Elon 如何思考

All right, so I have an advanced copy of your book, “The Book of Elon: Elon Musk’s Most Useful Ideas in His Own Words.” You just said that there are only 4 of these copies in the world. Who has them?

It’s a pretty special list. It’s Naval Ravikant, MrBeast, Ivanka Trump, and you.

Okay, so the idea for this is that you spent 5 years and thousands of hours studying Elon. He’s been a personal hero of yours for a very long time. I’ve obviously read and reread the book. I’m just going to run through a bunch of highlights and ideas that I thought were interesting, throw them to you, and see what you find interesting about them or what additional context you can add.

Something we were talking about over coffee this morning is the importance of encouraging as many people as possible. We have enough dealmakers; we need people making products and building companies. You don’t need to be doing deals all day long, and that is a main theme that Elon talks about all the time.

He says this quote in the book, which I loved: “I do not start companies with the standpoint of what is the best risk-adjusted rate of return or what I think could be successful. I just find things that need to happen, and I try to make them happen. I thought these things needed to get done. If the money was lost, okay, it was still worth trying.”

What is his mindset around what he chooses to spend his time and energy on?

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 I think is unique.

A lot of people assume that he’s money-motivated, or a lot of people are money-motivated. You hear entrepreneurs all the time talk about, “Oh, this is a great business model. This is a good place to go.” They’ll say, “I’m going to go start self-storage because the failure rate is so low.” 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, because nobody else is working on it, and I can.”

He has a great line in here. He’s like, “Don’t start a company because you want to be an entrepreneur or because you want to make money. It is better to approach it from this angle: What is a useful thing you could build that you wish existed in the world?”

Yeah. I think there’s a paradox there: The thing that you can do that nobody else is working on is actually more likely to be successful. 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 and adding a capability to humanity. You’re not just starting another commodity business of some sort.

Yeah, I think it’s important to point out the context in which he started SpaceX and Tesla.

He’s been thinking about these problems since he was in college, literally—even younger, as a kid. He was very influenced by science fiction and thinking about things that are possible.

He talks about engineering as magic. He’s like, “If you build something that couldn’t previously exist, that’s like being a magician.” Who wouldn’t want to be a magician?

There’s a whole section—not just a chapter, 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 the money I need.” The constraint is not capital; the constraint is truly excellent engineers.

Does he go into detail about how he finds truly excellent engineers?

Yeah. His interview process—I mean, a lot of it just comes from him being a really good engineer himself, right? He looks for evidence of exceptional ability, he says. He looks for people who’ve really solved a specific problem, and he asks detailed questions about a hard technical problem that they’ve solved in the past.

He’s got a good bullshit radar. You could ask those same questions, or I could ask those same questions, and not have the same ability to scrutinize and determine who’s truly excellent. But he does because he’s so close to all this all the time. That’s his advantage.

He really biases toward hiring young, unproven engineers and then giving them a shocking amount of accountability and responsibility. That’s part of the benefit of the iteration rate of these companies: He can figure out who knows what works.

It’s like in wartime, how you get these skip-level promotions. You just find competent people and give them more responsibility as fast as you can. That’s how these companies operate.

I was just talking to Luca Ferrari, who’s the founder of Bending Spoons, and he said something that was interesting. He wants to hire young interns or young people.

Yeah.

And he says, “Once you find somebody competent, you just saturate their capacity.”

Yeah.

Which I thought was an interesting description.

Yeah.

This idea of finding people—it’s better to have somebody who has no habits than bad habits, so recruiting from existing incumbents.

Yeah.

That’s something that reappears throughout the history of entrepreneurship.

Another thing that reappears throughout the history of entrepreneurship—maybe my favorite maxim of all time from the history of entrepreneurship—is that excellence is the capacity to take pain. Elon has a great way of saying this. He says, “My way of dealing with mental problems is to make sure you really care about what you’re doing and take the pain.”

Yeah. I think it’s so funny that the most productive person on Earth does none, none, none of the meditation, journaling, or morning routine. He wakes up, picks up his phone, and goes to war every day. That’s his routine.

Goes to war.

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

Yeah. We were trying to come up with any sort of analogous founders, and the closest thing we could come to is Napoleon. He’s not analogous to other founders or operating companies with the standard best practices of today.

He is moving around constantly, moving people between companies, moving the fronts, looking at supply lines. It is a very unique operating situation. He fired his scheduler because he’s like, “I want complete, perfect control of my time. I want to be able to work on the most important thing immediately. I want to be able to move whenever I want to solve the problem physically.”

That’s one of the big tenets of his productivity. I think there’s so much to be said about doing the right work at the right time. It is a multiple-order-of-magnitude productivity increase, not a percentage.

Say more about moving around resources and people.

One of the underrated advantages is that all the time, you see problems getting solved by people from other companies. When there was a real constraint on Raptor engine productivity at SpaceX, the engineer who was in charge of that—a young, really talented engineer—brought in the head of production from Model 3 and walked the line with that guy.

He was just sobbing because the aerospace best practice, even at SpaceX, was way, way, way, way behind how they thought about volume production.

Wait, who was crying?

The guy from Model 3. He was just like, “How is this your most efficient thing? There’s so much room for improvement,” because of what they learned on Model 3 production, which is, “Produce or die” very, very quickly.

That’s why SpaceX has reached this volume of production that nobody in aerospace ever has.

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 you and I both love, and we actually printed it out. There are a bunch of notes in front of us.

He calls these memes that spread through Elon’s companies, and at the end of the essay, he has these 5 memes.

No. 1 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 this section: This is true at every level. Each SpaceX site has a single dominating objective, right, to 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.

Yeah. That essay is excellent, and it asks a really important question that a lot of people have talked about, one that this book is really an answer to: How does Elon get so much done?

This essay and this book are really an examination of why SpaceX is so special. How has nobody been able to replicate what they’ve been able to do? The path that they’ve been on has been proven for years. There are lots of people with more engineers and more money, so why can’t they catch up? They’re not even really getting closer. There have been more mission failures at Boeing than SpaceX. This is not good.

This is unpacking that, and the deepest answer is the culture, the habits and routines, the selection of the people, and then the memes that spread through the organization—how they work and how they attack problems.

I think that is a great description of the whole organization learning to operate like Elon does, which is a combination of 2 extremely important skills: Find the most important thing to work on, and then absolutely attack it. What’s the limiting factor? Go apeshit on it immediately.

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”?

Oh, he’s got some absolute killer lines about this.

“I don’t ever give up. I’d have to be dead or completely incapacitated.” The one you just read about was, “My way of dealing with mental problems is to just care about what I’m doing and take the pain. Come hell or high water, we’re going to get this done.”

There’s so much unlocked when you have a mission that you know you would never give up on. So few entrepreneurs, I think, would make the bets that Elon has made because they’re not truly, purely as ideologically and philosophically motivated as he is. To think that, on his third company, Tesla, and fourth company, SpaceX, he started with 200 million dollars and put his entire generational wealth and reputation—maybe even more importantly—on the line is incredible.

How many entrepreneurs do you know who have risked going back to zero and public humiliation once they reach a nine-figure net worth? He’s the only one I can name. That happened at the lowest of the low points, and he was all in before he asked anybody else to put in any money: 200 million dollars into his own companies.

That ability to not give up and not even think about giving up, to burn the boats and keep pushing and keep pushing, comes from this maniacal devotion to the mission because it is a truly important mission. Getting us to a new planet could mean the difference between consciousness continuing or not continuing. If you are truly in on that mission, of course it’s worth risking public humiliation. Of course it’s worth risking 200 million dollars. Of course it’s worth working 100-hour weeks, living in the factory, recruiting anybody you possibly can, demanding the most of them, and firing anybody who feels like they’re slowing down progress.

It’s a really incredible test, actually, to give yourself that. If you can imagine giving up on what you’re doing, should you even start it? I know you talk like this all the time. You’re like, “Death is my exit strategy. You’ll pry this mic from the cold, dead hands.” You are unquestionably on the mission of your life, and that’s a really interesting question to reflect on.

He talks about burning the boats constantly. And he did this from day one.

Yeah.

