Ep 106 | Elon Musk's Close Call: His Ups & Downs in Business with Brian Gubernick

Thank you for joining me today. It's Brian Gubernick and welcome to the No Days Off podcast where we believe that every single day brings a new opportunity to get better. So let's get into it. Today I'm going to be discussing Elon Musk and specifically a failure or near failure that almost changed the complete trajectory of Elon's business career. Now, why am I talking about this topic? Last week, I was having a conversation with one of my business partners. And she had said to me, you know, I don't know if everyone has the ebbs and flows, the ups and downs in business, like I've been experiencing as of late. You know, and this isn't the first time I've had these ups and downs. I failed in 2004 and had to rebuild, and I kind of fell apart again in 2010 and had to rebuild. And it's, it's gotta just be me. Like, there's no way everybody's experiencing this sort of thing. And I said, no, no, no, everybody does go through these ups and downs, some a little bit more than others, but there's peaks and valleys for all of us. And she said, I don't know if I believe you. And I said, well, who do you think's avoided this sort of thing. And she said, Elon, Elon has had an absolutely amazing career. Everything that guy touches turns to gold. And I said, I think you might have some of the story wrong. During the early days of SpaceX, Elon Musk had several several instances where the company's financial situation was incredibly dire, so much so that it was going to potentially wipe out every single thing he had accumulated up until that point. He had to take significant measures to keep that company afloat. After founding the company in 2002, he initially invested, I think it was around $100 million of his own money into the company. Now, if you didn't know, Elon owned X.com that eventually merged with PayPal. And from the PayPal experience, when that company was eventually sold, Elon worked with a— walked with a pretty solid chunk of change. It's been reported $150, $170 million or so. So he was doing just fine. He starts SpaceX. Why did he start SpaceX? Because the guy genuinely wants to colonize Mars. I mean, that's— he wants to, to, to create life or the ability to live on other planets. So I'd say he's got pretty big goals. And he, and he starts SpaceX in 2002. He drops $100 million of his own money into the company. In the mid-2000s, so a few years later, SpaceX faces multiple launch failures. Which not only hurts their progress, hinders their progress, but it creates massive financial loss. And by 2008, they had 3 consecutive launch failures and the company was out of money, like literally out of money. As a matter of fact, if you read Elon's biography, at one point SpaceX was down to its very last funds and was unable to secure contracts or investments or any money just due to the skepticism around their, their goals and the skepticism around their technology. Remember, they just came off 3 failures and failures in that type of business are not minor. They're major. Musk struggled to meet payroll and he had to make personal sacrifices to ensure the employees were paid. He actually sold personal assets of his own. Including real estate, including, you know, giving up some of his PayPal earnings to infuse capital in SpaceX just to keep it alive. And all he was trying to do was keep it alive for the fourth attempt at rocket launch. Their fourth launch attempt, SpaceX's fourth launch attempt, which was the Falcon 1 rocket, that was in September of 2008. It was literally a make-or-break moment for the company. Elon actually said that if the launch failed, SpaceX would have likely gone bankrupt and shut down. So the stakes were extraordinarily high. So let's just pause for a moment, okay? This guy goes out and builds a career as part of this PayPal explosion and, and financial windfall, gets paid $165, $170 million, takes more than half of that, puts that into SpaceX, his vision, his dream, other companies he was running, takes those dollars all the way down, literally all the way down, burns through all of that cash by meeting payroll, building rockets, doing all of these things that are not cheap, and has maybe like 2 more weeks worth of money to support payroll. He's selling his own assets to keep this company alive. And it's all coming down to the success or failure of this fourth attempt. Talk about going from the highest of highs to maybe not the lowest of lows, but I would say there's a little bit of stress there. Now, as the story goes, that fourth launch attempt of Falcon 1, it actually reached orbit on September 28th, 2008. And clearly, goes without saying, that was a pretty pivotal moment for SpaceX because that successful launch was a massive turning point in that SpaceX was now, you know, now on the map, beyond on the map. They had done something that, that most deemed impossible. And as a result of that success, they got contracts from various clients, including NASA, for different satellite launches and cargo resupply missions and all sorts of other things that go on in outer space. So these contracts, it goes without saying, created much-needed revenue and maybe even more importantly created confidence in SpaceX's capabilities. NASA continues to use SpaceX even still today. Now, he wasn't completely, you know, out of it, right? Like out of the, you know, the, he still, they still had challenges. SpaceX still has its ups and downs, but you know, they've reached some degree of stability today. Now I started this story by talking about SpaceX 2002. 2008 is when he was barely meeting payroll. Think about how long those 6 years were. I mean, think about your own world where it's been challenging. You've had ups and downs. 6 years is a lifetime. Can you imagine the stress? Can you imagine the failure? And many of you are saying, yes, I can imagine it. I just want to make it clear. Where am I going with all this today? The greatest business minds out there, the greatest innovators of our time. You take the Musks, you take the Gates, you take the Bezos, you even look at the Buffetts. And I'll tell you what, you don't hear a heck of a lot around their failures or when they almost lost it all. But every one of them has a story like that. Look up Bezos. Look at how he was building that company out of his garage and how many times he was nearly extinct because of fundraising and the inability to get money to pull together. Take a look at it. And I bring this up today because I just want to point out that again, that the best of the best still have these downward moments. But they figure out a way to get through it and it builds resilience and it builds momentum. And once you get through that sort of thing, you're so much stronger as a result. You think that Elon has any fear these days, let's say around Twitter, where so many people think that thing could potentially tank and he's going to drive it to the ground. Guess what? He doesn't care. And he doesn't— it's— I don't want to say he doesn't care because of his ego, or he certainly has one. We all have one, but he certainly got one. I'm telling you, he doesn't care because, man, that thing dropping a little bit is not anywhere close to the experiences he's had. He's worked on this resilient resiliency muscle for over 20 years of his business career. Any ebbs and flows, ups and downs with Twitter or whatever else he dabbles in today, is nothing compared to that experience. I would bet you— now, I've never had the opportunity of speaking with Elon Musk, but I would bet you he's pretty grateful. He's pretty thankful to have been tested 20 years ago, 15 years ago, to the level he was, because he's that much better a business leader today. So there isn't a focusing question for you today. Instead, I want you to give yourself a little bit of grace as you're striving to build a big business or a big world, recognize it's not all, it's not all in the up all of the time. Over the course of time, the trajectory will be up, but the line on the daily, weekly, monthly, yearly base, that, that growth line is going to be a lot of up and down, just with the constant growth over the course of time. That's all I have for you today. This The No Days Off Podcast. Thank you so much for joining. And remember, every single day brings a new opportunity to get better. So let's get after it.