How Elon Thinks——イーロンはこう考える

All right, so I have an advanced copy of your book The Book of Elon Elon Musk's useful ideas in his own words. You just said something that there's only four of these copies in the world. Who has them?

[laughter]

He seems to attack problems that nobody else is working on that have a positive impact on the future. That's his philosophy and mindset going into everything he does. Which is I think you need a lot of people assume that he's money motivated or a lot of people are money motivated and you hear all these entrepreneurs all the time talking about like like this is a great business model. This is a good place to go in. I'm going to go start self storage because like the failure rate is so low. And then this is not how he thinks in any way, shape, or form. He literally says nobody else is crazy enough to try space. So that's the company I have to go build cuz nobody else is working on it and I can't.

Yeah, I think there's a paradox there of like the thing that you can do that nobody else is working on is actually more likely to be successful. Like it forces you to try to do something unique that also ends up being more valuable for everybody else because you're solving a problem. You're adding a capability to humanity. You're not just starting another commodity business of some sort.

about these problems since he was in college literally like even younger as a kid. He was a very influenced by sci-fi um and thinking about things that are possible. He talks about engineering as as magic. He's like if you build something that couldn't previously exist, that's like being a magician. And like who wouldn't want to be a magician? Like there's a whole section, not just a chapter, like a section in this book about the value of engineering and the fact that excellent engineers are the fundamental constraint on building and growing civilization and the constraint on advancing these companies. He's like I have all of all the money I need. Like the constraint is not capital. The constraint is truly excellent engineers.

Yeah, his like interview process. I mean, part of it a lot of it just comes from him being a really good engineer himself, right? So he you can take the questions like he looks for evidence of exceptional ability, he says. Um he looks for people who really solved a specific problem and he asks detailed questions about a hard technical problem that you solved in the past. And he's got a good … radar. Like you could ask those same questions and not have the same ability to scrutinize and determine who's truly excellent that he does because he's so close to all this all the time. But that's his advantage. He really biases towards hiring young unproven engineers and then giving them like a shocking amount of accountability and responsibility. And that's part of the benefit of the iteration rate of these companies is he can figure out who knows what works. You know, it's it's like in wartime how you get these like skip level promotions. You just find competent people and like give them more responsibilities fast as you can. Like that's how these companies operate.

Yeah.

Yeah. [laughter] I think it's so funny that the most productive person on Earth does zero zero zero of the like meditation, journaling, morning routine. Like he wakes up and pees on his phone and goes to work like every day. Like that's his routine.

Yeah. In in this book, we have uh Isaacson's biography of Elon, which you and I both have read and reread. I've done an episode on on that book as well. Yeah, he has this great thing that he would repeat for decades, that he is wired for war.

Say more about moving around resources and people.

So, we have a friend named Max Olson who's writing a book on SpaceX that is not released yet, but he just did this excellent essay that me and you both love, and we actually printed out. There's a bunch of notes in front of us. It's he he calls this uh the these memes that spread through Elon's companies. And he at the end of the essay he has these five memes. Number one was tip of the spear focus. Always identify and attack the biggest limiter. Don't spread effort across secondary problems. Laser in on the single constraint that if removed would unlock everything downstream. This is my favorite line from the section. This is true at every level. Each SpaceX site has a single dominating objective, right? To simplify simplify prioritization. A NASA manager who visited SpaceX observed that when a new problem appears, it looks like a flash mob appears in the hallway.

I know he's mission-oriented. He's like, I have a mission in life, this is what I want to do. But, does he talk about anything other than I'm going to do this and essentially persevere through pain?

He talks about burning the boats constantly. And he did this from like day one. Like even with like Zip2. I do think there is some kind of like an very advanced understanding of human nature that if you truly are putting your back against the wall and not giving yourself any options like you will come up with ideas or like push yourself to in in a manner in an extreme manner in which you just can't. If you if you're optimizing for like optionality or it's like oh if this isn't work out I have like a plan B. I love Jeff Bezos's quote on this. Bezos is like the plan B should be to make plan A work.

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I think the purpose-driven nature of these businesses is a extremely powerful piece of their success. Because that's not just Elon, it attracts people who feel the same way about the mission and who want be pushed. Like how many people go into their jobs and they're like, "God, really I want this company to just ring all of the potential out of me. I want to give everything possible to this mission." It's not what most people think. Um but it is how the people who go work at these companies think. And that's an incredibly powerful thing for to drive the success of the company, but it's also great for the people who want to hop into that environment. Like that's why Tesla's kicking the rest of the auto industry's ass, like and will continue to.

I have many hopes for this book, but the overarching one is like I hope that this book can generate like 1 million Musks. Like I I don't mean go follow his life blueprint. I don't mean start electric car company, but I mean figure out a unique problem that nobody else is working on and dedicate your life to solving it. Like a thing that adds a new capability to humanity. Build a new thing. Biggest lesson of Elon's life to me is like we are all capable of so much more than we think.

He's special, but he's not superhuman. He's just figured out how to get an unbelievable amount out of himself. And you know, he had a lot of disadvantages. Like a lot of people listening to this are going to have a lot better hand to start life with than Elon did.

Yeah, I don't think that's a particularly like well-informed take. Um, his dad was an engineer and an entrepreneur and he had ups and downs in his career, but the more defining trait of his dad was that he's uh I I've never met the dude, but like by all accounts in the Isaacson biography, he did have like a lot of surface area with him and from accounts from Kimball and Elon, he's like a narcissistic, abusive, manipulative, grandiose.

