Third Row Tesla Podcast – Episode 7 - Elon Musk's Story - Director's Cut

welcome to the thermo Tesla podcast my name is Safi infer ball and today we have a very special guest but before I introduce our special guest I'm going to go through and introduce our crew so our regular their third row Tesla podcast recruit so today we have omar Kazi hustle truth boom we have Kristen hey hey ten thank you and we got Vincent you from Tess main Ian hi all right great and then we got Galileo Russell from hyper change what out third row and that we got viv who's falcon heavy hey okay all right Omar you want to introduce our guest please welcome the inventor of the car fart Elon Musk thank you thank you put that on my gravestone so yeah it's kind of crazy that were actually all here and thank you so much for doing this hey welcome we're all test the customers fans and it's really good that it's finally happening I remember that I was looking at your Wikipedia tweet and there's like this bizarre fictionalized version of reality yeah and I replied town like why don't you come on a podcast and like tell your fix my reality until my fictionalized and you're quite okay sure and I was kind of like taken by surprise by that and you know the way you engage and listen to your customers online it's like I've never seen anything like that from you know CEO of a public company or any executive so can you tell us a little bit where that came from why you communicate directly instead of like having this a PR strategy that most companies have sure um well I mean it started out I actually had one of the very very first Twitter accounts like when it was like less than 10,000 people and I've been and then orders tweeting at me like what kind of latte they had at Starbucks and like if this seems like the silliest thing ever so I deleted my Twitter account and then someone else took it over and so I'm tweeting in my name yeah and then a couple of friends of mine well Lee and Jason Calacanis said they both said hey you should really use Twitter to get your message out and also some somebody's tweeting in your name and they're crazy things so I'll say crazy things in my name did you have to pay them no no they they they I'm not sure who it was but it was some reason that I don't I got my account back great and and then I were just I don't know it's some grits I could just sort of I just start tweeting for fun really and when my early tweets were quite crazy as I was trying to explain like it has the arc of insanity is short if we met it's not very steep because it started off insane and so if it's still insane its you know hasn't changed that much so yeah and I don't know I it's it's in kind of fun too you know it does it I think I said this before it's like you know so we will use their hair to express myself I use Twitter why do you like to order so much I mean you could use exactly well I gotta trust Facebook you know and and and then Instagram is is fine but it's I think not exactly my style it's hard to convey a intellectual arguments on Instagram I don't know it's hard on Twitter to but it's but you can't you know it's so instagrams also in my Facebook's and I was like yeah deleted yeah yeah just leave it when I it's like I don't really need to just if I need to say something I don't really need said on one platform pretty much and that's an answer if I try that and I don't ever spent too much time in social media so was just like Al if if you're wondering what I'm saying then they can just sort of go to Twitter you know else to keep doing that as long as Twitter is good I suppose more good than bad yeah if your crypto scammers are really taking advantage of Vincent recently I know management really yeah like 10 Vincent's out they totally everything it just like change one use my avatars and then the picture and then they just post like right below yeah your tweet you know yeah I'll say Wow yeah and they block me too we fight them all the time we're always like reporting them like every day we were report like 10 people yeah yeah I have so many like yeah exactly the conversations Twitter like come on hey can you just like I think or take like three or four custom shows people to just look look at this it's crypto scam block it and it should be easy it should be easy should be it then like my wife fee and Shelley I think you'd like to treat the other day she got banned for like replying to one of your tweets and quoting like the video inside of it and that she got suspended for like a day or something I was like what the heck is going on yeah so it's just weird how the algorithm works yeah so yeah there's a lot of manipulation but you're going back to the Wikipedia page you know it's kind of interesting just what a decade you've had I remember I was reading somebody's article I think they interviewed you in 2009 or something like that and they said you know if you'd met Elon Musk in 2009 right after the recession they're like struggling with the Roadster you know you never would have thought that you are where you are today you're you know launching astronauts into space well yeah this year you know servicing the International Space Station I mean Tesla with the model the the model y you know electrification really without Tesla it would not be where to stay you see where the other legacy automakers are they're not doing great so you know looking at kind of like this like you've become this legendary figure and looking at kind of like how people kind of see you kind of the Ashley Vance biography or Wikipedia page what is it that really kind of sticks out to you or you know makes you laugh like that's just completely off-base yeah well I think I mentioned that the that I kept in referred to as an investor in yeah and like that much things in a psychic but I actually don't invest really except in companies that I helped create so I only have their only publicly traded share that I have at all is Tesla I have no diversity on publicly traded shares like us and yeah that's right quite unusual so you know almost everyone you diversify so degree and then the only stock that I have of significance outside Tesla SpaceX which is privately it was probably a private corporation and and then in order to get liquidity which is mostly to reinvest in SpaceX and Tesla and occasionally in like provide funding for much more projects like your link and boring company then I'll actually take out loans against the Tesla and SpaceX talk so the so what so what I actually have is is whatever my Tesla SpaceX talk is and then there's about a billion dollars of debt against that so word which you know it's it's that this is sort of taken to apply that I'm claiming that I have no money which I'm not claiming [Music] but is it somebody make it clear that you'll see some like number them some big number in like four or something people will think I have the talents basic stock and I have the cash mm-hmm and I'm being somehow I'm just sitting on the cash I'm sure nothing like hoarding resources like no it's you know the only alternative would be to say okay let's give the stock to the government or something and then the gum would be running things and the government it just is not good at running things that's the main thing but there's like like a fundamental sort of question of like consumption versus capital allocation that was probably getting me into trouble but I you know the the the paradigm of say communism versus capitalism I think is fundamentally what was sort of orthogonal to the reality of of actual economics it ended like in some ways so what you're actually care about is like the responsiveness of the feedback loops to the maximizing happiness of population and if if more resources are controlled by entities that have poor response and their feedback loops so if it's like a monopoly corporation or a small oligopoly or in the limit I would take the monopolistic corporation in the limit is the government so you know it's just it's it's this is not to say people work at the governor bad if you're saying people are taken put in a better sort of operating system the situation that outcome will be much better so it's really just what is the responsiveness of the organisation to maximizing the happiness of the people and and so you want to have a competitive situation where it's truly competitive where companies aren't gaming the system and and then where the rules are set correctly and and then you need to be on the alert for regulatory capture where the the referees are fact captured by the players which is you know and the player should not control the referees you know essentially it was like which which can happen you know I think like that happened for example with I think visitor efficient vehicle mandate in in California where the California was like really strict on EVs and then they the car companies managed to sort of frankly in my view trick the regulators into saying okay you don't you don't need to be so hardcore about the EVs and instead you say save fuel cells of the future but fuel cells of course many years away certainly forever this is a then citizen that they let up the rules and then you know GM recalled the ev1 and crushed him in it exactly yeah a junkyard was against the wishes the oh okay all lined up to buy them and they wouldn't let him buy him I mean Chris painted this great documentary on it and it's like the you know the owners of the of the ev1 which while there wasn't actually that great of a car but they still wanted the electric car so bad that they held a candlelit vigil at the junkyard where they were cosmic crushed oh well like it like it was like a like a prisoner being executed or so yeah that was literally you know and like a win in the last time you even a heard of that for a product right you know GM is stops to the product I mean what I mean listen man they don't doing that for any other GM product hard to get through these guys you know so anyway I think that's a very important thing so generally where you could see like these oligopolies forming or do uh please the and then they get effective price-fixing and the night they cut back an R&D budget I like it I kind of a silly one frankly it's like it like candy like there's a candy oligopoly and it's like wins the we don't see much innovation in candy so you're still working on the candy comfort gel candy is that boring boring candy it wasn't he's gonna be boring I haven't seen a Candide yet that's good enough to send out but and it's yeah but I think I think it it's it's there's like three companies or something that control the whole the candy in the world pretty much and dog food yeah there's somebody constructed like this it's this crazy conglomerate and and it's like and it's like dog food and baby food and candy and it's like all you know all the brand's arranged yeah but you hung yourself friends yeah you think you're buying for different companies but all funnels up to like three companies or something like that don't send the rendering food to the candy company yeah yeah big candy you want to have like a good competitive forcing function so that you have to make a product better or or you lose like you can make the park better and and and improve the product for the end consumer then then that company should have literally less prosperity compared to a company it makes better products another car industry you know it is actually pretty competitive mmm-hmm so that's good and yet something like that but the good thing about a competitive industries than if you make a product that's better it's gonna do better in the marketplace oh this is Gene Wilder's old house yeah it's lovely thanks for having us here well thank you really special yeah it's a good it's a cool spot has got a solar glass roof yeah right we didn't notice it but you checked it out the second time yeah I'm waiting for my three so I'm waitin for Version three well whatever is they're gonna put on I don't care emotion three yeah yeah for two it yeah we saw it at the store in Torrance actually they've got in the stores now looks really good well the night that the it's an actually designed touch that you don't notice it so he's like this like it's all hot this is like it's an old house and I'm probably fifty years old something like that and it's quite quirky so if you put something on that was like it didn't blend in that it would it would not look right it would be pretty strident and this had a black comp single roof so I was like okay let's see if we can actually have it weave in and still feel natural look good and yeah and I think it's it's achieve that goal oh yeah this is a lovely quickie little house I'll show you around afterwards it's got all sorts of weird things it's exactly what sorry is it Frank Lloyd Wright now I I don't think so I think it was just built in increments over time by probably several people but then there they would have just knocked it down and built a giant house here so it's like so glad I didn't yeah it's super cool really so Gene Wilder's were my favorite actress actually so it's great for movies so so when you come up with a product like the solar glass roof I think a lot of people misunderstand that like your goal is to bring these crazy technologies to market and really create a change in the world yeah and so I think it's fascinating that you do it through companies and it seems like the fastest way to create that feedback loop and to really like get go from inventing something to millions of people using it right away yes so lately it seems like buying a Tesla is almost like the best thing you could do to help the climate crisis because you're like turbocharging R&D and products and innovation I feel like not enough people really understand that yeah that is so I think there's lots of good things people can do for the climate but just generally anything that is moving towards sustainable energy it was sustainable energy create a generation through solar or with an electric vehicle actually just think just things like better insulation in a house because is just really effective for energy consumption but refugees morph ingratiate let's move on the motion oh I actually got him a little following a little knitted mom in the Martian you know the helmet with you I look super cute so did you always know like you know business was the way you wanted to kind of attract attack these problems versus say you know maybe a nonprofit or you know working as a college professor or something I don't know well when I was in high school I thought I most likely be doing physics at a particle accelerator so that's what as a physics and computer I mean I got distinctions in two areas in physics and computer science and those were yes I'm like two best subjects and I and then I thought okay well but I want to forget what's the nature of the universe and so you know go try to working with people banging particles together see what happens and and then it sort of things went along in the the superconducting supercollider got canceled in the US and that actually was like whoa you know what if I I'm working at a collider there's been all these years and then the gum it just cancels it Wow and then that would was like oh I can do that so um so it's like well we were all back a little like a chef record we're going to kill like I'd like this existential crisis and about 12 years older than the end and I was like well what does the world mean wait what's real about reliving some meaningless existence and then I met I made the mistake of reading Nietzsche and Schopenhauer and don't do that to need to build older everything now right actually lately these days I sort of reread it slowly you know it's actually another bad oh wait he's got issues got issues but you know it's anyway so but there are the Hitchhiker's Guide to the galaxy Douglas Adams shoes which is like quite a really quite a good book on philosophy I think and I was like okay we don't really know what the answer is obviously so but the universe the universe is the answer and that really what are the questions we should be asking to better understand the nature of the universe and so then to the degree that we expand the scope and scale of consciousness then we'll better be able to answer the ask the questions and understand the why we're here or what it's all about and so we should sort of take the set of actions that are most likely to result in us understanding what questions to ask about the nature of the universe so the therefore we must propagate a human civilization on earth as far into the future as possible and become a multi-planet species to again extend the scope and scale of consciousness and increase their probable I've span of consciousness which it's gonna be I think probably a lot of machine consciousness as well in the future and that's the best we can do basically you know and yeah that's best we do so yeah and think about the various problems that we're facing or what would most likely changed the future the when they were in college there were five things that I thought would be I thought these were actually the I would not regard this as a profound insight but rather an obvious one the you know the internet would fundamentally change humanity because it's it's like an even become more of a super organism because the Internet is like the nervous like nervous system um now suddenly any part of the human human isms anywhere would have access to all the information made instantly neuro-link hey well I can imagine if you didn't have a nervous system you wouldn't know what's going right fingers wouldn't know what's going on or your toes were knows what's going on it had to do it by diffusion and the way information used to work was really by diffusion one human would have to call another human or to write them like it was in a letter you would have to write let you'd have to have that letter to another human that would be carried through a bunch of things plain little person would give it to you inefficient extremely slow diffusion and if you wanted access to books if you're not did not have a library you're no you don't have it that's right so now you have access to all the books instantly and you if you can be in a remote like you know mountaintop drunkle location or something and have access to all of humanity's information if you've got a link to the internet this was a fundamental profound change so that's one thing I was on the internet burly because of it you know in the physics community that was pretty normal although it was interface was you know wasn't have e-text and hard to use but that another one via of making life multiplanetary making consciousness multiplanetary the changing human genetics obviously I'm not doing by the way is a thorny subject but it would it is being done with CRISPR and others you know it would it will it will become normal to to I think to change the human genome like what's the opportunity something that's inevitable or well you know I think for sure as far as say getting rid of diseases or propensity to various diseases than evil that that's gonna be like the first thing that do you want to head it out you know it's like if you've got like your you know the situation where you're definitely gonna die of some kind of cancer or at age 55 prefer to have that edited out yeah definitely so I think unit that out you know there's a big the Gattaca sort of extreme thing where it's not really edited out but it's like it's edited in for various enhancements and that kind of thing I which probably will come to but I was saying you know argue for or against that I'm just saying this they're more likely to come the night at down the road yeah so then and then a I really major one so these are all big motivational factors no - yeah keep our consciousness going oh and it's a sustained sustainable yes yeah so sustainable energy so sustainable energy actually was something that I thought was important before the vytal environment implications became as obvious as they they are so because if you've mined and burn hydrocarbons then you're gonna run out of them because you it's not like it's not like quite a mining sort of service a metals for example if you can if you know that we recycle steel and aluminium and because that's just it's it's not a change of energy stage whereas if you if you take fossil fuels you're taking some from a high energy state converting it to a lower energy state like co2 which is extremely stable you know so whereas and we will never run out of metals not a problem we will run out of mind hydrocarbons and then necessarily if we have got billions ultimately trillions of tons of hydrocarbons that were very deep underground in solid liquid gas form whatever but they're deep underground you say shield remove them from deep underground to the oceans the atmosphere you will have a change in the chemistry of the of the surface obviously and then there's just a sudden probably associated with well how bad will that be and the range of possibilities goes from mildly bad to extremely bad but then why would you run that experiment that seems like the crazy solution ever especially since we have to go to sustainable energy anyway why would you run that experiment this is just the maddest thing I've ever heard I'm not saying there shouldn't be some use of hydrocarbons on earth but there just should be the cover of the correct price for a place on co2 