Elon Musk reveals the night that reshaped SpaceX – How the world’s richest man embraced failure to fuel breakthrough innovation

“During the formative days of SpaceX, I remember a long, grueling night in a tiny workshop in California. We’d experienced consecutive rocket failures, and every engineer in that room was feeling the weight of a decade’s worth of sacrifices. I sat down with my team, and amidst shared frustrations and rare moments of laughter, we decided that failure was not the end — it was simply a stepping stone to innovation. That night, we committed to pushing the limits no matter the setbacks.”

– Elon Musk, recalling SpaceX’s early challenges at a 2014 tech conference

Told years after the fact, Elon Musk’s tale may have embellished history a bit. For example, SpaceX was established in 2002. Its Falcon 1 rocket reached orbit just six years later, on its fourth attempt in 2008. So no one in that room would have put in “a decade’s worth of sacrifices” before achieving success.  

Still, the core of Musk’s tale may provide inspiration for those of us who, like Musk did at the time, are down on our luck, short on funds, and feeling like time is running out. After all, Musk did move on from that tiny workshop in California, and that time when he was mere dollars away from seeing his company go bankrupt. Just 20 years later, he was the literal richest man in the world.

It was a remarkable turnaround in fortune. But exactly how did he do it?

To hear Musk tell it, innovation was the key, and pushing the limits. In truth, however, probably the most important part of Musk’s success was in sticking to the basics, and reducing his risks.

Recall the situation. Working out of a small atoll in the South Pacific, Musk and his team had launched, one, two, three separate Falcon 1 rockets. Each had blown up and broken up after launching, showering his tiny island with broken rocket parts. So what did he do next?

As Washington Post space reporter Christian Davenport told it in his book, The Space Barons: “Musk tried to stay positive … [He] waited for low tide to start to recover the pieces of the rocket” that had blown up. In the following days, Musk and his team “cataloged and marked” each piece of debris “as evidence for the investigation into the cause of the mishap. This needed to be an orderly process.”

Ultimately, he was able to narrow down the problem to a single nut on a single fuel pump that had failed, causing fuel to leak and the rocket to catch fire. That was the key that enabled SpaceX to proceed with its flight tests … eventually put the first privately-built spacecraft in orbit … and then build SpaceX into the $350 billion titan of the space business that it is today.

So what can we non-rocket scientists learn from how Musk solved his own problem? Say you’re in a similar (but smaller-scale) situation to what Musk faced that day. Your debt is high and rising, the bills are piling up, and your income isn’t enough to cover the difference. “A decade’s worth of sacrifices” hasn’t been enough to save you, and you’re starting to feel frustrated. What do you do?

I humbly suggest that you not do what Musk said he did, and start “pushing the limits!” Rather, you should do what he actually did: Methodically lay out the debris of your financial life, search for clues, and then fix the problem.

Fix the problem

Get all your bills together, and add them up to determine your spending. Compare them to your last tax return, calculate your after-tax income, and figure out what the difference is. That’s your “nut” that needs fixing.

Next, go through your bills line by line, and figure out which items you can live without, and how much doing so would save you. Do you really need cable, for example, or is it time to cut the cord and switch to streaming TV? Is your cellphone plan too expensive, and could a discount provider offer you a better deal? And your daily to-go coffee habit. Is it really that much of a bother to just brew a pot at home instead?

Next, examine your income. Would a second job help to balance your household books? Is your bank paying you below the national average rate of 0.4% on your savings account? If not, then it’s probably time to find a better bank, one that pays at least the average, and ideally one offering a high yield savings account, which can pay as much as 3% or 4% per year.

The specifics here will vary for each person, but the point remains the same: Do what Musk did: Methodically identify the problem. Then fix it.

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