It was the Tuesday before Labor Day, back in 2000, six months after dot-com-mania had peaked. But at eight A.M. that morning, the Peninsula Fountain & Grill in Palo Alto, California, was still filled with intense young men in the black and metallic-blue clothes of the haute nerd, chattering into their cell phones, pecking at their PalmPilots, or staring into their BlackBerrys.
At a red leather booth by a window, working his Palm VII while devouring slabs of French toast, sat venture capitalist Derek Proudian. Across from him, in a black cashmere Armani pullover, was Elon Musk, 29, a baby-faced fellow with soulful eyes and pouty lips, who’d just sold his first Internet start-up for $300 million, pocketing $22 million for himself. I was there with them, reporting a story on Silicon Valley’s nouveaux riches for Talk magazine and looking for an ostentatious lead character who might warrant skewering.
The pair had worked together a few years earlier, when Proudian was C.E.O. of Musk’s first start-up. They were catching up. Proudian boasted that his new firm, Ironweed Capital, had “20 captive parking spots”—apparently a telling statistic in bursting-at-the-seams Silicon Valley. Musk, whose wispy brown hair and whispery voice couldn’t quite conceal his steely competitiveness, countered with stats about his latest venture, X.com, an Internet bank. Valued at $680 million five months after its founding, the company had recently merged with a company that owned an online-payment system called PayPal that let anyone (Musk claimed that there were 3.4 million anyones by that point) move cash around with computers and cell phones. To show how it worked, he called for the check. “I can pay my share with this,” Musk said, stabbing his cell phone, a child showing off a new toy.
Musk’s grand dream for X.com, that it would become a cyber JPMorgan, did not pan out; financial deregulation, including the November 1999 repeal of Glass-Steagall, the 1933 law separating investment and commercial banks, was about to turn Wall Street and the financial industry into the new Wild West, printing money as fast as Silicon Valley was. He’d miscalculated. But PayPal did pan out.
After breakfast, Musk and I walked a few blocks to the garage under his new $1 million condo. He apologized that his favorite car, one of only 64 McLaren F1 sports cars ever made for private use, which had cost him another cool $1 million, was in the factory in England for repairs. So he was reduced to pointing out another toy, his 1967 Jaguar E-Type, worth $70,000, and his wife’s brand-new Westminster blue Jaguar XKR convertible, which cost $81,800.
He unlocked a jet-black BMW M5. “This is the family car,” he said sheepishly, even though an M5 was also hard to find and usually sold for $70,000. He brightened as he turned the engine over and the on-board computer began to glow. “It’s the fastest four-door car in the world,” he pointed out.
He steered the BMW onto Highway 101, heading to San Francisco for a photo shoot. His thoughts turned to cars and why anyone would buy one—even a McLaren—for a million dollars. “If you have a lot of money, what do you do with it?” he said. “At the end of my life, I’ll probably give most of it away, but between now and then? I have no interest in a giant house. I would just end up in the bedroom and living room. But a car is a pretty cool toy. If you have a Porsche 911 Turbo, so do a dozen other guys on your street, but there’s an intrinsic interest in the thing itself as opposed to the effect the thing has—will people be impressed? The McLaren is an engineering work of art.”
Cruising north, he passed signs of the times. Tech expertise, bellowed a billboard for Merrill Lynch, followed by another touting Techiegold.com. Then Musk pulled to a stop so he could figure out where he was—he hadn’t loaded the navigational software into the BMW’s dashboard computer. He was under another billboard, for something called More.com. Musk stared at the sky above it. “I think it would be really cool to have a jet,” he said.
Before the dot.com crowd emerged in the late 90s, rich bankers, C.E.O.’s, and hedge-fund managers were very, very rich but not yet insanely rich. That didn’t happen until decade’s end, when a new upper class began to coalesce—the first wave of today’s .01 percent, though no one called them that yet. Consumption went from conspicuous to preposterous.
The swarming new rich were far younger and—for the moment, at least—far wealthier than any batch of upstarts American society had ever seen before. They were techies and traders, an arriviste class rooted in information, not inheritance or industry; tech culture, not high culture; Silicon Valley, not Locust Valley.
Engineering was the engine driving their accumulation, and over the next 22 years Elon Musk would emerge as tech’s capo di tutti i capi, the richest man in the world. But in 2000, before the sale of PayPal, before Tesla and SpaceX, and before his bid to acquire Twitter for about $44 billion, Elon Musk was just ordinary rich. Innocent rich. And it was a new feeling for him.
