Season 3, Episode 1 —  Tesla - Acquired  ## Metadata - Author: **Acquired** - Full Title: Season 3, Episode 1 —  Tesla - Category: #podcasts - URL: https://share.snipd.com/episode/b6bea9b0-17a9-4a61-9b20-160aac251ba8 ## Highlights - Elon Musk's Test-Flight of the Tesla Roadster Key takeaways: (* Elon Musk became a playboy after he lost money in a business venture., * The media covered him extensively when he bought a $1 million car and live streamed the delivery.) Transcript: Speaker 1 And i think you can see a lot of his behavior through that light. Shortly after it happens that zip to, he actually attempts a coup to regain the the coset, attempts aboard cu and fails. That was his first failure in the start of world zipto. Shortly after that, ends up geting acquired by compact for about three hundred million dollars. Elon nets about twenty two million dollars out of that sale. And so he's kind of been burned through his experience there. But now he has twenty two million dollars. He doesn't really know what he's going to do with his life. He decides to basically become a playboy, live like the playboy life style in silican valley. And the media, kinne, gets wind of this and loves him. He's like this dot com wonder kid. So the first thing he does, and this is gong to directly lead to testla here, and it's not the media in the sense that he's covered in the media today. Speaker 2 It's amazing to even think about elon five years ago, let alone fifteen, twenty years ago, of just not being the sort of global icon that we know of to day. Speaker 1 Yet this is a very, very different elon, and a very different kind of media coverage here. So the first thing he does, he buys a mc claren f one for one million dollars in cash. So the mc claren f one was, was, maybe still is, i think, the fastest car ever made. There are only about fifty of them in the world. And then he gets c n n to live broadcast the delivery ([Time 0:08:37](https://share.snipd.com/snip/34ea3678-2e14-44c0-a39b-c551aed63bd8)) - The Paypal Episode Key takeaways: • Elon Musk, the founder of x dot com, would later create pay pal, which would become one of the most successful companies in history. • However, one of his co-founders would start a rival company, which would eventually fail. Transcript: Speaker 1 But he also wants to start another company. And he wants to make sure that the vi cs will never oust him as co again. He starts a company. He calls it x dot com. And the goal is, he's really ambitious. He wants to become an on line bank. He wants to bring banking on line. He funds it himself. He invests twelve million dollars directly into the company. He has a few co founders, but this time he has problems with his co founders. So one of his co founders stages a co and ends up taking most of the employees and going and starting a rival company doing exactly the same thing. Not good. Eline keeps going with x dot com. We didn't get any of this in the paypal episode. X dot com would become pay pal. Bcause they now have all this empty space in their office, they sublet some of that empty space to a plucky start up in paloalto called confinity that was founded by peter teal and max Levchin and the rest of the pay pal crew. They're working on some crazy pom pilot stuff, but they see what elon and x dot comera working on, and they like, oh, that's a good idea. We should just do that and change pivot and compute with these guys who were sub letting space from. They do that, and they change their name to paypal. Then a bunch of stuff happens. Elin kicks them out of space. They go somewhere else. Speaker 2 So david, the people that spun off to form a rival company. What would't that end o being? Or that just fizzle. ([Time 0:10:26](https://share.snipd.com/snip/aa9e67d1-fa7b-4a74-96c0-0c96e2c80df5)) - The Billionaire's Obsession Key takeaways: • Tasla Lake is a successful person because he is lucky and good multiple times. • Tasla Lake started Space X, which is a story for another day, because he wanted to have a really big impact. Transcript: Speaker 2 One thing you sse with successful people is you one time they're lucky. Twice they're good. Three times, you know, they're good. And what you see with elonis is a pattern where people do the things that made them successful because they believe that that is the way to do things. And he has every data point so far to show that when something goes really well and you get a munch of money, you should plough all that money back into your next an because that will do well Speaker 1 Too, i think, because that will do well too. And lake, he just has this complex that's lake deep within him from these early days of lake. I need this to be mine. I need control. He's been burned time and time and time and time again. Again. All that, all that is just background. But i think it's really important to understand, as we look it, the journey of tasla and what's happening to day, and why you'll unnecessarily behaves the way he does. O k, so he gets a hundred and eighty million dollars after taxes. He decides he's done with the docom play boy stick. He wants to actually have a really big impact. This is the summer of two thousand two after the pay pal sale, he still has his whole life ahead of him. That leads to him starting space x, which is a story for another day. ([Time 0:13:15](https://share.snipd.com/snip/bf1437e5-7c7c-4abb-9e92-d67c44995a99)) - Tesla, Elon, and the Quest to Create an Electric Car Key takeaways: • Eberhard and Tesla Motors Inc. cofounder, Martin Eberhard, were both inspired by Nikola Tesla when they decided to start the company. • The goal of Tesla Motors was to create a massmarket electric car that paid tribute to Tesla's