IRON MAN

Jared Dillian's picture
Rank: King Kong | banana points 1,752

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Sometimes when you have your head down sending emails or bidding and offering or whatever people do nowadays, you sort of lose track of the bigger picture, and the bigger picture is that there is this dude out in California who 1) has a spaceship company, and 2) makes the coolest cars in the world. In addition to the aforementioned 1) and 2), he is trying to build something called a "Hyperloop."

How is this not news? Well, in the business world, it is kind of news, but not as big of news as it should be. We are talking about a guy who--and I'm saying this with a straight face--could be responsible for elimination of much of the carbon emissions in the United States, and maybe the world. That would be a pretty big deal, right? And immediately, you start to think of the forces arrayed against this guy.

Obviously we are talking about Elon Musk, who is South African, who moved to Canada, and then, the United States.

He is 42 years old, three years older than me. He graduated from Penn, went to Wharton and also majored in physics. Out of college, he started a small software company that he sold to Compaq for oh, $300 million, then went on to start Paypal, which he sold to Ebay for, oh, $1.5 billion, which he rerolled into SpaceX (not publicly traded), which currently has a $4 billion order backlog for sending satellites and stuff into space. Let me say that again. He has a spaceship company, and sends stuff into space. He is in competition with governments, and winning, because he is hundreds of times cheaper! But do you really want to know why he wants to go into space? Because he wants to colonize, and live on, Mars. He has said in interviews that he wants to die on Mars--just not on impact.

So I am telling you about a guy who wants to colonize Mars, and I would not short this guy, not with your money, because he just might do it in our lifetime. I would not short anything that Elon Musk does, because he is the real deal. I've been around long enough to know what the real deal looks like, and it is Mr. Musk. People don't fall bass-ackwards into $300 million and $1.5 billion paydays, then launch actual rockets into space and build cars that have the highest Consumer Reports rating ever. That is not a coincidence. Guys just don't luck into things like that.

I'll tell you a quick story. I'm sure lots of you already know that I was a band geek in high school, the king of band geeks, actually, the all-time king of band geeks. I was the drum major, the best around. I was a high-energy, enthusiastic guy with a positive attitude. So one of the drill instructors made a small speech before one of our competitions, and singled me out, saying that whatever I had, that something, you wanted to put it in a bottle and sell it. Well, that's the way I feel about Elon Musk, times ten. Did you know that the movie version of Tony Stark in Iron Man is more-than-loosely based on Elon Musk? Did you know that Elon Musk had a cameo in Iron Man 2?

So Elon Musk is pretty busy running this spaceship company that is changing the world (they regularly send stuff into orbit) and running this car company that is changing the world, but he was sufficiently offended by the idea of the biggest boondoggle in the history of boondoggles, this silly "high-speed" rail between SF and LA, slower than a plane and more expensive, and, after accounting for budget overruns, probably more than $100 billion, in a state that can't afford it to begin with--that he drew up this back-of-envelope plan to travel in a pneumatic tube at just about supersonic speeds for maybe 20 bucks. Is he serious?

Deadly serious, but he is too busy going to Mars and eliminating carbon emissions to change public transportation forever, so he drew up the engineering plans, and gave them to everyone, for free, so maybe someone else can build it, instead of the stupid boondoggle railroad. He'd do it himself, but some things you just can't delegate. It will be interesting to see what Moonbeam does with the plans, because it is so obviously a smarter idea, but can you imagine the special interests who are counting on all that money to build the stupid railroad? Elon had better grow eyes in the back of his head, and I'm only half kidding.

Mr. Musk is actually pretty critical of his fellow Silicon Valley entrepreneurs, because they do Instagram this and Twitter that, and it is all internet doo-dads, and he wants people to think bigger, to use their imagination and creativity and business acumen to do something outside of computers, which are all under surveillance, anyway. You can throw his name in with Ford and Edison and some of the world's great inventors, but it's kind of hard to do that with a guy like Zuckerberg, because, in spite of writing the best massively scalable computer program, and connecting people from around the world, and starting this whole gifted and talented camp, you have to admit that Facebook, while it makes people's lives better, is not really a game changer. Going to Mars is a game changer. Hyper tubes are a game changer. Even Paypal was a game changer, of a smaller order.