Compulsive liar, yeah, fabricated a lot of things. Um he had brilliance, but he was also really dark. Um, he's unreliable and he would lie to the kids all the time. I mean Elon at like eight would stand in the living room and be berated by his father for hours. It's not just like a mean comment. Um he'd scream at his face and call him worthless and useless and stupid and like as a young young boy. Like imagine what that the fuel that that fills you with as a kid and the I mean and Elon figured out how to like make the demons pull the plow. Like he turned that into something really productive and really positive for the most part. And there's another case where he got beat up very badly. Like it's not like lost a fight. Like stomped by a gang of kids and was in the hospital for like a week. Unrecognizable face. And his dad sided with the bullies and like called him stupid for picking a fight. And that is that is an unbelievably brutal place to start. Um, and so I think some of these rumors about like how privileged he was actually come from his dad lying and trying to take credit for some of his success. Um, and they've had a strained relationship and all kinds of weird stuff has happened over the last couple decades, but Elon arrived and as an immigrant to Canada at 17, paid his way through college, graduated with student debt, dropped out of Stanford uh graduate school to start his first company in the early internet boom and like basically made I forget the exact first number 22 million

yep

yeah so which is just like he's like standing in the mailbox holding this check being like wow and he yeah that that like paid off his student debt and so he made his first like fortune by himself and in that era was like he said he couldn't afford an apartment and an office so he leased an office and he showered at the YMCA like worked constantly all he had was a laptop and like some books and student debt like that's his starting place and he earned his first seed money from and everything most of what he made from Zip2 he rolled right back into starting like the week later starting x.com which became PayPal

and he rolled that dice like a bunch of times

I started with the the full list of maximums according to me which is like 107 and I checked I went down the list and I checked all the ones that I felt like Elon was a good example of which is like 75

and then I went down again and was like what are the ones that he's like could be an iconic exemplar of and it was like 15 or 16 so I think that's a good testament to like the not just Elon as a well-rounded entrepreneur but also like the ability of the maximums to describe the traits that become an incredible entrepreneur um the business from A to Z I think this seems to me as the one who like best he exemplifies this like the banana man

The fish that ate the whale.

It's an incredible book of like high agency and deep expertise and this guy was like running a banana empire from the farms in you know Honduras or Guatemala or something. And so Elon is a like the modern manufacturing example of that. He lives lived on the line. He goes to the problems. He has a really deep understanding of not just the product but like the physics behind the product. There's a so many stories of him having this deep intuition for what the materials in a thing can do, where the threshold is and pushing engineers and designs over and over and over to like get to that failure point and find what the true like most elegant, most simple, most efficient version of the product could be.

One is the thickness of the stainless steel welds on Starship, right? And so the design engineers gave one number and then he went and talked to like the guys actually doing the welding and they were kind of like we think maybe like 4 and 1/2 mm would be like getting to sketchy and he's like let's try 4 mm and 4 mm worked. Even the move to stainless steel, like most rockets previously had been made with carbon fiber. Um it's just really hard to work with and it's big and he had this intuition and knew that stainless steel at low temperatures gain strength and so once the rocket is actually up in orbit, it's stronger which is an easy thing to forget and so he's like pushing people over and over again to like use things that are cheaper, use things that are easier to work with, reduce the moving parts. My summary of Elon is is David Goggins level like intensity. He's Richard Feynman's level of like unconventional technical brilliance. And he's Napoleon's strategic genius and insane bias to action. Those three traits combined make him just incredibly singular and the volume of time that he puts in like even if you put in this amount of time to try to know your business from A to Z as without that deep technical intuition or sense of the fundamentals of the physics and the materials that you couldn't make the calls that he's making or you couldn't push on the things that he's pushing on. Of course, he's not always right. Of course, the engineers are always the ones like doing the highest volume of the real work. But as you say, like the founder is the guardian of the company's soul. And he is there to raise the bar and push people. I think he has this really keen sense of I love the line so much. Failure is essentially irrelevant unless it's catastrophic. And so he pushes these things to the breaking point, pushes the materials, pushes the designs. He wants to reach the point where he knows for sure that it's the most efficient version of the design because the mistake or the failure that reveals that information is going to pay off a million times. We're going to make 10,000 of these engines and I don't want it inefficiency in there that we're going to replicate 10,000 times. I want to make the failure. I want to fail 500 times on every single design decision so that I know that we have the most elegant thing as we scale up and ramp up.

Yeah.

Yeah. He's They're literally building these rockets in a tent in a parking lot. You know, which is a very is a very Elon thing of like, let's do just what we have to do to make progress on the product. I want to linger on on failure for a second because I think it's a really underrated piece. I think these some of these maxims and some of these taglines that Elon uses, if you kind of put them next to each other show this pattern of he's like he's designing these organization organizations to create small failures as quickly as possible, right? So, um if you're not adding back in 10% of the things you remove, you're not taking out enough, right? So, you like fail that is that is a mandate to go create something that doesn't work and then figure out why it didn't work and just add that little bit back in so that we know it's the most efficient version of the design. When he sets deadlines, he's like, I want to pick a deadline that I'm 50% likely to make. We're going to miss half our deadlines and I'm totally fine with that. Because it means we'll be moving as fast as we possibly can and we're going to make some deadlines that nobody thought we were going to make. If we're making 100% of our deadlines, then they're way too far out because we'll always consume at least the amount of time that we give ourselves. And I think people have this inherent bias, especially like if your job is on the line or if you want to like look good in front of your peers or you want your your company to work, you don't want to be seen as failing. Like you make so many decisions engineers in general like I don't want my product to fail I don't want my product to fail and he's so much of what these cultures reinforce and these these sort of maxims reinforce is like you should be failing. He says when he hires people like if you don't if you can't tell me the four ways you … something up then you aren't the one doing the real work.

Yeah, it's a it is a great one but it it all of those kind of line up behind like if you're not engineering your organization to have these small failures, you're creating this is the antifragile idea like you're creating this sort of fragility and this inefficiency in the global thing if you don't learn to fail along the way and iterate extremely quickly towards a better product.

Yeah.

The iteration towards reality as the teacher is it was another great element of Max Olson's essay. Um and Naval is super articulate about this like applying David Deutsch's ideas to company buildings. Like, your goal as a company is to discover new knowledge, which means interact with reality, and then instantiate it into a product. And this cycle of iteration and experimentation is how you check against reality, right? This is how all knowledge is created. It's it's gene mutation and selection. It's scientific hypothesis and testing. Um Um but people don't usually think about their organization in terms of like how much new knowledge is being created. How many experiments are we running? How quickly and how cheaply can the failures be created?