production mmm-hmm and and the obvious thing to do is have us here is a carbon tax it's a no-brainer every I don't know the 90 plus percent of economists would say this that I think physicists and it's just the you know the market system works well if you've got the right price and things it's very very simple and if you've got a price of zero effectively or very low then it's well people wave accordingly though so just that's that's the thing that needs to get done I think it will get done and and then the the if our time is you raise the price on our table and you can actually I think encourage of sequestration technologies over time and they'll be a lot of innovation in that regard and know that's a right way to do it so you had these realizations about you know areas of big value and you ain't and started zip to you sold it got you know twenty million cash you were the largest shareholder of PayPal at the time eBay acquired it I think you know you got 160 million or something like that I you know you have enough money basically for an entire lifetime why go and put your money into space X which is a huge you know risky operation or Tesla why not just kind of you know relax sure what so yeah basically you know I I graduated from from from Penn basically physics and economics and then that we rented a road trip to to Stanford with with Robin Ren who is in my physics class and now works at Tesla actually it's cool yeah you grew up in Shanghai yeah so yeah yeah this was a very smart guy he ended up continuing at Stanford and I ended up going on deferment to Cal plays into the semester but I was gonna be studying material science and the physics of high-intensity capacitors for yeast and electric vehicles so that intent was I was gonna okay I'm gonna work energy storage solutions for electric vehicles and I'd worked at a company at Cold pinnacle research for a couple summers that did high high energy density capacitors I was going to try to do a factory like a solid-state version of of what they were doing with yeah it's gonna get very complicated from a technical standpoint but they were using a routine at the ruthenium tantalum oxide lithium is extremely rare and expensive it cannot scale act so like can you find a substitute for ruthenium but we are able to get to the energy density is comparable to let us a battery but with incredibly high power density so bro I cannot go down a deep rabbit hole there but what's the purpose of a capacitor in any option Buster no I think with the advent of high energy lithium-ion batteries a capacitor is not not the right path was your thinking back then though that made you think it could be useful for v's I want to use advantage of making equipment to make capacitors that were precise at a molecular level so at the you know just a level of precision that was sort of unheard of in in capacitors like capacitors energy is a function of its area however and the separation distance so if you have if you could have very tiny separation distance and you can cook and you can have it quantum tunneling it likes it how do things get pretty esoteric so you got to inherit quantity' tunneling give very short gap and and then you could in theory get to very high energy densities you by making capacitors in the way that you would make a an x86 processor and since those there are tens of millions dollars going into chip making Rd that I thought there might be a way to make an advanced capacitor using chip making equipment instead of the conventional means so is it off the table alter capacitor it's unnecessary okay interesting it so necessary it's it's it I think I think it's it thinks probably it's physically possible it's unnecessary at this point I mean I know a lot of people were talking about Maxwell and they'd been working on some stuff with capacitors the funny thing is that when I was doing the my internships at this advanced capacitor chemical pickle research which was in Los Gatos we talked a lot about Maxwell and Maxwell was also trying to make high indigenous to capacitors no Tesla acquired Maxwell awesome yeah Wow we're looking forward to that investor day yeah it's kind of a big deal that's great great to know Maxwell has a bunch of technologies that are that the where if they're applied in the right way I think can be have a very big impact like the dry electrode stuff don't be one of them little ones we do yeah for sure okay much much bigger deal that may seem yeah there's a few other things with with the the space that takes up for the ovens that you know for the current technology you can save all that that real estate space now that's one aspect and the cost reduction the weight savings I mean there's so many pluses right yes there's many things that but I'll have to wait until you know whatever battery day sure you know hopeful in a few months but I think we got some pretty exciting things to share so Galle is very excited yeah it seems like the pace of the innovation of that the battery thing is just taken off like since you have some more capital and being able to like have the gigafactory be vertically integrated just seems like no other car companies making that many batteries so they're not even thinking about what comes next but thanks they're not you know not even come cool oh I can 201 miles not nerdy that's a joke yeah no it's really I the other car country just really when I outsource battery technology not nerdy even not even making the thickest battery module and cell but they're they're obviously out so I've seen the sales but even outsourcing modules in the packs yeah you know and and it's like they're really not thinking about fundamental chemistry improvements and there's some pretty deep wizardry it has on this run it I should say bit about like like electric vehicles and and and it's all sustainable energy in general you know I said it was free I think obvious to not not just meat to me ever to a lot of people even go back 30 years or longer that we must have a sustainable energy solution in fact it's total article if it's if it's if it's not sustainable we must at some point find an alternative to it and so even if there were no environmental impact to the sort of fossil fuel economy then it would run out of them and then we would have economic collapse and the world civilization fall apart so so that was actually my initial motivation for electric vehicles it's like okay we're going to have a solution that does not require mining hydrocarbons that is sustainable in the long term it was not actually initially from an environmental standpoint because I don't realized the gravity of the environmental situation at that time and I thought actually for sure by now we have electric cars like for sure but yeah totally why are we not back emits contain he doesn't say if he said salt something in 69 that yeah that we're not a be back on the moon and in like 2020 that would be like are you probably might even punched honestly because I feel like you're just it's it's like in so insolently route to the future like what is wrong with you it's encouraging though yeah yeah yeah so it's like we should we have a share of base on the membership send people to Mars no no that's occurred you know it's gonna those we were to make that happen yeah so this but on the society front it was really like said it not somewhat initially not so much from an environmental standpoint but from a necessity of replacing a finite resource in order to ensure that civilization could continue to grow and then the urgency of it became much more obvious like well we're just really better do something because the environmental stuff is becoming quite serious and the the the inertia of lodge and companies is just hard to appreciate it they just want to keep doing the same thing and maybe 5% different every year maybe 5% difference um big companies hit change so um so then the you know the time the Tesla universe was created or we you know there was no no one was doing electric cars no they worked really startups there weren't the big car companies weren't doing it GM and Toyota cancelled their IV programs now everybody is doing is right now like if and their mom is doing it yeah and we will all like to congratulate about the gigafactory 3.1 yeah yeah yes and I would like to know like why China is the best country to build the first form gigafactory China is the biggest consumer cars in the world so it's the basis so that that that alone would be enough to do it thank also there was a lot of uncertainty about tariffs and and you know it's like potentially would be unable to sell effectively in China if we did not have factory locally yes or at least been able to sell at prices that weren't extremely high but those are really the two two main reasons I think that book the open I think was also a third important reason that there's just so much talent and drive in China that I think it's a good place to do a lot of things um and the evidence is is there in the incredible progress in the factory which was both with very very high quality in very short period of time and the the cars coming out of of Shanghai are already very high quality I can't tell and the run rate is amazing and I love that they used the Chinese badge as well it's like a symbol of pride and a jerk you know made made in China so yes supercool how did Tesla managed to get the first wholly-owned foreign car company in China I mean a factory well I've went to China many times and they kept saying that we would have to do this you know majority local and rancher and and I said that well I ripped apart or somebody said well you know we're a little late to the dance here you know so Rudy partner with you know and nobody then we left and and and also we're just a little company so you know we've you know that like because they should get married and like we were young you know and then so then yeah but I know and they're also pointing out like you know this to me Chinese companies that are gonna you know they're establishing factories in or in the US and it's like Faraday future and that kind of thing and and that's harps on owned by them and so for me to be fair it should be allowed that an American company should be able to own its factory in China as well and so we have talked him over a number of years and they eventually said okay well which will trip will change slow and the changes law but now those other companies can't do it as well and so it's not just limited to Tesla and how much of that production he'll like learning's have really enabled because one of the I don't want like to bring up capex but one of my favorite things is the stats and the shareholder letter if it's so much cheaper not only faster but it seems like the you guys have learned so much from this the Fremont factory and that really enabled like kind of a turbocharged build for Shanghai yeah the I think the big difference is is like we are way less dumb than we were so the the fortress of cavil expenditures was very high and it's less I know [Laughter] and then with the the shanghai factory we designed out all of or as much of the the foolishness as we could think of and that exists at fremont and at in nevada so we just made a lot of decisions that weren't smart and and we designed those out so such the production line is much simpler so it's much simpler and and better implemented and then we also found like with us so it's in most cases the suppliers were more efficient in china as well than in the US so but we've also managed to get a lot more output from existing equipment in in the US as well so the model three body line in in fremont for example was only ever meant to do five thousand cars more threes a week and ensuing seven thousand Wow nice nice and and it with was turning off a bunch of unnecessary things that were being done so it did I mean there's just so there's a lot of foolish things they were doing so and were changed some of those ions and made it easier it would it's it's like a hundreds of little things to make it to make it easier to vault and and so being able to get forty percent more output of the same line obviously makes it makes a big difference and and while while reducing the cost the marginal cost of production and I and I think improving the quality of the car so it's all good good stuff was the result of a kind of hard work and a lot of people so yeah it was kind of miss it necessary in that with those we didn't really have a place to put a second military body line so it's like you either we eat to make us one go faster or we will not be able to achieve production but the model three body line in Shanghai is much much simpler than the one in and I said I said that a good way then because it has the same the same end result so if you yeah and and but but it's a much easier to understand this just getting rid of unnecessary movement there's a lot of unnecessary movement in the Fremont's body line but not in Shanghai so you guys said in the production letter that you just started battery production in Shanghai too and I heard that you guys were getting cells from cattle and LG Chem are the cells basically kind of like a commodity part that you can assemble into your battery packs there you know does it make a difference how do you see that long term I believe these cells are not yet from LG would you expect to use locally locally produce cells but I'm like I don't know it's we clear I don't always know exactly what's going on and everywhere in the 50 thousand person company so some of the things like the most most most of the things I say will be correct it's the media occasionally something that's not as to this my knowledge we were not yet using LG Chem cells we were using Panasonic cells made in Nevada but LG Chem can meet pretty much the same cells as Panasonic yes but pretty much is not the same as same so there's still a few bugs to work out with the LG Chem cells before we can use them in our module and battery pack production system the CLL cells or is this a health situation will be more of an integrative module than it will be a cell and that's so that it's it's not just it's not super easy to replace with these things but yeah we'll be we do expect to use the ATL would would expect to use LG currently is using Panasonic I'm gonna say you expect you I mean like roughly about a matter of months so by the middle of year we probably using both LG&E tail in volume so if we were talking about a lot of Tesla stuff but we kind of wanted to ask you about your personal history because we were saying you were saying how there's some misconceptions you would like to make straight and you know Ashley Vance wrote a book about you I just found a lovely book and it was really wonderful I loved it and learned a little bit more history about your family and you've um what are some of the misconceptions that you would like to correct you know most of this is just an inner being kind of water under the bridge that people didn't notice that much yeah I mean this is the sort of some stories in there or it sounds like I like fired people all of a sudden and arbitrarily which was not the case there you know it just Ashley asked somebody who at who didn't know what was going on and then that person was suddenly not there and they didn't know why yeah but you you know I definitely do not fire talented people and yeah you know unless there's no option so yeah and absolutely not know without warning like keep hearing you say we like it sounds like you're always thinking of everybody your ICU is a very selfless person I mean seriously I mean yeah it's like the age 12 that sounds like you've been thinking about how to help humanity yeah I mean I'm not trying to be sort of like some you know the sort of Savior or something like that you know I said it's really just that if it just seems like the it's just I don't know seems like obvious thing to do like I don't know why you do anything else you know we want to maximize happiness to the population and propagate into the future as far as possible and understand the nature of reality and from that I think everything else follows I saw you in Twitter like talking about how that people are having this rumor that you've been wealthy or whole life and that would be like the only reason you became successful when you've debunked that and can you like share more about your upbringing and what led you to going to North America when you're sure I was in in South Africa and it seems like wherever there was like a lot of the advanced technology in the world was being produced in America and there's a Silicon Valley especially so I wanted to be where where I could sort of be have impact on technology so that's or be involved in the creation of new technology so that's what prodded me to go to at first Canada because like he gets doesn't show up in Canada through my mom and then ultimately to the US but yeah I just left South Africa when I 17 and landed Montreal I had like I know about $2,000 Canadian and I started steady staying in a youth hostel for a few days and then there was a you could buy a ticket to go across to camp the country for her bucks and still have a long way and so I did put that and just her that Greyhound across Canada and so all these like little towns well we're getting I didn't have much so I had like a backpack Thank You Ana Pursuit casebooks move it the the the that of the bus company regret had that unloaded it in one of the cities and then the bus left without my light my stuff oh that's nice so this we had nothing all your books but your clothes - actually weirdly I think I might have had the books thing but it's priorities all you needed yeah because I knew I was sitting in the bus station reading waiting for the bus to get ready and I think out the books but not no no but no clothing so yeah but I managed to get to the Swift car Saskatchewan and then what my but it's your cousin cousin Sonja has a wheat farm there and I worked on the wheat farm for about six weeks Wow and today I turn 18 in Saskatchewan it's a town called Swift Current so that was summertime right and it's June yeah yeah June 28th so cuz I've been there in the winter and it's like minus 40 yeah yeah you don't wanna be traveling there yeah did you ice skate did you try ice skating no there was it was quite warm I was just observe for about six weeks oh you're lucky you survived that's good yes old there literally worked working on the wheat farm did a bond raising and I cleared out the wheat bins you know the grain but a grain silo is that kind of thing and I just worked the vegetable patch basically it's doing various things which are mind just thinking of what you're what you're gonna do after that yeah so I figure what I do next in order to do so then when I ended up getting back on the bus and went to Vancouver mm-hmm it had a half uncle there who is kind of in the lumber industry he like made lumber like clever equipment sounds like the Northwest yeah yeah yeah basically so I end up chain sawing logs and working on at the slumber mole and cleaning out the the way that where they boil a pulp and your second create crazy so boiler rooms and that that might be is the hardest job I've had actually because it's like crawl through this little tunnel in a hazmat suit and then I with with shovel with it and then then you shovel esteeming sand and put and mulch out of the the boilers to clean them out and it's like there's only one entrance or exit which is like a little little tunnel if you're claustrophobic you could reveal it real bad and then you could you shovel the the sand and the mulch through the tunnel and actually block the tunnel and then somebody else would reach in and shovel it out from the other side so just a big enough long enough if you have a shovel with the long handle the one person on the inside can shovel it far enough that the someone on the outside can shovel it out oh ha and then yet to rotate every 15 minutes to avoid getting hypothermia safety so just a man looking out for you there's just two people kind of paired up so if like one person's just collapses and you're gonna call somebody but it'd be really hard to drag somebody out I have to say that it does not seem safe because the photon gets blocked trying to get the automatron block that tunnel would be very difficult to in a short period of time it was the highest paying job at the employment office so I was like okay the other jobs for like under eight dollars now and this one was eighteen dollars narrow it by your clothes never gone well they give you a half a hazmat suits yeah yeah how long did you have did you do that job for like four days yeah it was like a short-term thing clean greement cleaning that the boiler rooms so what was next we were in boiler rooms and then yes yeah I met literally was like a lumberjack is chain sawing logs and just during library love her stuff basically um for a few months there and then applied for college go to Queens University in Kingston and it was there for a couple years and then somebody that's just I should reply to UPenn and I I didn't think I'd be able to go because I thank my way through University just which is actually not that hard in Canada because that the tuition system yeah the tuitions have yourselves a night in Canada so so with you know with basically some if you just sort of work during the summer and semester and take out some lumens and some get some