Even with Zip2, I do think there is some kind of very advanced understanding of human nature. If you truly are putting your back against the wall and not giving yourself any options, you will come up with ideas or push yourself to an extreme in a way that you just can’t if you have a plan B.

It’s like, “Oh, if this doesn’t work out, I have a plan B.”

Yeah. I love Jeff Bezos’s quote on this. Bezos is like, “The plan B should be to make plan A work.”

Yes. I think Schwarzenegger says the same thing. Zip2 is a good example. Most people don’t remember that he started a company at around 20. He was a little older, actually, but he was going all in on it unbelievably hard. He was doing these insane surges and setting deadlines and things.

He set their initial launch date for PayPal on Saturday of Thanksgiving weekend, and he was like, “Get your ass in this office. We have a deadline.” They were like, “Why do we have to launch on Thanksgiving?” He said, “Because I said so. We’re launching on Thanksgiving weekend. Get in here, work 24 hours, and let’s get it done.”

It’s been an operating principle that is an outcome of who he is and has been consistent through all of these companies.

He talks a lot about fear in the book—or you profiled him in the book about fear. He says, “Feel the fear. Do it anyways. Look fear straight in the eye, and it will disappear. The nature of fear is that people don’t look at it. Look at it directly, and it will be gone.”

These are direct quotes from Elon: “When something’s important enough, and you believe in it enough, you do it in spite of fear. It is normal to feel fear. If you don’t feel fear, you definitely have something mentally wrong. Just feel it and let the importance of your mission drive you to do it anyway.”

I think the purpose-driven nature of these businesses is an 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 to be pushed.

How many people go into their jobs and think, “God, I want this company to just wring all of the potential out of me. I want to give everything possible to this mission”? It’s not what most people think, but it is how the people who go work at these companies think.

That’s an incredibly powerful thing to drive the success of the company, but it’s also great for the people who want to opt into that environment. That’s why Tesla’s kicking the rest of the auto industry’s ass, and will continue to.

Yeah, that was interesting when I asked you, “What do you hope people take away when they buy the book, read it, or give it to somebody else? What’s the point? What do you want to happen at the end?” What was your answer to that?

I have many hopes for this book, but the overarching one is that I hope this book can generate 1 million Musks. I don’t mean follow his life blueprint. I don’t mean start an electric car company, but I mean figure out a unique problem that nobody else is working on and dedicate your life to solving it.

Find a thing that adds a new capability to humanity. Build a new thing. The biggest lesson of Elon’s life to me is that we are all capable of so much more than we think.

That is what you said to me. He’s special.

Yeah.

But he’s not superhuman. He’s just figured out how to get an unbelievable amount out of himself. And he had a lot of disadvantages. A lot of people listening to this are going to have a much better hand to start life with than Elon did.

Explain some of the disadvantages, because a lot of people think he was privileged. That’s something you’ll hear a lot of his critics say.

Yeah. I don’t think that’s a particularly well-informed take. 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 was, by all accounts in the Isaacson biography, a really difficult person to deal with. From accounts from Kimbal and Elon, he was a narcissistic, abusive, manipulative, grandiose…

I think I was going to say compulsive liar.

Compulsive liar, fabricated a lot of things.

He had brilliance, but he was also really dark. He was unreliable, and he would lie to the kids all the time. At 8, Elon would stand in the living room and be berated by his father for hours. It’s not just a mean comment. His father would scream in his face and call him worthless, useless, and stupid as a young boy.

Imagine the fuel that fills you as a kid. Elon figured out how to make the demons pull the plow. He turned that into something really productive and really positive, for the most part.

There’s another case where he was beaten up very badly. This wasn’t just a lost fight; he was stomped by a gang of kids and was in the hospital for about a week, with an unrecognizable face. His dad sided with the bullies and called him stupid for picking a fight. That is an unbelievably brutal place to start.

I think some of these rumors about how privileged he was actually come from his dad lying and trying to take credit for some of his success. They’ve had a strained relationship, and all kinds of weird stuff have happened over the last couple of decades.

Elon arrived as an immigrant in Canada at 17, paid his way through college, graduated with student debt, and dropped out of Stanford graduate school to start his first company during the early Internet boom. He basically made—I forget the exact first number—

22 million.

He says it’s a great line in the book because they sold Zip2 for 307 million dollars in cash to Compaq Computer.

Yep.

He goes, “My bank account went from 5,000 dollars to 22 million and 5,000 dollars.”

Mm.

He’s standing at the mailbox holding this check, being like, “Wow.” That paid off his student debt. He made his first fortune by himself, and in that era, he said he couldn’t afford an apartment and an office, so he leased an office and showered at the YMCA. He worked constantly. All he had was a laptop, some books, and student debt.

That’s his starting place, and he earned his first seed money from Zip2. Most of what he made from Zip2, he rolled right back into starting X.com the week later, which became PayPal. There’s a great line in the book—I think he might have been in college—where he figured he was either going to be broke or wealthy, but nothing in between.

Yeah. And he rolled those dice a bunch of times. You do a really great job of breaking down the ideas, essentially, under these headings of maxims, and you know I’m a sucker for maxims.

One of them actually came from Founders Podcast, which I appreciate.

Yeah.

And it says, “If you know your business from A to Z, there’s no problem that you can’t solve.” Why did you apply that to Elon?

I started with the full list of maxims, according to me, which is 107. I went down the list and checked all the ones where I felt like Elon was a good example, which was about 75. Then I went down again and asked, “What are the ones that he could be an iconic exemplar of?” There were 15 or 16. I think that’s a good testament not just to Elon as a well-rounded entrepreneur, but also to the ability of the maxims to describe the traits that become an incredible entrepreneur.

Mm-hmm.

The business from A to Z—I think Sam Zemurray is the one who best exemplifies this, the Banana Man.

Yeah, the book, so people know, is called…

Yeah. “The Fish That Ate the Whale.”

“The Fish That Ate the Whale.” It’s one of my favorite books. It’s by Rich Cohen. I’ve read it about 3 times.

It’s an incredible book of high agency and deep expertise. This guy was running a banana empire from the farms in Honduras and Guatemala.

Honduras or Guatemala.

And stuff. Elon is the modern manufacturing example of that. He lived on the line. He goes to the problems. He has a really deep understanding not just of the product, but of the physics behind the product. There are 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 get to that failure point and find what the true, most elegant, most simple, most efficient version of the product could be.

Can you give us some examples of that?

One is the thickness of the stainless steel welds on Starship. The design engineers gave one number, and then he went and talked to the guys actually doing the welding. They were saying, “We think maybe 4.5 millimeters would be getting too sketchy.” He said, “Let’s try 4 millimeters.” Four millimeters worked.

Even the move to stainless steel was a great example. Most rockets previously had been made with carbon fiber. It’s more expensive, harder to work with, and large. He had this intuition and knew that stainless steel gains strength at low temperatures. Once the rocket is actually up in orbit, it’s stronger, which is an easy thing to forget. He’s pushing people over and over again to use things that are cheaper, easier to work with, and reduce the moving parts.

My summary of Elon is that he has David Goggins-level intensity, Richard Feynman-level unconventional technical brilliance, and Napoleon’s strategic genius and insane bias to action. Those 3 traits combined make him incredibly singular, along with the volume of time that he puts in.

Even if you put in that amount of time and start to know your business from A to Z, without that deep technical intuition or sense of the fundamentals of physics and materials, you couldn’t make the calls he’s making or push on the things he’s pushing. Of course, he’s not always right, and of course, the engineers are always the ones doing the highest volume of the real work. But as you say, 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 a really keen sense of this. I love the line so much: “Failure is essentially irrelevant unless it’s catastrophic.” He pushes these things to the breaking point, pushes the materials, and 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 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 an inefficiency in there that we’re going to replicate 10,000 times. I want to fail 500 times on every single design decision so that I know we have the most elegant thing as we scale up and ramp up.”

Yeah, I think one of the things that will surprise people is just how much—I said this in the episode I did on the Isaacson book—half the book is just him yelling at people to simplify and delete.

Yeah.

There’s a maxim for this: genius has the fewest moving parts. You see this with that meme of—I think it’s the Raptor engine design. There are 3 different ones over time. It starts as a convoluted mess and gets to this simple, beautiful simplicity.