Another branch off of that is like physics doesn't care about your feelings. Um and so that is a line that he repeats over and over again with people who are like how can you be, you know, so quick to to judge people or to fire people or to like get the team he's like we have we have one test. We have one bar to clear. Like does the rocket fly? And how much payload can we get to orbit? Like there is one metric that we're optimizing for. And I will do what I have to do to march us towards that peace, to clear that bar. I mean this is where the Asperger's comes out. You know, like in a truly advantage way. Like he says being the need to be liked is like is huge disadvantage that so many people have. And I do not have that. He straight up says like I do not have that weakness. And Peter Thiel has an interesting observation about that she was like why are so many of the successful tech founders like seem to be somewhere on the spectrum? Like why do they all have this sort of biological advantage in dismissing the opinions of others? What does that say about like our society that that's a skill that you need to have in order to be an innovator and build something new and build a great organization?

Question requirements. Make your requirements less dumb. Is is like specifically how he says it a lot. And there are so many requirements. I think it's a really that was a hard earned first step.

The the most common error of a smart engineer is to optimize something that shouldn't exist. And there are many places that requirements come from, right? Sometimes they come from inside the organization, sometimes they came from a team, sometimes they came from legal, sometimes they came from a design partner like in NASA. Like if you're going to shoot up a rocket and the capsule the vehicle is going to like dock with the space station, they have all kinds of requirements about your latches and like how things go in. If you're going to launch from a specific pad, you've got requirements around sound or timing or all these things. And he he's like so much money and time and effort is wasted trying to accommodate requirements that don't make any … sense in the first place. So the first thing to do is like shorten your list of design requirements so that you've got the maximum possible space to play in. And there's so many times many stories in the in the latches like a a true one that's in Max's essay which is like the requirement said you got to buy this specific like Omni latch from an aerospace company made of these materials and it was like super expensive and they started question that requirement and they were like all right, well, it's fine as as long as it like does this and this, it's fine. And so they bought off-the-shelf parts like McMaster-Carr and they did the job just fine, which were like two orders of magnitude cheaper. There's also times when the requirement is legal or regulatory and he'll assign somebody like go it'll take a year or a half a year and a half to like get this permit and he's like assign somebody like go fly to this office and sit in this office until you get permission like sign on this sheet come back. Don't come back without a signed sheet or you're fired. Like that is a way to question the requirement or or a dismissal or a waiver of this requirement cuz it doesn't make any sense. And there's there's things that he's like we are forced to comply with so many regulations from 20 years ago, 50 years ago that just don't make any damn sense and they're not helping the consumer. So let's remove as many of them as we can so that we can design the best possible product or the for the cheapest possible price.

Delete, delete, delete. Simplify. Um there's a I mean the canonical line about this is like the best part is no part, the best process is no process. And I don't know exactly the number, but the like the the number of times combining parts has happened over the course of the Model 3 or eliminating them. Like I think when he started there were over 10,000 parts. And that has come down steadily as he's combined parts because every time two things need to be attached, not only are there two things that need to be attached, but maybe they need to be glued, maybe they need to be screwed, bolted, riveted, whatever. The way the metals interact needs to happen and they need to be actually assembled and then there's like a tolerance that could change whether other things fit. It's like the number of expenses, changes, and risks that come from additional parts or additional attachments is so so so high. Simplicity gets you both reliability and low cost. That is it. The best part is no part. Simplicity delivers both reliability and low cost. And so like between those two things, you have to delete as much as humanly possible. And so he goes to great lengths to combine parts, simplify things. He says go ultra hardcore on deletion and simplification. That's how you see that like Raptor meme where things get more and more and more simple. And that's how the Model 3 has gotten simpler, more reliable, cheaper to produce, and better. And the maybe the most famous example of this is his um decision to cast entire the front third and the back third. And he got that idea from toy cars. Like toys are cheap, reliable, scale quickly. How do they make them? Like let me let me steal an idea from this industry and turned out that nobody had ever made casting machines that big. And so he like

Mhm.

Yeah and that's in the production system yeah I mean he this is why automate is the last step of the algorithm.

Yeah he his original vision for Tesla is like we're going to automate everything this is going to be like a pure robot you know dreadnought autonomous line and he's like that was a huge mistake we didn't we didn't have it refined but we we didn't have the design refined we didn't have the manufacturing design we hadn't questioned the requirements we hadn't deleted enough parts we should not have automated until all of these other steps have been gone through. He said there's many times where he did every step in exactly reverse order something was like automated and then tried to done faster and then optimized and then ended up getting deleted because nobody had questioned the requirements. That's why we do these things in this order over and over and over and over again and well there's a great story of taking Starlink was like a a mess right? It was 10x were and they were building 1/10 of how many they needed. So, like two orders of magnitude off success. He's He's like, "I've had it. I'm fixing this. This is now the bottleneck." He grabs uh Marchenko, so which is one of his like super talented early hires from SpaceX. This is a rocket scientist. This is not a guy who's ever worked on satellites. He grabs a team that of engineers that he trusts. They fly up to Seattle. They fire the entire Starship leadership uh our Starlink leadership team. And they sit down in a war room, which I think is an underrated like tactic. And they start running the algorithm. What is the first principles of like satellite design? How simple can we make this thing? Why? Why? Why? Why? Why does this exist? Why are these two things so far apart? Why do we need this much energy? Why do we need this manufacturing process? And over the course of like a few months, they make this two order of magnitude leap. Like Marchenko who had never encountered this design before, but just by applying the algorithm and working with maniacal urgency towards this extremely high design bar, they created this product that's now, you know, if it was a standalone business, it'd be worth tens of billions of dollars.

Yeah.

Yes.

Step number three is simplify and optimize, um, which is I think that's what most engineers just like do as a standard, um, but that is the thing that like you should only do after you know for sure that the thing exists and you know for sure you've got your requirements as clean and short as you possibly can. The other thing that's actually really important about the requirements is that a single individual's name has to be attached to every one of them. He's huge on direct individual accountability. And so there's no such thing as like a requirement from legal. There's like a requirement from Jan in legal so that you can go ask her and be like, "Why does this requirement exist? Please explain it very thoroughly. Can we throw it out?" etc., right? And so so many times he found requirements that were like created by an intern who left the company two years ago or a department where nobody in the department actually agrees with the requirement. Um, so once you get there it's like the the very normal engineering work of like let's figure out the trade-offs. Let's optimize this thing.