legacy. • They were both on the same page when it came to their vision for the company. Transcript: Speaker 1 Ye, so unlike elon nhow? So they're basically in the same position as elan. They're tring to get the a c propulsion guys to do this. They realize they won't. Elon already has space x, though he's already started a company. Eberhard andtarpeting, they're free agents, though. So they're like, great, we're going to do it. We're going to start this company. We can get the band back together on july first. Two thousand three. They incorporate the company. Eberhard goes down on a trip to disney land in l a, ironically, with his wife, and he's walking around disney land and seeing all the, you know, the the history and how disney's incorporated That into the lore and mythology there, and he comes up with the perfect name for the company, tesla motors in honor of nikolay tesla, the famous inventor who did much, much work on electricity. Speaker 2 And the goal that eberhard had there, which is really similar to sort of elon's later vision for the company, is, we cannot build something that screams, electric car. We cannot scream something that says environmentalist or nerv or like it. It just can't be about that. The t zero, that's what the t zero was. You know, the name t zero represents, like, the time on the x axis, where it intersects the y axis, time is zero, and going on from here. So it's for like, you know, mathners and battery nerves. You know, the whole vision of starting tessla, when they are thinking of what's right name for it, is really around, how do we go mass market with this thing, yet still pay a loose homage To sorwerwe where the history of the industry is. Speaker 1 And so they, again, they elan, are on the same page. ([Time 0:21:35](https://share.snipd.com/snip/631c451c-b0e4-4dfc-876d-f3bf07b0315f)) - The Rise and Fall of Tesla Key takeaways: (* Tesla started the electric vehicle wave, and now they are focusing on autonomous vehicles., * Their old company was not happy with their decision to start their own company, and they had to raise money again.) Transcript: Speaker 1 They just haven't met yet. They think that the best way to get this thing going and get it to market is to actually start with what a c propulsion is doing with the t zero, and make it, you know, icn reversion. They do a bunch of thinking about, like where the technology is, both with batteries and drive trains and everything, and they realize that it's not like a big s v they should be building. They should be building a sports car. That's what's gong to best express the technology of electric vehicles at the time, not a preas and those sorts of things. So they take this business plan, and they actually, not just the business plan, but an actual t zero self to sand hill road, and they go start pitching v cs on raising a series a to start building this company, to start building tessla. And of course, they've raised money before. They've had a successful exit. And everybody on sandhill is like, you guys are nuts. You want to build a car company like your tec dudes. Like, what are you doing if you're a v c firm and a pair of ontripeners, not just even a single unchmier, but the whole team, like the two copaning, has had a successful exit for you, made a bunch of money. And then they start another company. It's almost like a blank check. It's kind of like aron and the rovrapper said, like, whatever you do, like, i want in al i'll lead it. It's so bad that their lead investors from their old company are like, i mean, we'll give you five hundred thousand dollars, but we're not going to lead because this is nuts. Speaker 2 And it's sort of a fasteniing case that too, were like, you don't know what wave is coming. And, you know, elon started this wave, or i guess eberhard and tarpning may have started this wave, but tesla started this wave of electric vehicles, and then you sort of get into ta overlapping wave of autonomous vehicles. ([Time 0:23:07](https://share.snipd.com/snip/15db78f5-fa21-42d8-9a8b-eb7ecf2b0791)) - Elon Musk and the Quest for a New Space Race Key takeaways: • Elon Musk is a very interesting person and he is always looking for new opportunities. • Eberhard and Typening met Elon Musk and he was very interested in their project and offered to invest six and a half million dollars. • It is very rare for an individual to lead a series A investment in a company, but this is what happened with Elon Musk and Space X. Transcript: Speaker 1 Intresting. Iid i didn't get that detail. Well, that perhaps leads to eberhard and typening. They're like kind of out of lick. They don't know where to go. They think they need seven million dollars to get a prototype of what would become of the roadster built. Every v c in the valley has turned them down. And the a c propulsion guys tell them about elon. Theyre like, oh, he there's this other dude down here in l a. He's got a bunch of money. He's running the space company. Ah, but he wants us to do this too. Maybe you guesh a chap. They introduce them, elon meets them, and within a matter of days, typical elon fashion, from first meeting and hearing about these guys, something like four days later, he's like, I'm in. I'm personally going to lead your series a. I'm going to write a check for the rest of the seven million you need. I moing to invest six point five million dollars myself. Now, this is not like eto. Typically, when you raise money as a start, if youknows you do a ced or series a or whatever. And you have individuals involved. They come in as angels. They're writing, like, twenty five k cheques. It's incredibly rare that an individual person would lead a series, eh, let alone one who is