He’s like, “We can weld stainless steel in a tent.”

Yeah. He’s literally building these rockets in a tent in a parking lot, which is a very Elon thing: let’s do just what we have to do to make progress on the product.

I want to linger on failure for a second because I think it’s a really underrated piece. Some of these maxims and taglines that Elon uses, if you put them next to each other, show this pattern. He’s designing these organizations to create small failures as quickly as possible.

If you’re not adding back 10% of the things you removed, you’re not taking out enough. That’s a mandate to go create something that doesn’t work, figure out why it didn’t work, and add that little bit back in so that we know it’s the most efficient version of the design.

When he sets deadlines, he says, “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.”

People have this inherent bias, especially if your job is on the line, if you want to look good in front of your peers, or if you just want your company to work: you don’t want to be seen as failing. Engineers in general are like, “I don’t want my product to fail. I don’t want my part to fail.”

And so much of what these cultures and maxims reinforce is that you should be failing. He says, when he hires people, “If you can’t tell me the 4 ways you fucked something up, then you weren’t the one doing the real work.”

I was literally searching for that quote right now.

Yeah. It is a great one. All of those ideas line up behind this: if you’re not engineering your organization to have these small failures, you’re creating fragility and inefficiency in the global system if you don’t learn to fail along the way and iterate extremely quickly toward a better product.

I had a conversation with Michael Dell—it’s one of the first episodes of this show—and he was talking about that, too. He said, “Listen, when you’re inventing a new business using new technology and a new business model, there’s no playbook. You can’t go read a book that says, ‘Here’s how you do it.’”

He said, “You can’t even hire people from adjacent industries, because they’re just going to do it the way they used to do it.”

Yeah.

So he said, “The only way to do it is to experiment it in…” I think he used the words “intuit yourself.” He said, “You have a hypothesis, and then you test the hypothesis.”

The point he was making was that you want mistakes. You actually want to make mistakes, because that’s the way you learn.

Yeah.

But you want to make them small, and you don’t want to make the same mistake over and over again. Again, that’s an echo of what you were just saying about Elon.

I guess this ties to the part of the book that’s right in front of me, where it’s clear that in Elon’s companies, he wants to use reality as a validation tool. He talks about how getting to the truth is really important. He says:

“In business and personal life, wishful thinking causes a lot of mistakes. You have to ask whether something is true or not. Wishful thinking is a natural human tendency. It is a challenge to tell the difference between believing in a new idea and persevering or pursuing an unrealistic dream. The real test of any startup is how well it responds to adversity and adapts. When most things start out, they don’t make much sense, but as long as you adapt quickly, you can make the company work. Being tenacious and super focused on the truth is extremely important. You should look for feedback from all sources.”

The iteration toward reality as the teacher was another great element of Max Olson’s essay, and Naval is super articulate about this when applying David Deutsch’s ideas to company building. He’s like, “Your goal as a company is to discover new knowledge, which means interact with reality and then instantiate it into a product.”

This cycle of iteration and experimentation is how you check against reality. This is how all knowledge is created. It’s gene mutation and selection. It’s scientific hypothesis and testing. But people don’t usually think about their organization in terms of how much new knowledge is being created, how many experiments they’re running, or how quickly and cheaply the failures can be created.

Yeah, here’s another great line: “If you have beliefs that are incompatible with the rocket getting to orbit, the rocket will not get to orbit.”

“Physics is a harsh judge.” Then I love this line. He repeats it over and over again: “Physics is the law—”

Yeah.

“Everything else is a recommendation.”

Another branch off of that is that physics doesn’t care about your feelings. That is a line he repeats over and over again with people who are like, “How can you be so quick to judge people or to fire people or to get rid of people on the team?” And he’s like, “We have 1 test. We have 1 bar to clear: Does the rocket fly, and how much payload can we get to orbit? There is 1 metric that we’re optimizing for, and I will do what I have to do to march us toward that goal, to clear that bar.”

I mean, this is where the Asperger’s comes out in a truly advantageous way. He says the need to be liked is this huge disadvantage that so many people have, and he does not have that. He straight-up says, “I do not have that weakness.”

Peter Thiel has an interesting observation about that. He’s like, “Why do so many of the successful tech founders seem to be somewhere on the spectrum? Why do they all have this sort of biological advantage in dismissing the opinions of others? What does that say about our society, that that’s a skill you need to have in order to be an innovator, build something new, and build a great organization?”

So, I guess that leads into the next thing I was going to ask you about, which is the algorithm.

Mm-hmm. Which is the first step of the algorithm? The algorithm is what?

Question requirements. “Make your requirements less dumb” is specifically how he says it a lot. There are so many requirements.

Yeah. Explain what he had to go through—how he learned.

The most common error of a smart engineer is to optimize something that shouldn’t exist. There are many places that requirements come from. Sometimes they come from inside the organization, sometimes they come from a team, sometimes they come from legal, and sometimes they come from a design partner.

At NASA, if you’re going to shoot up a rocket and the capsule—the vehicle—is going to dock with the space station, they have all kinds of requirements about your latches and 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. He’s like, “So much money, time, and effort are wasted trying to accommodate requirements that don’t make any damn sense in the first place.”

The first thing to do is shorten your list of design requirements so that you’ve got the maximum possible space to play in. There are so many stories. The latch is a true one that’s in Max’s essay. The requirement said you had to buy this specific Omni latch from an aerospace company, made of these materials, and it was super expensive. They questioned that requirement and said, “All right, well, as long as it does this and this, it’s fine.” So they bought off-the-shelf parts from McMaster-Carr, and they did the job just fine. They were 2 orders of magnitude cheaper.

There are also times when the requirement is legal or regulatory. He’ll assign somebody and say, “Go.” It’ll take another year or a year and a half to get this permit, and he’s like, “Assign somebody. Go fly to this office and sit in this office until you get permission. Sign off on this sheet. Come back. Don’t come back without a signed sheet, or you’re fired.”

That is a way to question a requirement—to get a dismissal or a waiver of the requirement—because it doesn’t make any sense. He says, “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 for the cheapest possible price.”

What’s the second?

Delete, delete, delete. Simplify. The canonical line about this is, “The best part is no part. The best process is no process.”

I don’t know the exact number, but the number of times combining parts has happened over the course of the Model 3—or eliminating them—is enormous. I think when he started, there were over 10,000 parts, and that has come down steadily as he’s combined parts.

Every time 2 things need to be attached, not only are there 2 things that need to be attached, but maybe they need to be glued, screwed, bolted, or riveted. The way the metals interact needs to be managed. They need to be assembled, and then there’s a tolerance that could change whether other things fit. He’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. The best part is no part. Simplicity delivers both reliability and low cost. Between those 2 things, you have to delete as much as humanly possible. He goes to great lengths to combine parts and simplify things. He says, “Go ultra-hardcore on deletion and simplification.”

That’s how you see that Raptor meme where things get more and more and more simple. That’s how the Model 3 has gotten simpler, more reliable, cheaper to produce, and better. Maybe the most famous example of this is his decision to cast the entire front third and the back third. He got that idea from toy cars. He’s like, “Toys are cheap, reliable, and scale quickly. How do they make them? Let me steal an idea from this industry.”

It turned out that nobody had ever made casting machines that big.

Okay, so this is an important part—

Yeah.

He combines these ideas together. We just talked about—

Yeah. First-principles thinking.

Yep.

He basically popularized it. Now everybody talks about it. Very few people actually do it. But in that book, I clipped this from one of my episodes—

Yeah.

I thought it was so interesting: he was at Tesla, playing with a little toy Tesla.

Mm-hmm.

He talked about learning from LEGOs and how precise it has to be. Then they’re like, “Why can’t we just cast the entire—I think—underbody?”

Yeah.

And he was like, “Because there’s no casting machine that’s that big.” He breaks it down: “How many companies make casting machines?” I think there were something like 6 in the world.

Yeah.

He’s like, “Well, let’s go talk to them about it.”

Yep.

5 said no, 1 said maybe, and Elon goes, “I took that maybe as a yes.”

Yeah.

And it greatly simplified the production. There’s another story from the books, and I think he talked about this on a couple of podcasts, too, when they were trying to solve production hell at Tesla.