Yeah, like the fire prevention team thought it was for sound baffling and the sound team thought it was for fire protection. Um, and like once that was established, they actually they tested it. They put them like in the car and like nobody could tell the difference. They're like, "Delete." Okay, so but it was the bottleneck at that particular time.

Elon's solution was very like simple. It's like, "Well, does it reduce the inside the cabin? Is it louder if this thing's not here? How are we going to figure that out?" Well, let's just put a … microphone.

We'll test it. And six hours later the part is deleted and like this whole thing that was slowing down, you know, they they pulled more robots off the line and it sped up and that increased the throughput of the entire production line. Then it was a millions, maybe tens of millions of dollars worth of decision. Like he he says there are times when a single half hour meeting has added a hundred million dollars to the enterprise value of Tesla. Every single minute of thinking is like worth a million dollars. A high quality minute of thinking. And these tools are the things that he does in those minutes that actually have that kind of effect, which is to your point of like, this is a singular greatest entrepreneur of our generation. This is the thing that he talks about most often. Maybe it's useful.

Yeah, I mean, that's why I I really design all my books to be read and reread. Like, I want them to be handbooks and reference guides and I love when I see like a just a beat to … copy that's been in and out of somebody's backpack like every day for years and is like dog-eared and flagged and all the highlight on every page. Like, these ideas repetition doesn't spoil the prayer, repetition is persuasive. Like, you have to work to install these ideas in your head so that they're there when you need them. So that you ask the right question or have the right instinct as an operator when you're confronted with one of these decisions.

I think the third step is the least interesting, honestly. Um, I think the like question requirements and delete are probably 80% of the lift. I think the simplify and optimize, the accelerate and the automate are the things that people leap to naturally and the algorithm is really designed to get them to, you know, sharpen the axe before they start chopping down the tree or be sure to chopping down the right tree. Um, be sure to chopping down the tree is the right next step at all, anyway.

Accelerate. Go faster. However fast you're going, you can go faster.

Not really.

[laughter]

go faster. He has that line where we uh What do you say? A maniacal sense of urgency is going to be our operating principle.

You have a great way to describe this in the book. I'm just going to read This is Elon's description of step four from the book, which I love. And so, he's talking, he's like, "Then and only then, step four, accelerate cycle time. Once you're moving in the right direction and moving efficiently, you're moving too slow. Go faster. You can always make things go faster. But do not go faster until you've worked on the other three things first. I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted. Speeding" This is hilarious. "Speeding up something that shouldn't exist is absurd. If you're digging your grave, don't dig it faster. Stop digging."

Yeah, he talks about the opposite of that. I think he calls it ivory tower engineering.

He's like, I'm going to design a product a process. I'm going to throw it over the wall and you can engineer a manufacturer. And he's like, no, you have to be able to the engineer and the manufacturer should be able to call a designer like, why did you do it this way?

All right, let's go to step five. I think I mistakenly said there's four steps. I've done 10 episodes on this guy. You'd notice by now. So, let's go to step five.

You just mentioned something I think is a huge like theme that runs throughout like his entire career that he wants to control everything always.

Can you talk about like why that is so important?

Yeah, he talked about the mistake of trying to maybe cuz originally they used like the Lotus, right? The Lotus chassis, I think it was what it was. He's like, "We should just design this from a blank sheet of paper. It's always better if you're going to do something new. Like just design from a blank sheet of paper."

Well, I think it's important to like hammer on this point though. Because it's obvious if you read like if you just study history of these entrepreneurs, like they're all they all line up at the same place. It's like as vertically integrated as possible. Yeah. They're going to control as much of their business, their raw materials, and everything. And what I couldn't help but notice is this is how the car industry started. Like Henry Ford, they made almost all their parts themselves. Obviously they were making it by hand. This is before he figured out how to mass produce a a car. And that was like his his main idea. There was no auto

Oh, so then you you start doing it and then you have control. He's also obsessed with control. He wound up buying out his investors I think in 1919 Henry Ford owned 100 by 1919 he owned 100% of Ford Motor Company. It was just like the equivalent of you owning 100% of like a 20 to 40 billion dollar company today. He was so obsessed with control. He Like he bought a railroad. It's like not only do I want to like control all every single like design and part that goes into the Model T and all of my cars. It's like I want to make sure that all those parts get to me and I want to control the logistics of them getting to me. And what's fascinating about Elon is like he just went and like bucked the trend of the American automobile industry at the time, which was like subcontractor subcontractor subcontractor. He talks about this over and over again and like they're just not even making their own …

And he's like, "I'm just going to go back and do it the way it used to be done." But I think the reason that it's so important is like not only do you have control, but it's like how you make a cost-efficient product. Because if you're having a subcontractor after subcontractor, I think when he he did the initial calculation, he wasn't calling it the idiot index, which we could talk about, but at the time of the rockets, he realized that like 98% of the cost of a rocket was not from what it was made out of. He's like, "Where the hell is the money going?" And he was like, "Oh, it's going from this contractor who's this subcontractor actually hired another subcontractor who hired another subcontractor who hired another subcontractor before I get to the actual person, like you said, bending the metal or making the thing."

There's two things that come to mind uh when you're talking about that. One, I want to talk about that I think people should heavily invest and maybe practice on their ability to like distill ideas and communicate like something complex in a simple way, and I think Elon's, you know, maybe arguably one of the best people in the world at doing that. The second part, which is a theme throughout everything, especially and I think it's most notable in SpaceX, is like cost could making cost control an obsession, is that something you like graft onto the organization after? It was there before the organization even started. When he has this idea where he's just like, why the hell are these Russian ICBMs so expensive? And he starts doing the first first principles first principles thinking, uh which is, you know, everybody knows the story. Which is interesting, but then him describing it in another way, which I found was way more memorable. He's like, "Why would Russia be the only way they can make a cost-effective rocket? And you go and it's in your book." And he goes, "Do we drive Russian cars? Do we use Russian appliances? Like, there's just no way that they this country figured out how to make the most cost-effective launch vehicle." And he goes, "You see, America's a pretty competitive place. We should have the most cost-effective launch vehicle." Which obviously now he's like absolutely dominating in that. But the again, it's like speaking in that manner is like you could say, "Okay, well I broke down you know from first principles thinking all the parts and looked up what it was on the commodities exchange or you could say Why aren't we driving Russian cars?