the co of another company with a full time jap. Speaker 2 And that other company is actually how they had a chance run in beforea. Eberhard and tarpening with elon musk. Did you, did you find this at all? I didye y. In two thousand one tarpenings. A big spacener drags eberhard to a mars society conference at stanford, and sees on speak about space x, the idea for what would become space x. Speaker 1 He hadn't started space x yet. Ah, good call. Sicis fastening. Speaker 2 Lik, we saw the sky speak once, and he's kind of a car guy, yes? Speaker 1 Well, n the a c propulsion guys, it contor reminded the minse and introduced so ito, again, typically elorm fashioned. He's in. He's all in. But he also, you know, he's also given ten thousand dollars to j b. Strauble, as we talked about with ry packs. ([Time 0:26:26](https://share.snipd.com/snip/564bed09-2918-4bc3-a32e-ec88467570b9)) - The Fixer Key takeaways: (* There was a personality clash between Elon Musk and Everhard van der Zande., * In early 2007, Valor Equity sent a fixer to assess the situation with production of the roadster., * The fixer found that there were major problems with production.) Transcript: Speaker 1 And this is why ido wanted to spend the time talking about the background up front a. By the way, a lot of this history comes from ashley vance's great book biography of elon, called elon musk. Elon isfor allof his tony stark, ironman. He don't much like tony stark, like, he's very sensitive and emotional, like, inside, like, he went through just terrible, you know, betrayals and, you know, heartache and burns with with his first few companies. And, like, you can very much see that coming coming out here and demanding this roll, demanding this recognition. So all this is happening, there's personality clash starting to happen between elon and everhard. And in the midst of this, as we get into early two thousand seven, it becomes clear that there are major, major problems with roadster production. It's not going to ship any time soon, and ther things are not good. So one of the new investors that came in in the series c was a firm called valor equity. And they had invested in other things in the automotive industry. They were more nonata v c. I think they're based in chicago. I could be wrong on that, but theyre, you know, not a sillan vallu b c. They have experience in this industry. They send in a fixer to kind of assess the situation of what's going on with production, with the roadster. ([Time 0:37:36](https://share.snipd.com/snip/4af3ae01-5eae-4319-acfc-e19f9b04ebc7)) - Tesla's Struggle to Bring the Roadster to Market Key takeaways: • Tesla's rapid transition from a small company to a major player in the automotive industry was shortlived. • Tesla's problems in the financing world were exacerbated by the global recession. • Tesla was helped by the U.S. Government during this time. Transcript: Speaker 1 Well, it was couple of years a tesle, buta drury last less than a year before elan ripe with with marks and, o no. Tha, that rapid transition there. Ye. So elon is now sof tesla. He's, you know, focused on getting the roadster out the door, in production. There's just one problem though, this is the fall of two thousand eight. And leman brothers has just gone der and the world is literally falling apart, particularly the financing world, which is important for, you know, people who want to buy a hundred thousand Dollar cars. The automotive world, where, you know, g m as gone bankrupt, or is going bankrupt. The car industry is literally being bailed out by the u. S. Government. And all throughout all this, tesla has all the problems of, you know, any start up, let alone wone as complicated as this. ([Time 0:44:38](https://share.snipd.com/snip/df5ebdb2-ba21-4553-991d-158d61f8fa65)) - The History of Tesla Key takeaways: (* Tesla was able to achieve success by working with external manufacturers, and by being ahead of the curve in terms of trends., * This was possible because car companies began to break down their vertical integration in the 1990s.) Transcript: Speaker 2 Ye, all right, i've got one. So tesla actually, ha, pieof two. A tessle was made possible by, i think, what eberhard was calling slow moore's law. They noticed that batteries, and specifically lithiamion batteries, were getting seven per cent efficient year over year. And so, well, at the time they started the company, it felt like, ah, this is kind of silly. You know, you can only go a hundred and twenty miles or whatever on a charge, and that's impracticable. They knew that by the time they got to twenty eighteen, we'd be going between three and four hundred miles on a charge for the model s. I love the notion that if you can see a trend and you know where you want to be in a certain number of years, you should start the company x years ahead of time, before other people sort of realize that the future has arrived. And my other one is that something happened in, like, i don't know when. It was some time between the sixties and the nineties, where car companies, rather than entirely vertically integrating, started to work with external manufacturers for components. And so if you were to buy a ford car in the fifties or the forties, you're buying a lot of stuff made by ford. If you're buying a ford car in twenty fifteen, you're buy in something assembled by ford, designed by ford, but they worked with a design shop. They they probly bilt the engine, they probly bilt the chasse, they probly built the drive train, but like everything else, as is done by specialty people. And so that paved the way for tesla to be able to ([Time 1:51:18](https://share.snipd.com/snip/27a42a79-6f53-4717-9c10-eb7111cd64af))