How SpaceX And Tesla Almost Went Bankrupt

The Two Companies Are Alive Only By The Skin Of Their Teeth

After the recent successful launch of SpaceX’s Falcon 9 Rocket, it seems like there’s nothing Elon Musk can’t do.

However, there was a point in time when Elon Musk was hardly sure his companies, Tesla and SpaceX, could even survive. At this year’s South by South West (SXSW) Conference in Austin, TX on March 9th, Musk revealed to the audience that both his companies were on the verge of bankruptcy back in 2008.

During the Q&A session, Musk admitted, "I gave both SpaceX and Tesla a probability of less than 10% likely to succeed," and, "at the beginning in 2002, I wouldn't even let my own friends invest as I didn't want to lose their money."

Musk invested $90 billion out of the $180 million he amassed from selling Paypal to eBay in 2002 into starting SpaceX and Tesla but for years the costs kept mounting.

At the International Astronautical Congress (IAC) conference in Adelaide, Australia last year, Musk also opened up about how he almost ran out of funds to finance his previous costly failures.

"I messed up the first three launches. The first three launches failed. And fortunately the fourth launch, which was, that was the last money that we had for Falcon 1. That fourth launch worked or that would have been it for SpaceX. But fate liked us that day. So, the fourth launch worked," says Musk.

By 2008, with Falcon 1 Rocket's costly third launch failure and Tesla almost going bankrupt just two days before Christmas, he was faced with the decision of whether to split the remaining $ 40 million he had between the two companies or to choose one.

"I could put it all into one company, and the other company would definitely die, or if I split it into both SpaceX and Tesla, then they both might die," he said.

"And when you put your energy into building something, it's your baby, so I couldn't choose. I put the money into both, and thank goodness they both came through."

"SpaceX is alive by the skin of its teeth, and so is Tesla - if things had just gone a little differently, both companies would be dead," he said.

A Driven Pursuit For Life On Mars

When asked about his motivation for entering the space industry, Musk explained that he felt that there was insufficient progress and investment being made to make space travel a reality.

"I wondered why we weren't making progress with getting people on the moon, and where are all the space hotels we were promised in 2001: A Space Odyssey?" he said.

Convinced that life on Mars is both possible and necessary, Musk firmly believes that space offers a possible solution to help the global population survive and thrive should a third world war occur.

While Musk may have gone through dark times during his business, there’s no denying that both companies are on a steady upward trajectory today. With Musk’s ambitious goal to “do short [Mars] flights back and forth sometime during the first half of next year”, space travel might just be a lot closer than we think.


Written by
Huiling covers a diverse range of topics at Billionaire, fuelled by her passion for environmental sustainability and humanitarian advocacy. In her downtime, she enjoys getting lost in a good book and tending to her urban garden.

 

BLLNR (Billionaire) is a platform for Entrepreneurs, Business Leaders and Creatives in Singapore.

 

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