So the thing that fascinates me about Musk is that he is almost from a different era, a time when people actually thought big and executed on it. I mean, can you imagine how groundbreaking the automobile industry was in its day, coupled with assembly lines? And this is sort of what Thiel and Kasparov were talking about, you can go on and on about the smart phone and the iPhone, but at the end of the day, it's just a computer, and computers have been around for years. It's not really an invention. So what inspires people to invent?

Any time you talk about Atlas Shrugged, people either get really happy or really unhappy, but let's deconstruct something for a minute: Rearden Metal. That's a Hyperloop type of invention, requiring lots of imagination, creativity, and business acumen. Why did Hank Rearden invent it? To get rich? I make the Family Feud XXX sound on you. No, he did it because it was cool, for the pure joy of it. He didn't much appreciate what happened afterwards, but those are political and philosophical questions which we are not going to address here. But Thiel and Kasparov are partly right, maybe: why have we gone so long without inventions? Where did everybody go?

I don't think the answer to that question has anything to do with politics or regulation; it's still very easy to start a corporation or LLC in this country, and even if it someday involves more paperwork, if you have dreamed up the Hyperloop, you will probably take the time to figure out the red tape. And if the rewards are great enough, how you are taxed really isn't important. So what causes people to dream things up and what causes them to play Xbox?

Funnily enough that gold is making a comeback, because gold is the opposite of Elon Musk. If you buy gold, you are essentially playing Don't Pass on civilization. The gold bugs may not like this statement, but it would be nice if we didn't have to use gold. It's not terribly convenient. Paper money is better. If you could trust people to do the right thing, and not debase their currencies, then paper money would be superior to gold. And you go through these periods of time where you have technological progress and stable currencies, where people can be trusted, and then you go through these awful periods of time where you actually go backwards in time and currencies get trashed because people are lazy and shiftless, where they cannot be trusted. The last twelve years has been the latter. It's funny that we found out recently about NSA surveillance, because all of this cool "tech" innovation over the last twelve years, well, every keystroke has been monitored and recorded. Doesn't seem much like progress to me, not compared to the automobile, or the television. Seems like we are almost going backwards in time. So people who have bought gold, like me, are engaging in the ultimate act of pessimism.

Up until recently, I've been right. Things have gotten worse, not better, and the gold position has made money. And I continue to be pessimistic on civilization. You see, if you think carefully about what Elon Musk is trying to do, in making the world a better place, he is running headlong against people who will try very hard to protect the status quo and their own interests. Energy companies. Auto and auto parts manufacturers. We have already seen car dealerships try to keep him out of New York State. You know what's funny about the Hyperloop thing? When he said that he wasn't going to build it--my heart sank, and yours did, too. Why--because we all know if he doesn't do it, it won't get done. I'm not just talking about the engineering aspect of it, but going up against all the people who stand to gain from snail rail. It can be exhausting.

But in 2013, we don't help people like Elon Musk, we hurt them. We tear them down. I don't know if movies like Elysium have always been around, or if this is a new phenomenon, but Elon Musk is one man against the entire world, a world that would willingly tear him to pieces. He accepts the challenge, and even smiles about it, at least on camera. He is winning now, in a minor way, with TSLA (disclosure: I own shares of TSLA) stock going to the moon, but this is the easy part. Used car salesmen in upstate New York will be the least of his problems. There are an uncountably infinite number of people who would like to see him fail.

Gosh I hope he succeeds. In 20 years, I hope we are all driving Teslas and zipping around in Hyperloops and Musk himself is conducting operations from Mars. But I doubt it. Not because I don't believe in Elon Musk, because I do--but I believe more strongly in the potential for civilized society to tear itself apart. I think about a world we live in, where thousands want to be President, a Congressman, or a Senator, but there is only one Elon Musk. One creator against thousands of destroyers. I'd like to grab dinner with Elon someday. I'm a creator, too, but in a very minor way. It's the same phenomenon, really: one writer, against thousands of critics.

What little kid decides they want to grow up and become a critic, anyway?

Comments (61)

Aug 29, 2013

WOW, great post Jared.

Agree, Elon Musk is a true visionary

Aug 29, 2013

UNREAL..

I'd give you 20 bananas if I could.

Aug 29, 2013

I agree with every word of this, and I hope to Christ we're both wrong.

Aug 29, 2013

Good post but you're a little late to the party.

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Aug 29, 2013

love it

Aug 29, 2013

We need more of this!