Mm-hmm.

They had to literally knock a wall out of the side of the factory. They were throwing out so many robots and disposing of them so fast, they knocked a huge wall out of the side of the factory and just threw out—I forgot how many—hundreds of robots.

Yeah.

He found weird shit like, “Hey, this 1 robot picks up this piece and hands it to another robot. That robot then turns around and hands it to another 1.”

Yeah.

“Why doesn’t this robot just hand it to that robot? Why is this guy in the middle? It adds complexity.” He’s like, “Just rip it out of there.”

Yeah. And that’s in the production system. This is why “automate” is the last step of the algorithm.

Because he used to do that first, right?

Yeah. His original vision for Tesla was, “We’re going to automate everything. This is going to be like a pure-robot, autonomous production line.”

That was a huge mistake. They didn’t have it refined. They didn’t have the design refined. They didn’t have the manufacturing design. They hadn’t questioned the requirements, and they hadn’t deleted enough parts. They should not have automated until all of these other steps had been gone through.

He said there were many times when he did every step in exactly the reverse order. Something was automated, then they tried to make it faster, then they optimized it, and it ended up getting deleted because nobody had questioned the requirements. He’s like, “That’s why we do these things in this order over and over and over and over again.”

And, oh, there’s a great story about Starlink. Starlink was a mess, right? It was 10 times too expensive, and they were building 1-tenth as many as they needed—2 orders of magnitude off from success.

He’s like, “I’ve had it. I’m fixing this. This is now the bottleneck.” He grabs Mark Juncosa, 1 of his 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 of engineers that he trusts, and they fly up to Seattle.

They fire the entire Starlink leadership team and sit down in a war room, which I think is an underrated tactic. They start running the algorithm. What are the first principles of satellite design? How simple can we make this thing? Why, why, why, why? Why does this exist? Why are these 2 things so far apart? Why do we need this much energy? Why do we need this manufacturing process?

Over the course of a few months, they make this 2-order-of-magnitude leap. Mark Juncosa and these people, who had never encountered this design before, just applied the algorithm and worked with maniacal urgency toward this extremely high design bar. They created this product that, if it were a standalone business, would now be worth tens of billions of dollars.

I did this episode of Founders called “How Elon Works.” In the description, or maybe even in the intro, I said, “Listen, I’ve read 400 of these f***ing biographies. I can usually find a historical analogy to an entrepreneur living today, where that person was very similar to this person maybe 50 years ago or 100 years ago.” I think Elon’s singular, and I think I said he was singular, living or dead.

Yep.

I can’t really find a historical analogy to him. But if that’s the case, and he repeats it—this is a direct quote. Well, no, it’s a paraphrase of a quote from Elon in that book where he’s just like, “I would say the algorithm so much, and I repeat it so many times that people in the meeting would start to be able to predict what’s coming out of my goddamn mouth.”

Yeah.

So why don’t we think about it? He’s a singular character in the history of entrepreneurship, and he repeats this over and over again. Maybe we should spend a little bit more time thinking about this over and over again, to the point that was a great illustration of the story. I think the maxim here is: repetition is persuasive.

Yes.

You have to repeat. One thing that is recurring throughout a lot of these founders is that they had to identify a handful of principles. If we go through all the notes, all the books, everything we have in front of us, it’s not 25 ideas. He’s got a handful of principles that he uses over and over and over again, and I love this idea that he built. It’s almost like another form of a meme. It’s like this operating system—

Yeah. Yeah.

—where there are 4 steps, and we can apply it in space, in cars, in tunnels, and everything else. Let’s go to step 3.

Step 3 is simplify and optimize, which I think is what most engineers just do as a standard. But that is the thing that 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 a requirement from legal. There’s a requirement from Jan in legal, so you can go ask her, “Why does this requirement exist? Please explain it very thoroughly. Can we throw it out?” And so many times, he found requirements that were created by an intern who left the company 2 years ago, or by a department where nobody in the department actually agrees with the requirement. Once you get there, it’s the very normal engineering work of figuring out the trade-offs and optimizing the thing.

Yeah. There’s a great story from Tesla where you had the battery pack, and then it had something like a layer on top of it.

This was for sound, and one part of Tesla thought it was for sound, while the other thought it was for fire prevention. Am I remembering this correctly?

Yeah, the fire prevention team thought it was for sound baffling, and the sound team thought it was for fire protection. Once that was established, they tested it. They put a microphone in the car, and nobody could tell the difference. They were like, “Delete.”

Okay.

But it was the bottleneck at that particular time.

But again, it’s like this department said this and this department said that.

Yeah. They’re not agreeing.

Yeah.

But then I think, not to skip over this part, because I think it’s the most important part, Elon’s solution was very simple. It’s like, “Is it louder inside the cabin if this thing isn’t here? How are we going to figure that out?”

Yeah.

Well, let’s just put a f***ing microphone in and test it.

Yeah.

We’ll test it, and 6 hours later, the part is deleted. They pulled more robots off the line, and it sped up, which increased the throughput of the entire production line. It was millions, maybe tens of millions of dollars’ worth of a decision. He says there are times when a single half-hour meeting has added $100 million to the enterprise value of Tesla.

Every single minute of thinking is worth $1 million—a high-quality minute of thinking. These tools are the things that he does in those minutes that actually have that kind of effect. To your point that this is the singular greatest entrepreneur of our generation, this is the thing that he talks about most often. Maybe it’s useful.

Well, I hadn’t made that episode in probably 6 months, and I was listening to it again to prepare for this conversation with you. I was like, “I should listen to this every month.” It’s an hour and a half. It’s an hour if you’re at 1.5× speed, or whatever it is. It’s just, “Oh, I forgot some of these ideas.” I think that’s where—

Yeah.

—the repetition is so important.

Yeah. I mean, that’s why I really design all my books to be read and reread. I want them to be handbooks and reference guides, and I love when I see a beat-to-shit copy that’s been in and out of somebody’s backpack every day for years, dog-eared and flagged, with highlights on every page.

These ideas—repetition doesn’t spoil the prayer. Repetition is persuasive. 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.

Are there any other interesting stories that you can think of that come from the 3rd step of the algorithm?

I think the 3rd step is the least interesting, honestly. I think questioning requirements and deleting are probably 80% of the lift. Simplifying and optimizing, accelerating, and automating are the things that people leap to naturally, and the algorithm is really designed to get them to sharpen the axe before they start chopping down the tree—or be sure they’re chopping down the right tree. Be sure chopping down the tree is the right next step at all, anyway.

What’s step 4 in the algorithm?

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

Is there anything else to it?

Not really.

So just go faster.

Accelerate.

He has that line where—what did he say? “A maniacal sense of urgency is going to be our operating principle.”

Yeah. The example here I would use is probably the tunneling machines. He’s like, “If you want to accelerate tunneling…” The machines that are currently tunneling, even in state-of-the-art tunneling, are nowhere near their power or thermal limits, so just crank them up. Make them go as fast as they can.

The interesting thing about when everything is actually automated is that how fast the robots can move is a much higher limit than how fast humans can move. If you actually accelerate everything, he’s been talking about this a bunch with AI. If you can remove the human element and then automate everything, you can do it to a degree that is superhuman in speed.

You have a great way to describe this in the book. I’m just going to read Elon’s description of step 4 from the book, which I love.

Mm-hmm.

He’s talking about step 4: “Then and only then, step 4, accelerate cycle time. Once you’re moving in the right direction and moving efficiently, you’re moving too slowly. Go faster. You can always make things go faster. But do not go faster until you’ve worked on the other 3 things first. I mistakenly spent a lot of time accelerating processes that I later realized should’ve been deleted.

“Speeding up something that shouldn’t exist is absurd. If you’re digging your grave, don’t dig it faster. Stop digging.”

Yeah. This is in the “Designing the Organization” section of the book, and I feel like it is really underrated that he applies the algorithm to his own companies. He minimizes the distance between the designers, the engineers, and the manufacturing engineers, and gets rid of as much stuff in his companies as he possibly can. He makes the companies go faster. He questions the requirements of the companies and the structure themselves.

