SolarCity, now among the largest solar companies in the country with 15,000 employees, was conceived by Lyndon Rive and his cousin Elon Musk on a trip to Burning Man.
SAN JOSE, Calif. — The idea for SolarCity came to Lyndon Rive on a trip with cousin Elon Musk to Burning Man in 2004.
“That’s when the light bulb went off,” Rive said.
A decade later, SolarCity is among the largest solar companies in the country, with operations in 19 states, 15,000 employees and 300,000 customers. The ride hasn’t always been smooth: In October the company announced it missed expectations and lost $2.41 a share in adjusted earnings in the quarter. Some analysts have knocked the company for high customer-acquisition costs and its struggle to turn a profit. And last month it said it’s pulling out of Nevada after that state sharply cut payments to solar-panel owners.
Job: Solar City CEO
Born: Pretoria, South Africa
Career: Rive started his first company, LRS, while still in high school. He and brother Peter founded SolarCity in 2006, with the backing of cousin Elon Musk.
Education: High school degree from Pretoria, S. Africa
Family: Married, two sons
Home: Atherton, Calif.
San Jose Mercury News
But SolarCity, which sells and installs solar systems for both residential and commercial customers, reached an agreement on a big cash infusion in late November. The Silver Lake fund group agreed to a $100 million strategic investment, together with $10 million from Elon Musk, the company chairman, and $3 million from Rive.
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The tight-knit family — Rive’s and Musk’s mothers are twins — have stayed together across multiple countries, continents and startups.
This interview has been edited for length and clarity.
Q: Your mother, Kaye, was a career woman?
A: She had multiple businesses. She wan an entrepreneur herself. She’s also the one that encouraged me to start my company at the age — my first company — at the age of 17. I’m very grateful. Most parents would not encourage their kids to start a company while they’re in high school. In fact, she was totally fine with me not going to high school and working on the business.
The principal was going to expel me because I wasn’t going to school. So I showed him my financial statements. I said, “Look, it makes no sense for me to leave this and come back to school, so that I can go to university with the hope of earning one-third of that.” He agreed. So then he allowed me to come and write the exams. If I passed, I passed. If I failed, I failed. I passed.
Q: You came over to the States, for the first time, on a 1998 trip with the South African national underwater hockey team for a tournament in San Jose. Tell me about your first impression of the States.
A: When you landed, just in the airport you could feel the vibe. This place was just buzzing. You didn’t even have to go anywhere, you’d just feel the energy of the Bay Area. You just walk around Palo Alto, you just walk around Mountain View, you just walk around all the places and everybody is excited about everything.
(My brother Russ) had the idea that if we start a software company that could manage PCs remotely, that could come in very handy. We funded the company (Everdream), spent a year building out the business model, getting customers, proving out that a remote management of a PC on a subscription basis can be a real business. In ’99, we got our first funding from DFJ. Steve Jurvetson led that round. At 20 years old, I got my first $2 million check. I went, “Wow. OK.”
Q: What did that feel like?
A: It was literally written out to Everdream, as a check. I deposited it into my bank account, which I had full authority over. Only in America. We spent the next eight years running that company.
Q: Why did you get into solar?
A: I wanted to do something that can have an impact on humanity. Something that you feel good about. It’s not anymore about working this hard for money.
On our way to Burning Man, it was myself, my wife and Elon in an RV. So we had a ton of time to talk. Elon’s recommendation was to get into the solar industry once he understood what I wanted to do. He didn’t say how, or what, but just get into the industry.
I came back, discussed it with my brother, Peter Rive. He loved it.
We launched SolarCity in 2006, July 4. We chose July Fourth as Independence Day. The goal is to become independent of fossil fuel.
Q: How important is the federal 30 percent tax credit for solar-panel installation?
A: On the federal tax credit, it’s super important. SolarCity has the lowest cost structure in the country, but we did a lot of work to get there. We will be able to grow in 2017 with a 10 percent tax credit. Not just maintain, but actually grow. But the gap between us and the next company is huge.
If the math doesn’t work, you’re not going to have any customers, or very few. If you look at the industry — 170,000 jobs — I would not be surprised if 100,000 jobs disappear. It’s going to be a total devastation for the industry. There will be a few left standing that can make it work. But it’s going to be a real pain.
Q: With the work ethic that came with your family, how do you escape?
A: My work schedule has improved to about 65 hours per week. I used to maintain 80 hours per week. Not for a period of time. It was forever. Then about three years ago, my wife was like, “Hey, I’ve been supporting you for a long time. Eighty hours is a little too much. The kids are at an age where they’re super fun. We’ve got to spend more time.”
Q: Is there competition between you, your brothers, your cousins?
A: Business competition? No. There is no competition. Elon trumps all.