How Elon Musk Responded to His Worst Year Ever
In 2008, Elon Musk came close to complete failure.
Tesla Motors, the company he took financial control in 2004, was on the brink of bankruptcy. They fired their 3rd CEO in 4 years, laid off 20% of their workforce, and delayed the production of the Model S for a third time. Additionally, they just lost a lawsuit to a rival and desperately needed to close a new round of financing to avoid insolvency. Musk soon became CEO and had to ask his Silicon Valley colleagues for a bailout.
2008 was also the year SpaceX failed another rocket launch. To date they had exactly zero successful launches out of three attempts to achieve orbit.
This was a huge financial hit to Musk. He invested most of his personal fortune and received large investments from his PayPal co-founders. He was quoted as saying SpaceX had only enough money for three unsuccessful flight attempts. This fact made the setback even more grim.
Just 8 years later, these same companies achieved two previously inconceivable milestones in their respective industries.
In 2016, Tesla had the largest vehicle launch in automotive history. Over 325,000 pre-orders were made for the new Model 3 sedan in just one week. Numbers like these have only previously been seen in the consumer electronics and mostly by one company (Apple).
Even more astonishing is that 115,000 of orders came sight unseen. Thousands of fans lined up at Tesla dealerships and happily handed over a $1,000 deposit. Knowing full well that they haven't seen the car and won't drive it for another 2 years.
Tesla Model 3 Launch
In addition to dominating the U.S. luxury market for the third year running, Tesla's Model S became the best selling full-size luxury sedan in Europe. The model that was delayed three times.
Tesla outsold luxury incumbents BMW, Mercedes Benz, and Audi on their home turf. Although I'm unable to find the exact numbers, this may be the first time an American luxury car has sold this well in Europe in over 50 years.
Tesla Model S Compared to the previous years luxury leader
In the last few months SpaceX had a couple of incredible milestones of its own. In December of 2015, they landed a Falcon 9 rocket for the first time at Cape Canaveral. And just last week, SpaceX managed to land their second Falcon 9 rocket, this time at sea.
The booster delivered its resupply mission to International Space Station,rotated on its axis and safely touched down on an autonomous ship. According to Musk, landing and re-using rockets will dramatically lower the cost of launches. It is the critical missing piece to further space exploration.
How was Elon Musk able to turn these two companies around?
After the third failed SpaceX launch in 2008, Musk gave a very candid interview to Wired Magazine. An interview that most CEOs would not have given. His answers provide an important insight into how he was able to turn his fortunes around:
Wired.com: At the end of the day you’re still zero for three; you have so far failed to put a rocket into orbit.
Musk: We haven’t gotten into orbit, true, but we’ve made considerable progress. If it’s an all-or-nothing proposition then we’ve failed. But it’s not all or nothing. We must get to orbit eventually, and we will. It might take us one, two or three more tries, but we will. We will make it work.
Wired.com: How do you maintain your optimism?
Musk: Do I sound optimistic?
Wired.com: Yeah, you always do.
Musk: Optimism, pessimism, fuck that; we’re going to make it happen. As God is my bloody witness, I’m hell-bent on making it work.
Musk's irrational belief that in success is fascinating. Even while facing multiple catastrophic failures, his belief willed his teams from failure to success. Despite all odds.
Realists, take note.