Aug 29, 2013

Much of your post had been what was roaming in my head about six months ago, in terms of Musk (which I'm also surprised at the lack of people who know his story, despite the recent TSLA hype) and the Atlas Shrugged comparisons. Love the Rearden Metal comment especially.

However, while gold might seem like a pessimism play, I don't think it can quite be characterized as such. Production will continue precisely for the reasons you outlined above, regardless of whether you're using money or gold to trade. While paper is lighter, you'll always have the worry of currency devaluation; with gold, you won't. Therefore, net net I'd at least prefer gold.

Aug 29, 2013

I'm also fairly certain that I read an article not that long ago that he wants to create an ironman like UI of some sort.

edit: Here is the article http://www.gizmodo.com.au/2013/08/elon-musk-wants-...

Also, Silver banana! I think this is the first one I gave out.

Aug 29, 2013
Skinnayyy:

I'm also fairly certain that I read an article not that long ago that he wants to create an ironman like UI of some sort.

He already did...


Elon Musk @elonmusk 23 Aug
We figured out how to design rocket parts just w hand movements through the air (seriously). Now need a high frame rate holograph generator.


Elon Musk @elonmusk 23 Aug
Will post video next week of designing a rocket part with hand gestures & then immediately printing it in titanium

Aug 29, 2013

He has the ability to design stuff via hand movements but to have a holographic screen like in Iron Man he still needs to work on. Which is why he needs the high frame rate holograph generator.

Aug 29, 2013
Going Concern:

I'm going to invent a cologne called Elon Musk...it's going to smell like victory.

Aug 29, 2013

The best and the brightest are today more interest in social media startups and android apps.

With apps especially, it's like the old joke with screenplays, everyone's got one.

Aug 29, 2013

I don't agree with the idea that we tear him down. Popular culture has a fascination with personalities and people. Just as the media hyped up his predecessors, e.g. Jeff Bezos, Sergey Brin and Larry Page, Steve Jobs, etc. they too are pushing Elon Musk. Even Wall Street is behind him, hence why TSLA is valued at ridiculous levels.

Aug 29, 2013

Nice post.
Just to point out something that people forget.
Electric cars don't emit carbone dioxyde, but they need electricity.

And electricity doesn't come out of thin air. So unless we invent some eco-friendly way to produce massive amounts of electricity, it's kind of misleading to state that he is eliminating car pollution

Aug 29, 2013
Zafrynex:

Nice post.

Just to point out something that people forget.

Electric cars don't emit carbone dioxyde, but they need electricity.

And electricity doesn't come out of thin air. So unless we invent some eco-friendly way to produce massive amounts of electricity, it's kind of misleading to state that he is eliminating car pollution

The Tesla supercharger network is powered by solar panels. Solar panels that come from Solar City, of which he is chairman.

Where other people get their electricity from is another issue, but Musk has been vocal about utilizing solar energy.

Jan 2, 2014
Zafrynex:

Nice post.

Just to point out something that people forget.

Electric cars don't emit carbone dioxyde, but they need electricity.

And electricity doesn't come out of thin air. So unless we invent some eco-friendly way to produce massive amounts of electricity, it's kind of misleading to state that he is eliminating car pollution

this^

http://www.economist.com/blogs/babbage/2013/12/dif...

Musk has been vocal about using solar energy, but the fact of the matter is that solar energy does not scale well. While it works well for running a house or heating a pool, its not really viable to think that we can get all the energy we currently get from gas from solar. Think about how much surface area would be needed for all the panels.

Also pointed out in this article is the fact that electric cars are not terribly efficient because of the weight of batteries, short charges, and long fuel times. As an alternative, hydrogen fuel cell vehicles are 4 times as efficient as your average gas powered car, and weight significantly less than electric cars. I think it would be cool to see Musk look into the fuel cell industry but the elephant in the room is that we need to find away to generate energy to create electricity or hydrogen on a macro scale.

Aug 29, 2013

http://www.forbes.com/sites/markrogowsky/2013/08/2...

looks like someone is giving it a shot

Aug 29, 2013

I wish Musk would develop an energy source a la Iron Man's generator.

Aug 29, 2013

This has to be one of the best things ive ever read

Aug 29, 2013

Epic post. This makes me wish I could go work for Musk.

Aug 29, 2013

Nice comp Mr. Musk with the Hank Rearden character.

Facebook is just a rip-off, poorer version of MySpace.

Aug 29, 2013

Awesome post. Agree 100%.

Aug 29, 2013

+SB. Please keep it coming!

