A white knuckle ride: early days of SpaceX

Elon Musk’s early days as part of the “PayPal mafia” are well-documented. His teaming up with Peter Thiel made him $180 million after eBay bought PayPal for $1.5 billion. That was after he had been forced out of the company, accused of being a confrontational egomaniac.

Post-PayPal, Musk became enamored of Los Angeles, moving his young family (wife Justine and their five sons) there. He was drawn to LA’s history in the aeronautics and space industry, and wanted to do “something meaningful” beyond internet services. This was pre-Tesla.

Musk made two trips to Russia to try to buy a couple of old ICBM missiles which could be converted into rockets, before working out that he could build his own. His idea: fill a gap in the market for taking small satellites and research payloads into space. 

With space expert Tom Mueller in charge of science and engineering, in 2002 Musk’s new company SpaceX was launched with the aim of becoming “the Southwest Airlines of Space”. Radically cheaper launches would contrast with bloated NASA and corporations like TRW & Lockheed Martin.

Yet by 2008 Musk had poured $100 million of his own money into SpaceX, with little result. Failed launch followed failed launch. To make matters worse, his marriage to Justine was falling apart. 

Finally, in September 2008, the fourth SpaceX launch became the first privately made rocket to leave the Earth’s atmosphere. But Musk had run out of money. He battled to keep Tesla (which he’d been pouring money into since 2004) and Space X from going into administration.

Musk had to juggle cash between SpaceX and Tesla, and coopt investors to give more. Tesla received commitments of more funding on Christmas Eve 2008, hours before it would have gone bankrupt. 

Through this period, his new partner British actress Talulah Riley saw him fall into depression and experience swings in weight loss and gain. Musk had borrowed money from friends, and instead of flying his jet, was using Southwest Airlines. 

But SpaceX was in for a surprise: NASA decided to give it a contract for $1.6 billion for a dozen flights to the International Space Station. Its future now seemed secured. Today, SpaceX is one of the most valuable private companies on the planet, valued at $100 billion.

Bottom line: There was nothing inevitable about Musk’s success. His early days span huge technical failures, near bankruptcies & divorce. Ex-wife Justine told biographer Ashlee Vance, “People didn’t always get the sacrifice he made in order to be where he was”.