Musk's Christmas Eve

Empire Decisions · December 2008 · Elon Musk

TL;DR: In the same week of December 2008, SpaceX was one failed launch from dead and Tesla was hours from missing payroll. The funding that saved both closed on Christmas Eve, after three straight rocket failures and a divorce had emptied the founder in every sense.

What actually happened

SpaceX's first three Falcon 1 launches had failed; the fourth, in September 2008, reached orbit on what Musk has said was the last money. Two days before Christmas, NASA awarded the $1.6 billion cargo resupply contract. Musk reportedly answered the call with 'I love you guys.'

Tesla, meanwhile, needed its investors to wire a round on December 24 to make payroll; Musk had put in essentially everything from the PayPal sale and was borrowing for rent. Both wires cleared. Isaacson's account, which the episode follows, is explicit that Musk refused the one move any rational adviser urged: choosing which company to let die.

The refusal is the story. The outcome made it legend, but on December 23 it was just exposure.

The play to remember

Diversification protects capital; concentration builds empires. Which lesson applies depends on a coin flip you only see afterward. The episode says so out loud.

Sources & fact flags: Isaacson, Elon Musk; Vance, Elon Musk; NASA award records (Dec 2008).

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