Aug 29, 2013

People don't like taking risks. Elone not only likes taking risks, he has the resources to do so. I like the guy, but I don't think that worshipping one inventor is really the key....there are plenty of people out there innovating, he's just at the top of his game.

Aug 29, 2013

Great post. But I don't know if I agree with the the statement that we are vehemently trying to tear him down. I think that group is much smaller than what you seem to be assuming.

Opstar lifestyle, might not make it

Aug 29, 2013

Reading this makes me want to watch the Avengers again.

Aug 29, 2013

Great post, Elon Musk took over for me where Steve Jobs death left off. A true visionary and a human that makes me proud to be of his race.

"Those who dare to fail miserably can achieve greatly"

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Aug 29, 2013
coleslaw:

Great post, Elon Musk took over for me where Steve Jobs death left off. A true visionary and a human that makes me proud to be of his race.

Exactly how I view him as well.

Aug 29, 2013

White?

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Aug 29, 2013

Great post! However, I disagree with the assessment that Facebook wasn't a game changer.

"Not me. Im in my prime"

Aug 30, 2013

I think you're overestimating the amount of input Musk has in the design and engineering process of these products. I just find it hard to believe Musk spends his evenings in his underground lab creating inventions a la Tony Stark. It's the same thing with Steve Jobs, who is credited for 'inventing' the iPhone. The true genius is in the pairing of dreams with resources. Engineering talent is just a commodity and these guys know best how to manipulate it.

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Aug 29, 2013
diverse_kanga:

I think you're overestimating the amount of input Musk has in the design and engineering process of these products. I just find it hard to believe Musk spends his evenings in his underground lab creating inventions a la Tony Stark. It's the same thing with Steve Jobs, who is credited for 'inventing' the iPhone. The true genius is in the pairing of dreams with resources. Engineering talent is just a commodity and these guys know best how to manipulate it.

Most relevant post in this thread. Full of nonsense worshipping people who generally amount to little more than management.

The people in today's society who truly innovate are unknown and don't get media attention, or are obscured by corporate structure.

Sep 5, 2013

prove it, at least in musk's case. every great idea needs a great leader to bring it to life. NEVER underestimate that

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Sep 7, 2013
Take_It_To_The_Bank:
diverse_kanga:

I think you're overestimating the amount of input Musk has in the design and engineering process of these products. I just find it hard to believe Musk spends his evenings in his underground lab creating inventions a la Tony Stark. It's the same thing with Steve Jobs, who is credited for 'inventing' the iPhone. The true genius is in the pairing of dreams with resources. Engineering talent is just a commodity and these guys know best how to manipulate it.

Most relevant post in this thread. Full of nonsense worshipping people who generally amount to little more than management.

The people in today's society who truly innovate are unknown and don't get media attention, or are obscured by corporate structure.

No to both of you. From my experience building real things:

1. great engineers (or indeed productive engineers) are NOT a commodity. I would say they form less than 10% of the engineer population, depending on the field (civil engineers tend to be more competent than software developers).
2. the greatest product managers understand 1. and spend most of their time hiring and nurturing the specialists and engineers that can make the product. It's a very, very hard job which is why there are few Steve Jobs and many bland, uncompetitive companies in the corporate landscape. Connecting resources and talent, it rarely happens, because you need to choose between this high risk strategy, or the lower risk but lower return strategy of carving yourself a piece of the pie. And consequently, just as people admire those traders who have chosen to take bold risks and made fortunes (e.g. Soros with the GBP jugular) people admire PMs who focused on quality products and risked a lot to make them happen (Steve Jobs, and, I will grudgingly admit since I hate the idea of electric cars, Musk with Tesla).

The worst relationship between PM and engineers is one where the PM says "here's the roadmap, here's a detailed plan, John, you do this by next Wednesday, Jack, you do that by next Tuesday, then we have another meeting". The best is one where the PM says "do what you think is right to solve the problem, if you fail, I will take responsibility and I mean it, if you succeed we will get resources to keep going". You hire engineers because they are smarter than you, not in order to give yourself a pool of juniors to make you feel powerful and needed.

To the more general thread point, there is one reason the comparison with Ayn Rand's great works is unwarranted, which is that Elon Musk has no qualms whatsoever with having the taxpayer pick up the tab for his work.

Aug 29, 2013

Musk has a significant technical background though. Jobs didn't. He was pure product management.

