla. In 2003, Musk co-founded Tesla Motors, to manufacture electric cars and the battery packs that power them. Celebrity endorsements apart, Tesla has changed how ordinary consumers view electric cars and thanks to their support, Tesla paid off the entire loan it received from the U.S. Department of Energy in 2010, nine years ahead of schedule.
As Investopedia says, “EV (electric vehicles) have been around for a few decades now, but none have really caught on. Tesla Motors sought to change all of that (and they did with their Tesla S, which can go from 0 – 60mph in 4 seconds), but their goal was loftier. Musk’s goal when creating Tesla Motors was never to create an electric vehicle that only the rich could afford but to have all-electric vehicles that anyone can afford. But since driving a vehicle that is powered from the grid (electricity generated by burning coal) only transfers the pollution somewhere else, there is a loftier goal. That is where Musk’s company SolarCity comes into play.”
The dream of a healthier planet and renewable energy
Musk’s interest in renewable-energy venture stems from his desire to make the world healthier at a time when climate change is staring us in the face.
Musk founded SolarCity in 2006, and it went on to design and install clean-energy systems for households, businesses, universities and more. As Investopedia informs, the Tesla battery takes forward the clean energy ideology of SolarCity. We quote, “It can be enough to completely remove someone from the grid (given adequate solar panels, low consumption, and other factors). The big idea here is that by using SolarCity’s clean energy updates a household can become less dependent on electricity, power their electric vehicle, and ultimately reduce their footprint on the environment without spending an outrageous amount of money.”
The Hyperloop regardless of its many challenges, roadblocks and controversies was ideated also along the same concerns. As Live Science simplified, the Hyperloop, according to Musk was to use electric motors to accelerate 6.5-foot-wide (2 meters) pods to nearly supersonic speeds. These pods would zoom through long tubes, which would be mounted on pylons to minimize construction costs, reduce earthquake risk and ease right-of-way issues.
Musk saw the system as a cheaper, faster alternative to California's proposed $70 billion high-speed rail system. He wanted to see a new , more efficient method of transport and that is an impulse that has driven him to change many things for the better.
A mission to simplify life
Take the example of Zip2, a company that provided and licensed online city guide software to newspapers and was founded in Palo Alto, California as Global Link Information Network in 1995, by Elon and his brother Kimbal Musk and Greg Kouri.
He later sold the company to Compaq for $22 million.
Be it electric supersonic jets imagined by Musk, that won’t need a runway to fly, or the Musk Foundation, that supports young innovators in areas as diverse as renewable energy, space exploration, childhood diseases and educational endeavours, the story of one man and his ever growing imprint upon the world is far from over.
The Visionary who saw the future
There are also some innovations that we now take for granted that Musk was instrumental in sparking. The location-specific searches that Google and many other tech giants are now using are so seamless with how we live that we don’t notice their complexity. But as India Times reported in May, 2018, it was Musk who in 1998, thought of making a system that would cater to geographic locations of people and then automatically bring in results for the closest places nearby.
As the beautiful piece on Investopedia put it, “Throughout history, humans have dreamed of what the future will be like. Elon Musk, has brought the science fiction fantasies much closer to reality than many people realize. His concepts and inventions could potentially revolutionize the way that we do life.”
We think Musk has already checked that box.
As Investorpedia says, “How will Musk and his enterprises revolutionize the world? It has already happened. From PayPal taking over the digital currency world to SpaceX already making flights to Tesla building an affordable electric vehicle (with self-driving capabilities), Musk’s inventions and companies have already revolutionized many aspects of the way we live and think..”
If you ask Musk though, he will tell you that nobody ever changed the world on 40 hours a week. But we think it is not how many hours he stays awake that have made him a global change agent, it is what he does with those hours. And then his ideas go where they must.
As another piece in August 2018 put it, Musk certainly seems to be genuine in his attempts to improve our world. But only time will tell whether he’s a crazy genius or just crazy.
We think he is a genius who is crazy enough to think that nothing is impossible. And that maybe his biggest contribution to the world we live in. The hope that we can do anything, be anyone and go wherever our dreams take us... the very essence of being human.
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