SpaceX #4: Money Problems

By 2008, Musk had almost used up his Internet fortune between Tesla and SpaceX, but “had nothing to show for it”, writes Eric Berger in Liftoff. His rocket company had had many failures; while Tesla was eternally in need of cash. As if that wasn’t bad enough, the 2008 recession happened. It was the worst possible time for Musk – (1) funding was scarce; (2) to get funds, he needed results; (3) to get results, he needed funds. Chicken and egg problem. The logical thing would have been to abandon one company and focus on the other. Musk agonized over such a decision – “It was like having two children”, he said.

 

But there was a possibility of getting a $1 billion contract from NASA for cargo delivery to the International Space Station (ISS). But first, SpaceX had to prove it knew how to fly into space. They scrambled to launch a rocket into orbit:

“After sinking six years and $100 million into SpaceX, Elon Musk finally had a real rocket.”

Thanks to that, the NASA deal went through and SpaceX was saved. Two days later, Tesla closed a new round of funding. Musk had pulled off the impossible - both his companies would live another day.

 

As SpaceX began to succeed, it got more NASA and US government contracts. Its competitors began to “fan the flames of political opposition”. Contractors and politicians were part of the backlash – they stood to lose jobs (and votes), and they were often in bed with other competitors.

 

But SpaceX had learnt to operate in this murky world – Musk had made his peace with the need to hire people who knew how to navigate these waters and had the right connections in the right places. In 2012, SpaceX docked with the ISS for the first time.

 

SpaceX had “arrived”, both literally and figuratively.