Aug 30, 2013

I wish it was he and not Peter Thiel who said of the future "we wanted flying cars and all we got was 140 characters." That is an epic quote. How many social media based review companies bundled with online maps do we need?

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Sep 6, 2013

ah you got in and mentioned the Thiel quote before me. I definitely think way too many of our best and brightest are designing apps of convenience rather than the revolutionary big picture thinking that Elon and Thiel and doing.

Sep 7, 2013
uoyyi:

ah you got in and mentioned the Thiel quote before me. I definitely think way too many of our best and brightest are designing apps of convenience rather than the revolutionary big picture thinking that Elon and Thiel and doing.

Doesn't quite work that way. For example, it is the Angry Birds that enable the subsidizing by the mass consumer of a portable electronics revolution that was overdue for a while. The impact is absolutely everywhere from the military (who uses iPads with Palantir in combat) to medical tools and aircraft systems. This is, really, why Bill Gates is/was the wealthiest man in the world - because by taking the PC into the home he enabled the diversion of enormous resources towards tech research which itself enabled the creation of enormous value in dozens of industries.

Aug 30, 2013

I recommend people read The Unwinding, by George Packer. There is a big part of it on Musk and Thiel, but largely it shows how money in this country no longer comes from building things, but by creating access, and how Washington D.C. and Wall Street have prospered so disproportionately then compared to even 20 years ago.

Aug 30, 2013

Originally posted asking for recommended readings about Musk, but then saw the previous post. Any more would be appreciated as well.

It's funny- I greatly enjoy reading about vc/entrepreneurship but at a certain point, you do reach a certain level of frustration w the incrementalism and lack of things that "matter". Not the case with this guy.

Oct 13, 2015

/

Aug 30, 2013

Followed Mr Musk for years now. Great to see things are actually changing the world.

Aug 30, 2013

I can wholeheartedly admit that Musk has motivated me to transition to tech VC.

I want to help big thinkers solve society's "problems".

People may dog out Teslas and Musks our in the sky ideas but he's winning. Teslas are great cars and net cost is significantly lower than most cars. He's sending space wares at fractions of cost as well. I'd love for Musk to actually build his hyper loop idea on the east coast as well.

Aug 31, 2013

This is probably the first time I've ever commented on WSO, but I've been following WSO for years. That's how inspirational this article was.

The funny thing is, I just blogged about this last night. In a much shorter version.

Check it out on my website. Johnny - Chen .com

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Aug 31, 2013

The truth has been spoken

Aug 31, 2013

Great post. Time to sit in a corner and reexamine my life...

The hills are alive with the sound of horsepower! - Jeremy Clarkson

Sep 1, 2013

WOW...I'm one of the "Lurkers" on this site who sort of takes in all the information for learning and entertainment...But PROPS to you for this post. I will post this link on FB immediately and piss off all my Poli-Sci friends

Sep 1, 2013

I've been here for years but this is the first time I commented. Absolutely agree. Do you also know this week he just invented the world's first hologram user interface scanner? Few months ago he made the world's first reusable rocket engine that lands like helicopter -SpaceX Grasshopper. Last year he made an electric 7 seater sedan goes faster than ferrari and porsche, Tesla Model S. This dude so inspirational. I hope our world can keep up with him. Let him do his thing. If I ever have any considerable net worth I'd pledge it to his causes, because he gives a damn.

Sep 1, 2013

Metal. Music. Life. www.headofmetal.com

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Sep 3, 2013

Great post. Loved reading it.

Sep 6, 2013

brilliant post. a polemic worthy of Ayn Rand (and without the long philosophical expositions slowing things down). I'm more optimistic on Musk - Atlas Shrugged is all about human achievement in the face of adversity. It sounds like Tesla has some momentum going and I think there's soon going to be a rush to get in on what is perceived of as the next big thing.

Jan 1, 2014

how did i miss this...
great stuff, +1

Jan 1, 2014

I work at, live in and absolutely love Silicon Valley. Elon Musk is Iron Man.

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

-Warren Buffett

Jan 2, 2014

Insightful post.

I'm bi-winning. I win here, and I win there.

Jan 2, 2014

Amazing post, wish there was more people like you out there.

Sep 1, 2013

I thought Tony Iommi was Iron Man?

Metal. Music. Life. www.headofmetal.com

Jan 3, 2014

Thank you for the great post!

Mar 19, 2014
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Nov 14, 2014