You can see the flaws in the organization in the product. If there’s a battery team building a box for the battery, but there’s a chassis in the car right above it, they’ll put a lid on the battery because it makes sense to design a complete battery with a lid. But there’s a car on top of it, so you don’t actually need a lid on the battery case. You end up with a box in a box, where the most efficient thing to do is have enough interaction between all those people that you’re not duplicating parts, responsibilities, or materials.

If you allow individual pockets to make too many optimization decisions, they’ll optimize for their own tiny unit, but not for how the unit exists as part of the broader system.

You’ll have a bunch of disparate metals that have to come together or a bunch of insane design decisions that don’t make the full system optimal as a whole product.

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 or process. I’m going to throw it over the wall, and you can engineer and manufacture it.” And he’s like, “No, the engineer and the manufacturer should be able to call our designer and be like, ‘Why did you do it this way?’”

Yeah.

Going back to the iteration speed and the number of failures that you can correct and identify, he had their whole team move their desks to the Raptor production line. As they’re sitting there designing or working on whatever it is they’re working on, they’re watching the machine—the engine—get manufactured right next to them. They’re dialoguing. The feedback—the bandwidth between the people actually moving the atoms and the people designing the product—is super, super, super high.

Traditional aerospace is like designing a vehicle that then gets parted out, which goes to subcontractors, and those subcontractors delegate it to subcontractors. You have to go 5 companies down before you find a guy who’s actually cutting metal or touching the material. Then it goes all the way back up, and everybody’s adding complexity, confusion, overhead, cost, and profit.

That’s part of the reason why SpaceX was able to do something that was orders of magnitude more efficient and cost-effective. That’s before you even get to the fact that they’re iterating so quickly on the design that they’re removing all this unnecessary stuff.

All right, let’s go to step 5. I think I mistakenly said there were 4 steps. I’ve done 10 episodes on this guy. I should know this by now. So, let’s go to step 5.

Step 5 is to automate. It is the Holy Grail, but you want to be sure you’re automating the right thing, because automation itself—the process of creating the automation—is expensive and difficult to adapt. So yes, things should be automated, but they should only be automated after you’ve rigorously applied the other steps to the algorithm all the way through.

You just mentioned something I think is a huge theme that runs throughout his entire career: that he wants to control everything, always. Can you talk about why that is so important?

Yes.

Well, he had a tough experience in the early days of Tesla, I think, sharing responsibility or power over this company. The beginning of Tesla was a messy experience. He was the main investor and chairman, but he wasn’t actually CEO. He spent so much time getting deeply involved in the product and trying to drive a good outcome there—one that reached the bar he had for his vision for electric cars—that it just didn’t really work in the long term. The company was heading down this tough path and wasn’t really making the kind of progress that it needed to.

And so he talks about his reluctance to step in as CEO of Tesla. He’s like, “If I didn’t do that, the company would’ve died. I provided most of the money. I’ve been as involved as you could be in contributing to the product.” But eventually he’s like, “If this is going to work, I’ve got to take control of it, and I’ve got to go all in on it.”

Yeah, he talked about the mistake of trying to use the Lotus chassis, right? I think that’s what it was.

Yeah.

The Lotus chassis, I think it was.

Yep.

And he’s like, “We should just design this from a blank sheet of paper.”

Yeah.

It is a really good lesson, and actually a big theme of his is: go for the strong form of the technology. Don’t try to adapt what came before. Try to think in limits, go to first principles, and build a true leap in technology that totally leaves behind the constraints of the past.

Well, I think it’s important to hammer on this point, though, because it’s obvious if you read—if you just study history’s greatest entrepreneurs—they all wind up in the same place.

Mm-hmm.

It’s as vertically integrated as possible.

Yeah.

They’re going to control as much of their business, their raw materials, and everything. What I couldn’t help but notice is this is how the car industry started.

Mm-hmm.

Henry Ford made almost all his parts himself. Obviously, they were making them by hand. This was before he figured out how to mass-produce a car, and that was his main idea.

There was no auto supply chain.

No. You start doing it, and then you have control. He’s also obsessed with control.

Yeah.

Yeah. He wound up buying out his investors. I think in 1919, Henry Ford owned 100% of Ford Motor Company. It was the equivalent of you owning 100% of a $20 to $40 billion company today. He was so obsessed with control. He bought a railroad. It’s like, “Not only do I want to control every single design and part that goes into the Model T and all of my cars, I want to make sure that all those parts get to me, and I want to control the logistics of them getting to me.”

Yeah.

And what’s fascinating about Elon is he just went and bucked the trend of the American automobile industry at that time, which was subcontractor after subcontractor. He talks about this over and over again. They’re just not even making their own shit.

Yeah.

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 is so important is not only do you have control, but it’s how you make a cost-efficient product. Because if you’re having subcontractor after subcontractor, I think when he did the initial calculation, he wasn’t calling it the idiot index, which we could talk about.

Yeah.

But at the time, with the rockets, he realized that 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—this subcontractor actually hired another subcontractor who hired another subcontractor before I get to the actual person,” like you said, bending the metal or making the thing.

Yeah.

There’s actually a very important meta to that, which is he has a completely different vision and set of incentives. The whole aerospace industry to date had basically been supported by cost-plus contracts from the government. So what is their incentive? Their incentive is to spend as much f***ing money as they can because they make a percentage of the budget, and they’re not actually incentivized to succeed.

Well, maybe they’re incentivized to succeed, but they’re not incentivized to succeed economically, and they’re not necessarily incentivized to succeed on the original deadline. What Elon did was go to the people actually awarding these contracts and say, “We want an outcome-based contract. I want to be incentivized to drive down the cost. I want to be incentivized to hit the deadlines.”

He wanted to compete at low cost. For all the talk that happens about him doing things that have never been done before, the things that he’s doing that have never been done before are because he drives costs down. And he drives costs down because the vision is not to make as much money as he can. It wasn’t to start a new aerospace company that’s as profitable as possible.

It was, “Get us to Mars,” which means drive down the cost of getting a payload off Earth as low as possible. That means I want to be incentivized to build a system that is as low-cost as possible. Once he did that, he did start winning all these contracts and getting actual outcome-based contracts, which, by the way, is better for the government and better for taxpayers.

That is a heroic thing to go in and say, “I know I could get paid X to do mediocre work or to do marginally better work, but I actually want to take the risk. I want to burn the boats. I want my back to the wall. I want to know that we have to clear this threshold that nobody has ever crossed before.”

“And I want to go tell my team that because that’s how we’re actually going to achieve this objective that everybody thinks I’m crazy for setting, which is get us to Mars, which is make this massive, orders-of-magnitude leap in the efficiency of the human engineering system.”

It is such a different approach, and that goes all the way back to his sci-fi dream and his purpose-driven nature. It’s the same thing with Tesla. He didn’t go out and say, “I want to make a profitable electric car company.” He’s like, “I want as many human beings as possible driving electric cars because that’s how we’re going to solve climate change. That’s how we’re going to put a dent in this.”

So, all of his decisions are not, “How do I maximize profits while making electric cars?” It is, “How can I get as many people as possible driving electric cars?” They have to be as cheap as possible.

I have to drive that down. I need to simplify the product. I need to get massive volume so that the scale of manufacturing supports a really, really, really low price point. And so he just keeps making these principle-driven decisions from a very long-term view.

His view is so zoomed out that it's actually really difficult to relate to. He keeps doing these things that seem crazy, stupid, visionary, or counterproductive, but aren't counter to the prevailing wisdom of the industry.

Mm-hmm.

But it's not from a sense of, “They're doing this, so I'm going to do this.” It's not even from a sense of, “This is a strategically optimal local thing.” It is, “I am working on this gigantic mission, and I will make every decision possible in service of this gigantic mission.”

That's why he's so strategically differentiated. It goes back to the paradox of when you're shooting for a target that nobody else is even shooting for: you are incentivized by completely different sets of systems, and those incentives drive all of these decisions. That's why Tesla and SpaceX both have the same dynamic, where they're doing things that nobody else is doing.

There are 2 things that come to mind when you're talking about that. One, I think people should heavily invest in and practice their ability to distill ideas and communicate something complex in a simple way. Elon is arguably one of the best people in the world at doing that.

The second part, which is a theme throughout everything and, I think, is most notable in SpaceX, is that making cost control an obsession is not something you graft onto the organization afterward. It was there before the organization even started.