scholarship so you can pretty much go to any college in Canada I think but I met so many whose it was at UPenn and and they said you should at least apply and I applied and they they actually gave me like quite a big scholarship so that allowed me to go there and so they did the physics and economics there and and then that thus would like to then roadtrip to Stanford with Robin rain and and and then I thought I was doing that that summer that I was like okay I can either spend several years kind of doing a PhD and another I carry out the PhD actually better Snoodle lab but I could either spend a bunch of yours working in a lab and maybe it would maybe the technology would pan out or maybe it wouldn't but the internet would it was definitely about to go supernova in 95 so it was like okay look I I can always come back to working on electric cars basically and wish I did but the Internet is not gonna wait so so then I put saffron deferment and started sup to which was really just the air we started off with maps and directions Yelp pages white pages that kind of thing and it was hurtful s my knowledge the first math and direction of the internet so and this was some like patents I have I don't know how many more of it I think that 40 laps at this point but for mental directions and your pages and advertising himself and I wrote the whole the whole initial card base I wrote personally because there wasn't any rails I just mean so and I only had a few thousand dollars and then my brother joined and he brought like five thousand dollars which was a lot yeah at least for the first few months there was literally only one computer so the website when the website wasn't working was because I was compiling code and an even chicken an internet connection was pretty hard but there was a inert service provider on the flow of Louis we're more like squatted in this office as the landlord was always like out of the country or something and nobody was using it so you've lived in there yeah I think I read that in for Higgs look you showered it the way I'm seeing then right that's right yes Martha I mean you you're thrifty but you had to do we're just like had no no money what do people think about zip to generally was it like seem is a crazy idea or like do people even understand the internet back then most people did not understand the Internet what people didn't know even on Sand Hill Road like we tried pitching people to invest in an Internet company most the VCS we pitched to had never used the Internet you remember some of the VC firms you went to on Sand Hill iris both sigh we wouldn't take a meeting and a fitter tech meeting they were pretty bored and not said like Lucifer's made money in the internet no were like no one okay but the sea change occurred when Netscape were in public yeah so but the first thing I tried to do was not start a company I try to get a job Netscape but they didn't reply to me oh no oh man so I just I tried tried hanging out and lobby at Netscape I don't know who to talk to you so that's really too shy to talk to anyone I know it so it's like okay I can't get a job at the only Internet company that you know that does the Internet software so then I try writing software so that's um kind of article what happened there yeah and America said my brother came down and joined the cycle like late 95 and then in January 95 I think it was the there was there was a lot more interest in internet stuff falling this the Netscape IPO and best the software software was more impressive I guess so then we then more debt more davidow invested so there VC from wants and Hill Road and they they invested like names like three million dollars for effectively 60% of the company Wow which we thought was crazy so like with these great from there it goes the money for nothing yeah so that seemed like like it crazy that there to keep us to give so much money for that company that consists of the time of about five people like literally I think five people at the time so but it worked out well for them in the end so we heard a lot more people we both out the service and I know but they're also ended up writing a bunch of software to bring the newspapers online so knight-ridder knew time's company Hearst role became investors and customers and at one points up to worse as possible for a significant section of the new york times company your website yeah so i got to know the media industry pretty well and it bit over over what i worked really hard with wizard to use it effectively got too much there was too much control by the existing media companies so that to me board seats and too much voting control and that they kept try to push the company down directions that made no sense okay so we exhibited actually had a really good software i tape started as comparable in some ways more advanced than say a yahoo or excite at the time but it was just not being used properly and it was a little being forced through through media companies who would they're not not use it yeah so it's like yeah it's okay we got the best technology but it's it's not being deployed properly so look we fortunately compact came along and they comp out a cat come by got acquired digital equipment and digital equipment had or at Alta Vista which the time was probably invested the search best search engine so they thought that idea was they will combine Alta Vista with a bunch of other Internet companies and try to compete create a competitor to Yahoo or excite that does the excite used to be a big thing amazingly and you have used to be a big thing a long time ago now it's like owned by Verizon or something yeah and there is a o-l Yahoo is a crazy story they you know yes they failed to acquire Google twice you know Microsoft offered them like 40 billion or something and they turned it down then Alibaba saved them out of nowhere yeah the Alibaba steak was worth more than the whole company owned by like yeah huge amount right it's basically a proxy for Alibaba sure it's training yeah exactly but at one point I mean at that time like if you go back to say 98 99 yahoo seemed like an unstoppable juggernaut yeah like true you have this company will you know there's a behemoth nobody could possibly defeat them but anyway and where's Compaq today yeah but that was their idea which is you know at least if executed well could have made sense and yeah we're recording a podcast yeah how do you want me to join um yeah sure so what do you remember about to do um yeah we remember yeah so but then the internet came along with this huge thing I mean it was always was always there but it became a big deal and then Ilan was working on working in Silicon Valley and as I remember it you know ever heard a meeting where some of the Yellow Pages companies were thinking of doing sort of online yellow pages and know what I would yeah you called me up and you said we should do you think you can do a better job so we think we can do it maybe made that up to try and get Kimball interested how would I be in a meeting with yellow pages cover I have no idea that's what I remember tonight I don't even know any yellow polish yeah I agree with you yeah but but so it was like the April of 1995 we started working on it and the I guess the idea was pretty simple to take mapping and apply it to the Internet and there were there were a few other companies trying to do it but no one with very the very cool technology of sort of what was called vector based mapping which is what we will use today where the map is actually alive you don't know not just a picture that's very head of its time I think we were the first I I know there were other people putting maps on the internet but I think we were the first to put vector based mapping which is what the kind of technology used today on the internet and daughter daughter directions so it was cool like I remember my brother and I pressing go on his server at our office and took about 60 seconds for the first daughter daughter daughter daughter directions to come up on Wow green and even 50 seconds was amazing yeah you're like this is incredible anywhere this is just amazing and definitely seen amazing at the time definitely seemed amazing you time yeah looks like now it's like a psych lab site wherever a little but this was like an impossible thing it was so cool and using Java Ilana had coded a interactive map which again all supernormal stuff today but the ability to just draw a square and zoom in or zoom out that was just unheard of technology change report square remember that it was like a little red square on the java Mara browser it was really that was unusual yes he's like yeah well we cheated if you're using Java applets yeah this is where Java sucked and there's barely yeah the most nice I think we even got some sort of recognition because it was the most advanced java application on on java at the time because it was so ridiculously hard it was it was a really crappy technology at the time this this was done on it this thing is if you if you downloaded the the Java outlet we could we could transmit the vector data not just a bitmap and this is what everyone's on a modem wears on like you know 20 kovetz modem or you know trying to download in a Mac image for take forever whereas if you had but downloading the vector data that locally rendered are you using the java applet was super was relatively speaking super fast yeah that's what made it cool smart yeah I mean yeah even like vector maps are even Google Maps losing like raster Maps a few years ago like seems like very out of its time well we were that I guess that I believe I believe we the two of us were the first humans to see maps and build little directions on the internet which amazin I think it's pretty cool well they were an internet based right so you could you could actually I don't think Garmin was even a player at this point it was NAVTEQ was the only place that we were that's where we got the data from yeah and they were building it for four Hertz never lost which came out a few years later you know those yeah things that no one uses in need the GPS systems really really bad technology but the actual mapping data was amazing and so we took that and applied it to the Internet we were 22 and 23 at the time it had cost some three hundred million dollars to build this data and they gave it to us for free with a simple contract saying if you ever make any money on this you've gotta you gotta come share it with them and that's that's how we got it that's amazing yeah you can switch what happens if you ask that's my sleeve and there's also part of it was these guys have been working so hard on the tech and no one had ever seen what they were doing yeah because it was not on the internet and was not being used for four Hertz and so it was just they were excited that someone would use the data and and would think people could see what they've been working on so how did you guys get the engineering chops to pull this off because it sounds like you were so young you didn't really have any help and then you built like cutting-edge piece of technology Damini limit ourselves er from I don't know what time what age but publisher like blast our game right yeah it was 12 did you write any other cool stuff back then yeah I wrote a bunch of games yeah and then like using the software for a few what asked for software you know you also work for a video game company yeah our family is called rocket science yeah that's funny by the way we took a SpaceX to yesterday was insane thank you for that that was amazing yeah I was so good it's like Batman's lair in there but it gives you perspective on what Tesla's doing because the technology is so advanced and that there's you know interchange of information there like the I know they used to inconel fuse right was from SpaceX when they couldn't get the the power output right it kept burning up the fuse in the the performance models mm-hmm so yeah it's awesome yeah it's pretty cool to see the SpaceX tech being applied to Tess laughing I think there's a jump there's one joint employee between SpaceX and Tesla and it's the materials is it the materials engineer because they're just not that many humans on the planet that know how to do this stuff no well sound like back in the old days it was was it just Elom doing the coding or I mean I did a little for like HTML friends not recently I know there was we're no money so you can employ a short I roll the software when you work through the night right you just amaze look II never slept I don't think I mean we lived in a little office I think this address was for 72 Sherman Way in yeah in Palo Alto it was probably leaving yeah it was probably like 15 feet wide by 30 feet long with a little closet in the back and we would we couldn't afford a place to sleep order like a fighter like a house home or apartment so we would sleep in it and it had to have caps that was a futon and it would pull out the futon take turns sleeping on the future nor the floor well though he caught it a lot of light so I used a futon at night and we had to code it at night because the server when the internet was live needed to be functional and we just had data for the Bay Area at the time so we were just kind of making sure that the people in the Bay Area could use it and then and then we added a little mini fridge with a cooking stove on it and we'd cook simple things you know clip pasta sauce and pasta and things like that that would be as cheap as dirt people think you it's expensive to eat real food is actually really cheap yeah vegetables pasta and beans stuff means super cheap and then and then we would go eat at jack-in-the-box which I can still I'm still kind of shivering probably 20 years or longer maybe 22 years and I can still probably recite the entire menu yeah we cycle through the menu a jack-in-the-box because it was like it's a few blocks away from and it was up in 24 hours open 24 hours it tried to get you know dinner in Palo Alto after 1000 yeah yeah so did they know you very well jack-in-the-box why they didn't really know I did know and I remember one time I got a milkshake and I was so tired I was like four for the morning and just needed to get some sugar for the rest of the night and it was something in it oh no I remember just flicking up and pretending it didn't exist if drinking my milkshake it was like that order that kind of like not in the zone to go back into Jacqueline argue about a milkshake but I don't want to not drink the milk shake I'm koala reason that food was like sir chief is that they had some people I think died of food poisoning right around that time when they got into a food poisoning scare and yeah so that there it was just very cheap to eat there and I figured like you know the quality of you know if taken some action because that after the food poisoning yeah hopefully yeah tastes funny stop eating if it tastes funny you run out of things to eat because they after like the 17th chicken fajita PETA you know ii can't do it the teriyaki bowl a cube okay was that one good it's actually it buried but it was it was edible so which one what the teriyaki bowl teriyaki bowl wasn't bad it was the sort of sourdough grilled grilled cheese thing that was wasn't bad yeah OC reminder that those were the good old days right I mean it was what is even good days I mean we just we were just hoping that people would let us stay in the country we were just doing everything we could to to get to get someone to support the company we didn't really understand I didn't understand a venture capital with that much so we were doing a seed round an angel round and doing our best to talk to everyone and anyone we could find we had a very good friend with us Greg curry who's now passed away who was older than us by about 10 years I think and yeah it was a wonderful mentor helped us out and put little money in as well and and then I did a lot of the work to just find just network with people I think our with our first salesman who was selling Yellow Pages ads for us I was a real estate agent who knew another person who knew this other person who helped us in to help us raise put together we end up not doing around but put together a round of like two hundred thousand dollars or something yeah and then we did like part of it or something yeah but I think once we had the Java Java map which was really quite impressive I mean if you've never seen if you're never you've never seen Google Maps or Yahoo Maps before it really is a remarkable thing to see we we started to go to we got it we got some audiences with some venture capitalist and it just went from we were starving we had no car well the car we had it broken the wheel fell off huh the wheel the wheel fell off yeah what kind of car was it I remember that an old BMW 3 Series until anyway we did a road yeah across the country yeah the one that my mom had some pictures of I think this I think there's still a there's a carve in the tin the road at page mill and I alchemy literally the wheel came off wheel fell off and the guy literally in the intersection just drove it without the wheel it's uni to the side that's pretty much time for the junkyard at that point because the whole car just falling apart so yeah it's like the point which the wheel falls off it's time to go to the junkyard know that was now that was way smaller so that's way later because we already had to deal but we were uh we were not I don't know if you were but I was not legally in America so I was illegally there I was legally there but what I was made unique student work oh yeah a student worker you were doing a Pete you were supposed to be doing a PhD in Stanford didn't ya decided not to so and that's like as loud if you work sort of supporting whatever you know I try to get a visa but this isn't there just not no visa you can get to do a startup yeah fortunately nobody was paying you anything and so so we got a deal from from from or David out and this really hot well-respected DC firm and we had to break the news to them that that that we take the bus we took the bus to get to to the offices we don't have a car and we don't have an apartment and we're illegal no you're illegal so but I was legal with my visa I was gonna run out in two years okay yeah but I was definitely reserved yeah we needed to get it sorted and so they were great I mean they're the lead investor his wife was from Canada they knew the whole challenge of being an immigrant and we have Canadian passports and so they they funded the company and they gave us some money to buy each by car and they gave us a salary so we could rent an apartment and they had we I got a visa through through the company but but the morning we were supposed to present to the partners I went to Toronto it was my mother was freaking out cuz she needed her computer fixed and but really seriously this is brutal so I I flew out there Manning to fly back on sunday and the meeting was on Monday and I get to the airport on Sunday and the the Board of Control are they there Cleve they called me out there like you're going out of work you know going down for travelens like no no I'm going out of work I explained actually no I didn't I said I'm not coming to work because I think that's what I'm supposed to say but the lawyers told me not to say anything and so they rejected me from the border oh and so I'm supposed to would do the presentation with you on the next morning and so a friend of mine came to pick me up at the airport and drove me across the border and we went to the the buffalo border and just said we're gonna go see the David Letterman Show and control I was like yeah go ahead the late night flight from Buffalo to San Francisco and we made the meeting in the morning so very good yeah we're technically you're not going out of work because that would have required we meant you of being painted something yeah I wasn't explained anything yet yeah technically we were but actually no you're right you're not actually breaking the law you're not breaking the law because we were not being paid anything yeah I should have told him that in the border control maybe it was very frustrating getting paid for something no no John that no yeah you're right exactly we were not not being paid exactly but yeah so so then they approved the deal at Monday and we started building zip to and it wasn't a business model for you know back in those days well it was kind of like a pre-cut like yet Yelp is like is but it business was similar to it sort of yeah but it was at a time when most businesses didn't didn't know what the internet was so and most people didn't have an email address or yeah we went online to them what a website was the internet was the kind of this cool thing people were using Netscape Browser and I think by the end of it we called 18,000 businesses to be on our service pay pain to be with websites and everything yeah you know a lot of the things that you can do today like automatically build websites we built a lot of those sort of tools to make it easier to build websites and we had to sell door-to-door it because that was the only way didn't hire people or is it just to you guys no no we had a team by that toe because we could hire a hire a team but I remember talking to a yellow pages guy once and it was amazing that was the hit of the Toronto Star that they owned all the yellow pages of the all pagers will never die famous last words