Elon Musk is the most famous founder in

the world of a company that he didn't

found.

It seems like virtually everyone in this

country thinks that Elon Musk is some

turbo genius that he is going to save

humanity, push past technological

frontiers. And clearly this isn't the

case. In our last video on Elon, I

covered how he has a very long track

record of proposing different moonshots,

sometimes literally, and then falling

extremely short of them or never

delivering on them. That wasn't a hit

piece. It was an objective accounting of

all of the times that Elon said, "We are

going to do this thing and then can't

deliver on it or just totally abandons

the company." Even the company he's best

known for, Tesla, was actually founded

by two individuals, Martin Eberhard and

Mark Tarponing on July 1st, 2003. Musk

came along in February 2004, not with an

idea, not with engineering expertise,

but with a checkbook, and he is credited

and propped up as the founder and

visionary of this company. This is the

story of how Musk went from investor to

founder. It involves a lawsuit, a

settlement, and two decades of

meticulous revisionist history scripted

and broadcast by Musk himself. We will

trace his full pattern leading up to and

including the early days of Tesla. So,

you can see that this is not an anomaly.

This is a consistent pattern with Elon.

But first, we need to start at the

beginning to understand who Elon is.

The self-made billionaire story starts

with a family that by Elon's own

father's admission had so much money

that they could not close their safe at

home. And I don't know about you, but I

didn't grow up poor, I grew up pretty

average. And not only did my family not

have enough money that the safe wouldn't

close, we actually we didn't own a safe.

And my guess is that you probably don't

either. And to understand Elon, we must

understand his father, Errol Musk. He's

a South African businessman, politician,

and emerald mine owner. The comment I

made about the safe was not hyperbole.

South Africa Business Insider in 2018

did an interview with Errol and he said,

quote, "We had so much money we couldn't

even close our safe." When Walter

Isacson started to work on a biography

on Elon, which doesn't really tell the

right story. For what it's worth, we

need to understand Walter Isacson first.

Walter Isacson is a great biographer.

He's done a biography on Benjamin

Franklin, Steve Jobs, a bunch of these

other kind of conflicted and geniuslike

figures in American history. But the

biographies I find generally come out as

more of a PR puff piece with a few safe

concessions in there to make it look

like real journalism. But it is very far

from that. And the Elon Musk biography

is no difference. So even in Isacson's

cursory and very surface level

investigation of Errol to understand

Elon, he was able to elicit from Errol

the following information. He said that

the mines were a quote under the table

operation because and this is a direct

quote from Errol. Quote, "If you

registered it, the blacks would take

everything from you end quote." That is

a direct quote from Errol Musk, Elon's

father. Snopes was the one to confirm

that Errol had an ownership stake in a

mine in Zambia. And you might be

thinking, you know, I don't know what

the situation is like in South Africa. I

didn't grow up there. Maybe it's more

common for people to keep money in

safes. Maybe the banks aren't great

there. They're not trustable with your

money. Let's contextualize the wealth a

little bit more, right? Errol's wife,

May, and him separated in 1979.

And at that point, the family owned two

homes. I I don't even own one. Most

people in America can't buy a house now,

so that's already a pretty big

qualifier. They owned a yacht, a plane,

five luxury cars, and a truck. And the

source on that is from May Musk's

memoir. And no value judgment there. You

don't choose what family you're born

into. You can certainly deviate from

your parents' path. And you know,

honestly, if I if it was the choice

between being born into a wealthy family

or a poor family, like I think most of

us would probably be choose to be born

into the wealthy family. It doesn't

inherently make you a bad person or set

you on a bad path. But early on, the

exceptionalism, the I do not have to

obey the rules mindset started to creep

in. And we have here that Elon was

actually a draft dodger. He fled to

Canada at the age of 17 to avoid South

African military conscription. So the

country that he was born and raised in

that his parents were paying taxes in

that he was benefiting from public

infrastructure in, he would not even

sign up for military conscription to

return the favor as part of just what

you do when you're living in that

country. I mean, I'm in America and I've

signed up for selective service when I

when I came of age. It's just what you

do. But not for Elon. Elon was the

exception to the rule. So, he fled to

Canada.

