Is Musk Close to Over-Extending His Financial Abilities/Assets?

[mme]

I find the idea of this thread a bit silly. Regardless of his finances, Musk will not invest in any project unless he believes that it can make money. He is not going to Mars unless he has NASA as a client. Having one engineer work on a BFR doesn't mean that SpaceX will be funding this project on its own. His plans for a Mars BFR is business development. If SLS gets cancelled, SpaceX wants to be ready for an opportunity to bid for its replacement.

I find this thread silly too, because SpaceX is doing really well, Elon Musk has a track record of pulling rabbits out of hats, and he has more money than God in stock which means he can borrow money to get through any rough patch.

That said, Elon Musk has consistantly stated that the entire purpose of SpaceX is to help bring about the colonization of Mars. He has also stated SpaceX won't IPO until MCT is a reality because shareholders could interfere with the plan. In the headquarters of SpaceX is a huge image of Mars as it is now, next to an image what it might look like in the distant future when it's terraformed. Tom Mueller has stated that everything SpaceX does is with the goal of getting to Mars.  Gwynne Shotwell has stated that there is no business case for Mars, but that SpaceX will pursue Mars. The point of BFR is to get colonists to Mars, hopefully paying their own way.

And yet people constantly say things like, "Elon/SpaceX won't do BFR/MCT/etc unless NASA/someone-else funds it." All the evidence is that Elon is all in, why do people doubt that?

[macpacheco]

And yet people constantly say things like, "Elon/SpaceX won't do BFR/MCT/etc unless NASA/someone-else funds it." All the evidence is that Elon is all in, why do people doubt that?

I think the all in analogy is wrong. He hasn't actually bet everything on this. Far from that. This doesn't mean he's waiting for NASA to fund him significantly either. SpaceX might not need much funding for MCT for another 3 or 4 years. In the meantime, SpaceX is launching, is making a profit on CRS / GEO / DoD missions.
I believe the first Raptor based rocket will be a FH replacement that is fully reusable.
Do you think the Raptor engine will be uncompetitive vs FH for launches ? Right now I believe Raptor development is inspired by the MCT demands, but it's an engine valuable even for current FH type launches.
Musk takes rabbits out of his hat because he's extremely efficient at extracting maximum value of his signature achievements, like the Merlin engine, the extremely effective Tesla factory, next in line should be the Raptor engine and then the Tesla giga battery factory.

[yg1968]

I find the idea of this thread a bit silly. Regardless of his finances, Musk will not invest in any project unless he believes that it can make money. He is not going to Mars unless he has NASA as a client. Having one engineer work on a BFR doesn't mean that SpaceX will be funding this project on its own. His plans for a Mars BFR is business development. If SLS gets cancelled, SpaceX wants to be ready for an opportunity to bid for its replacement.

I find this thread silly too, because SpaceX is doing really well, Elon Musk has a track record of pulling rabbits out of hats, and he has more money than God in stock which means he can borrow money to get through any rough patch.

That said, Elon Musk has consistantly stated that the entire purpose of SpaceX is to help bring about the colonization of Mars. He has also stated SpaceX won't IPO until MCT is a reality because shareholders could interfere with the plan. In the headquarters of SpaceX is a huge image of Mars as it is now, next to an image what it might look like in the distant future when it's terraformed. Tom Mueller has stated that everything SpaceX does is with the goal of getting to Mars.  Gwynne Shotwell has stated that there is no business case for Mars, but that SpaceX will pursue Mars. The point of BFR is to get colonists to Mars, hopefully paying their own way.

And yet people constantly say things like, "Elon/SpaceX won't do BFR/MCT/etc unless NASA/someone-else funds it." All the evidence is that Elon is all in, why do people doubt that?

I am a fan of SpaceX (and what they have accomplished) but it's not realistic to expect them to spend billion of dollars to fund private missions to Mars. Musk is always thankful to NASA for their contracts. SpaceX's funding for Mars missions has been minimal so far. Musk isn't going to stay a billionnaire if he doesn't have clients that pay him to go to Mars. It's wishful thinking to believe that SpaceX can get to Mars without any government funding.  Musk is a businessman and he understands that.

[Jim]

Musk takes rabbits out of his hat because he's extremely efficient at extracting maximum value of his signature achievements, like the Merlin engine,

that is not his achievement.

[RocketGoBoom]

Musk takes rabbits out of his hat because he's extremely efficient at extracting maximum value of his signature achievements, like the Merlin engine,

that is not his achievement.