literally we were in a joke tune to partner we said we want to part with you and unless this be one of your partners to do to put the old pages online and he picked up the yellow pages this book this big thick book that full of ads is multi-billion dollar revenue stream I mean these guys were so arrogant and like we are kings of the world and you will never and he picked up this book and right at me and he said do you ever think you're gonna replace this and I was just like I'm in my head in my head is like dude you already do this was my duty Tesla peoplewe you know gas cars will never die yeah but I mean like and we saw the growth of the Internet we saw the use of the Yellow Pages we saw even more competitors and stuff and no one was using the paper yellow pages if you had the choice yes exactly no one yes that's right and so so at that point very few people are on the internet so it was really a question of really is the internet gonna succeed which we were huge believers in and these guys were not you know they didn't even clue in yeah it was like one one foreign country after another we would say like listen put your L pays online so you're gonna cost very little you know you have still own all the content everything and they're like they're just throwing us throw us out of the office yeah if you like to know and how dare you even suggest this okay I guess we'll just build it yeah but it's been in to watch over the years where like it PayPal the competitors were not banks you know even though that should have been no that there would they were bank stopped riding feet it wasn't it eBay mostly that was the bit maybe that's a good point yeah that which but it wasn't exactly like PayPal yeah but generally they had an issue with trying to get payment for stuff like yeah like two people would have to mail checks to each other yeah that's gonna work if you don't mail a check and you receive the check and yeah how do you know the checks real then you've got a you know cash check and take you know two to five days supposed for the money to transfer so it could take two weeks before somebody had confirmed payment and then I then they would ship you the item and so that the transaction velocity was very low as a result with you at instant payment you improve transaction velocity dramatically like factor of you know maybe three to five yeah I just sort of seen that the when you when an industry is disrupted that you've worried about the major players I mean we remember when we saw the test that we were aspiring to be that GM of the 21st century four years later GM went bankrupt you're like okay we don't read and and and it's you know whoever is going to be the main competitors you know we don't know yet but it may not be that the entrenched players Maybelline I sort of other companies and so so that happened it's up to where we we tried our best to partner with the industry because that seemed like the best way to make some money and actually have a revenue model and we ended up finding the newspapers to be a better partner because they didn't have the Yellow Pages business and there I think they think we're smarter there classifies business was was getting eaten away by Craigslist you know before Craigslist classifies was the bread and butter of the newspaper and of course anyone who used use Craigslist would never use the newspaper so it was it was those folks seem to have a better least some of the players had a more more vision of the future and so our business became putting your major newspapers New York Times to all of the you know Philadelphia Inquirer Chicago Tribune or whatever all the main players all the LA Times everyone and then we started going internationally doing the same thing so if you went on to the New York Times website and you wanted to search for a restaurant of course they have all these reviews or if you wanted to search for a home that you could we tied them MLS together with maps and door-to-door directions so all of these services are we now used to take for granted ed used maps and order or directions we we did that all in the 90s to find a business model yeah well my title after - why didn't you go like straight into sustainable energy right so um gonna recall things that are not quite a while so it would've been like 98 when compact offered to acquires up to and which I think it was a good thing to put into acquired because as I mentioned it the the newspapers actually owned media companies had too much control over it too so they were not we had great technology that was not being deployed effectively and they were just generally be averse to anything that could remotely be competitive with their newspapers so so we're sort of trapped in this situation and at the breathing Compaq came along and bought the company in late 98 when the deal closed early 99 so that as a result that can when I had some capital was 20 million dollars or something out of it and I think the thing that was frustrating to me was that we're both incredible technology and it had not been used they were just sort of like it was very disappointing you know put a lot of work into this technology and just wasn't being used so I was like okay I'm gonna want to do one more thing on the Internet just to show that we can make technology that is when it's use properly can be extremely effective the souther about what what's digital essentially what's it what's what exists in the form of information and is also not high bandwidth because it in 99 people still mostly had modems so you couldn't like video is not really feasible in 99 so with money is low bandwidth and digital effectively mostly digital so it's like what can we do to make money work better and like money in my views is essentially an information system for label allocation so it hasn't power in and of itself it's a it's like a database for this for guiding people what what as to what they should do and so you can think of banks as a set of heterogeneous databases with that there are actually not very secure and certainly the the monetary system the transfer system of checks is not is very insecure still is insecure so our credit cards and and it's all as still mostly bad processing and there was an entirely batch processing that they say it was not so pay masseur the money was a secular genius high latency low security collection of databases that's what banks are and so just from an information theory standpoint there should be something that can be much better if it can be real-time secure and you know just very fast and essentially it's just one real-time database so it's like okay let's try to build that so that that's what x.com was and then at the time I also thought we should try to do is just do all the financial things as well not just payments I still think that's really what PayPal should have done but whatever it's water under the bridge at this point um and then there was a company that was phone runs same time called confetti which was here till Max Levchin and VIN look no sake David Sachs Kent how are you never was and a tech stock home there's also like Jeremy Stoppelman and that who created yell Roelof Botha who then went on to run Sequoia and and find YouTube that was it was XCOM so we just had this like to show you two companies with like a crazy amount of talent extra comic infinity and could confetti started as a Palm Pilot cryptography company back when your you could communicate by the infrared port above home pilot yeah and have my palm so it was like so you you can basically communicate crypto tokens between Palm Pilots using the infrared port and then reconcile them or on a piece or an auto PC now obviously that's there they evolved to go on the in the payments direction as well and we were both in Palo Alto or like literally a block away from each other I think at one point were briefly even in the same building that was you know yeah so we were just competing with each other like maniacs and and then we had a coffee and University Avenue and said hey when we just combine our efforts or we're just gonna bludgeon each other to death here so we merged confetti and XCOM and and raised 100 million dollars in the space of three weeks in March of 2000 yeah and then April the moth went into freefall yeah so yeah so it's like I remember that I was insane and we kind of thought it was gonna go into freefall I really better get this thing done fast or we're both gonna die so and it's so excellent was technically the acquirer of caen Finity but it was a you know fifty point one and forty nine point nine or something like that and and then was a lot of drama that those so much drama at EDX at home and the company was called XCOM for about a year and then we changed the company name to the product name the part of the product was PayPal with all the incorporation documents everything is all my incorporation documents who came up with the PayPal name I actually don't know people call you guys the PayPal mafia tío wrote that in his book you know I don't know who did the did PayPal I was never a huge fan of PayPal as a name but the reason being that I think that I thought it made sense for for the company to kind of broader it be much broader yeah exactly I mean if you don't your self to payments then necessarily if you who want to transfer money out of the system and as soon as they transfer money out of the system the efficiency of the database drops dramatically because now that you're in a traditional banking world so if you just offer all the things that if you just basically address all the reasons why people are taking money out of PayPal systems so you have to provide them with with checks so that you have a bridge to the legacy transaction system you gotta probably provide them with a debit card provide them with the ability to UM get a loan and that kind of thing and and but these are all ancillary to accelerating the velocity and accuracy and security of payments then then basically pay for with you all the money is it would just suck all the money out of the banks and there wouldn't be the banks would go away yeah so any plan you gonna do with the egg stockholm i right doesn't hope if they just executed the business plan i can have a product plan I wrote in July 2000 let's just do that but they I talked to them if there were several times but they didn't do it so why did you and PayPal kind of part ways what was really the drama that led to that you know separation ultimately well things were very dicey in 2000 you know companies were dying like all over the place so I see of the combined company and we're doing quite well from a ghost at point I'm like adding a hundred thousand users a month type of thing which back then was a lot yeah but off financially things were tough and we needed to raise financing around we were also like there are some technical questions around what what code architecture would we go with and then there's also a branding question like I said like I think we should not use PayPal as brand because this is not consistent with being where all the money is you see we want to centralized database so so I was coming against to PayPal branding and you know and I wanted basically I wanted to do a bunch of things that would that seemed extremely risky and I I'm I think those things would have worked out but at a time when companies are dropping like flies and I'm proposing it that we do all these things that sound very risky this is what this is just much too scary for the rest the team you seem to be attracted to crazy ideas that other people are like but like you know I think the autopilot one is a great example or everyone's kind of trying the spatial approach to self-driving you know they're doing way more for 10 years nobody cares and you come out and say hey we think vision is the way board and deep learning and vision you know will take us all the way there how do you find like yeah for courage inside - I mean people have to be coming up - all the time and you know thinking that you're an aviator it's never gonna happen and you know how do you find that in yourself to like go through all that resistance and still be confident in you know your thesis I mean I try to be hyper-rational so it's not you know - she's like if this is the reasoning fits a New York violating the laws of physics or something then that's the thing you should do so yeah I guess the other day if we lost a lot of money I wouldn't you know as long as we didn't lose well feels money I guess I just lost lose my money out of mine at these things to start seeing that crazier to me so like I think if if PayPal to execute the plan that I wanted to execute on I think you would probably be the most value company in the world yeah we called X but it would be the most valuable company in the world on the other hand now that's not all good though on the other hand then a lot of super talented people would have state and because because people have got good acquired by eBay not long after like you know those like the PayPal COO at the end of 2018 months later it was acquired by eBay so and and then it you know feeling of the companies that came out of PayPal so so-called PayPal mafia YouTube you know of status' Steven Chad created YouTube Gerry Solomon created Yelp you know Peter created Palantir and with a bunch of other things there's David Sachs Chris company and Reid Hoffman created LinkedIn Wow it's almost like all that market cap still exists but now it's allocated on all these other tech companies instead of XCOM yeah so in retrospect I was like it's maybe a good thing that X wasn't okay if I wasn't didn't achieve those things because all these other companies would have at least been delayed or may not have existed there's definitely been kind of resurgence and interest as we get into kind of cryptographic you know money and Bitcoin and all that if like interest in this idea you know and it's interesting like software has an e in the banking industry yet software's even a lot of industries there's something that it just hasn't and banking still there you know stripes stripes eating them slowly but they're doing pretty good job that they that they're the better banks are in trouble if it's not stripers be somebody else and you love code but you don't seem to be as bullish on Bitcoin do you have any could you break down like why cuz you're talking about this big database that's more secure for faster transactions it seems like bitcoins hitting at least some of those I'm neither here nor there on Bitcoin yeah yeah what do you think when you read like Satoshi is liked it for the first time real like oh it's pretty interesting all right that was pretty clever it's just like the things yeah as the source gets like the crypto people angry but at the critical yeah there there there are transactions that are not within the balance of the law and those in there obviously many of those in different countries and normally cash is used for these transactions but but cat but in order for illegal transactions to occur those the cash must also be used for legal transactions you need an illegal to legal bridge that's where cryptic comes in so is it kind of the darknet stuff it can't be entirely dark because otherwise how do you buy normal stuff it and cash these days is used just much rarer it's hard to take increasing it up with used cash some places you can use cash at all so there's a forcing function for transactions that are illegal quasi legal and in some cases legal but it's got to have some it's got to be both legal and illegal so it doesn't count otherwise otherwise you simply it can't just be transactions within an illegal economy because how do you buy like you know food and a house or something you know some you go you must have a legal to a legal bridge so where I secret eyes is effectively is a replacement for cash but not as a replacement for as a primary no not as I do not see crypto being the primary database so now this is this is sort of taking me like I'm being judgmental about crypto and it's actually I think there's a lot of things that are illegal that shouldn't be illegal but you know so it's not as though I think that sometimes governments just have too many laws about the mission that they should and shouldn't have so many things that are illegal didn't you say like on Mars there'd be less laws hopefully yeah I think probably that's the best it I mean probably it's best thing Mars democracy you know the most like knocker see and you want to make laws super short and simple right well yeah I mean like if people can't understand Louis then how do you then what's usually gonna happen as some special interest is gonna bamboo is a little public with long laws yeah and then the Lord is like reading this Lord slow is like the size of Lord of the Rings but a very boring version of it like a dealership thing is just crazy to me you know like America supposed to be competitive free market it's weird right yeah absolutely so Eric just so you were to keep the lower short and have it given some kind of sunset period so they're just stay there forever otherwise just accumulate over time and just eventually they'll be unwieldy so the laws should have some timeframe associated with them they automatically go away so I mean it just keep a little short to avoid trick trickery and and sort of special interests the ultimately does not benefit the public and and then I think direct direct democracy is less susceptible to corruption than a representative democracy so in a crowd from just being like to what degree is this action being taken that do not serve that generated the interests of the population you know do not need to result in a net increase in population happiness as a whole and so that's that's that's why I think polite about direct is better and there's things in real time so you know if you want to vote on something you just you can vote on it real fast yeah it would probably make it eat outside make it easier to get rid of Louis than to put them in because these things tend to have a lot of inertia and to have a bias towards having laws go away and not be there you know so like maybe it'd take 60% to put a law in place but 40% to remove it something like that yeah let's try it you know see what happens the pills are extremely long that they pass no one reads them they happen to come but hardly anyone in Congress has read the bill and if you eat if they read the bill if you quiz them on the details they would know it they'll find their page yeah it was like Tony what's yeah this members no idea seems kind of alarming that that's like the status quo and everyone just accepts his plate yeah these laws tend to be written by industry groups as well so that the there they'll write the law and then and then interact with congressional staff and and and but most of the work will be done by the industry groups and so they're gonna write laws that entrench the position it's like the people are the players buying the raft like you were saying earlier that exact right so you get the regulatory capture the exactly yeah the players shouldn't be paying the ref salary everything well the referee shouldn't be thinking I'm gonna retire and get paid by the players so it's kind of amazing that it works as well as it is given all these issues yeah so then I fell I I never getting blurry and anyway in 2001 deputy - yeah 2001 yeah it's also about this the malaria thing that was he went on vacation right the average South Africa with Kimble actually yeah that's crazy and then came back and I had like near death case of malaria yeah we live grew up with laughing that we we'd go to the bush felt all the time to the what do you guys call Safari and you just reaches out a house in the bush you used to go there every every few weeks or so I don't think we ever took malaria tablets yeah Yeah right like and so we were told to and we did take malaria tablets you took em as well and and when you got back the was in Stanford and I couldn't figure out what was wrong with him our uncle who's a doctor in South Africa is like he has malaria and they said no no he doesn't malaria we checked to check again malaria kind of hides in the body and they so this was after PayPal got started oh this is 2001 so sort of after the paypal CUSOs that's all the PayPal board and I was providing you know pranks or product advice and or not but yet in December were late late December 2000 which went on a trip to South Africa came back January early January 2001 and I had a severe case of malaria almost died - now that we've just said 31 interrelated factors waiting to see it they seem to me get some some pajamas for him and I do closes store was someone please released or something so I just got in some pajamas you were sleeping I mean like your it affected your brain that that harsh yet no was proud of it's really bad does that change your perspective how do they like influence here after that no no I don't think it changed me that much would you say no anything you did yeah but how many times he'd been on being I lost like 50 pounds oh no no more vacations oh well yeah it was a I resisted took me like over six months to get back to normal and so I and then if the SN 2001 I just think about you know what do you next and and I thought the you know this is like okay sustainable energy like a basic electric cars solar space and then if I might ask me you know so what do you do