At LAUNCH Festival 2015, Peter Thiel offered insights into how Elon Musk simultaneously transformed the auto and aerospace industries through Tesla Inc. and SpaceX.
What Happened: In a conversation with Jason Calacanis, Thiel explained that Musk succeeded partly by choosing “weak competition.”
He noted that while traditional car companies and the U.S. aerospace sector had “barely innovated in 50 years,” Musk entered these industries with strategic foresight.
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“If you’re going to start a search company, that would be tough because Google's a really tough company… going up against General Motors… and Lockheed, you're at least picking pretty weak competition,” he stated.
Thiel also described Musk's talent for “complex coordination.” This involves combining existing components in new ways, as seen in SpaceX’s rockets and Tesla’s cars.
The Paypal and Palantir Technologies co-founder and billionaire investor compared this approach to Apple Inc.’s creation of the iPhone, which also involved bringing together existing technologies in a novel way.
Thiel also expressed his confidence in Musk’s ventures, stating, “I would never bet against Elon in anything.”
While Musk was on vacation, PayPal's board, led by Thiel and Max Levchin, ousted him as CEO, appointing Thiel in his place in September 2000.
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Why It Matters: Musk founded SpaceX in 2002, investing $100 million from his PayPal earnings.
Following his ousting from PayPal, Musk reportedly grew frustrated with NASA's lack of Mars plans and began pursuing private space projects, including a $100,000 pledge to the Mars Society.
SpaceX initially operated out of hotel conference rooms before moving to Hawthorne, California, where Musk, serving as Chief Engineer, led the development of the Falcon 1 rocket.
In 2008, Falcon 1 became the first privately developed liquid-fueled rocket to reach orbit. Musk's goal was clear: cut space transportation costs and make Mars colonization possible.
However, in 2022, Musk expressed his wish for more competition for SpaceX, believing it would aid in making life multi-planetary.
In the first half of 2024, SpaceX launched 67 missions using its Falcon launch vehicles.
Meanwhile, Musk’s journey with Tesla began in 2004, a year after founders Martin Eberhard and Marc Tarpenning launched the company.
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He joined as an early investor and board chairman, contributing $6.35 million of Tesla's initial $6.5m Series A financing, as per Forbes.
His role quickly expanded, and after internal tensions led to Eberhard’s exit, Musk took over as CEO in October 2008.
Thiel's Founders Fund has invested in SpaceX but holds no stake in Tesla. Previously, Thiel has said that he typically avoids public companies, and Tesla went public relatively early in 2010—though he has since admitted having some regrets.
“We should have invested in that one,” he said at the Aspen Ideas Festival in late June 2024.
Last month, Tesla reported third-quarter revenue of $25.18 billion, up 8% year-over-year, missing a Street consensus estimate of $25.37 billion.
Image via Wikimedia Commons
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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