actual debt was trading at twenty-five cents,â Musk said. âThis was like the biggest opportunity ever, and nobody seemed to realize it.â Musk tried to remain cool and calm as he rang Goldman Sachs, one of the main traders in this market, and probed around about what he had seen. He inquired as to how much Brazilian debt might be available at the 25-cents price. âThe guy said, âHow much do you want?â and I came up with some ridiculous number like ten billion dollars,â Musk said. When the trader confirmed that was doable, Musk hung up the phone. âI was thinking that they had to be fucking crazy because you could double your money. Everything was backed by Uncle Sam. It was a no-brainer.â
Musk had spent the summer earning about fourteen dollars an hour and getting chewed out for using the executive coffee machine, among other status infractions, and figured his moment to shine and make a big bonus had arrived. He sprinted up to his bossâs office and pitched the opportunity of a lifetime. âYou can make billions of dollars for free,â he said. His boss told Musk to write up a report, which soon got passed up to the bankâs CEO, who promptly rejected the proposal, saying the bank had been burned on Brazilian and Argentinian debt before and didnât want to mess with it again. âI tried to tell them thatâs not the point,âMusk said. âThe point is that itâs fucking backed by Uncle Sam. It doesnât matter what the South Americans do. You cannot lose unless you think the U.S. Treasury is going to default. But they still didnât do it, and I was stunned. Later in life, as I competed against the banks, I would think back to this moment, and it gave me confidence. All the bankers did was copy what everyone else did. If everyone else ran off a bloody cliff, theyâd run right off a cliff with them. If there was a giant pile of gold sitting in the middle of the room and nobody was picking it up, they wouldnât pick it up, either.â
In the years that followed, Musk considered starting an Internet bank and discussed it openly during his internship at Pinnacle Research in 1995. The youthful Musk lectured the scientists about the inevitable transition coming in finance toward online systems, but they tried to talk him down, saying that it would takes ages for Web security to be good enough to win over consumers. Musk, though, remained convinced that the finance industry could do with a major upgrade and that he could have a big influence on banking with a relatively small investment. âMoney is low bandwidth,â he said, during a speech at Stanford University in 2003, to describe his thinking. âYou donât need some sort of big infrastructure improvement to do things with it. Itâs really just an entry in a database.â
The actual plan that Musk concocted was beyond grandiose. As the researchers at Pinnacle had pointed out, people were barely comfortable buying books online. They might take their chances entering a credit card number but exposing just their bank accounts to the Web was out of the question to many. Pah. So what? Musk wanted to build a full-service financial institution online: a company that would have savings and checking accounts as well as brokerage services and insurance. The technology to build such a service was possible, but navigating theregulatory hell of creating an online bank from scratch looked like an intractable problem to optimists and an impossibility to more level heads. This was not dishing out directions to a pizzeria or putting up a house listing. It was dealing with peopleâs finances, and there would be real repercussions if the service did not work as billed.
Undaunted, Musk kicked this new plan into action before Zip2 had even been sold. He chatted up some of the best engineers at the company to get a feel for who might be willing to join him in another venture. Musk
Musk had spent the summer earning about fourteen dollars an hour and getting chewed out for using the executive coffee machine, among other status infractions, and figured his moment to shine and make a big bonus had arrived. He sprinted up to his bossâs office and pitched the opportunity of a lifetime. âYou can make billions of dollars for free,â he said. His boss told Musk to write up a report, which soon got passed up to the bankâs CEO, who promptly rejected the proposal, saying the bank had been burned on Brazilian and Argentinian debt before and didnât want to mess with it again. âI tried to tell them thatâs not the point,âMusk said. âThe point is that itâs fucking backed by Uncle Sam. It doesnât matter what the South Americans do. You cannot lose unless you think the U.S. Treasury is going to default. But they still didnât do it, and I was stunned. Later in life, as I competed against the banks, I would think back to this moment, and it gave me confidence. All the bankers did was copy what everyone else did. If everyone else ran off a bloody cliff, theyâd run right off a cliff with them. If there was a giant pile of gold sitting in the middle of the room and nobody was picking it up, they wouldnât pick it up, either.â
In the years that followed, Musk considered starting an Internet bank and discussed it openly during his internship at Pinnacle Research in 1995. The youthful Musk lectured the scientists about the inevitable transition coming in finance toward online systems, but they tried to talk him down, saying that it would takes ages for Web security to be good enough to win over consumers. Musk, though, remained convinced that the finance industry could do with a major upgrade and that he could have a big influence on banking with a relatively small investment. âMoney is low bandwidth,â he said, during a speech at Stanford University in 2003, to describe his thinking. âYou donât need some sort of big infrastructure improvement to do things with it. Itâs really just an entry in a database.â
The actual plan that Musk concocted was beyond grandiose. As the researchers at Pinnacle had pointed out, people were barely comfortable buying books online. They might take their chances entering a credit card number but exposing just their bank accounts to the Web was out of the question to many. Pah. So what? Musk wanted to build a full-service financial institution online: a company that would have savings and checking accounts as well as brokerage services and insurance. The technology to build such a service was possible, but navigating theregulatory hell of creating an online bank from scratch looked like an intractable problem to optimists and an impossibility to more level heads. This was not dishing out directions to a pizzeria or putting up a house listing. It was dealing with peopleâs finances, and there would be real repercussions if the service did not work as billed.
Undaunted, Musk kicked this new plan into action before Zip2 had even been sold. He chatted up some of the best engineers at the company to get a feel for who might be willing to join him in another venture. Musk
Similar Books