Yes.

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-principles thinking—which everybody knows the story of, and which is interesting—he describes it in another way that I found was much more memorable. He's like, “Why would Russia be the only country that can make a cost-effective rocket?”

It's in your book, and he goes, “Do we drive Russian cars? Do we use Russian appliances?” There's just no way that this country figured out how to make the most cost-effective launch vehicle. He goes, “America's a pretty competitive place.”

Yeah.

“We should have the most cost-effective launch vehicle,” which, obviously, now he's absolutely dominating.

Yeah.

And again, speaking in that manner, you could say, “Okay, well, I broke down all the parts from first principles and looked up what they cost on the commodities exchange.” Or you could say, “Why aren't we driving Russian cars?”

Yeah.

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

No.

America makes great shit, and we make it great and cheap.

Yeah.

Why can't we do the same thing for this domain that I want to operate in?

The answer is because it had been a government-contract-driven oligopoly for the last couple of decades, basically. NASA was amazing at pioneering, but hadn't really applied itself to this project.

I think that's something people forget: the original vision for SpaceX was not to start a launch company. Elon's original goal was to increase NASA's budget, and he was willing to burn $100 million on a philanthropic mission to deploy a greenhouse on Mars.

He wanted to shoot a greenhouse to Mars with existing rocket technology and get this photo on the front page of every paper. There was a little plant on the red planet—the first time life had transferred to another planet—and he's like, “That'll probably increase NASA's budget and spur this wave of exploration and interest in space.”

When he tried to do that, he discovered that the space-launch market was so expensive and uninnovative and hadn't been moving forward. 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.”

Then he sort of ended up, almost accidentally, but as a byproduct of making that progress, moving into Starlink, and now moving into solar compute in space.

So, the Starlink thing is interesting. It's in the book, and it's also in the Max Olson essay that you and I keep referencing, which is, “If you're not on the frontier—”

Yeah.

Elon obviously wants to operate on the frontier in the domains that he's operating in. The reason that's important is not only because he wants to push his missions forward, but you also unlock opportunities you can't see unless you're on the actual frontier.

Yeah.

If they didn't have the ability to put up—I think there are about 9,000 satellites in the Starlink constellation now, somewhere around there. It's an insane number, and it's obviously increasing. That couldn't have happened when he was launching at the time he founded SpaceX.

Yeah. I think they said they were launching 2 to 4 times a year—

Yeah.

—or something like that. I think there's now a SpaceX launch every 2 days.

Yeah.

This is a concept of induced demand. People have this perception that the demand, the size of a market, is always going to be the size of the market, and he's like, “Well, if you lower the cost by 2 orders of magnitude, there are a lot more use cases that are suddenly valid.”

As Max talks about in the essay, reaching volume production of rockets is actually a core part of SpaceX's strategy. You need iteration and volume to cover the fixed cost. So you come up with new use cases to drive the volumes.

What are you going to do with new tons of launch capacity every year? The first thing, the most obvious thing, was, “All right, Starlink.” And now the next most obvious thing is this solar compute: build a Dyson sphere, build a moon base. All kinds of crazy stuff is going to happen.

There are stacks of S-curves here that are going to continue, and Elon deserves a lot of credit for not sitting on his laurels. He could have sat on Falcon 9 and just absolutely raked in cash for decades. There's nobody else who can do it, and it's a super-profitable business.

But he is always aggressive. As soon as that was even beginning to be obvious, and probably before, he was already onto Starship. Again, back to this purpose-driven nature: “We are going—this is the business, the technology, and the team that's going to get us to multiplanetary.”

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

Yep.

“Elon Musk's Most Useful Ideas in His Own Words.”

Yep.

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

Yep.

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

It's set up as a dialogue. I want it to feel like you're out to dinner with Elon Musk, actually.

Again, I want to hammer on this idea. He came to the same conclusion that most of his generation's entrepreneurs did, which is to vertically integrate—

Yep. Vertically integrate, control as much of your business as possible.

Yep. That also ties in. He said it wasn't a philosophical thing for him. It was, “These other companies move too goddamn slow.”

Yeah.

And I'm in the section of your book where he talks about time. This was fascinating to me.

Yeah.

The reason I invited you, and I wanted to have this conversation with you, is, 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 read a couple of things and throw them at you to see if they spark any thoughts.

We already mentioned this: “A maniacal sense of urgency is our operating principle.” And his whole thing is, “Don't waste time.”

Yep.

“Get rid of all large meetings, unless you are certain they're providing value to the whole audience, in which case, keep them short.”

Yep.

“Also, get rid of frequent meetings, unless you are dealing with an extremely urgent matter.”

Yep.

Meeting frequency should drop rapidly once the urgent matter is resolved. This is such a good observation by Elon. That makes me think of the observation by the guy at NASA who's observing SpaceX. He's like, “Wait, there's a problem. It looks like a flash mob.”

Yep.

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 it's obvious you aren't adding value. It is not rude to leave. It is rude to make someone else stay and waste their time.”

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 because he talks about how speed is both offense and defense. This was a fascinating story—

Yeah.

—that 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 underappreciated as a competitive factor.”

This is, actually, I think, both Tesla and SpaceX's core advantage: how quickly they iterate and design new technologies. He open-sourced the patents for Tesla: “Go ahead. Go copy it. Good luck.”

Yeah.

Because by the time you're producing the things that they've open-sourced, they're going to be 5 or 10 years ahead. And there's a bunch of stuff in that book about what he's learned from military history. He's like, “The decisive factor in most—certainly every modern war, but many wars—is the speed of technological innovation. Not tactics, not size, but this technology asymmetry, and the longer the war, the more important the speed of iteration becomes. Not where you started, but how quickly you're developing something new.”

He continues, “A factory moving at twice the speed of another factory is basically equivalent to 2 factories.”

Yeah.

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 tip-of-the-spear focus. What is a limiting factor? Literally get on a plane and go to whatever the limiting factor is, and don't leave until that is resolved. Which is another form of speed.

Yeah.

It's the speed of identifying the bottleneck, then going to it, attacking it, and resolving it. Every one of those steps is an increase in speed that pays off. And there's so many things. This is a tiny story, but I love it because I think it's an example. It's a thing that happens in every single company that usually takes 2 weeks, that he does in an hour, right? So, he's interviewing a machinist, and after a 20- or 30-minute interview, he wants to hire the guy. He asks him how much he costs, haggles right there, and comes to terms. Somebody's standing beside him with an offer. He's like, “All right. Fill in the blanks. Here you go.” Signs it, goes to work.

The same day?

Same day. And by the way, it's Saturday at 6:00 p.m. So, your description of how he uses time—it's like he uses all of it immediately. That's such an important insight, and he is—it's why not just he, but also these companies, move so quickly. When you combine—I feel like a lot of people talk about the tactics. They're like, “Yes, he moves fast. Yes, he has first-principles thinking. Yes, he works on the bottleneck.” But when you combine these things, it's like a Lollapalooza from Charlie Munger, right?

It is not a 10% on a 10% on a 10%. If you're working on the most important thing with manic intensity, and you're doing that 100 hours a week instead of 40 hours a week, you are orders of magnitude beyond the productivity of somebody else. And he's been doing this for decades, so no wonder he's so far ahead. Yes, he's smart. Yes, he's intense, but he's not superhuman. He's not orders of magnitude smarter than his competitors. But the way that he works and the methods that he uses, the mindset that he has, puts him orders of magnitude ahead.

I love that you describe it as a Lollapalooza. I think that's what I'm trying to get across from the podcast I've been doing on Elon—the conversation I want to have with you, the conversation we're having right now, your book. You have to use all the ideas, because when they're combined—

Yeah. Yep.

—and they can apply to anything. I'm not building rockets.

Yeah. Literally, right before we started recording, there's this idea of finding a limiting factor, even for this show. Me and my partner Rob, who's sitting over there, identified 2. We want to go faster and increase production. Well, what are the biggest bottlenecks? We have 2 of them, and we're attacking both of them. You heard me talking to another team member right before we started recording. I was like, “There's 1 thing that I'm not happy about.” I was like, “We need to drill down on this over and over and over again.”

