Erik Nordeus - The Engineer

Elon went on a two-week trip to meet future investors, though other sources says he travelled to Australia to watch the Sydney Olympic Games, which would be his first vacation in years. “That’s the problem with vacation,” Elon said. 260He might have been doing both. But when he returned, a coupe had occurred, and Elon was forced out of the company. In October 2000, Thiel took his position as CEO. 71

Because Elon owned a large share of PayPal and he remained on the board, he decided not to fight back. “Life is too short for long-term grudges,” Elon said. “One has to recognize where one’s strengths lie. It’s more interesting for me in the early stages of running a company, where the concentration is all on developing the product. I’m not really interested in administration.” 71,254

It might look like Elon didn’t contribute with much to PayPal. But he was responsible for several of the factors that made the company so successful. According to himself, he came up with the company’s main viral growth mechanism, he recruited several of the key employees, and he came up with the business model of charging fees only to heavy sellers and not to buyers or light sellers. By the time Thiel took over the rudder as CEO, the PayPal product and business model were largely as we know them today. 259

Before the owners sold the company to eBay in October 2002, PayPal got $180 million in funding and 20 million users. Thiel quoted the article Earth to Palo Alto in which the author was negative to PayPal. “And so I’d like to send a message back to planet Earth from Palo Alto,” Thiel said. “Life is good here in Palo Alto. We’ve been able to improve on many of the ways you do things. Come to Palo Alto for a visit sometime and learn something. I think you’ll find it’s a much better place than Earth.” 189Elon, who was the largest shareholder, agreed. Life in Palo Alto was good.

As he had once again failed to change the world, Elon was still not satisfied. The large vision behind X.com had just become a small, glorified feature. It was Zip2 all over again. Still in 2012, Elon believed PayPal has the potential to become the world’s largest consumer financial services company. “It has 120 million customers, and there’s a high trust factor. There’s a lot of unleveraged value there,” he said. 71

Most key employees left PayPal, and they are today known as the PayPal mafia. You can find a picture of them where they wear mafia suits. Thiel is considered to be the don [the boss] of the mafia group and Levchin the consigliere [the counselor]. 260But not everyone is present in the picture. The YouTube founders, Chad Hurley and Steve Chen, were not allowed to participate in the photo because the corporate handlers at Google didn’t want them to be linked to the mafia.

Elon is also missing from the photo, and the reason is simple. He missed the shoot because he received an innovator of the year award in Chicago at the same time as when the photographer took the picture. 257“Peter [Thiel], Max [Levchin], and I are not directly aligned philosophically,” Elon said. “Peter’s philosophy is pretty odd. It’s not normal. He’s a contrarian from an investing standpoint and thinks a lot about the singularity. I’m much less excited about that. I’m pro-human. I’m also an investor in Peter’s hedge fund.” 259,260Levchin agreed that he and Elon were not always aligned. “Elon is obviously really freaking smart,” Levchin said. “He’s one of those guys who can be larger than the room.” Levchin added that larger than the room can be a negative trait. 71

The book The PayPal Wars was released in 2004. “The only negativity in recent years was due to a book called The PayPal Wars, written by a sycophantic jackass called Eric Jackson,” Elon said. “Eric couldn’t find a real publisher, so Peter funded Eric to self-publish the book. Since Eric worships Peter, the outcome was obvious – Peter sounds like Mel Gibson in Braveheart and my role is somewhere between negligible and a bad seed. However, to his credit, Peter didn’t realize the book would be as bad as it was and apologized to me personally at a Room 9 board meeting at David Sacks’s home in LA.” 259

Elon, Thiel, and Levchin invested in the company Room 9, which was founded by Sacks, who had earlier worked at PayPal. Room 9 released the movie Thank You for Smoking – a satirical comedy on the tobacco industry. The story is as follows: “Satirical comedy follows the machinations of Big Tobacco’s chief spokesman, Nick Naylor, who spins on behalf of cigarettes while trying to remain a role model for his twelve-year-old son.” Elon was the executive producer of the movie, and he had a small role in the movie as a pilot of a private jet.

After this rough ride, Elon realized he had inherited the flying genes from his grandfather and father. He thought his McLaren F1 wasn’t fast enough, and he didn’t want to buy a group of islands, so he decided to buy a black Aero L-39 Albatros. The Albatros was an aircraft that was used to train fighter pilots in eastern Europe during the Cold War. With an airframe from former Czechoslovakia, a jet engine from Ukraine, and avionics from Russia, it was a true product of the Soviet Union. 113

Elon used the Albatros for fun to chase other planes in the Nevada desert. “Literally, it was just like in Top Gun,” he said. “You’re no more than a couple of hundred feet above the ground, following the contour of the mountains. We came up to a mountain, did a vertical climb up the side of it, inverted. Turned upside down. Yeah, that was fun. It’s like a roller coaster. Only you go much farther up and down. But your butt hurts if you fly in it for more than an hour. The seats are really hard.” 114

Elon and his former housemate Adeo Ressi went on a trip to Long Island, just outside of New York. Ressi’s girlfriend and Elon’s wife were also with them. 350Ressi was now a wealthy man after he had sold his own Internet company Methodfive to Xceed for $88 million. 46

On the way back from the trip, they were stuck in traffic on the Long Island Expressway. The rain poured down. Elon, who by now was tired of glorified features, began daydreaming together with Ressi. “What would the next-next thing be?” they wondered. The new idea had to be something big. “I pointed my hand out the window, and I was like, ‘space,’” Ressi said. “It was almost a joke at first. We debunked the idea no one can do anything in space. The more we debunked the idea as being impossible, the more it made us interested in how we could do it. Why does it take a billion dollars? Why is it so complex? It’s just metal and fuel.” 278,301They continued talking about space and in particular going to Mars. But Elon thought NASA already covered this area, and space also seemed too complicated and expensive.

When they came back from the trip, Elon visited NASA’s website. He searched for information on when an astronaut would set the first small step on Mars. But he couldn’t find anything on the website about the topic. “I thought there was some kind of mistake,” Elon said. “I expected to find that they were well on their way and that we’d have to figure out something else to do. But there was nothing at all.” 278

“Hey, let’s do space,” Ressi shouted. They asked themselves why nothing had happened within the area since the last time we traveled to the Moon. “In the popular literature of the time, they expected that we would have a Moon base, a Mars base, that we would be exploring the solar system in a significant way by now,” Elon said. 57

One problem was that we were no longer motivated by a military threat. US citizens used to be afraid of a communist base on the Moon and of nuclear weapons orbiting the Earth. A military threat motivated the earlier space programs. The early rockets were originally designed to deliver nuclear weapons and spy satellites. This threat motivated people to make sacrifices they wouldn’t have made in a time of peace. The last flight of the Apollo program occurred in July 1975, and the goal of the mission was to dock the Apollo capsule with the Russian Soyuz capsule. It marked the end of the space race between the rivaling countries. A military threat didn’t exist anymore.