Right? Is your dishwasher at home? Is your fridge Russian?

Yeah.

The answer is because it had been like a government contracted driven oligopoly for the last like couple decades basically. And and NASA was like amazing and pioneering but hadn't been hadn't like really applied themselves to this to this project. And like that is a thing that people forget is like the original vision for SpaceX was not start a launch company. Elon's original goal was to increase NASA's budget and he was willing to just burn a hundred million dollars on a philanthropic mission to display a greenhouse on Mars. So like shoot a greenhouse to Mars with existing rocket technology, get this photo on the front page of every paper that was like a little plant on the red planet, the first time life had trans- transferred to another planet. And he's like that'll probably increase NASA's budget and like spur this wave of exploration and interest in space. And when he tried to do that he discovered that the the space launch market was so expensive and uninnovative and hadn't been moving forward and that's actually how he discovered the opportunity to start SpaceX. It was like that's what's actually going to move this market forward. And then he sort of ended up almost accidentally as a byproduct of making that progress moving into Starlink and now moving into like solar computing space.

Yeah.

Yeah.

I want to go to some more ideas directly from Elon. Again, the subtitle of your book I think is super important.

Elon Musk's most useful ideas in his own words.

It's like when I was describing to friends like what I was reading, I was like it's 200 pages 200 pages of just Elon talking to you directly to you.

And like you're going to be able to like you can read it straight through if you want or you can just go to a certain chapter and like I think keeping this book on your desk and reading, you know, a few pages every few days is like a great idea, like a tool for your career.

Again, I like I want to hammer on this idea like he's just completely, you know, he he came to the same conclusion that most of his successful entrepreneurs did, which is like vertically integrate vertically integrate control much as your business as possible. That also ties in and and they said it wasn't like a philosophical thing for him. It was these other companies move too goddamn slow.

And I'm in the section of your book where he talks about time and this this was fascinating to me. The reason I invited you on and I wanted to have this conversation with you was like I said, I've read every book I could find on Elon. I've read countless books on the history of SpaceX. I've done 10 episodes on the guy, and yet I found stuff in your book that I've never found anywhere else, which again goes to I think how thorough you are. But I want to go to just read a couple of things and throw it at you and see if it has any thoughts. We already mentioned this. A maniacal sense of urgency is our operating principle. And he said his whole thing is like don't waste time. Get rid of all large meetings unless you're certain they're providing values to the whole audience, which case keep them short. Also, get rid of frequent meetings unless you're dealing with extremely urgent matter. Meeting free This is so good such a good observation by Elon. Meeting frequency should drop rapidly once the urgent matter is resolved. That makes me think of the observation by the guy at NASA who's observing SpaceX. Like wait, there's a problem. It looks like a a flash mob.

Like flash mobs don't stay there forever. Why are you having this recurring meeting? Walk out of a meeting or drop out of a call as soon as obvious you aren't adding value. It is not rude to leave. It is rude to make someone else stay and waste their time. This is I've double underlined several things in your book. This is one of them. The only true currency is time. And then he tells this story cuz he talks about that speed is both offense and defense. And this was fascinating story that I hear I haven't heard anybody else talk about. He says the best offense and defense is speed. The SR-71 Blackbird is a military plane with almost no defense except acceleration. It was never shot down, not even once. Over 3,000 missiles were shot at the SR-71 Blackbird and none hit. All it did was go faster. The power of speed is an underappreciated as a competitive factor.

He continues, "A factory moving twice the speed is another factory is basically equivalent to two factors."

And I love this. I have a running triage of what I do at each company. Constantly thinking, "What is the most useful thing I can do?" Which goes back to that tip of the spear meme that's tip of the spear focus. Like, what is a limiting factor? Literally get on a plane, go and go to where whatever limiting factor is, and don't leave until that is resolved. Which is another form of speed.

Like, same day.

I love that you you describe it as a Lollapalooza. I think that's what I'm trying to get across to you. Like the podcast I've been doing on Elon, the conversation I when I have with you, the conversation we're having right now, your book. It's like you have to use all the ideas cuz then combined and they can be applied they can be applied to like anything. I'm not building rockets. They're literally like right before we started recording like there's this idea of like finding a limiting factor even for like the show. Me and my partner Rob who's sitting over there. It's like we've identified there's two. We want to go faster and increase production. Well, what are big bottlenecks? We have two of them and we're attacking both of them. I was just you heard me talking to another team member right before we started recording. I was like, there's one thing that I'm, you know, not happy about. It's like we need to drill down on this over and over and over again. It's like you can use this for anything. Uh there's something that you have in your book which I read for the first time. I think I read this guy named Ashley Vance wrote this biography of Elon I think in 2013

It was the first one, yeah.

Everybody should go listen to that. David will hate it.

[laughter]

Yeah. And and you unlock an entire team and all the infrastructure value. So a thing that's underrated about Elon in my view is like this this hyper fluency across domains. Like he this is a simple example but he studied both physics and economics as an undergraduate. He has been like running his business and functionally being head of product at all of his companies. It's an extremely wide like multivariate set of trade-offs that he's looking at and he deeply understands to your point the zoomed out view of opportunity cost and compounding. So thinking about where a business could be in 10 years, where the bottleneck is today, what the burn rate is of all the money and equipment and time and attention and what gets unlocked not just today but the potential future value of that is really really interesting. And that's why I think a powerful source of the maniacal urgency is cuz he's like hair on fire all the time. It's like there's there's billions of dollars at stake every single hour of the day. Like, we can be working with such greater intensity and the rewards for doing it go up every time we're able to move faster.