Yeah. It's like you can use this for anything. There's something that you have in your book, which I read for the first time. I think I read this guy named Ashlee Vance, who wrote this biography of Elon, I think, in 2013, when I first read it, maybe.

Mm-hmm.

That was the first one.

Yeah.

Yeah. It's the first episode of Founders ever. In 2016, I did an episode on it.

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

No. Do not do that. The way I think about it is like this: we're talking about speed and time, and building products, companies, and everything else. But he even applies it—and you just mentioned this—that he has this weird, long-term view—

Yeah.

—that if you don't have that, you're not really going to understand the decisions he's making. The way I describe this paragraph, what I'm going to read to you, is this is how Elon thinks about money. I've never heard this anywhere else.

“In early SpaceX, I told the team everything we did was a function of our burn rate. We were burning through 100,000 dollars per day. In the same way, I expected the revenue in 10 years to be 10 million dollars a day. Every day we were slower to achieve our goals was a day of missing out on that revenue.”

So, there's a story in the Ashlee Vance book where they're like, “I don't get Elon.” It's like, “I just went to him and tried to get him to spend 25,000 dollars on a part. He said no because he thinks I could build it for 2,000, because of the idiot index. That part should be 2,000. Figure out how to do it.” Yet, he just let them use his jet and burn 60,000 dollars of jet fuel to get a part to Hawaii that would save them a workday.

Yeah.

And so, that makes perfect sense if you spend 60,000 dollars because that day, 10 years from now, is 10 million dollars.

Yes. Yeah. And you unlock an entire team and all the infrastructure value. So, a thing that's underrated about Elon, in my view, is this hyperfluency across domains. This is a simple example, but he studied both physics and economics as an undergraduate. He has been running his businesses and functionally being head of product at all of his companies. It's an extremely wide, 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, I think, a powerful source of the maniacal urgency, because he's hair-on-fire all the time. There are billions of dollars at stake every single hour of the day. We can be working with such greater intensity, and the rewards for doing it go up every time we're able to move faster.

Yeah. I just randomly flipped to this page in the book, which I think speaks to what you're saying. Before I read it, I think what you were referencing there is he talks about the fact that finance and engineering are in the same head.

Yes. The same brain.

Where in most companies, it's separated. It's him.

Yeah. Yeah. So, he wants to make something. They want to know the cost or the potential growth and revenue. It's like, “No, that discussion—”

Yeah.

“—is taking place with me.” So, there, again, I can move faster—

Yes.

—because it's in 1 head.

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

Yeah. There's not many committees that make great things.

Yeah.

In fact, I've never read Atlas Shrugged before. And the funny thing is, I'm reading it. I actually might do an episode on it. I think it's an interesting thing. But in the beginning of the book, there's 1 person who is very much like an Elon character, and her brother is kind of her partner, and he's the opposite. She's made a decision to do something. He's like, “Well, how did you decide that?” She's like, “I just decided.”

Just decided.

It's like, “But we have to check with the board and all these other people.” It's like, “No, we don't. We're just going to make the decision.”

There's actually—you'll see this as a pattern as you read. There's a pattern of responsibility. There's a chapter in my book called “Internalized Responsibility,” and over and over again, you'll see the hero characters in Atlas Shrugged. Everybody else is sort of trying to find someone else to make a decision or shove risk, and Dagny's just like, “I am responsible. This is me making this decision. I'm responsible for this decision. If it's right or wrong, hold it against me later.”

And you'll hear Elon do that in launch rooms. It's kind of like, “Hey, we've identified a risk factor. Go or no-go?” In that moment, standing in front of a rocket worth tens of millions of dollars with the public watching him at a launch, he's running a calculation of the physics, the risk, the economics, the market value, the speed of the company, and when the next launch window is. And he'll be like, “Take the risk. Launch the rocket. Let's go.” Over and over and over again, so many of those decisions that he's solely responsible for—and that's why I think these lessons are so valuable.

Who else has lived this kind of experience and honed these lessons to deliver to us?

So, going back, let's extend this idea of how Elon thinks about money. He says, “Tesla is getting to the point where every high-quality minute of thinking has a million-dollar impact.” You referenced this earlier.

Mm-hmm.

That is insane. That’s Elon talking.

Yeah.

“If Tesla’s doing 2 billion a week in revenue, that’s about 300 million a day, 7 days a week. There are many instances where a half-hour meeting improved the company’s financial outcome by 100 million dollars.”

This is the highest-leverage man on Earth. How many tens of thousands of engineers, how many billions of dollars of capital, billions of dollars of CapEx, factories? And he says, “It makes it hard to sleep. There’s always something important to go do.” He’s constantly running a triage on what’s the most important thing he can do. That’s why he runs no schedule. His jet has him flying all over the world to whatever the most important thing is to do.

Yeah. I think there’s a story in Walter Isaacson’s book where I think he’s dating Grimes at the time, and she was interviewed by him. She’s like, “I’ve caught him in bed. I’m sleeping, and I wake up and he’s just sitting there in the thinking man’s pose.”

Yeah.

When we went to sleep, he’s in the thinking man’s pose. I wake up, he’s still in the thinking man’s pose.

Yeah.

I mean, there are many stories of him dressed to go to a party, and he’s like, “I’m just going to go look at this,” and then ends up spending the night under a rocket, working in a tuxedo.

Those are early days in SpaceX history.

Yep. I think it’s a Christmas party, and he’s in fancy leather shoes—

Yeah, or something.

Yeah. And they’re like, “You know, we’re going to be an hour late. We’re going to be 2 hours late. We’re not going, and now my fancy shoes are f***ed up because I’m literally trying to help build a rocket.”

Yeah.

Just some random quotes from him. I think this is great, and it’s almost like a maxim: “Avoid serial dependencies.”

I mean, the most obvious one is just, who starts SpaceX and Tesla at the same time? That’s insane. But both of these things are important, so I’m going to try my best to do them both. The story from PayPal is a little more generalizable, which is: We have these regulatory boxes we need to check, we have these partnership integrations we need to run, and we have a product we need to build.

The sane thing to do is do one after the other, and these end up being 3-year things because you’re not wasting time building a product if you don’t know you’re going to get the regulatory clearance you need. He just attacks this and is like, “We’re going to do it all in parallel, maximum risk, minimum timeline. We do it all in parallel and launch in a year, ready to go.”

Warren Buffett’s quote is, “You can’t get a baby in 1 month by getting 9 women pregnant.” It’s this sense of asking how many things you can do in a row to minimize the overall timeline. 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, that’s actually the thing you should do.

That’s a big part, I think, of why the pace of these companies, the velocity of them, is so high. Many great entrepreneurs talk about how underrated velocity is. Elon talks about it, too—not just the pace of the company, but the team itself. He talks about the team as being a vector sum.

Imagine every employee as an arrow. How big the arrow is is maybe how high-quality the employee is. How long the arrow is is how fast they’re moving. Then Elon’s job is to align them all on the same thing. He talks about how good the team is, how aligned they are, and how hard they’re working. That is the vector sum of the team, and that is what’s ultimately going to determine the progress of the company and how successful they are.

I want to bring up a couple of things you just mentioned. He’s constantly hammering on time, not wasting time.

Yeah.

But I can’t help but notice that in an episode dedicated to Elon, you mentioned getting 9 women pregnant. I don’t know if you slipped that in there intentionally or not, but we’re just going to move on.

I’m not going to say anything. I haven’t slipped anything in intentionally. “The one thing you cannot replace is time.” Direct quote from Elon here. Thank you very much. A few pages later, “I often tell the team, ‘It’s okay to scrap equipment or money. It is not okay to scrap time.’”

Minimizing the waste of each other’s time. Once you’ve identified that exceptional entrepreneurs or exceptional engineers are the fundamental constraint, the next question is how effectively you’re using them. How effectively are they aligned?

Elon is underrated as a communicator, actually. 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 with which he communicates is extremely high, and he’s got this amazing habit.

Yeah, I think that’s, again, world-class communication. There are so many—

Yeah.

—limited things that a human being can remember.

Yep.

And so, if you can organize your entire company—

Yeah.

—around one single thing, it’s like: Is this getting better? This is how we’re going to judge our success.