next I said well you know so I would love to you swing its face but I didn't think anything if there's anything that a private individual could do in space but at least I'm gonna go on the NASA website and find out when people are going tomorrow's and I go on the network last website and it's nor to be found and so I was like well this is pretty weird yeah then I discovered that it was actually a NASA policy not to talk about it um really yeah that's why what'd I do you think what I was told is that when George first the first I was when he was elected he said it might pass now to NASA to put together a plan to send people to Mars in 90 days they came back with a plan and it was 500 billion dollars and it says all that this is like political suicide so then after that talk of manned missions to Mars were bad that's why sold yeah so that I racers like well you know maybe there's something can be done here to get the public excited about going on Mars and if I get public excited then they will vote NASA to have more funding and so the original idea for SpaceX was just to have a philanthropic mission to Mars yeah it started as a graphic of a pot plant you just need to get the pot plant to Mars you know it was like a inspiration sure just as a as a way to prove to the world that it could be done yeah there's a the mission was called Mars Oasis there was seasoned dehydrated nutrient al that would hydrate upon landing you go get this great picture of green plants I've read background be like the first sort of life as we know it on Mars and the you go Salerno you know a lot about what does it take to keep plants alive and have a little miniature greenhouse on unsocial Mars so that that's why I initially pursued as it's like a way to basically increase NASA's budget that was it wasn't let's create a space company it was how do we get NASA's budget increases so we can go some fuel to Mars and over there so I try to figure out how to get this thing launched and I've that the Rockets the European and US rockets were too expensive and I can't afford them so I went to Russia to try to buy some ICBMs in 2001 a literally and they kept raising the price on me and it was quite being quite difficult and I said I know I can afford to pay like under nine million dollars for ICBM but not not 20 because I have a range of two of these missions because odds are good that one would fail and then it could have a negative impact potentially so the house pretty weird being Moscow for by CBN's in 2001 yeah that's amazing call the military and say well you know they got a giver of these things anyway because of the arms reduction treaty so it's like you've listen if you're gonna throw it away I'll buy it a tour of your hands yeah they have to I was like ss-18 to never it was the biggest nuclear missile in the Russian fleet and but you know deaky decommission these things so why why not just tell me them instead and then they were torching the price would go off and like this is it's not good because I you know even if at once we do I deal probably gonna get shafted afterwards too and if this is the pre deal shaft it's like it's what's gonna be after all or it's you know when after I've given the money gonna be good so so that I yeah so and then I start looking into it as acquire Rockets cost so much and there's lying fundamental about why don't you have so much if you add up the materials and say if you know there's not like the raw materials cost that much I really just need to figure out a smart way to get the materials in that shape and and then do you need we need to make Rockets reusable so like a for transport if it's not reusable it's extremely expensive you know if your cars for single-use you know and you need a round trip you know bought a car for $20,000 then your round trip will cost you forty thousand dollars but it's crazy so it's the same things true for aircraft and boats and rockets everything so so there were the Rockets were expensive even as expendable things but then they're also not useful so there's no way we're gonna have a city on Mars unless we can have reasonable low-cost reliable rockets that's fundamentally the issue so so I came to get clusion that even if this Mazda ASIS mission was successful it would still not result in the GUP it would not materially further the goal of being a multi-planet species because the rocket technology was not good enough and it was not getting better in fact it was arguably getting worse so so the real thing it needed to be solved here is reusable rocketry and lowering the cost of access to space and that that's sounds like okay well I try to do that um so I was good SpaceX started in early 2002 basically NASA I was living in part at the time but most of the engineering expertise was in Southern California so that's why I moved to LA did you ever have any like even inkling of imagination that you could be doing you know dozen launches a year and being contracted with NASA is that even like it I thought those where I know I thought we had you know ten percent chance of success or something like that you ended up being chief engineer right this is like no one wanted to give up their secure jobs of you I in something yeah I exactly I actually tried to hire but it basically they've been a number of attempts at doing a sort of private rocket company or commercial rocket company in the role already they're all failed effectively and then that's to the degree that it was like a joke in the aerospace industry like how do you make a large portion large fortune in the rocket you know I just saw with it yeah how do you how do you make a small fortune in the rocket industry start with a large one that's how matrix so many times just jump to the punchline you know so yeah it was very hard to recruit people because I had not built any physical hardware before so it's and I kept being called Internet guy for longest time for ages finalists I've made for first ten years they call me Internet guy we're basically an internet entrepreneur it slash fool he's trying to start a rocky company they would have an idiot that was generally not a win so it was quite hard to recruit people and especially so he's got like a secure job at you know volume a Lockheed or something like that then trying to recruit them to the inner chief engineer of a sort of rocket company or some hopeless well so basically no no nobody nobody who who was good was willing to join and I was no point in hiring Smitty wasn't good so I ended up being chief engineer you know which is yeah hey the the the first three launches failed and probably if I'd been better than I we would have gotten too overt sooner so we're took me a while to learn all these things so from books or books enjoyed people did you go to Utah and talk to anybody like it a TA orbital oh yeah visit rate here at what autos Dulles Virginia so yeah visited ATK visited orbital and the overall had had a success with the solid rocket based Pegasus but they'd also gotten like an eight launch deal from DARPA so okay if you got you're starting off with basically an eight launch day off with our friend that's a good situation I know we did not have a large steal from anyone Pegasus is a and I mean there's some clever engineering with Pegasus but fundamentally I think launching rockets from planes is not sensible yeah it's it sounds like it would be a good idea but it's not and then even orbital went away from doing that with their as soon as you get past certain sizes they went to grad lawyers I was reading somewhere that um 88 FICO more in that called they they were doing snow cats they were doing ski lifts and they sold that to the man who made the DeLorean he really yeah I just read that and their Wikipedia I'm like oh that's fascinating what a come around so yeah okay sorry yes sir SpaceX going and that was very difficult we got the Falcon 1 rocket built it was very simple it's the simplest overall rocket that's liquid fuel so it had the potential for reusability for four useful Ria's body and then with three failures finally got to orbit at the end of 2008 that was incredible good at a quarrelin and watching they wrote it like a blog for a while yeah I actually still have it up there it's a little and it's a old blogging platform that Google still keeps alive it's called quad rockets dot blog spot.com I think it's gonna get a lot of traffic soon yeah totally sanity check it out it's all there it said photos and photos of there was one photo of Elon picking up a satellite we'd launched the rocket and the rocket exploded which was very very very sad everyone servers I think people about pouring their heart and soul into the rocket and the satellite was I think in the US Navy Air Force Academy it was Academy and it it was thrown out of the rocket and fell through the roof of the hangar business like we really think exactly it's like a like a like a stand-up tale small toolshed yeah wasn't supposed to do that but this may be the size this room I mean a rocket it had this is the first launch failure so the it had a there's a cracked limit of B nut on that they contracted during during liftoff and created it so the engine there was an engine fire the this was wound up in the end of the world but there was a one of the the helium lions was a steel mesh over aft with over the Kevlar sleeve and it melted the the sleeve the the in and so we lost pressure pneumatic pressure which caused the engine ballast to close so I about 30 seconds after liftoff the engine shut itself off due to the engine fire and then it went ballistic and basically smashed and in the rocks just a couple hundred feet offshore and when it when it's wet it was quite a big explosion actually explosion the satellite which was interfering went through a fairing on a ballistic arc back onto the island smashed through the tool shed roof and onto the floor in pretty reasonable conditions like it wasn't totally gnarled reuse it so we gave them back their satellite so like we didn't lose your satellite it may need some repair but it was so improbable that the satellite would come back we had couple more failures laughter that yeah 2008 was particularly difficult year because we had the third failure 2008 the Taser on financing around collapsed oh it's such a nightmare I got divorced and aracely's proud I think 2008 was about here really really bad you have that year yeah I don't think anyone could I think 2018 I think 2018 would was worse what's up with Anglo with the model 3 ramp right oh there were so many things that happen at 19 so trauma is insane yeah so yeah sorry so was were that were in 2002 saw X base X moved out to LA and it was pretty fun in the beginning like generally startups are pretty fun in the beginning and then you go through the you know chasm of doom yeah chasm of doom yeah awful sorrow truffula sir exactly it's rough despair yeah usually it was like it runs like super optimistic and excited for the first year or so and then when things start to go awry and there's usually many years of grief before he just finally they don't so yeah so like if 2002 and then about in 2003 was when Rosen and JB Straubel called me up and said hey everyone I have lunch I want to say how old was I think that's his name but he he weirdly had he was a pioneer in space technology and electric vehicles we're side in our crossover and he dents with rows and motors it was like sort of an electric vehicle company and but he'd also been pioneer and geostationary satellites so Eric will be open today this so it weird like lunch at Mike Smith some lowlights key of homing in pop in El Segundo at worst basic started and so it's traveling Rosen we were talking about space stuff and then start talking about electric cars and I said oh yeah you know it's gonna be working on electric cart technology at Stanford and and Jim JB said you know we should take a drive in the teaser Oh from AC Propulsion and I was like yeah you know because the timing is it was like the lithium-ion batteries was really like the critical breakthrough needed for compelling electric cars and so it's like okay I'll go try out there t0 which had specs similar to what we eventually bought to market is Tesla Roadster so then I so yeah so I got I got right in the t0 and then I tried to convince Alec Akoni and Tom gage to commercialize the t0 know the teaser and there's like lots of stuff online about it it it didn't have doors or a roof so I clearly you need to add those things or any safety systems and it was very reliable because it was just like a sort of a proof of concept basically how it was basically like and assemble you guys really had trouble scaling it hey it's a minute literally didn't have doors or a roof or any airbags or an effective cooling system for the battery and it was not safe and was very unreliable you know break down yeah it's like you'd need to be babied by an engineer or it would not you can use it so but nonetheless it did get like zero to 60 I think out of 104 seconds turn 50 mile range it was enough to convince you that it was possibly I mean I I knew it was possible because if you go from the energy density of lead acid to to lithium-ion you've got about a 4x energy density improvement so if you got if you got to say a 60 mile range with glare acid you're gonna have a battle charter forty mile range with with lithium ion for the same way so but it was it was cool to see it in action working with a solution so I tried hard to convince those guys I could really mess with them a lot to go into to commercialize the the T zero and they just did not want to do it weirdly the thing they wanted to make was an electric Scion and I'm like you guys nobody's gonna pay seventy thousand dollars for an electric silent okay that was their idea seventy thousand dollars for electric Scion I'm like this not gonna work okay you will sell like fourteen of these things you know right and like a kid you know I have like the email trails lease yeah I mean I think they're still around so in fact but III even say listen I even though I think this is the dumbest idea ever I I will I will pay I will fund one tenth of it if you can find by another people and I think the only other person I could find you were Sergei Sergei Brin yes sir it's like okay so good and I the only ones going to do this I think and so they didn't actually get it off the ground but I said it's gonna fail I can but if this is something and the answer then eventually listening if you guys are not going to commercialize the teaser do you mind if I do it and they're like no you have better be totally fine like okay so so I was gonna it's like okay so I'm go do this with j-b and we'll go commercialized create a commercial version of the T 0 and then engagement kakuni said well you know there's some other people who also want to do it do you want to maybe team up with them and so there were two other groups that wanted to do it and it's like okay sure you know this maybe this is a way that I can have my cake and eat it too you know famous last works out goddamn try to have your cake and eat it too doesn't it this one's gonna be easy no I didn't think it would be easy but it was like I thought maybe I can allocate like 20 to 30 hours a week and just work on product engineering and then other people could do those stuff I don't even like doing elf anyway so that didn't work out so so that then Tom Gage said you said there were two teams but I only ever met one and that was ever hard happening and right but like the thing it's really bugging about the mistake they ever otter particular the worst guy I've ever worked with and I want to make a note of this he's literally the worst person I've ever worked with and I've worked with some real douchebag okay to be number one takes a lot it's not easy that his version of the story is like he is that out of the blue he pitch me on on a fun on finding his electric car company and and and and he convinced me to do it totally false okay I was like I'm creating an electric car company it's like they engaged said well maybe you could team up I was like okay well that might be worth doing and and so the company ended up being basically five people this is right the top earning you know ever had struggled myself and and this was the five of us and then like talking which tries to right right right out of the history books because they had a huge battle and they made me choose which one was going to be CEO it's a right oil or ever hot and torch JBL's like which one because I really didn't know want to be CEO so they're like okay well let's both have issues but maybe right has bigger she's done toughening so JB said so maybe you know lesser of Evil's like okay fine I gotta make a choice here because the two of them would not they would not refuse to be the same bullying so I was like lot of drama but it tears out so trauma and it's like okay you know it's not like the what I said like you know you know less retrievals so it's like I said in right sorry you know not that I didn't think he had good points but I got if I got a pick one and I adore I was trying not to be CEO or gonna make this rocket company work so okay so then made you know I was like the right you know as I had to leave then anyway so we got the basically we we jammed AC propulsion power train and battery pack into a Lotus Elise with the first prototype being like really just jammed it in you know and and and in retrospect this was not a good idea because the the car ended up weighing like like 60% more than Annalise or on that order and that we didn't have enough falling you to put the battery pack and we have to meet Orion validated all of the crash tests because the weight distribution was different it was heavier so now the crash tests were valid anymore to redo the airbags the air conditioning air conditioner ran off a belt fan so we now have belt fan so we had to have a new air conditioning system sort of change the HVAC system and so basically in the end only about like I think six or seven percent of the parts ended up being in common with analyse so it and and we went through a lot of trouble trying to chew on everything in there and it immune it's a cute car but it's ten percent too small it was like and and then the car center of being crazy and yeah and then ya know there was there was an audit of the costs of the road but the production cost the Roadster by one of the investors that joined in 2007 and and then they they they called me up and said hey the the numbers that Martin is telling you that everyone's telling you about the Roadster are totally false oh boy and I was like what do you mean like says no we're just didn't ordered there it's more than twice of what do you say the maze yeah it's like we would have to sell this car for a quarter million dollars in order to make to not lose money not like this is insane so in our opinion here we obviously had to fire ever hard there was no choice about that I yeah and then it turned out he'd not only had he misled me directly be instructed others to also lie yes when I say like somebody is like the worst person ever worked with it was pretty bad so but his face X also hadn't gotten to over to that time so I was like man I said our choice so like okay I asked where's the name Harris I'm really guy interim yeah he he ran like a manufacturing company I mean he seemed pretty smart to put the problems problem that I found with Tesla was we were startup in Silicon Valley building a car that was really manufacturing and materials engineering and its really like all the talent was forever you think there was probably talent you know in Detroit or Japan but if you took any of those guys into Tesla they would run up like a car company and then it would be destroyed but no idea you can take somebody who's running not take someone from a massive company culture and have him do a start-up and yet you couldn't find anyone in Silicon Valley who knew who knew enough about making cars and so he kind of found a middle middle road one who's he was in it he was an expert in manufacturing xeo Flextronics was an investor and he he agreed to just pick up join us the interim CEO and this is 2007 yeah but I mean Tesla was a company you tried so hard not to be CEO of yes but the thing is this is misinterprets if I say it it's messenger but it's like I somehow don't love Tesla which I do it's just like try not to go insane with working yeah you can you beat CEO of a real start-up is 80 hours a week PC of to is 160 hours a week and there's only a hundred sixty nine hours for something of sleep of 168 hours a week so like you just can't physically do it yeah I mean pain levels extreme so that's yeah I mean those directors tried quite hard not to eat - yeah it had to be no there's no choice but that hotels were dying so so that yeah ever hard cut was fired in July 2007 and it was at the time we didn't know he'd instructed other people to lie so we thought he was just you know it wasn't as bad but once he left the building then which it turned out no he'd actually orchestrated this massive deception which was quite bad so I yeah yeah well he also said he came up with the name of tells Moses promoters which is false that was a created by a guy 95 and and more of a he knows this because we went to great lengths we have to buy the trademark exactly so the name is trade 195 well so is like the whole bullshit back story of it but the the guy we're