Five years earlier, Musk had arrived in Silicon Valley with no money and a vague interest in starting an Internet company. The Internet was something “pretty radical that might be a shortcut to doing something interesting,” he told me, adding, “I wasn’t sure if it would be or not.”
He bought a beat-up 1978 BMW, rented a windowless office for $500 a month, installed a futon to sleep on, showered at a local Y, and survived on cereal and Jack in the Box while developing an online Yellow Pages program. A friend of his landlady’s invested $10,000. “I thought he was crazy,” Musk admitted.
Later that day, Musk gave me a tour of his condo, a decorator-made maze of rooms in Afro-Asian style, with laptops scattered here and there and a stunning array of home-theater equipment, including a $16,000 plasma-screen television monitor floating above a fireplace designed around a pair of black-lacquer pyramid speakers. The décor hearkened back to South Africa, where Musk was born, and where he wrote his first computer program, a video game, at age 12, and got obsessed with computers that allowed him to “create things just using your brain,” he said. He ended up in Wharton’s undergraduate business school but didn’t like his classmates. “They were crass materialists,” he smirked.
That first company, the one he and Derek Proudian had sold for $300 million, was called Zip2. “We figured maybe it could be worth a couple of million at some point—which would be cool. The probability was that it would die and I’d go back to grad school.”
Within a year of its founding, the company was valued at $7 million on paper. He moved to an $800-a-month apartment and traded up to a $900 Honda Civic. Once he started earning a salary, he upgraded to the ’67 Jag. It was “beautiful to look at,” his first wife, Justine, a leonine-haired novelist, observed, “but a complete high-maintenance bitch.”
In 1999, Compaq paid more than $300 million cash for Zip2. “Hard currency!,” Musk marveled. He used some of it to buy his McLaren (“Although it’s not really a good use of money”) and some of it to start X.com. His goal was to “be revolutionary” and “change the world,” he said. “And I think being famous is kind of cool. Yeah, fame is interesting, you know? I think so.”
After we met, X.com, renamed PayPal, was sold to eBay. Musk moved to a giant house of the sort he’d disdained—in the exclusive and old-school enclave of Bel Air in Los Angeles. He got his first jet, a Dassault Falcon. And, as we all know, he went on to found SpaceX and Tesla, the space-exploration and electric-car companies that made him the richest man on the planet, the model for Tony Stark of the Marvel Universe.
But the Musk I met in 2000, before all that, was bursting with joie de vivre, too likable to skewer. He had the same insouciance and indifference to expectations he does now, but he was easy, open, charming, and funny. He was worldly and sophisticated—a techie, for sure, but neither autistic savant nor hoodie-clad, soul-dead tech bro. He seemed to have heart as well as brains. The mix of self-absorption and childish innocence that gave birth to self-driving electric cars and dreams of Mars missions—and made me like him enough that I portrayed him as a herald, not hateful—hadn’t yet curdled into ruthless egotism, actress-bonking attention-seeking, libertarian ranting, and toxic grandiosity.
At the photo studio that day, an art director filled Elon Musk’s hands with pennies. Then the photographer decided he should pose holding just one in his palm. Musk stared at it with a little smile. “I like this better—it’s minimalist,” he said. Then he looked at me. “What is money?” he asked.
The shoot continued. Musk stared at pennies, flipped them, held them to his eye and in his outstretched hand. He played Hamlet: “Alas poor Abe, I knew him well.” And finally, after almost two hours of shooting, he stood in a rain shower of pennies, suspended from invisible threads, looking bored. Realizing he’d lost his subject’s attention, the photographer worked him. “This is a normal day for you, right?” he asked, as an assistant painstakingly re-hung a coin. But Musk’s face was blank; he’d just gotten a work-related call on his cell phone and his mind was somewhere else.
“Just picture us all naked,” the photographer tried.
“I wouldn’t want to do that,” Musk muttered, distracted.
“I.P.O.?” the photographer tried again. “Does that make you smile?”
“Not really,” said Musk. “At least, not right now.”
Behind the scenes at PayPal, things weren’t pretty. Musk and some of his partners were at odds, and within weeks he would be removed as the company’s C.E.O., replaced by the now even more controversial Peter Thiel. But despite himself, Musk started smiling again, standing in a shower of pennies from heaven. The photographer snapped a Polaroid so Musk could see how he looked.
He stared at it a moment, then allowed, “I look like a happy little guy, don’t I?”