Elon Musk paid for it and his job title says, "Chief Designer".
Sounds like it is his to me.
I think Elon is the first person around to also give due credit to his team of smart guys.

[Robotbeat]

The engine is Tom's, IMHO. Musk is more of a big picture guy, he probably made the decision for a tic-tac-toe pattern on v1.0, possibly the more efficient octoweb. I don't think he's super into the miniscule details of solving all the problems of a new rocket engine design.

[Nessus]

I am a fan of SpaceX (and what they have accomplished) but it's not realistic to expect them to spend billion of dollars to fund private missions to Mars. Musk is always thankful to NASA for their contracts. SpaceX's funding for Mars missions has been minimal so far. Musk isn't going to stay a billionnaire if he doesn't have clients that pay him to go to Mars. It's wishful thinking to believe that SpaceX can get to Mars without any government funding.  Musk is a businessman and he understands that.

Who say's Musk's aim in life is to stay rich.. on Earth? As far as I can tell, when he says that he wants to 'die on mars', I'm sure he's willing to spend every penny of his wealth realising that wish. Profits from SpaceX go towards SpaceX's research and development... and Mars colonization. On Mars, material wealth on Earth is only useful if it produces money to buy stuff to send to Mars. Can't visit your Earth mansion too often!

[meekGee]

The engine is Tom's, IMHO. Musk is more of a big picture guy, he probably made the decision for a tic-tac-toe pattern on v1.0, possibly the more efficient octoweb. I don't think he's super into the miniscule details of solving all the problems of a new rocket engine design.

Sure, but the engine is not one of the unique differentiators of SpaceX.  It has some attributes that are first-in-class, some that aren't, it sure fits the job it has to do, and I venture to say that it's not by some happy accident.

Musk's achievements, at least IMO, are the things that make SpaceX different - the no-compromise goal, the vertical integration, the decision to pursue full and rapid reuse, and the very market-aware behavior.

Someone brought up Tesla upthread, and it is very similar - the no-compromise goal, the vertical integration, the strategic market-centric behavior (start with high-end luxury cars, work your way down - exactly opposite what everyone else is doing)

And since Musk is the driving force behind both companies, you can't treat them as separate companies with for-hire "professional" CEOs that just happen to be the same person.  They are linked, and have each other's back. I don't know if the investors overlap, btw, but I'm sure both sets of investors see the companies as extensions of Musk, for better or for worse.

[AJW]

I worked 15 years for a self-made billionaire and I have to say that they think very differently than most of us.  At a certain point they have all the cars, jets, and vacation homes  that they want and they know that all of their family's needs will be met far into the future.  They ask themselves what is left and the answer becomes 'Legacy'.  Collecting Norman Rockwells and Maxfield Parrish is fun, but soon thoughts turn to building museums so others can see their collection.  Bill Gates turns to Philanthropy.  Musk has decided that his legacy will be to create the first colony on another planet.  Kennedy got us to the Moon.  Musk wants to take us to Mars, hopefully to stay.

I really don't think he is concerned about any business justification.

If you think that this thread is silly, the 'When will SpaceX IPO' was even sillier.  The answer was easy.  Musk has no incentive to go public until after his legacy is insured.

[Jim]

Musk takes rabbits out of his hat because he's extremely efficient at extracting maximum value of his signature achievements, like the Merlin engine,

that is not his achievement.

Elon Musk paid for it and his job title says, "Chief Designer".

No, it is Chief Technology Officer.  Big difference.  He sets the course (like choice of propellants) but the others like Mueller (pintle injector) got him there.

[Oli]

I really don't think he is concerned about any business justification.

I don't think (or hope) Musk is one of those mentally challenged billionaires who waste money on their pointless legacy.

Someone brought up Tesla upthread, and it is very similar - the no-compromise goal, the vertical integration, the strategic market-centric behavior (start with high-end luxury cars, work your way down - exactly opposite what everyone else is doing)

It's not the opposite of what everyone else is doing. There are numerous smaller car companies that build luxury cars for a niche audience. The big players introduce their innovations in the luxury segment first. Tesla is not particularily vertically integrated at all.

[sublimemarsupial]

Musk takes rabbits out of his hat because he's extremely efficient at extracting maximum value of his signature achievements, like the Merlin engine,

that is not his achievement.

