Remembering When Elon Almost Went Under

To all the aspiring entrepreneurs battling through COVID: With the hopeful Crew Dragon launch on Saturday, Elon will show us yet again what the human spirit is capable of and usher in manned space flight’s next chapter. However, I remember & experienced when not one but all three of his companies were on the brink of extinction at once at the end of 2009. Tesla was running out of money ( had a count-down timer), SolarCity lost its California tax incentives (rev dropped 90%) and SpaceX was down to one final, make or break rocket launch. The co-founder of Paypal was deep in the red.

I’ve known Elon since we were on a board together in the early 2000’s. When I was at DFJ Portage, DFJ was an early or initial investor in all three of his companies. We saw our investments flirt with death and witnessed first hand Elon’s tenacity, focus and force of will during this dire time. Below is an interesting short montage:  
There are a lot of things that make Elon who he is. At the risk of way over-simplifying, here are a couple:

  1. Be clear on your purpose & make it worthy as you will be tested hard. Too many entrepreneurs focus on the wrong things like making a fortune or feeding their ego with status/success. These provide no support and become emotional boat anchors during trying times. SpaceX: make space flight affordable to almost anyone (also, ensure the survival of mankind) and give people a sense of excitement in the future.
  2. Focus on only the key technical limiters in the way.  When Elon is focused on an issue, he is maniacally single-threaded in his attention. A common Entrepreneurial error is being distracted or focusing on non-essential matters. Know the core 1-2 things you need to deliver on for success and focus obsessively on it/them. Tesla: one was to build a 300 mile EV battery that wouldn’t burn up.
  3. Take definitive action in the face of fear and be relentless in your commitment. As Edison said:

“Many of life’s failures are people who did not realize how close they were to success when they gave up…I have not failed [regarding the light bulb]. I’ve just found 10,000 ways that won’t work.”  — Thomas Edison

In the end, Mercedes invested in Tesla (for the battery tech above) which triggered a $465m government loan. Fisker was not able to deliver on its tech, failed to get a loan and went under. SpaceX’s final rocket successfully launched, generating billions in launch backlog. Solar City’s subsidies came back.

So, as you strive diligently in these hard times, remember that daylight is around the corner eventually. As the Under Armor Phelps ad says: “What you do in the dark puts you in the light…Rule Yourself”.