Yes, the same brain.

decision. I mean, how many of the great founders of history are like that kind of sole decision maker?

There's actually over you'll see this as a as a pattern as you read. There's like a pattern of responsibility and and there's a chapter in in my book called like internalized responsibility and over and over again you'll see like the hero characters in Atlas Shrugged everybody else is sort of trying to like find someone else to make a decision or like shove risk and Diagoras is like, "I am responsible. This is me making this decision. I'm responsible for this decision. Like, if it's right or wrong, hold it against me later." And like you'll hear Elon do that in in like launch rooms. It's kind of like hey, this is like we've identified a risk factor, go or no go. And like him in that moment standing in front of like rocket worth tens of millions and like the public watching him in a launch is like running a calculation like the physics the risk, the economics, the market value, the speed of the company, when the next launch window is, and he'll be like, "Take the risk. Let's let's launch the rocket. Let's go." Like, over and over and over again so many of those decisions that he's just like solely responsible for. And that's why I think these lessons are so valuable. Like, who else has lived this kind of experience and honed these lessons to to deliver to us?

This is the highest leverage man on Earth. Like, when you tens of thousands of engineers, how many billions of dollars of capital, billions of dollars of CapEx, factories, like, you know, but he says, "Well, it makes it hard to sleep." There's always something important to go do. And he's he's constantly running a trios on what's the most important thing he can do. That's why he runs no schedule. This jet is him flying all over the world, like, whatever the most important thing is to do.

Yeah. There's I mean, there's hours of many stories of like dressed to go to a party, and he's like, "I'm just going to go look at this." And then ends up like spending the night under a rocket like working in a tuxedo.

Yeah.

I mean, the most obvious one is just like who starts SpaceX and Tesla at the same time? Like, that's insane. Um, but both of these things are important, so I'm going to like try my best to do them both. Um, the story from PayPal is like a little more generalizable, which is, you know, we have like these regulatory boxes we need to check. We have these partnership integrations we need to run. We have a product we need to build. And the same thing to do is like do one after the other, and these end up being like three-year things because you're not like wasting time building a product if you don't know you're going to get the regulatory clearance you need. And he just attacks this as like, "We're going to do it all all in parallel. Maximum risk, minimum timeline. Do it all in parallel and launch in a year. Ready, go." Um, so these things are you know, Warren Buffett's quote, "You can't get a baby in 1 month by getting nine women pregnant." It's like this sense of like how many things can you do in a row to minimize the overall timeline? And yes, it comes with additional risk, and yes, it's more expensive. But back to the fundamental currency of time being the most valuable thing, like that's actually the thing you should do. And that's a big part, I think, of why the pace of these companies, the velocity of them is so high. And over and over many great entrepreneurs talk about like how underrated velocity is. And Elon talks about it, too, not just like the pace of the company, but the team itself. So, he talks about the team as being a vector sum. And so, imagine like every employee as an arrow. How big the arrow is is maybe how high quality the employee is. Um, how long the arrow is is how fast they're moving. And then Elon's job is to like align them all on the same thing. And so, he talks about how good the team is, how aligned they are, and how hard they're working. Right? Like, that is the vector sum of the team, and that is what's ultimately going to to the progress of the company and how successful they are.

[laughter]

I didn't slip anything in

I'm not I haven't slipped anything in intentionally.

Minimizing the waste of each other's time, especially once you've identified the like exceptional entrepreneur or exceptional engineers are the fundamental constraint. The next is like how effectively are you using them? How effectively are they aligned? And this is a thing where like Elon is underrated actually as a communicator. Like he's not a super polished presenter like Steve Jobs, but especially when you read him and read a well-edited transcript of him, the clarity that he communicates with is like extremely high. And he's got this amazing habit, you know, you talk about often about how clear and how repetitive good CEOs need to be, good leaders, good founders like need to communicate super clearly and align the team. And he's got uh the power of one, like one metric that the entire team is working towards. And he's really methodical about like the beginning of every meeting, we are going to this metric better be on the first slide. It's the thing that we're optimizing for. So when he was working on autonomous cars, it was like how many miles are driven without interventions? When they're working on Neuralinks, it's like how many electrodes are you installing per minute into a brain? So there's always like a single key metric that the team is driving towards that every decision is run through. Like does it drive this metric forward? Does it drive this metric forward? And that's a really good way of aligning all those arrows and for him to sort of know that the team is working on the objective that he's identified as the most important and doing it as most effectively as they can and for themselves to all keep keep each other honest and not get distracted by these like secondary objectives.

Yeah.