Around this time, we can start to see

our first inklings of revisionist

history as well because Elon claimed

that he moved with nothing, no money,

despite the fact that he moved to

Canada. It's a very American story,

right? Moving to moving to America with

nothing in your pockets, just clothes on

your back and becoming self-made. But

even this isn't true. And this is where

the lies begin in earnest. His father,

Errol, said that he gave him $28,000 in

seed money for his first startup, Zip 2,

in 1995. Elon, of course, disputes this.

The Emerald Mine may or may not have

directly funded Tesla. But the claim of

self-made is really outkicking its

coverage when you consider that the

family owned a yacht, a plane, two

houses, luxury cars doesn't quite sound

self-made to me. Musk's corporate

aspirations had more humble beginnings

than a cutting edge tech company. In

fact, his first startup was an online

yellow pages application. His own board

replaced him as CEO before the

acquisition closed. So the company's

name was Zip 2. He co-founded it with

his brother Kimble in 1995 and it

provided maps and business listings to

newspapers. Musk was CEO, but once the

company gained a little traction, the

board brought in an actual CEO that

actually knew what they were doing. He

took over for the day-to-day and they

squeezed Musk out before the

acquisition. They were acquired by

Compact in 1999 for 307 million in cash.

Compact is a name I haven't heard in a

while. They used to make laptops and

computers back when I was younger. So,

let's note the pattern. Let's stick it

in the back of our minds and recall it

as we go through so it can provide

context. He's already replaced as CEO of

his first company because at this point

likely he's not good enough to hide his

narcissism, his egoentrism, and it's

transparently visible. You don't want

this guy running a company that's going

to lose you as an investor a bunch of

money. This will happen again as we will

see.

>> [music]

[music]

>> Pretty shortly after Zip 2 in September

of 2000, while he was in Australia on

his honeymoon for one of the first of

many marriages, his own board decided to

fire him and replace him with Peter

Teal, somebody who actually knows what

they're doing when it comes to running a

company. Musk actually founded a site

called X.com, which you may know is the

successor to Twitter, but X.com has been

around for a long time. He actually

launched it in 1999 as an online

financial superstore. The company then

merged with Confinity, founded by Peter

Teal and Max Levchin in March 2000. Musk

wanted to keep the X.com brand. Let's

log that in our heads for later. But

everybody else wanted to focus on the

core PayPal payments products. Ashley

Vance puts this most clearly in his Musk

biography. The direct quote here is what

followed was one of the nastiest coups

in Silicon Valley's long illustrious

history of nasty coups. The board voted

Musk out and installed Peter Teal as CEO

while Musk was on his honeymoon. And

Musk was pissed. In a 2007 interview

with inc.com, he said that he buried the

hatchet, but while he was saying this in

the interview, he mined pulling a

hatchet out of his back and he literally

told Walter Isacson while he was setting

up for the biography, quote, I had

thoughts of assassination running

through my head. The company rebranded

to PayPal in 2001 and then sold to eBay

in 2002 for 1.5 billion. Musk had an

11.7% stake, which netted him about 175

million after taxes. So, he's doing

better, but some things are still the

same. It's his second company, second

removal as CEO, quite violently in this

case, but at least this time he kept his

shares and he walks away a rich man. As

you know, he later bought back the X.com

domain from PayPal in 2017 and he

rebranded Twitter to X in 2023. This is

a good example of how he cannot let an

ego rivalry go. Even after almost a

decade, he still had to win. This ties

into our main theme, which is he views

himself as an exceptional figure,

somebody that does not need to follow

the rules that you and I follow. You can

trace this back. Like I said, being born

rich doesn't necessarily make you bad.