Elon Musk paid for it and his job title says, "Chief Designer".

No, it is Chief Technology Officer.  Big difference.  He sets the course (like choice of propellants) but the others like Mueller (pintle injector) got him there.

The SpaceX website (where he is listed as "Chief Designer") and pretty much every interview with SpaceX employees disagrees with you. Elon is intimately involved with the design process, he does not just sit in his cubicle making the broad choices while letting other do the legwork.

[yg1968]

I am a fan of SpaceX (and what they have accomplished) but it's not realistic to expect them to spend billion of dollars to fund private missions to Mars. Musk is always thankful to NASA for their contracts. SpaceX's funding for Mars missions has been minimal so far. Musk isn't going to stay a billionnaire if he doesn't have clients that pay him to go to Mars. It's wishful thinking to believe that SpaceX can get to Mars without any government funding.  Musk is a businessman and he understands that.

Who say's Musk's aim in life is to stay rich.. on Earth? As far as I can tell, when he says that he wants to 'die on mars', I'm sure he's willing to spend every penny of his wealth realising that wish. Profits from SpaceX go towards SpaceX's research and development... and Mars colonization. On Mars, material wealth on Earth is only useful if it produces money to buy stuff to send to Mars. Can't visit your Earth mansion too often!

Welcome to the Forum!

Musk has mentioned that there is something to be said for a keeping a business within the same family. He has mentionned the Ford family as an example that he would like to follow. He wants to pass on his companies to his sons. He doesn't intend to take the Buffet pledge and give most of his money to charity.

[meekGee]

The NUMMI plant does everything from metal stamping to interior plastics. If you follow up, he even plans to manufacture the batteries. That's pretty vertical.  Most other high volume attempts at EV or hybrid (Leaf, volt, Prius) were nothing like Roadster or the S.

A few years ago I spoke with him a few times. He is most definitely involved in detailed tech design.

[RedLineTrain]

Musk has mentioned that there is something to be said for a keeping a business within the same family. He has mentionned the Ford family as an example that he would like to follow. He wants to pass on his companies to his sons. He doesn't intend to take the Buffet pledge and give most of his money to charity.

Too late.  Musk has already signed the Buffett Pledge...

http://givingpledge.org/

As for Musk, he knows his rocket down to the gnat's ass (in his words).  Jim shouldn't make the mistake of thinking that he's not intimately involved.

[Lurker Steve]

The NUMMI plant does everything from metal stamping to interior plastics. If you follow up, he even plans to manufacture the batteries. That's pretty vertical.  Most other high volume attempts at EV or hybrid (Leaf, volt, Prius) were nothing like Roadster or the S.

A few years ago I spoke with him a few times. He is most definitely involved in detailed tech design.

You can't compare Telsa with GM or Toyota methods.

Telsa only builds a single car model. They discontinued the Roadster to work on the Model S.

GM and Toyota have much broader product lines and numerous factories and suppliers. It makes sense to them to share the same tooling for Gas / Hybrid / Electric autos, and just make adjustments for the powertrain. There aren't that differences between a fully plug-in electric Prius and the Gas / Electric Hybrid version of the Prius.

They don't manufacture all their components, but they definitely have design input into each detail.

Also, you can't really talk about high-volume auto manufacture until you reach the same output as the Honda factory that is cranking out Civics and Accords.

[Redcoat22]

Not true.  The funds are not transferable. They are isolated from each other.

Unsubstantiated. 

Distributions can be used however an equity owner desires; particularly in a privately held company.

[Dudely]

Elon Musk paid for it and his job title says, "Chief Designer".

No, it is Chief Technology Officer.  Big difference.  He sets the course (like choice of propellants) but the others like Mueller (pintle injector) got him there.

Jim,
You are just wrong so often it is getting silly. Elon's titles are CEO and "Chief Designer". Anyone with the common sense to check their website would know that.

http://www.spacex.com/about/leadership

Fair mistake- if you look at Wikipedia it says CEO and CTO, so perhaps it changed?

[Lar]

Let's all be excellent to each other, please. Thread trimmed a bit.

[R7]

CTO, Chief Designer, same difference. It's his company so he can call himself Technica Pontifex Maximus if it pleases him. Historical anecdote is of course Sergei Korolev, Chief Designer was his cover name. But Jim has a fair point, Mueller & co aren't interns there, they make chief designer's dreams come true while filling in the nitty-gritty technical details, keeping things within bounds of reality.