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He's talking about his sense of prediction, but it's also cultivating these failures. Like he does not mind being too early. He does not mind being wrong in a specific prediction. He talks how often about he's like, "I'm rarely correct specifically on the timing of a prediction, but the direction of the prediction is almost always correct. So, I might be a year off, I might be 2 years off, and sometimes I'm five. But like being directionally correct, again, once you're zoomed out about the the heading of the future and what we're working towards is massively more important than the specific break points. To make stuff, to make important stuff, to make it as cheap as possible. Yes. This is the clip. I believe he was on the Joe Rogan podcast where I was like, I must write this book. It identified to me that he is like such a clear communicator and this is such an important idea. And I think about, you know, my my like generation of entrepreneurs and the the leaders that we had, the people that we look up to, the content we created, and that's just something that I want to install in as many people's heads as I I can. Like you you you and Toby talk about like your job is to create as many entrepreneurs as I can as you can. Like I believe in creating entrepreneurs. I believe in spreading good ideas, spreading useful ideas, spreading correct ideas, like expanding knowledge into as many people as we can. And this is an unbelievably important meme. If we all run around like creating info products or charging as much as we can while delivering as little value as you can or starting commodity businesses or worse of all, like trying to do as little as possible while getting as much as possible or legislating yourself universal basic income and never working again or whatever. Like this is not how we advance. This is not how we grow. This is not how we take care of each other. Like we have to produce stuff and build stuff. Like I think the first sentence in the book is like, don't aspire to glory, aspire to work. Like aspire to be useful. Do something that is a benefit to all of your fellow humans. I do I do agree with you. I think it's one of the most important ideas. In Max Olson essay, I love what he said. He's like, "The output of SpaceX in particular is not cheaper rockets. It's people being trained to do difficult things and taking those ideas and applying them to different domains." And I think the important thing is like making more things, not doing more deals, not going into finance. Like you have the best entrepreneur on the planet, maybe the best in history, telling you the What did he say? "There is an over allocation of talent in finance and law. Too many smart people are going into finance. We should have fewer people doing that." "And more people making stuff." That is a direct quote. "We should have fewer people doing finance and more people making stuff." Man, this is so important. Manufacturing used to be highly valued in the United States. These days it hasn't been as much, which I think is a wrong. "Making cars is an honest day's living, that's for sure. Making anything or providing a valuable service, like good entertainment, good information, these are valuable things to do." And then I'll close the section with again that that quote, which I my favorite part. "I've got mad respect for makers of things." I mean, if you think about like the the most famous or of like just go through like the robber barons where their names are known, it's just like there's only one there was essentially one robber baron that did finance and that's like Jay Gould. But like J.P. Morgan. I have a different take on that where like if you read I've read every single book I could find on J.P. Morgan. Yeah, he's an interesting character. I found his dad to be much more of a formidable individual than than he was and there's a funny thing when um J.P. Morgan dies they his size of his estate is revealed. I forgot the number it was like 50 million which is still a ton back then, but Andrew Carnegie goes, "Oh, it's a think. He wasn't even a rich man." But like Carnegie and steel, Rockefeller in oil, Vanderbilt in transportation. There's not, you know, they were building things. They were creating I mean, they were creating essentially entire industries if you really think about it. They were building the best company inside the industry, but they were really creating the industries. It's just refreshing for him to talk about how important manufacturing and building physical things that are. I mean, he says in in the book, "Manufacturing is the moat." Two things define manufacturing competitors economies of scale and technology. If you maximize your level of technology and maximize your level of scale, that is obviously going to be the most competitive situation. That's why these plants are so freaking giant. So, we've already touched a few times on the fact that he wants to take technology to its absolute limits and yep and like be operating on the frontier. You again, you did a great job of finding quotes um somebody like studies Elon for years that I've never heard anywhere else. And he was just talking about the fact that, you know, if you're developing technology, it should be pushed to maximum level possible. And then he gives an example of somebody not doing that and he's like, "It was like building F-22 fighter jets and then selling them to people who rolled them down the hill at each other. That's not the way to use the technology." The way I think about Elon is like there's no work about work, just work. So, he has this great quote, "Better to pick a path and keep moving than just vacillate endlessly on a decision." What matters to me is winning and not in a small way. Yeah, he could use his talents for evil. Did you ever read Jimmy Soni's biography of Claude Shannon? I think it's called A Mind at Play. And Claude Shannon made famous for coming up with the information theory, but he gives this great talk in this biography where he wins this award and he's like, "It's really weird that history celebrates like conquerors and like politicians." He's like, "We should actually celebrate innovators, inventors, engineers." And he gives this whole speech and that was probably like 60 years ago. Claude Shannon's an incredible example. Here's another thing we've already talked about, but I think it's really important. A lot This is Elon. A lot of entrepreneurial talent and financing goes to the internet. Other sectors like automotive, solar, and space don't see new entrants. Not a lot of entrepreneurs go into those areas and not a lot of capital goes into those startups. This is a problem because innovation tends to come from new entrants to an industry. In an oligopoly, no one is forced to innovate. New entrants drive innovation more than anything, which is why I have devoted my efforts to building new companies in those industries. He's obviously very high agency. The what I loved about that the story from one of the biographies is how dismissive everybody was. It's like, "Oh, this is just a software guy playing with expensive toys." That's how he was described. There was a lot of failed I mean, one of I find this guy fascinating cuz there's so little known about him, Andy Beal. But Andy Beal was he made money independently in other industry and then tried to do a rocket company, wound up burning I think a couple hundred million of his own money, and then the reason it was really signalized because when they trying to find a place in Texas to set up, it turns out they could lease this property that was previously used utilized by Beal, I think it was Beal Aerospace. And so it kind of like jump-started them. Another great quote that I haven't seen anywhere else. I have a habit of biting off more than I can chew and just sitting there with chipmunk cheeks. That was a great visual, yeah. Yeah. Yeah. [laughter] I mean, he like he keeps An underrated piece of him again is that he like he keeps doubling down and taking massive risk. Like, he took what seemed like that impossible pay package trade-off at Tesla that everyone was like, "Oh my god, this is never going to work." He did it. Got the biggest, you know, comp package in history because it was the riskiest, and I was doing it again. Like, he won't he'll get a trillion dollars if Tesla becomes a trillion trillion-dollar company, but nothing if it doesn't. Like, again, just all on the line over and over again. Burning the boats, putting his back to the wall, putting himself in a situation where there's there's no option but forward at max speed. [laughter] [laughter] [laughter] How do you motivate the team? I told them we have to go ultra hardcore. [laughter] Yeah. It comes straight from his like study of military history, right? Like wherever generals lead from the front line, wherever the general is, the the troops are going to fight better. Like these are Napoleon things um that he exemplified. And he he even says in there like, "Not only did I sleep on the factory floor, but he slept like outside the conference room. It's not like he slept at the factory and I've