almost it wants had to change the name of the company because the guy who owned Tesla Motors wouldn't communicate with us and so eventually we sent it with a nicest kind of company know who's weirdly Martin's best friend which I don't understand but mocked happening super nice guy I like Martin a lot actually you can't not like more it's impossible he's super nice guy so this president mark to go sit on the guy's toe step and not leave until he until I agreed to at least negotiate with us or something it talked to us and then we were in our buying the trade walk for $75,000 yeah no that was a whole different nightmare no the head to main guy that took us ten years to buy that telecom domain man it was a it is I think still like a networking engineer of Jennifer yeah so yeah there was and that cost us like 10 million dollars yeah that was crazy I just the guys just held out was he just sitting on the domain Oh was he using it for something it was impossible to know he wasn't using it for anything just holding the mean it's like Twitter handle falcon heavy is amazing we fight without one yeah man that was took us ages by the Tesla economy we were gonna have to change the name to be something else and actually I would the delete candidate was worst was Faraday as the name because it Faraday invented the electric motor and then Tesla perfected the electric motor with the AC induction motor so is so if we couldn't do Tesla we do Faraday and then ironically a competitor or Chris later created cool fire yes I start up yeah first China right yeah yeah yeah so um did you guys have a Faraday a logo or anything with you that far down no we don't really even have a Tesla logo until later because there's nine to sell or anything so the the end of the Tesla logo and the Tesla font was done by me working with basically a little foam that's why the Tesla and SpaceX yeah there are some similarities between the the fonts and that's because just don't buy the same people and ask for a lot of time on the Tesla SpaceX pots that's cool yeah it'll be much easier if the world was flat or not in front of flat situation but as soon as things are not flattened you've got look the world is like it has undulations and curves and and then your car can be at any kind of at any kind of angle and then if you if you accelerate or brake it's actually gonna tip a little bit yeah but sort of pitch in your compensation is if that's where it gets really tricky yeah I mean they're doing just amazing work it literally just blows my mind every time like there's an update like you think it's like wow I can't believe it's this good and it just gets better like the big one was the faster lane changes latest push the tortoise Orion was like like immediately it's really awesome yeah I was kind of just like before I was like okay it's not that good but it feels good because like I can't believe what computers doing this then we got the faster ones and I was like oh my god it was so bad before you know yeah it'll be able to just do crazy maneuvers like you're like a high speed chase technically because it's you don't always want to bias the thing to be conservative in any actions that it takes because there's quite a significant foundational rewrite in the telepath system that's almost complete really yeah and what it what part of the system like perception like planning or just like it's it's instead of having planning perception image recognition will be separate they're they're being combined so yeah I don't even understand what if actually like the you're the sort of neural net is absorbing more more of the problem right beyond simply the is this is if you see if an image is this a car or not oh no it's it's kind of what where does it where you do from that 3d labeling is the next big thing where the car can go through a scene with eight cameras and and and kind of paint a a would paint a path and then you can label the path in 3d this is probably two or three order of magnitude improvement in labeling efficiency and labeling accuracy you know you have to do two throwers be proven in labeling efficiency and significant improvement in labeling accuracy as opposed to having to label individual frames from eight cameras at 36 frames a second you just drive through the scene rebuild that scene as a 3d thing with it's like there might be a thousand frames that were used to create that scene and then you can label it all at once is that related to the dojo thing you mentioned a thought on Amida no doges for learning for training the neural net that's like when you're trying to build the neural net that you ship into the car dojo speeds that up by Hardware accelerating it yeah exactly are you guys does that up and running at her no it might be we might have the first one at the end of this year but next year I think it's very likely next year maybe this year but it's essentially meant to absorb massive amounts of video input and and then and then training against vast amounts of data so that can be using the inference engine in the car so it's just like a human really it's like how long does it take you to learn a subject versus do a subject you know it's like hard to learn say calculus but once you learnt it then you can you know integrate something fast or something yeah it's like it's a it's a it's really yeah same basic thing yeah I mean that'll just really tighten the feedback loop like at some point it just gets impossible to catch you guys in like the rest of the people oven or even really like started the rest of the auto industry and like the feedback loop is just getting so tight with autopilot now it's just like makes it a lot easier I think I think it will they will catch up eventually or at least they will catch it to where Tesla is now on a great things like like for example we're talking about maps and directions and how today like computer based and navigation is a trivial to consider trivial but you know back in 95 it was not dry yeah it was considered very hard and the compute power you had was was tiny so like like the code had to be super tight can't couldn't have fluffy code if you're you know trying to execute something on like a 386 you know it was like very very puny amount of memory and compute so so now it's but by now maps of directions are easy I think in the it's at some point in the future it might be a decade or something then autonomy will seem easy yeah I mean it'll obviously become audit eyes din the long term yes wrote it was will seem easy in 10 years but the real long stretch there were the if there's building vast differences between cars well I have the the order industry it is used to slow rates of improvement so you know it's this whole not really a car yet that matches the original Model S maybe you're like take a 2012 yeah if you look at like the EPA ratings here literally is just all below yeah so those 2012 and it's 2020 so it's it's all like pretty hard to get a car let's say that's there's something there's there's not a car available at the price of the Model S that has the capabilities the Model S of 2012 it's kind of exactly what you were talking about with the Elise where you're like oh we'll just put a battery in the Elise and that kind of showed you like okay we really ground up electric disk and the nursery hasn't done that like the the the sort of founding principles of Tesla what were basically completely wrong the premise going in is like it's not gonna be that hard you know we'll just take the Lotus Elise with some you know nice lightweight lightweight car and we'll take AC propulsions drive unit technology and it'll put her together and we'll have an electric car and it'd be great it sounds pretty easy yeah except the AC propulsion technology would could not be industrialised like it was like basically handcrafted electronics with an analog motor controller yeah and so depending if there was hot or cold I would respond differently or not at all and the motors were hand round it was just like it is like impossible it cannot scale is this technology you can have like finicky individually made super expensive prototypes but you could we end up using none of the AC propulsion technology so yeah it's something that looks cool and works well at an individual prototype level does not necessarily scale and then the likes that was like maybe 7% of the parts of the original roads were in common with the Lotus Elise it would have been way easier if we started from a blank slate it would have been a better car so but I think like the real test of of any given startup is how well does it respond to adversity and adapt and and and I just figure it out you know so like most things are just when they start out they're just they don't make a lot of sense but then as long as you adapt quickly then you can make the company work and you know if they like sort of con Finity you know doing doing pomp out took tokens with the infrared port made no sense but they did after quickly to online payments you know that's those close key and yeah a TEDx calm was originally a bioroid more than he could chew by trying to all the banking services and that also focused on payments it's like do all these banking things we're gonna do banking license banking license gonna slow us down we're just focus on payments we could just get a payment you know license from the state and was just like fifty bucks or something you can be a money transmitter literally and it goes so you're just gonna adapt quickly you kind of need to be naive though if you had known as much about manufacturing you might not have done it yeah yeah this would have been it would have been difficult to I guess if you know the outcomes gonna be good in the end sure it sort of depends on how much for knowledge do you have about it it manufacturing is insanely difficult it's under appreciated in its difficulty yeah no that's totally true yeah you've making the Roadster which you're really my peak made about 600 roadsters in a year but you know call it like ten a week or something like that you know 10 or 12 a week so you know if ii got made in a day that was a big day and you know Tesla's making over a thousand cars day now what I find amazing is from start to finish your car is made it within 48 hours yeah it's been worked counts so to finish me yeah depends but but you can see the roll aluminum and one section of the factory and you can see the cars coming out the other end and then these astounding and their cars have been built for a long time but but this is just astounding it's still when you you don't appreciate when you're driving a car how much goes into the level of detail of 10,000 party that come together the shaping of everything about unique parts alone is several thousand cells and it all comes together with people that are skilled but you know skills are changing as things become a little bit there's more there's more autonomy but it's not it's not perfect you you do need to have a lot of people there and and these cars have to be perfect I mean it's just just a call if given how much complexity there isn't a car it's walkable that castles the laws they do this so much that's my car so so what sort of processes do you remove like it you know first principles type thing approach from the Elise to like the model ass like was it a massive jump there yeah I mean it was gigantic that yeah Tessa had never made a car made a full car before the Louis made a non powertrain portion of the Roadster and then it has about the battery pack murderer power electronics charger and they put Porter all together at the end and that okay final assembly was actually at an old Ford dealership in Menlo Park um you can see some of the stuff in revenge of the electric car yeah see anything great okay yeah it's great just gives you crazy perspective to look back on it crazy we need a third one yeah I mean the idea of having a car like a car assembly tiny plant in Menlo Park of all places and that was just because we've managed to sublease the Ford dealership close down and we're going to get it like this deal from Stanford because it's the suburbs gonna redevelop it and they saw that and they they're we figured they're probably taking way longer than they expected to redevelop it so he said well you're not bringing it to anyone like can we pay you like 50 cents a square foot and you can create a shot kick us out whenever you want and it was actually a huge dealership and it had enough room to do final assembly of the cars so we just did finals team leader cars there Oh amazing yeah in the most absurd places to build cars on earth his Midland so no test track or anything just the road outside or something yeah would actually know the early roses were very and reliable so we're generally put about 50 miles of just drive normal driving so drive around the bay yeah with somebody following you unless the s right fancy looks from people it's like what is that yeah we're we're approaching 50 miles knit each one of those cars because there's two have a lot of things that break down in the first 50 miles so and then yeah battery production was in San Carlos yeah so man that was there's just a lot of detail when they don't want and all that but great from the road said to Wallace was a massive leap because the the Model S is quite a sophisticated sedan where we Tesla built the whole thing as opposed to splitting powertrain and yeah so here are competing against like Mercedes BMW Audi type thing so that that was those massive leap of difficulty we did get the new me plant but really that just meant we got a box yeah because they struck the plant of all the great equipment the only equipment that's herder and GM left behind was the stuff that that they could not use anywhere else Wow so the only left the most tricky broken pieces are gonna bind it we managed to use some of it but but yeah then just in the paint drop I mean some things were literally not even worth the scrap value so there's like not worth it if all the scrap metal dealer what'd you do with it we made it we made a lot of those things work oh you didn't have plastic injection molding machines Ram work Wow and the paint robots we mostly made those work that the assembly that the body production line had to be made new because they're stripped yeah there was just nothing so we made the body production line from one less was created from scratch yeah worked out but it was very difficult it was also in the beginning the the top suppliers would not work with us or we would get like their D team because like who wants you know if if they like but I got all these customers like they got yeah the big car companies they go like Toyota or you know a UW Ford as customers and and a startup who now you're in this Laplace position which team are you gonna assign to us to start up that everyone says is going bankrupt you're gonna inside assign the interns and rejects okay it's not gonna be your top two you have the same thing with are you talking is gonna go to like Toyota you know your big customers two top teams so we get the worst team usually at the supplier company if the supplier would even work with eating that influenced you to vertically integrate more it was vertically integrated or die make sense yeah and we tried out supposing the battery production originally was gonna be made at this place that made I think Bobby cute girls in Thailand yeah and I was like man they have no idea how to make a battery and and I was like this is crazy we're moving it to but back to our headquarters in st. Louis and we can't make it here because the basically once there's a massive amount of work going from a prototype to production and you need a fast feedback loop with engineering and if that feedback loop is although out in in Thailand it's just no way it's like it's not like it's if you have an existing production line that you already know how to make it or volume that you can move but you cannot create a production line it never existed that's super far away from where the engineers are it's gonna it's ready for disaster and also that the cells were coming from Japan so they go from Japan they go to Thailand they go through customs if you're waiting and that then I'd be going to battery pack then that battery pack will be sent to England then Lotus is this is these all things that got changed but the supply chain like let's say there's been a problem with the cells you're only flat this planning exchanger so long that you'd only find out that it didn't work five months later yikes yeah and then you're five months of scrap inventory so this was a recipe for disaster so that backup moved to San Carlos the cells shipped directly to San Carlos put it in a module figure out why the modules not working fix it they put into a pack like the original reason why the roasted battery pack had like he was like sixteen sort of blades was if was what modules with with if one of them didn't work you could pull it out and for another one in because that happened then we identify so you don't really need modules and my beer sure just go from cells to pack at this point but um yeah it was a very difficult thing going from Rosa to well as the fact that like the model 3 stars modules is kind of vestigial its vestige oh yeah because if the modules the model three are not actually interchangeable so there's no point in having modules really your Sabbath Jewish just have a pack was that done to just save Causton or some other reason it just sort of because it's not it's not a sensible reason the the the reason that there were cells modules in pack goes back to the earlier days where would make a module that module would have problems and so then you could swap out a module it's like a like a server rack the idea was like you know if you have a bunch of servers in a server room and one of the servers flakes out you can pull out for another in so without our interface so so you could replace a small fraction of pack instead of the whole pack then but then that concept just carried forward into Model S X and 3 but without the original logic no longer exists because the modules are not interchangeable yeah you can't just swap out a module so but these things just have a lot of inertia so we really want to move to no such thing as a module there's just sales in pack yeah yeah cuz I mean initially they have the battery swap facility right at how yes I mean and then the model three I don't think I have that capability that you could actually swap the whole pack out quickly right does not yeah right mm S&X still have the ability to do a fast pack swap but it thinks essentially evolved in the same direction that phone's evolved mm-hmm you know for a long time phones had swappable battery packs mm-hmm and now basically nobody almost nobody makes a phone with this woful battery pack definitely as soon as the range gets past a certain point then I agree yeah it doesn't make sense but but this was far from clear at the time of designing the Model S so worked a lot of trouble to make the S&X pack capable of a fast swap with quick disconnects and bolts coming in only from the bottom and that kind of thing and they were did that demo we swapped out two packs faster than some people gasp that's amazing it's kind of ridiculous to me like taking the battery out of your car just and you know Harris Ranch and they put a new battery in and you'd come back it was kind of like it's good that supercharging got a lot better yeah it was just way better to increase the range of the pack and have better faster charging so but but the this debate which seems obvious in retrospect was not obvious at the time definitely and and the air back then I think at least a lot of phones had swappable packs because this was sort of would have been designed in you know we had the first prototype out in 2010 for the more less so back in 2010 let's say the thought process going into this in 2009 would have been you know a time when under maybe most phones had solvable packs or something like that you know I thought it was like 2007 or something iPhone one and yeah so that so then it doesn't didn't make sense but but you know countries have a lot of momentum so the the snx pack is still a swappable pack yeah yeah as its I was like sterile have changed the design and well 3 still has modules even though shouldn't have modules if some degree like what you'll see in any given product is that the the errors in the structure of an organization will manifest themselves in the product so you know that's where we have module team so we have modules like we're saying you just combine the module team with the pack team and there were of your modules so generally the you yeah the errors no ization manifest themselves in the product you can see where the organizational boundaries are and then and then you'll often get like a box in a box it's like wait why is this thing you have two boxes well because DS this team wanted to have an enclosure and this team wanted to have an enclosure and so they they having a closure on enclosure this is still the case with them of them one cell is a cow what a silly thing but that's actually the case with the model 3 well 3 battery pack has a top enclosure and the car also has an underbody yep what's the point of that that doesn't make any sense because the pack the pack team wanted to have an enclosed battery pack and the body team wanted to have an enclosed body yeah that