But I think the risk there, the real

spiritual risk is that you begin to view

yourself as somehow having more worth or

being better than others. And this

mentality is clear. It's clear that it

is metastasized throughout Musk's entire

career. And we're starting to see the

early intimations of that with buying X

back and with being ousted as CEO twice.

Nobody who can see through his BS

wants to work with this guy.

Unfortunately, as we'll see as the story

develops, as his life goes on, he begins

to improve his skills to mask these

sociopathic impulses and starts to pull

the wool over people's eyes, including

most people in America right now who

think he's a genius. And so, he

continues this trend of self-perceived

exceptionalism when he eyes up Tesla.

>> [music]

[music]

>> Martin Eberhard did not need Elon Musk

to start Tesla, but Elon needed Mark's

company to become the man that he

believed himself to be already. Martin

Eberhard was an electrical engineer, an

actual engineer, and already had a

success under his belt when he sold Nuvo

Media for $187 million. Mark Tarponing,

the other co-founder of Tesla, was

Everhard's business partner from Neuvo

Media. Everhard had a great idea that I

think illustrates his pragmatic

engineering mindset. He noticed that

every rich neighborhood that you drove

through in Palo Alto had two cars in the

driveway, a Porsche and a Prius. He

thought, "What if you could have both in

one car?" It was personal for him, too.

His [snorts] cander here cracks me up.

So, in a Business Insider interview in

2014, Abberhard says, quote, "I was

thinking that I should do what every guy

does and buy a sports car. I couldn't

bring myself to buy a car that got 18 m

to the gallon." So, he tries to buy the

AC Propulsion TZ electric sports car

prototype when AC Propulsion decided to

commercialize it. He and Tarponing got

to work on July 1st, 2003 and

incorporated Tesla Motors. and Eberhard

and tarponing set to work doing what

every true founder has to do at the

beginning of their company. They

validate a bit of an initial concept.

They get things going. They feel like

they have a good vertical. They have a

good business plan and they need to

throw some fuel on the fire to get

things cooking faster. Especially, I'll

tell you from personal experience when

working with hardware as opposed to just

software. Software you can start in a

dorm room. Hardware you need a lot of

people. You need manufacturing. You need

space. it is expensive to get into a

hardware business. And so these guys

have what they think is a good thing

going and they need money. They need

some venture capital. So they mingle at

the Mars Society, which is like a crazy

nonprofit society focused on Mars

colonization. This is what rich people

do in their spare time. And they smoo

with Musk. And so Eberhard emails Musk a

pitch. He tells them this is a company

with very high potential for growth and

it is going to break the compromise

between driving efficiency and

performance. So Musk leads their series

A round. He chips in 6.5 million and

becomes chairman of the board. And we

need to make a very key distinction at

this point. It is crucial that you

understand this fundamentally important.

Musk did not design the Roadster. He did

not engineer it. He did not conceive of

it. He was an investor. He paid money to

be involved in the company. And during

the four ensuing years, 2004 to 2008, he

was not CEO. Eberhard was CEO. Musk was

on the board. He was an investor. And

under Eberhard, Tesla did something that

they have failed to repeat under Elon's

leadership of the company. They

delivered things on timelines that were

accurate. They raised venture funding.

They revealed prototypes. They got the

Roadster into production and in fact it

was the world's first highway capable

EV. Remember the Prius is a hybrid. This

is fully electronic vehicle. It is the

first highway capable one that exists.

It's a massive achievement that has set

the stage for the development of all

other electric vehicles that you see on

the road today. But as I said, hardware

is ludicrously expensive and if you

haven't worked in it before, you're

going to get caught out with financial

surprises. And this is exactly what

happened with the Roadster. They

expected a $25 million development cost,

but it ended up being $140 million. But

despite this debt, important to note,

they did what they set out to do. The

car existed, a real product that you

could go out and buy. And that was all

before Musk ran anything. So in 2007,

Elon plays an Uno reverse card. And he

uses the board to oust Eberhart. After

he does that for the next 15 years, he

calls the only guy who's really spurned

Tesla forward on an adequate cadence the

quote worst person I've ever worked

with. The guy that built the company

that he bought and then took over. Let's

break down the timeline of that

takeover. In 2014, Musk becomes

increasingly unhappy over something that

only a narcissist would become

increasingly unhappy over. The media

starts calling Eberhard quote Mr. Tesla.

