Elon Musk’s PayPal Struggles Almost Led To BANKRUPTCY—Here’s How He Built SpaceX

Elon Musk, one of the most influential and controversial figures in the technological world, continued a remarkable career when in 2024 he transitioned into a new political role, where he took his appointment as co-leader with the newly established Department of Government Efficiency under entrepreneur Vivek Ramaswamy. Elon had already taken an official entrance to the world of government work.

Elon Musk’s road to success has been by no means smooth. Walter Isaacson’s 2023 biography, Elon Musk, reveals a turning point in his early career. In 2000, while Musk was CEO of X.com—PayPal’s predecessor—he was booted out of the company in a dramatic coup d’etat. He was sent packing when he and his then-wife, Justine, made a visit to Australia. This decision, orchestrated by the major PayPal figures Peter Thiel, Max Levchin, Reid Hoffman, and David Dacks, became a significant turning point in Musk’s life.

Recalling the incident, Musk admitted, “I had thoughts of assassination running through my head,” but he eventually realized it as a veiled blessing. “It was good I got cooped. Otherwise, I’d still be slaving away at PayPal,” he reflected. Musk believes that if he had stayed, PayPal might have reached a valuation of “a trillion dollars.”

Although Musk left the company abruptly, he retained equity in the company and earned $250 million when eBay acquired PayPal for $1.5 billion in 2002. That windfall became the foundation for Musk’s next groundbreaking venture: SpaceX.

SpaceX: A Vision Realized Against All Odds

Later in 2002, Musk founded SpaceX with what he described as a far-fetched goal: to make life multi-planetary. However, early years are not easy to live in. The company had seen three consecutive failures with the Falcon 1 rocket, sending it into bankruptcy. By 2008, the fourth launch was being made as a last-ditch effort after all financial resources had almost reached their end.

In a twist of fate, Founders Fund, led by Musk’s former PayPal colleagues, Peter Thiel, stepped forward with a $20 million investment. This timely support provided the lifeline that the company so desperately needed. Musk referred to their help as “an interesting exercise in karma.

The fourth launch became a tremendous success, thereby securing the reputation of SpaceX in the space industry. Not much later, NASA awarded it a contract for $1.6 billion, which is when this company started climbing the sky.

SpaceX At The Pinnacle Of Space Exploration

Fast forward to 2024, and SpaceX is still leading the fray in space exploration. The company recently undertook a critical NASA mission to rescue astronauts Sunita Williams and Butch Wilmore, further underscoring its significance in the field.

He has always compared his experience of getting thrown out of PayPal with that of Julius Caesar. “I wouldn’t have done well if I had let my initial reactions take over, space would be dead,” Musk said. He credited himself to turn adversity into progress, and “karma may be real.

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