makes sense but you don't need to so yeah this is all this and putting the talk cover on the battery pack is a big pain in the neck so as mass and cost and stuff so that should definitely go away in the future but lots of brackets on brackets that kind of thing so you survived the production howl of the model 3 which was pretty intense I mean that was like it's stupendously difficult and I mean thing is sort of it has a manner of his sacrifice team might be accurate is the first company coming to reach volume production I think in an 80 80 or 90 years that in the u.s. yeah it's a harder time you do it for sure yeah the complexity of like what people expect or requirements and the minimum expectations for a car at this point are dramatically more than they were 80 or 90 years ago and the place you chose to do it - yeah and so that was a super difficult one there's like the sauce a car company startups but that's during the prototype is the easy part - building a production system is a hundred times harder yeah so I mean that's where you see the things fail like yeah but they've been over the course of the last century probably thousands of car companies startups most of which people have never heard about you know occasionally like hear about something like a DeLorean or a Tucker most of them this there's there's not even a footnote and it's it's because the difficulty of production and then you know and here's a real important point that is not well appreciated this is a point that should be advanced by short-sellers but I not T not I've not seen or articulated which it should be the the incumbent car companies make most of their money from selling spare parts to their existing fleet at high margins and they'll sell the new cars either at de facto zero margin or even at a loss it's kind of like printers and cartridges or razors and blades you sell the r8 razor at a loss celebrates or profits or in trouble SLO quatrain of profit or video game consoles you know the actual cost of say an Xbox is $600 you can buy it for three or four hundred dollars because they make it up on in the games that are bored so the this is this now so if you're a new company you do not have a fleet you use so you have no fleet with which to subsidize the sale of your new cars this is the this is the primary reason there has not been a successful car company startup in the United States this is the primary reason so because the in chemical car companies have eighty percent of their fleet outside warranty or something like that maybe it's seventy percent but approximately like if a car last for say twenty years or something like that and the warranties for four years then it's eighty percent out of warranty so even if they stopped selling new cars they would still mean the profit would increase so according to Edmunds dealerships make twenty percent of their revenue but 50 percent of their profits on service yeah exactly so and and and the cop of the car companies themselves will often make more than a hundred percent of their profit on selling spare parts Wow yeah so it's a like if the point which they're making say a hundred and ten percent of the profit from selling spare parts that means that they're actually selling in your closet at a loss so this is a this is the very difficult thing to overcome in order to overcome it the the a car has to be significantly more compelling than other than other vehicles such that people are willing to pay a premium and that you can actually be positive cash flow aspirationally profitable with selling new cars not simply selling spare parts to the fleet so I mean a for Tesla's fleet is probably ten percent of Tesla's fleet or second less than twenty percent is out of warranty whereas 80 percent of the other car makers is out of warranty so this makes it very difficult also electric cars need much less servicing so that that's another difficult thing so that this is this is the main does this should be the main argument advanced I think for why a car car in your car company cannot successful the main one and so yeah and then like I said they think that in order for that card havoc alchemy to have any chance there must be it must be compelling enough that people will pay for you otherwise there's no chance and I think there's actually in order for comedy to be successful it has to succeed on two on two fundamental technology discontinuities one being electrification the yellow and being autonomy I think not even even pure electrification by itself is not enough they say you can indicate with like system very brush line they're living to major technology step changes being electrification and autonomy and the combination of those two is the only thing is that's the only opening for a new company to make it yeah make sense of you know without autonomy you'd probably have to wait for EVs to reach price parity we thought with autonomy you can drive many more miles and bridge that gap easier and it's like well Tesla's moat in some ways are not moat I guess but um like Tesla's advantage in many ways is bigger because like these are two such different technologies that are happening at once that you've been working on well nobody else has so it's like that much harder to replicate now that it's been accomplished almost it's very hard for it's very hard for any okay any new car company to get on the market that they have to make it very compelling a product it means they have to have some significant technology advancements in the electric drive for you drivetrain and the battery pack and just generally over the car itself and then the autonomy has to be very compelling but autonomy in and of itself is enormous so the both of those things um okay County must be successful in doing or they will end up in the cemetery so that's that's the real challenge of it yeah well even with like the I mean the software updates I mean that's something that no other manufacturer can really even get right they can't do it over the air you guys take your car into you know because it doesn't work right so that's a core component of providing updates instead of getting your revenue now from the dealership and spare parts of stuff you can actually send software as a service you know we actually did a whole podcast on this well goal is to minimize service costs yeah whereas the other car countries this is Owens Haley goes to max my service costs but it's a you know to minimize well car companies also have two different businesses as the dealerships where their business is actually just service and and I don't think it's any one surprise that that people don't like going to their dealer I mean it's like it's it's because their incentives are actually not aligned with the what the customers are saying incentives they their goals bring you back as often as possible yeah they're the dealerships in Sam's also most aligned with the the car companies in the during a warranty period because the warrant the car company has to write I pay for the warranty that the service during warranty so it's it that there have a conflict of you cannot contribute to contrary to enter of interests yeah the guy car company has covered the warranty costs but the the dealership makes profit on the servicing so they want to maximize servicing even during the warranty period it's almost like the economic factors you just mentioned have created like complacency where there is no innovation because you know nobody can just start a car company yeah right I mean it's like show photos of creative destruction struction you know there's like the innovation tends to come from new entrants to an industry so if there's if an industry is formed and all I could elegantly or something like that then they were the forcing function is weak for innovation because innovation tends to come from new entrants yeah this problem with rockets this does not know our new entrance so innovation forcing function is weak but it's encouraging to see your rocket booster land you and everyone else like wow we can't innovate maybe yeah it's actually surprising how little innovation has been on there and despite SpaceX showing reusable rockets landing and reflowing these Rockets many times the like come on you know is copy yet something I mean yeah yeah that works just do the same thing didn't like Chinese space companies started putting great fins on their Rockets I think there's some Chinese rocks that have launched with grid fins well you can really use any kind of fun great friends just a more predictable across a range of speeds so from hypersonic sit through you know supersonic transonic subsonic there they're just it's quite easy to predict the behavior of a Griffin and the center of pressure where Griffin doesn't change that much worse if you have a a you know fin fin like a wing looking thing that you'll see quite a big change in where the center of pressure is across a wide Mach regime they either wonderboy the shuttle didn't have Griffin's what do you think about rocket laps approach of trying to use a helicopter to recover that first stage yeah I think that's gonna be harder than it seems but the their booster is quite small so that the issue with helicopters you write into a max lowered problem like the lifting capability of helicopters not that great and that lifting capability drops with altitude and then the Ranger helicopters will so not that great so so then you end up having to helicopter on a ship and then if in that in heavy weather conditions you can't take off so that you're gonna you have to be your whether constraints at the launch point and the catch point are and up limiting your launch availability and then then you got it it's it's it's dangerous you've got somebody in a helicopter with a you know pilots try and catch this thing coming out of this guy it doesn't sound too sane there's certainly the potential for somebody you know so we go wrong whereas if you have a grown ship there's you know it smashes into the drawer trim it's not a big deal but specially into helicopter that's a big deal yeah so you know overall I bet yeah thatthat said I've been pretty impressed with rocket lab and they're made they're making we're making a go of it yeah and they're gonna you do reusability which is important it's fundamental you guys still see yourself doing that city-to-city Travel in 30 minutes one day it would be awesome yeah yeah I think they can for sure can be done yeah I'm sure gonna be done it is it is loud that's but it's really annoys is that the biggest concern they're both taking off or landing when it comes in for landing that sonic boom is loud it's like yeah there's actually two sonic booms so it sounds like somebody just discharged a double-barrel shotgun in your backyard so it's not like it's breaking windows or anything but it's like it's be pretty annoying your is happening on a regular basis that's basically what I'm about to say that you have to do offshore so I think will do but it can't be done definitely um and it's a fastest way to get anywhere based on known physics so and I think the economics can be made to work as well so that it would be competitive with international air travel today Wow I can't wait for that I travel a lot like today sure like minimum like 12 hour to 14 I'll show ya will you try to keep most the launches around the equator just or would it matter like it doesn't matter a ton it matters if you're going east to you know if you're from if you launched East you have the advantage of the Earth's rotation the closer you are the equator and more you can take advantage of with rotation if you if you fly west you're actually counteracting the Earth's rotation so your Delta blushes that you need is higher but you go neither direction I think what about whenever I upcoming launches is actually retrograde retrograde flight so it's gonna go against the Earth's rotation yeah but if starship is gonna launch so many times a day how do you gonna produce all these Raptors because we've been we've been touring the SpaceX factory North on and you're doing you're making them by hand right are you gonna automate any of this yeah I wouldn't say it's being made by hand the being assembled by hand maybe but yeah that's why I say we have a lot of metal printers with a whole yeah that's a 3d printers are crazy Reedy metal printing Wow yeah love it I mean I think SpaceX is pushing the envelope for metal printing more than anyone else oh these that's what's the splash tell us but we also have a foundry that so we do a casting of exact parts for a raptor with a lot of CNC machines it's a very complicated engine to build a moment looks like a toy or relative to your after it's very simple but we're gonna make a lot of raptors than starships those are they gonna be made in the States then yes okay they'd have to be much matter yeah yeah we can get simple ingredients from outside the US but other than that we're not we we cover know how to transmit any sort of gas I yeah yeah yeah no no no anything like is a quite a sophisticated element of a rocket engine were allowed to transfer out the awesome or yeah rocket II stuff is the weapons technology so so just a starship when it's assembled will fly there and come back so I technically there's a lot of rockets at the bottom of the ocean so if your city to city rocket travel works does that mean Tesla doesn't need to build an electric airplane man well English we are plane has a lot of difficulty associated with that or what about the VTOL jet it's a lot of difficulty associated with that I I gotta make sure well it takes a massive amount of effort to do any one of these things so you can't do them all it's not possible you say that say well oh how are you I like it the resources what's the best thing to do making a VTOL jet you can definitely be done doing electric aircraft for sure you know old transport will go electric except for rockets yeah everything I guess why it seems exciting is because if Tesla's leading an energy density and battery technology then the logical next step is like if somebody's gonna build an electric airplane it's the company with the best lightest most efficient batteries right yeah it's it's not it's just it's hard it's an entirely different regulatory regime it's like there's there are there aren't any car companies that are also aircraft companies so why don't they just make it aircraft after you know it's kind of funny there was like some conspiracy theories on Twitter because on Instagram Tesla's yeah allegory it said automotive and then somehow aircrafts is go God like at the cyber truck event or cyber charter an airplane this is like your Wikipedia I think it's incredibly hard to bring an aircraft to production and meet all of the regulatory requirements worldwide very it's a very difficult thing so it's not like we're good at something it could be used to be done we would have to not do a bunch of other things it's not like there's like a ton of unallocated resources tell so I'm like well what should we do no it's like a constant resource starvation so there's like Wendy's other thing I'll give what we were starving for resources yeah then what will you not do well it seems like that's what's so exciting is now that the business is kind of taking this next step that resource like starve is kind of changing or hopefully slowly changing okay and therefore I'm like hit another car something it's not yeah not a giant airplane so I'm just in general it seems like the financial help means you can spend more on R&D you can invest more like that's not how it works this it's not like if you just had more money you could spend it effectively an RD but if there was a if there's a factory producing excellent engineers that would be true where is this Factory it doesn't exist so it's incredibly difficult to find the right talent to integrate them into an organization and how it'd be work effectively it's not a money thing it's just hard to find that this is a short and a small number of people you know more engineers especially there's just a fundamental limitation on exceptional engineers there's just not that many so given like these constraints and all the things you have to do could you tell us like a little bit about your thinking on how you prioritize and the prioritize prioritizing has usually been out of desperation not choice but it's not like oh let's sit back and how shall we spend these resources thing isn't gonna work we're gonna if we don't make it work we're gonna go back up you know and then so we better make it work I mean the mall 3 program there were so many mistakes that were made with all three program that the entire company had to be devoted to fixing the model 3 production system so you know we would cook everyone off solar almost everyone off in a battery pack power world power pack and that kind of thing anyone who was working on you know roads the semi everyone yeah stop doing that working model 3 or there won't be any Tesla yeah it's kind of amazing you really bet the whole company to get to this next level but you know I mean I have a model 3 I couldn't afford a Model S so like I'm very thankful that you guys decided it that Thole company there was no choice it's like either you go to you got to get to volume is those chicken and egg situation you can't make the car at an affordable price unless you have high volume unless you have a high volume you can't get an affordable price so now what do you do yeah how do you brew strap this thing that you basically just kind of take a giant flying leap at high volume and hope you get to the you know grab a cliff at ledge with your fingertips it's like that Indiana Jones really like riding down the thing and this here's what it actually feels like it's like that what temple are doing what all right you know where's like there's a damn boulder chasing you down okay on the ground can you make that game you need it jump across a holographic and if you slow down the bullet is gonna crush you this is what it feels like it's like I don't shoot you'll do Boulder drill a hole in the ground and they drive across or you die so that's basically order you know get the situation you know like like at this point maybe we could say like okay what shall we do at this point you know the the biggest problem we have to solve right now is having production on each continent because it's insane to be making cars in California shell bring them to Europe and and Asia this is I mean as it is making kosnov areas pretty absurd and then you also go to ship those cars half around the world and so you got all this finished goods inventory on the waters that's very high capital carrying cost and you can finance part of it but not all of it is so but you know then there's you got the transport costs you got tariffs you got you know every time a car gets loaded or unloaded there's some potential for damage just let zero you know so it just creates a lot of cost and and and then it's hard to manage the factory complexity in California it is amplified because you've got several different regulatory regimes so you're building it seems like you're building model 3 where you're actually building several versions when well three depending upon whether it's going to china japan australia europe then you go to go down right-hand drive as I put that there every night everything's gonna go some random bureaucratic decision hundred years ago right hand dryer left arrived this is a mega pay in the end yeah absolutely and then all these different languages you know can't have like warning labels in English it wasn't they don't speak English it's like I don't know what it means so this is stickers all over the place for you know seventeen different languages or whatever it is and that's all in one factory so so so the complexity amplifies the difficulty of manufacturing and then you can't get into the cycle where in the first month in the quarter well let's say first six weeks in the quarter you build cars for Europe and Asia and you get them on the boats and then for the next say three weeks you build cars for the east coast of the US or North America and then the final three weeks you both coasts cause for the west coast so the the deliveries early in the quarter look look very very low and they spiked exponentially at the end because basically all the cars arrive at the customers at the end of the quarter and then they were like then we'll have these conversations we've got to get out of this wave like and they're like we'll hope they'll punish us very badly if we get out of the way because the financials will look horrible yeah so then we know okay we'll do the wave again and so that we so now we've got a Factory in Shanghai that should that'll go a long way towards levy ating the complexity and the cost you know we'll have far fewer goods that we need to finance better on boats we want to get the factory going in Berlin Brandenburg technically looks close to blue and then then that's this massively reduces the complexity of production and and introduces the fundamental cost of the vehicle so this will really distressed the company a lot so local production will break the wave logo production will break the wave I mean just like we've had number times that headlights have come up as an issue we have this is crazy we've had to ship cars to Europe many times where the the supplier of the headlights for the EU headlights couldn't match rate