This makes him furious and he threatens

to cut ties with Tesla's PR firm because

of this. He's pissed that he is not in

the spotlight. In 2007, Everheart is

asked to step down as CEO. They're

having cost overruns like I mentioned

with the Roadster and the board is not

happy about that. That's not just an

Elon position. So then you have an

interim CEO, Michael Marx, who's

installed then Zev Drury after that. In

2008, Musk says, "I will do it. I will

be CEO of Tesla and take credit for

everything. And Everheart is rightly

pissed off about this. In 2008, he sues

Musk for liel, slander, and breach of

contract. It's a 146page complaint,

which I feel like, knowing what I know

about Elon from this research and from

secondhand sources is probably light in

the core allegation levied against Musk

is exactly what's going on here. And

it's exactly on brand and exactly Musk's

pattern. Everhard claims that Musk quote

set out to rewrite history by falsely

claiming that he was the founder or

creator of Tesla Motors. Accurate. And

the suit alleges that Musk used his

board control to basically populate it

with his homies, his friends. He brought

his friends into the board so that way

he could kind of control the board and

shape it to be the way he wanted it to

be. They were his little puppets. And

the suit alleges that he did this in

order to force Abberhart out and take

control of the company. The suit also

alleges, and this is juicy, that Musk

misrepresented his own educational

background. We'll probably never find

out exactly what the outcome of that

suit was. It was dropped, which implies

that likely there was some kind of

outofc court settlement and resulting

gag order on that. So, nobody's going to

talk about it or else they're going to

be out a lot of money. But here's the

crazy thing right now. Five people

legally share the co-founder title of

Tesla now for the history books.

Eberhard, Tarponing, Musk, JB Strawel,

and Ian Wright. So, he basically sued

his way into the founder title. Musk did

even post settlement. Musk gets what he

wants. Another sign of a true sociopath

is he has to rub Everard's nose in it

over and over and over again, even after

he's won, even after he's achieved the

outcome that he wanted, which is

basically to say, "I created this

company. I founded it. Nobody else was

involved. I'm a genius. I'm an engineer.

This is my baby. This is my company.

Even after that, in 2019, deleted tweet,

quote, Tesla is alive in spite of

Everhard, but he seeks credit

constantly. 2020 podcast, quote,

Everhard is literally the worst person

I've ever worked with. And Everhard told

Business Insider that that actually

violated their non-disparagement

agreement. 2022 tweet, Eberhard, quote,

could have risked his money, but he was

unwilling to do so. response to that

from Eberhard, quote, "Not one sentence

of that tweet is true." So, the pattern

is complete. We see Musk is up to the

same antics. It's the same antics, but

they're scaling. There's a CEO ousted

from the company, but this time, not

only does it make him wealthy, he is

actually the one doing the ousting. So,

each time he fails, he gets a little bit

better at masking, a little bit more

manipulative, a little bit more

strategic. And so this time he's able to

not only become rich from it, but also

retain the CEO title, which is what he

wanted. In 2008, Tesla had $9 million in

cash. That's nothing for a hardware

company, especially an automotive

company. The Roadster was hemorrhaging

cash and then the US government wrote

Elon a check for 465 million. Musk wants

you to believe that he was the one that

pulled Tesla from the ashes, that

resurrected it, but really it was a

government bailout. So in 2008, peak of

the financial crisis, Musk is sleeping

on friends couches. Tesla is nearly

bankrupt. They have very little cash

reserve and their prospects don't look

good. The Roadster, like I mentioned,

cost about 140 million to develop

instead of 25 million. And things are

dire on Christmas Eve 2008. They get

emergency funding on Christmas Eve like

hours before payroll wouldn't have

bounced. So what I mean by that is all

of the employees, you know, you get your

check. Let's say you work on the

assembly line from the Tesla the Tesla

factory, their account would have been

low enough that when you go to cash that

check, it would have bounced. You

wouldn't have been able to get cash your

paycheck. And Musk's own tweet, quote,

"Tesla financing round closed at 6 p.m.

