Chapter 32: The Model S: Tesla, 2009

Musk travels to Russia to buy used rockets for a Mars mission but encounters absurd pricing and disrespect. This failure triggers his decision to start his own rocket company, SpaceX, applying first-principles thinking to rocket design and economics rather than relying on existing technology.

In 2001, Musk travels to Moscow with Adeo Ressi and Jim Cantrell to purchase decommissioned Russian rockets for a Mars mission. The trip is marked by comic failures: Musk passes out during a vodka-laden lunch, and at a subsequent meeting with Russian missile sellers, an angry official spits at them while denouncing the capitalist Mars mission. Despite these setbacks, Musk returns to Moscow in early 2002 with Justine and aerospace engineer Mike Griffin to negotiate for two Dnepr rockets. The Russians manipulate negotiations, escalating the price from $18 million per rocket to $21 million, taunting Musk about his limited resources. This humiliation catalyzes a decisive shift in Musk's thinking. On the flight home, he applies first-principles analysis, calculating that rockets have an extremely high "idiot index"—their cost far exceeds the raw material expense. He begins designing his own rocket on spreadsheets. Despite an intervention by friends who show him exploding rockets to discourage the venture, Musk resolves to start a private rocket company. He recognizes that existing aerospace contractors like Lockheed and Boeing focus on large payloads, leaving an opportunity to build cheaper rockets for smaller satellites enabled by microprocessor advances. He incorporates Space Exploration Technologies (SpaceX) in May 2002, with himself as chief engineer, setting an ambitious goal to launch the first rocket by September 2003 and send an unmanned Mars mission by 2010.