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Elon had already formalized how to build a modest sized rocket for a specific market segment. It was on the flight home, after an unsuccessful attempt to buy Russian ICBMs. He showed his team a spreadsheet. It listed materials, costs, and calculations. He presented proof that it was possible to assemble and launch a rocket. Elon Musk incorporated SpaceX on March 14, 2002. It would create a whole new sub-market, providing low-cost rockets to the world.
The following is Methods of Prosperity newsletter number 33. It was originally deployed February 1, 2024. As of October 10, 2024, original subscribers have received up to issue number 69: Phil Knight (continued).
Part 33.
Elon Musk
PayPal Mafia boss / SpaceX / electric cars (continued).
TL;DR
PayPal sold to eBay, providing Elon with $100 million to put into SpaceX. During this time, Elon and Justine lost their first child. Elon’s determination intensified. SpaceX built the first low-cost rocket built from scratch, failing to launch 3 times. In 2003, Elon partnered with JB Straubel to build electric cars.
Key lessons:
Collaboration is more useful than competition.
Expect something to go wrong.
Focus on the future.
Be extra ambitious.
We’re improving quality of life at scale for hard working families.
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His exit from PayPal gave him $100 million in liquidity to put into SpaceX, and build the Falcon 1 in 2003. It was the first low-cost rocket built from scratch by a small team. Near the end of the decade he slated a trip to Mars. That ambitious timeline is typical of Elon Musk.
The PayPal Mafia announced the eBay deal. Behind the scenes, Elon and Justine lost their first child, named Nevada. their child died from “a sudden infant death syndrome related incident”. This was according to doctors. Refusing to wallow in sadness, Elon threw himself into his work. He is forward-moving and doesn’t dwell in dark places. Within the next 5 years, his wife gave birth to twins, then triplets.
Before launching Falcon 1, SpaceX announced plans for a second rocket. Along with the Falcon 1, it would build the Falcon 5. This rocket would have five engines and carry more weight: 9,200 lbs to low orbit around Earth. Capable of resupplying missions to the International Space Station, it attracted NASA contracts.
SpaceX first launched from Omelek Island. It’s part of the Kwajalein Atoll in the Marshall Islands. Omelek Island provided the ideal location for launches. This was due to its proximity to the equator, which made it easier to reach orbit. The company began launching Falcon 1 rockets from this island on March 24, 2006. In the control room that day, Musk wore shorts, flip-flops, and a t-shirt. He paced back and forth as the rocket took off. Around 25 seconds in, Falcon 1’s Merlin engine caught on fire. It lost control and tumbled back to earth, falling onto the launch site. The satellite cargo smashed through SpaceX’s machine shop roof. It landed more or less intact on the floor. Some of the engineers dived to the bottom of the reef to recover the pieces of the rocket.
SpaceX’s Falcon 1 rocket experienced three failures before achieving success. The first three launches for the Falcon 1 were unsuccessful. The second failure occurred in 2007, and the third failure was in 2008. It was not until the fourth attempt in 2008 that the Falcon 1 achieved its first successful launch. It was the first successful liquid-propelled orbital launch vehicle. Never before had a a private company funded a similar mission.
In the fall of 2003, Elon Musk met JB Straubel. Straubel developed lithium ion battery technology for electric vehicles. He’d been making significant progress and was seeking funding. Elon had been thinking about electric vehicles powered by ultra-capacitors for many years. Impressed with Straubel, Elon Musk invested $10,000 of the $100,000 Straubel was seeking. Straubel then introduced Musk to his friends at AC Propulsion.
The tzero was a handmade electric sports car. AC Propulsion designed and built it in very limited numbers by the early 2000s. It was a prototype vehicle built by hand in 1997. The tzero was fast and ran on lithium-ion battery cells. Musk fell in love with the car. He offered to help bring this proof-of-concept into commercial production.
There’s an uncanny phenomenon. Separate, similar great inventions and discoveries simultaneously happen. Werner Heisenberg formulated matrix mechanics in 1925. He provided a mathematical framework for quantum mechanics. Erwin Schrödinger, in the same year, developed wave mechanics. Schrödinger offered an alternative description of quantum phenomena. In 1999, both Elon Musk and Peter Thiel had been working on a peer-to-peer payment system. In both instances, a user could send money to an email address. In 2003, Elon Musk and JB Straubel were not the only ones working on electric cars.
To be continued…
I like you,
– Sean Allen Fenn
Methods of Prosperity newsletter is intended to share ideas and build relationships. To become a billionaire, one must first be conditioned to think like a billionaire. To that agenda, this newsletter studies remarkable people in history who demonstrated what to do (and what not to do). Your feedback is welcome. For more information about the author, please visit seanallenfenn.com/faq.
