The Year It Almost All Ended

If you want to understand how far Elon Musk is willing to go, look at 2008. It was the year his personal life and both of his companies came apart at the same time, in the middle of the worst financial crisis in generations. How close he came to losing everything, and the bet he made to avoid it, is the core of his whole story.

Everything breaking at once

The list of what went wrong in 2008 is hard to believe. His marriage to his first wife, Justine, fell apart and the divorce began. At SpaceX, the small Falcon 1 rocket failed for the third time in a row in August, destroying its payload and draining a company that was already nearly out of cash. At Tesla, the first car was over budget and behind schedule, the economy was collapsing, and no one wanted to fund a money-losing electric car startup. Elon Musk was personally running low on money too, borrowing from friends to cover his living expenses. Any one of these problems could sink most people. He had all of them at once.

The choice: split the money or save one

By late 2008 Elon Musk was down to his last chunk of money, the remainder of his PayPal fortune, and he faced a brutal decision. He could put all of it into one company, giving that one a real chance while letting the other die. Or he could split it between SpaceX and Tesla, keeping both alive but risking that neither would have enough to make it. Most advisers would say pick a winner. He split the money. He decided he would rather risk losing both than choose which of his life's projects to kill, and he put himself all the way in on that bet.

The rescue at the end of the year

The year that nearly destroyed him ended with a run of luck and results that he had set up by refusing to quit. On September 28, 2008, the fourth Falcon 1 launch reached orbit, making SpaceX the first private company to put a liquid-fueled rocket into orbit around Earth. In December, NASA awarded SpaceX a contract worth about $1.6 billion to fly cargo to the International Space Station, which rescued the company. And on Christmas Eve, Tesla closed an emergency funding round just hours before it would have run out of money and gone bankrupt. Both companies crossed the finish line of 2008 alive, within weeks of each other.

The bottom line

The Elon Musk of today, with a rocket company and a car company both worth enormous sums, exists because of choices he made in his worst year. He kept both companies alive when the safe move was to sacrifice one, and he backed that choice with his own last dollars. The all-in bet of 2008 is the single clearest example of the risk appetite that defines him, and it barely paid off.

Related

Keep reading: Fired on His Honeymoon, The Uninsured McLaren Crash. Zoom out to the Personal Life timeline or the State of Elon overview.