and and that or made them wrong or something and then so it may have to make cause with us headlights shove them to Europe then ship a bunch of EU headlights to Europe change them in the port because they know how to exit the port until they have the EU headlights oh my god so that was the port problems we would see that's one of the many port homes I like like the first year quarter last year was a tragedy of errors it was not a comedy but a tragedy if Alton went on strike right and you know and I like what I mean Belgium's on strike yeah coming into subversion and like okay now what do we do nothing just the cars are stuck because a good ok the theater then they're scheduled to go off strike in this other day and like ok so then we can move things great there's just so many so many things and it caused get stuck in the port of Shanghai because they had the wrong sticker oh my god yeah I know [Laughter] it's better off like just mini in China absolutely sure like totally agree you don't have to spend like two weeks three weeks on the ocean go there and roll thicker and you have to wait every place people don't appreciate Giga Shanghai yet until recently nothing not yet I don't think people have realized it awful it's extremely important yeah yeah and these like shipping times all that like like like technically as possible if your everything goes right you can get the car there in two weeks but the ships don't don't leave every single Bay and then you also have to queue you can't just instantly load the cars so the cause you have like send like two thousand cars to a lot in like you know for Oakland and for San Francisco you accumulate the cars moot then they get moved to another place then they get loaded onto the ship one at a time yeah and then finally the ship leaves and they like sometimes the ship has problems yes like the storms or something calming customs so much drama anyway to go wrong I say yeah I'm like the ship's engine broke down somewhere yeah it's great like right now like everything roll off the production line go directly to the right it's wonderful so I have another question it's like from your perspective how do Cheney's public perceive Evie well China's very Pro Evie and it's Vegas TV mark in the world I think it's it's like half of all the Eevee's or made and bought in China yes I mean like right now yeah yeah so that not that China sort of subsidies for eby's dropped conservatively so that did cause a reduction a lot but it is EBE incentives were very high in China yeah and now they're much less than like a third what they used to be or less yes so the so that's caused some decline in demand as one would expect but I still trying to instill the biggest market for EVs in the world so I think they're very positively received wow that's great yeah so talking about the incentives because you I know the the price there was a small price reduction right in the Chinese bottle three and then but then the subsidies were there balance so it's actually not it's not any impact on Tesla and then the profit right no I didn't make so yeah well you know the obviously look at if it depending on what percentage of the car is made in China the parts that are made in China are not subject to a tariff so that's with me helpful we also save on logistics and generally we found that locally sourced parts in China cost less than in the you know in the US for Europe so this all pretty helpful also the Tesla got added to the purchase tax exemption which which although the other this is I'm not sure if you like the rest just how much of an article battle Tesla has had to sell cause in China it's been a you know really we hadn't basically no access to any on subsidies and repaid a tariff and we had to shut the cars over and every single thing was set against Tesla and still we made progress and decently well so I think there will be much better a much better situation with local production they not have a Jeju shipping and tariffs and and being able to have lower cost local sourcing of components so it does make a big difference I think is that your victory dance that's a big deal huge yeah just uh there's just fundamental economics it kind of makes sense that making cars on the continent where there are we'll be a lot more efficient than making them in California and shoving them around the world no and you can get paid for the cars before paying your suppliers which seems to not be the case if you're shipping around the world that could be a huge like friction on the whole kind of cash flow situation rate has been we're sure will sure make a big difference on cash flow because yeah it's there's no way to get the cars especially to Europe but but even trying to get them to customers you know before we have to pay suppliers so if you're a rapidly growing company it's it's night and day if if you get paid by your customers before you have a failure suppliers like nine day because the faster you grow the video cash cash position is but if it's the other way around where you have to pay your suppliers before you get paid for customers to get paid by customers then the faster you grow the the faster your cash position professor all yes because he doesn't spend more money to make yes it's a growth growth actually it causes you to auger into the ground in a situation like that now tells we had a mixture of both things where we had a lot of customers in say in California and and that's that's fast for sure we would get paid by customers faster then we'd have to pay suppliers but then for cars going to Europe and Asia with theirs it's the other way around you know so we would have to pay suppliers before we got paid by customers and now we could offset some of that with an asset-backed line which was pretty helpful but only some of it not all of it and so the this is the fundamental financial health for sure improves dramatically by just having just been having a factory on the continent okay we're not talking next door but it's just how many OSHA year is it like especially Europe was logistically super hard because we're on the west coast if we run east coast then then China would be much harder but if but if you're on the west coast your charter because you got to go through the Panama Canal or even worse around said you know Tierra del Fuego because sometimes the parent Panama can all get backed up like this friggin ship is going to the Antarctic okay it's like to the end and it's stormy as hell this is good since ship around Chile are you kidding you know in the little crazy storms and then back up all the way and then like you know it is oh my god so little justic nightmare um so yeah we great to just have I have it not get on a boat and cross the Pacific and Atlantic and that kind of thing so maybe similar to Vincent's question all I what's the biggest advantage in choosing Berlin compared to other European countries Berlin has the best make those once years ago well dad I don't know I mean he looked a lot of different different locations and I mean sort of I don't know I we could we could have put it in a lot of locations we needed to move move quickly and and actually this this place you know it's like we're of the 30 minutes to the outskirts of Berlin technically in Brandenburg it actually was a place location that BMW was going to put a plant there so a ton of the environmental work all of the permits and stuff had already been done and then for some reason BMW chose a different location but there's like I guess or something on the order of a year's work worth of environmental you know paperwork and stuff that's been done on that location for an order plans so that's it made it one of the quickest places to get going and the generally like that the government local and state government was very supportive so you know I went there and it's like okay this seems like some pretty good vibes this place so this was all lovely part of this lovely place and those opportunity for like it's it's closed after Billa and that's a young people kids still you know live in an apartment in Berlin and commute to the factory it's right there's a train station actually move the train station it's a small train station but they're gonna move for the train station to where you can literally get off the train and be right at the Ganga balloon wow that's perfect you could literally just pop right off and you know walk well very near to bicycle so then it's like okay this is pretty cool and yeah so so young people career in berlin department and selects you know working here willing but if you want to have more of a family situation but backyard there's you know affordable housing available with you know houses with your arts and stuff that aren't too expensive yeah so it seems like a good good combination of factors and a lot of talent in the area so it sounds cool to grateful in it this is just sound like some get some cool nightclub I think you could definitely have any cool neckline that was cooled that view oh yeah good nigga Shanghai - it sounds pretty cool new party - oh yeah yeah yeah we're like a rave cave in the you should have like your own nightclub yeah but I think that'll be a food who doesn't know what should do that I feel like I'd go fresh or work at a company way that's good tonight that sounds way more fun didn't you want to put a roller coaster into a tree manufacturing yeah you're still gonna do that I mean I think that would be pretty fun to do okay here you just like - yeah just basically have like we just needed a rail that can support like a modified - modified Tesla's and and then yeah the invention of plaid flat yeah just like zip around around the factory like five seconds doors would be booked for months yeah we should get in right now yeah we kind of actually in various pasta factory we have vehicle conveyance systems they just don't move that fast but they're kind of like roller coasters that move slowly exactly oh yeah but yeah we're feeling pretty you know work no ten feet or anything but like pretty good about where things are headed and I think this is a skull I got a lot of good things you know the model white coming out this year and some exciting announcements about batteries a lot of progress in the auto pilot yeah yeah so boolean giggle in and and then make your progress on some of the new vehicle developments I don't insulate the solar roof spoiler glass roof getting rolled out the cyber truck got received really well I think yeah did you expect that many orders I'm not no not really when I first saw the cyber truck and I in in Francis design studio I mean you know you know it had told me that this was a this was a daring design although I think you the most excited about this design than any just yeah I think it's our best product ever yeah and I saw it I was just taken aback and not not by the design so much by the pure aggression that the truck you stand in front of it you're like okay I'm afraid you know it really is like a badass truck yeah yeah well it seemed like the lot of reasons why people buy pickup trucks you know in the US was like because it's like the most badass you know like yeah like which one is the toughest truck and yes like that what stuff other truck a tank like a tank from the future so it's a good G just in case the first four are busy yeah absolutely yeah it's literally like so how you out tough a truck use bigger futuristic overstock area and that's the tougher than a truck and I feel like autonomy you'll probably be very like mature by the time it ships yeah for sure so how many cyber truck orders do we have right here raise your head I got one I ordered three I mean it's gonna be pretty special and I'd look like the other thing so you know yeah it looks so cool like the first time I showed it to my son is like daddy this is something from alien this is the first impression yes yes it is that's that's how it was designed it was like what's the you know list let's make a future futuristic armored personnel carrier you know and so the inspiration board was like literally like you know Blade Runner you know like sort of Mad Max back to the future you know aliens hideous you know they've like yeah so it's the best way it looks like like the pre-order number it's amazing what's gonna be over like 400,000 all right I think it was risky and it just like at first people were like even people who like or hardcore fans let's go and then people are like wait a minute like yeah uh-huh kind of amazing I want they could see it like there was like in person you can see it we're having really fast the reaction and then they're processing then you seeing all the features and then the range in the price those are the compelling things are really healing like just hit everybody the forty thousand was the biggest job I was like oh people are gonna be buying in that range to like it's just actually just sixty nine thousand five hundred miles 2.9 seconds like claw [Applause] he'd loved it too right he did actually yeah yeah this is one of the last things he said actually don't see ya did he have a drive in it and no he saw pictures of it but I think he was not obviously he died recently so you didn't use what you saw pictures and he said yes great and it says send us a note like loves it you know yeah so you know you wanna you wanna have these things that inspire people feels different and I like everything else is like the same it's like variations on the same theme you want to have something different yeah but if you felt like how many I wasn't sure if nobody would buy it or a lot of you know I don't know but you know I just told Tim I listen to nobody wants to buy this we can always make one that looks like the other trucks that's not like yeah yeah you don't just try it and yeah that's it was a you know GU say okay was a weird failure but no no I'll make one night looks just like the others and there you go yeah it seems to capture the whole world though like elevated Tesla and the cultural zeitgeist in a way that like is so exciting like the Travis Scott music video already happened like that was so I was the first music video I was like ever to us yes so yeah it's gonna be hard to make that by the way so it's not it's because because it's a different architecture that's an exoskeleton architecture so there isn't any cars out there that I have an extra skill in architecture so if you got to rethink how they will the internals of the car done so that you can use the external shell as as as a load-bearing structure instead of just basically thin sheet metal that is effectively that just there for aerodynamic reasons so you can take you could take the the external that make what's called a class of so soft most cars and still drive around it loose almost no structural that value a you should go very very thin sheet metal so it's a totally new scale and obviously some challenges building that it's a starships three it's a star you can use the same steel as the ship yeah I'd love one of those limited quantity once oh I don't like it Tim yeah Tim Tim would ask about that every day astronaut yeah that's cool guy is okay he really knows his ways to learn about yeah it does so yeah those this is what if you know a lot of good things undoubtedly be some you know setbacks along the way but it's looking looking pretty good should we do some closing thoughts you know I just remember when I got my model 3 it was like a difficult time in my life and it made it easier and you know you don't have to buy gas car drives you around just makes your life better all of our lives in these little ways like all this struggle you do it you know it really makes things better and just makes you hopeful and inspired and you know just can't thank you and the whole Tesla team and enough for for all the love you put into the car you know every day it's just happy because I have a model three no that's cool I'm glad you like it as I go I go so you know maximize make feel like really touch people's heart and with the product and it's a I think it like to any of these companies out there the design these things probably is sort of a spreadsheet and script marketing surveys and that kind of thing without saying do you love it you like the part that you're making you touch my heart very much I like thank you for this chance like doing interview with all of us and I'm SS shareholder and model 3 owner I remember like one time you tweaked about your money is first in and we'll be lost out yeah I was really touched to see that tweak I think it's like years ago sure like right after one of the shareholder meeting I was like like we Co would do this and like after iPod my model three I'm more believed to the company like I older motoi and then to psy was from Porsche fans before and then the Rhino like he was gonna get a take on until he saw the range yeah I I was thinking to get at a car like why not like give it a try but sure well you look at the spec the to range turn me off like yeah it's obvious we'd already 201 like who's gonna buy it for 150 K well just not talk about money just talk about range itself it's a spec it's like it's not there yet yeah so with like 150 K Plus like nobody gonna buy it yeah so thank you all and absolutely thank you very much oh yeah well I think thanks you guys for your support was really it makes difference yeah yeah I mean I don't know Tesla so I hope hopefully I will truck though yeah yeah sure yeah and your shareholders gonna call it yeah yeah I gotta save up but I will buy one and I've got to say a truck like you say no but um thank you for me I've made so many great memories just like through these cars like I've met all you guys through Tesla and this is like amazing just like what kind of community just is created through products that you love and I think that really means a lot like I don't I think I've never seen people being so excited about a product before I like having this whole family feeling that's really cool thank you so much anyways welcome yeah thank you yeah I just want to say congrats first of all because I feel like this has been it's kind of like a feel-good moment for Tesla all that's happening yeah obviously thank you because like you've inspired all of us and I think there's not many things in the world that like people get pumped about that are positive about the future like I really feel like we need that now and so Tesla like bringing us all together has been really awesome and really much-needed I think great this is really cool I think I'd have to agree with what gali said just where Tesla's going um you have a car that's actually making a difference with the clean energy changing the earth cleaning things up I mean it made me excited to see and you're so efficient and you can you actually get things the way you do it you just I don't know you get it done and and I trust you and I trust the company and I it's it's I don't know such a passion it's amazing I thought no I just don't get the words out sometimes late but we get things we get it done in the end yeah yeah yeah always deliver yes thank you you're welcome no thanks please for it well I just want to say like how I described this this podcast like we kind of kind of just grew out grassroots right and I look at you as also part of the community you're as much third row as all of us right so I I mean I'm I'm really grateful you were able to come on this and also tell these really show more people I hope we can do it again too because there's so I'm sure there's gonna be sure things that come up that we can set the record straight yeah and then maybe have some celebrations dude so yeah that sounds good yeah there's a lot of exciting things probably like said probably some you know if disasters and draw along the way so Sarah how is that good we'll be there that helps yeah it was always good to get feedback like you know and if you would be sure in my position what would you do like it a lot of times like I just don't know if something's wrong I don't even know what's wrong you know it has to have to learn it somehow you know and then I'll cure you know forgot okay how do we deal with all these different issues you know it's scaling service effectively it's very difficult for example and so that's like what are you it's like a mundane thing but it's very important definitely yeah I think the mobile service is incredible yeah I mean I've had I'm on my fifth tussel now yeah not the last because I just keep upgrading them no the last one I so I have a p100 the Model S which is outside right there and yeah I I have that I got the license plate get Tesla yeah yeah if you want it I would love to give it to you so yeah thank you again thank you cool yawn can you sign my model three oh yeah my bottle let's do all right cool [Applause] [Music] you

Channel: Third Row Tesla

Views: 902,846

Rating: 4.9062781 out of 5

Keywords: Tesla, Electric Cars, Technology, Vehicles, Elon Musk, Maye Musk, Kimbal Musk, SpaceX, Zip2, Paypal, X.com, Childhood, Early Days, 2020, Starship, Falcon 9, Cybertruck, Kwaj Rockets

Id: J9oEc0wCQDE

Length: 215min 3sec (12903 seconds)

Published: Sun Feb 09 2020

Reddit Comments

[u/OplopanaxHorridus]

Say what you will about Musk, but he is not a compelling public speaker.

[u/Raoul_Duke_Nukem]

“And then we told them electric cars are the way of the future”

[u/cchiu23]

"Now I know how the africans at my parent's diamond mines feel, well except I've got a proper wage"