December 24th, 2008, last hour of last

day possible or payroll would have

bounced 2 days later." So, this puts him

on life support, but it's really in June

2009 when the Department of Energy

really bails Tesla out. They loan them

$465 million through the ATVM program.

at rock bottom interest rates. Can't

beat the interest rates. This funded the

Model S development and the buildout and

staffing and furnishing of the Fremont

factory in California. And so if they

were to do another funding round or take

out another loan, their next best

funding source would have cost them

something like 30 to 40% annually. And

that's from Tesla's own SEC filing. So

that's straight from the horse's mouth.

But instead, this Department of Energy

loan they give them, it has them

floating at an interest rate around 3 to

4%. So, I mean, it's basically nothing.

It's basically inflation. And as always,

you and I, the taxpayers, get screwed.

If the Department of Energy would have

negotiated like a venture capitalist,

the taxpayers would have earned 1.4

billion. But instead, we earned about 12

million in interest. And the supreme

irony of this is when Musk is appointed

to Doge, the Department of Governmental

Efficiency, so-called, he actually shuts

down the same Department of Energy loan

program office that had originally

issued Tesla this loan. So there's no

loyalty. And furthermore, if you want to

get really dark about it, it's like he's

pulling the ladder up behind him. So any

other EV companies can't take advantage

of this program and compete with Tesla.

And that's not all. They stole a lot of

other tax money from you. Tesla profited

enormously from ZEV credits, state tax

breaks, especially for the Nevada

Gigafactory, and federal EV tax credits

for buyers. Zip 2, PayPal, Tesla, the

playbook is always the same.

[music]

Take control, push out the builders, and

rewrite the origin story. to go through

those highlights again. Zip 2, he's

ousted as CEO before the company is even

acquired, but he walks away with some

cash. PayPal, he's fired in a boardroom

coup during his honeymoon, but this time

he walks away with decent amount of

shares in big chunk of change. Tesla. He

bought a board seat, staffed out the

board with his friends and lackeyis,

forced out the original founders, sued

his way into the founder title, and then

spent 15 years essentially defaming

Everhard and putting him down in every

media outlet he could have access to.

All the while claiming that he himself

built Tesla. He is not an engineer. He's

not an engineer. He does not have

degrees in engineering. He has degrees

in physics and economics from Penn. He

has no engineering degree. And his chief

engineer title at SpaceX that he loves

to tout around is self-appointed. It's

very important you understand that.

Chief engineer title selfappointed. That

would be like if I started a company and

I decided that my title was king of

Norway. He is a dealmaker with an

extremely high risk tolerance as you

have when you have a big rich nest egg

to cushion back on. And he has an

extraordinary talent for narrative

control. I will give him that. He is

fantastic at controlling a narrative,

shaping public perception, and operating

without any scruples to do so. None of

this means Tesla's cars aren't important

or that EVs are bad. Like I said, I have

a Model Y. I really like the car. But it

does mean that the story that you've

been told about Elon that he is a

genius, that he is a visionary, it's

just not true. It's just not true. The

public deserves to know this story about

Elon. Isacson's biography did not touch

on it nearly in a profound enough way to

get this message across. I'm sure he

will continue to do narrative control,

but I will be here to deliver more

videos on the facts about Elon, about

Sam Alman, about these other contentious

figures in the valley. Thank you so much

for watching. Please share this video

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