I've talked to employees there who are like they're like, "There's a hotel across the street." Like it would have been fine if he just went to the hotel and come back. His presence would have been the same. But he wanted people to see him sleeping on the factory floor. He doesn't just like not have concern for his personal comfort. He like sacrifices his personal comfort for leadership. Like for the credibility of his engineers to build trust in that. And that is like part of how he gets so much out of people is like these conspicuous, visible, tangible, obvious displays of self-sacrifice. And it it it does over and over again. He He pushes himself so hard. I mean, the the edge of sanity, he says. Like I work to the edge of sanity. Um you've talked about Talulah Riley in in the 2008 thing. He's having like a night terrors. He'd wake up screaming and puking. Like Yeah, like it is like edge of sanity is not a like euphemism for I worked hard. It is like a Herculean test. Yeah, it's a it is a very like I think a meta lesson from the book and from his life that that anybody can take away. It's It's the It is Goggins of entrepreneurship. It is you are capable of so much more than you think. What you think is your best effort is maybe 30% effort and you're actually capable of so much more. If you make full massive use of time, if you push yourself to the edge. Like I'm not advocating that this is the right path for everybody. I think like some people are Jason I don't know anybody else that could withstand as much pain and torment as he he has. I can't think of another entrepreneur living that has. If it's not a blueprint, is it an example of what's possible, right? Yeah, maximum effort always everywhere is the way I really think about him. I just came across another paragraph that I underlined I think ties a lot of these ideas we're talking about the fact that he's obsessed with speed, obsessed with control and if you're obsessed with control it's going to lead to vertical integration and then you really should just design from a blank sheet of paper and do that in a first principles way. He says there's a lot of vertical integration at Tesla. We make the battery pack, the power electronics and the drive trains ourselves. We vertically integrated because the pace we need to move was much faster than the supply chain could move. That's a great line. To the degree that you rely on the legacy supply chain, you inherit the legacy constraints including their speed, their cost and their technology. He's talking about Tesla, that exact same thing is applies to SpaceX though. But no one does it. it's interesting. Explain that to me again. So, he's trying to find out the limiting factor for xAI. Kind of relates to a little bit about like to just paying attention to the smallest details. Um, this is something that I think is really important, too. It's like most people don't consciously notice the small details, but they do subconsciously. Your mind [clears throat] takes in an overall impression. You know if something is appealing or not, even though you may not be able to point out exactly why. That sense is a summation of many details. Most of us experience this as that's ugly or that's beautiful or wow, that's elegant. Or but that but we cannot break it down why. Pay attention to little details, train yourself to notice them. When I read that section, I thought about what Steve Jobs was I think maybe the best in history at it. And he has this great way of describing this. He says that a great product is better than it has to be. Something I thought about when I was reading your book was, you know, the idea is like we're going to have a a single organizing principle to see to track like the progress on this particular product of this particular company. Yeah, it kind of breaks things down to like a singular objective or a singular something he repeats. There's a a a line in Sam Walton's autobiography, which I thought was very interesting, cuz we're talking about like, you know, Elon has not only started the companies, but now these companies are at scale. And Sam's like, "Listen, it's a human nature to overcomplicate things. As your company grows, you are going to add bureaucracy, and your job as the founder is to beat bureaucracy back over the line. And you're going to beat it back over the line, and it's going to creep back up, and you're going to beat it back over the line. That that ebb and flow will never stop." And one way that Elon talks about this in the book that I thought was interesting, he's just like, "For any company, you just ask yourself a very simple question. Are the efforts that we're doing right now, are the efforts that we're expending resulting in a better product or service?" If they they're If they're not, then you stop those efforts. It's a Yeah, I like the point that you made that like when he applies the same idea to at the product level and at the company level. So, this idea where he's like, "Please go ultra hardcore on simplification and deletion." It's like in the product and in the company. It's a great He he he repeats the same idea in different ways, too, which I thought was interesting. Like, "Eliminate what isn't necessary to solve the key problem. And so he gives an example of what what is he talking about there? Early versions of Starship didn't even have doors. We didn't need doors. We We did need to be super focused on getting to orbit. Doors were just unnecessary complexity. The first 10 ships or more, we were not going to get back from orbit. So then again, understanding that failure is built into it, like we're seeking the limits, so we are going to fail things. Uh and then then he talks about again, the genius of the fewest moving parts. It's really hard to scale something that's complex. So he says scale has value in itself. For example, the same computer that controls a tiny rocket controls the big rocket. The percentage of weight of the electronics is significant in a small rocket, but becomes vanishingly small in a big one. Well, another thing you do a good job in the book of is you give multiple examples of the same idea. And again, all these ideas relate to each other. And so he talks about like why did they move remove the landing legs? I think this is a Starship 3. Uh and he says again, here we try to think to the limit of physics. The problem with landing legs is they add mass. We have to protect them during re-entry and we have to get a giant rocket from wherever it landed back onto the launch stand. That is tricky. I was trying to think of the limit. What's the fastest way to achieve reusability? It would be to land on the launch stand. So, he talks about, you know, planes land and then they immediately take off again. That's what we're going to do with rockets. It would be to land on the launch stand. Why not just have it land on the arms of the tower it launches from? So, again, which is a crazy thing. When we talked about it first, it sounded batshit crazy. To direct quote from Elon, "To custom build a giant tower to catch the heaviest flying object ever made with mechanical arms. Pluck it out of the air, but we did it. It is an epic sight. Giant robot arms catching a giant rocket." I think the book that you wrote is really important. What I want to do is I'm going to buy a thousand copies. Uh I will leave a link down in the show notes. So, maybe the first thousand people that click that link, I'll buy a a copy of the book for them cuz I do think like what you're doing is like think about how crazy it is. Elon has a 35-year career as an entrepreneur so far or something around around that way. You spent five years and thousands of hours distilling the way he thinks about building companies and products and new technologies into a book somebody can read in five hours, 10 hours. Like that is insanely valuable. I do want to end our conversation with what I think is most important to you and I and what we're both trying to do with work. This entire reason I'm doing this new show is like a celebration of capitalism. It is a love letter to capitalism. It is, hey, you know what? If you want a role model, how about somebody that started a company that built a product maybe somebody else has liked better. That created wealth for their their their their employees. That had to create jobs. They created wealth for themselves and their family. Like these things should be applauded. And it's exactly what Elon says here. So, I want to close here. He says, "It is insanely hard to build and ship useful products to a large number of people. There's a hell of a lot of difference between a company that has shipped a product and one that hasn't. It is night and day. If you create great products and services which create wealth, that should be applauded. You increase the standard of living of the country and perhaps the world." Thanks for writing the book. Thanks for taking the time to have this conversation. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast Founders. For almost a decade, I have obsessively read over 400 biographies of history's greatest entrepreneurs searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.