So, you and I have been talking for a few months. You were kind enough to give me an early copy of the book. We’ve been talking about Elon for a few months, and you brought it up earlier this morning when we were having coffee. You’ve brought it up on the phone. This idea that failure is almost meaningless, as long as it’s not catastrophic.

There’s a line in the book that I thought was interesting, where he says, “The longer you do anything, the more mistakes you will make cumulatively.”

He’s talking about his sense of prediction, but it’s also cultivating these failures. He does not mind being too early. He does not mind being wrong in a specific prediction. He talks often about how he’s like, “I’m rarely correct, specifically, on the timing of a prediction. But the direction of the prediction is almost always correct.”

It’s like, I might be a year off, I might be 2 years off, and sometimes I’m 5 years off. But being directionally correct, again, once you’re zoomed out about the heading of the future and what we’re working toward, is massively more important than the specific breakpoints.

I want to jump to something else that you and I have talked about a bunch, which is one of your stated goals for making this: You want to encourage more people to make stuff, to actually make products—

To make stuff, to make important stuff, to make it as cheap as possible.

I talked to Tobi Lütke on this podcast, which was one of my favorite conversations I’ve ever had in my entire life. It was very interesting. I didn’t even think about it in these terms, but at the end of the conversation, he’s like, “Oh, me and you actually have the same job. Our job is to increase entrepreneurs—

Mm-hmm.

—to create more entrepreneurs.”

Mm-hmm. He’s doing it through Shopify.

I’m obviously doing it through reading all these biographies, taking this collective knowledge of history’s greatest entrepreneurs, and pushing it down the generations.

Yeah.

So, in many cases, I do think there are going to be people who pick up your book—

Yep.

—and your series of books, and be like, “Wait, I can do something, too.”

Yep.

And take these ideas and apply them, even if it’s in a small way. This section is only 2 pages here. It’s like a page and a half. I think it’s really important. I highlighted almost the whole thing.

Yeah. You did.

Just again, these are Elon's words that are super important. He says, “We must make stuff. Manufacturing is underrated. It is hard. I've got mad respect for the makers of things.” That's my favorite sentence in this book, or on this page.

He says—and this is why it's important—“Some people have an absurd view of the economy as a magic thing that just produces stuff. Let me break it to the fools out there. If we don't make stuff, there's no stuff. Some people have become detached from reality. This notion that the government can just send out checks to everybody and everything will be fine is not true. Obviously, you can't just legislate money to solve things.”

“If we don't make stuff,” he says it again, “there is no stuff. Technological progress is not inevitable. It's not some kind of abstract concept. Humans make technology.”

Yes.

“If we don't do it, it will not happen. Somebody has to do the real work.” This is the clip—I believe he was on the Joe Rogan podcast—where I said, “I must write this book.”

Say more.

It identified for me that he is such a clear communicator, and this is such an important idea. And I think about my generation of entrepreneurs and 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 can.

You and Tobi talk about your job being to create as many entrepreneurs as you can. I believe in creating entrepreneurs. I believe in spreading good ideas, spreading useful ideas, spreading correct ideas—expanding knowledge into as many people as we can.

And this is an unbelievably important meme. If we all run around creating info products or charging as much as we can while delivering as little value as we can, or starting commodity businesses, or, worst of all, trying to do as little as possible while getting as much as possible, or legislating yourself a universal basic income and never working again, or whatever, this is not how we advance.

This is not how we grow. This is not how we take care of each other. We have to produce stuff and build stuff. I think the first sentence in the book is, “Don't aspire to glory. Aspire to work. Aspire to be useful.”

Do something that is a benefit to all of your fellow humans. Elon has both really hard and really positive motivations. He burns clean fuel and dirty fuel at the same time, right?

Yes, he's trying to escape this really hard childhood he had and prove to himself that he has this incredible value. But he also has these really beautiful, massive aspirations. He's inspiring so many people to do great work and helping them learn how to do it in the most effective way.

He's raising and educating this whole culture, all these entrepreneurs who are going to come out of these companies. We're already seeing SpaceX founders do incredible things. And the intensity, pace, and vision that these people are working with, I think, is going to usher in an incredible next generation of entrepreneurs.

And I hope this book helps people get these ideas into their heads and choose what they think is important, what they work on, who they work on it with, and how they work on it.

I do agree with you. I think it's one of the most important ideas. In Max Olson's essay, I love what he said. He's like, “The output of SpaceX in particular is not cheaper rockets,”

Yes.

“it's people being trained to do difficult things and taking those ideas and putting them into different domains.” And I think the important thing is making more things, not doing more deals, not going into finance. You have the best entrepreneur on the planet, maybe the best in history, telling you...

What did he say? “There is an overallocation of talent in finance and law. Too many smart people are going into finance. We should have fewer people doing that,”

Yeah.

“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 wrong.”

Yeah.

“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 this section with, again, the quote, which is my favorite part: “I've got mad respect for makers of things.”

Going back to the kind of founders archive in your head, how many of the great founders were making things, manufacturing, building, moving physical stuff around?

I mean, if you think about the most famous—or just go through the robber barons—where their names are known, there was essentially 1 robber baron who did finance, and that's J.P. Morgan.

J.P. Morgan.

But I have a different take on that. If you read... I've read every single book I can find on J.P. Morgan. He's an interesting character. I found his dad to be a much more formidable individual than he was.

Hmm.

There's a funny thing: when J.P. Morgan dies, the size of his estate is revealed. I forgot the number; it was $50 million, which was still a ton back then, but Andrew Carnegie goes, “Oh, to think he wasn't even a rich man.”

But Carnegie and steel, Rockefeller and oil—

Yeah.

Vanderbilt and transportation. They were building things.

Yeah.

I mean, they were creating essentially entire industries.

Yeah.

If you really think about it, they were building the best company inside the industry, but they were really creating the industries. The closest analog for Elon are those names. I don't think there's anybody else.

Going back to why he's singular, we would have social networks without Mark Zuckerberg. We'd have search engines without Google. We would have operating systems without Bill Gates. Yes, they're some of the biggest companies on Earth, and they were incredibly well executed, but I don't think they were singular, and I don't think we're going to see quite the same longevity that we see out of both of these companies.

It's just refreshing for him to talk about how important manufacturing and building physical things are.

It is.

I mean, he says in the book, “Manufacturing is the moat. Two things define manufacturing competitiveness: 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.”

Yeah. I mean, Tesla is building a lot of things in the U.S. and now working backward into its own supply chain. It can't get enough lithium, so it's starting a lithium refinery in the United States and spinning it up. It's now starting to fabricate its own chips because that's become a bottleneck. It just keeps attacking up and down the supply chain as much as it can in order to be as efficient as possible and drive the product cost down.

So we've already touched a few times on the fact that he wants to take technology to its absolute limits—

Yep.

—and be operating on the frontier.

Yep.

Again, you did a great job of finding quotes from somebody who has studied Elon for years that I've never heard anywhere else, and he was just talking about the fact that, if you're developing technology, it should be pushed to the 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 roll them down the hill at each other. That's not the way to use the technology.”

Yeah. That was an outcome of his Zip2 experience, where he was building software and then selling it to legacy media companies to move newspapers online, way back in the day. And he was just super frustrated by having to sell to a slow-moving, old-school company that was between him and customers. That's where he came to an early lesson that he's carried with him forever: go straight to the consumer. Own everything, and the customer is the one who's going to make the final determination. You want to take the technology straight to the customer.

The way I think about Elon is there's no work about work, just work.

Yep.

So he has this great quote: “Better to pick a path and keep moving than just vacillate endlessly on a decision.”

Also, a PayPal thing. Make the decision as quickly as possible and then just keep moving. Back to velocity, speed is everything.

“What matters to me is winning, and not in a small way.”

He's a competitive guy. Loves to win. We are lucky that he's working on the things that he's working on. His inherent personality would dominate whatever industry he went into, and how lucky are we that he's working on some of the most important problems that humanity faces?

Yeah, he could use his talents for evil.

Yeah. I mean, which goes back to the incentive system—thank God for capitalism. Napoleon didn't do a lot of good with his massive energy and brilliance, right? He won a lot of land, lost a lot of land, and a lot of people died.

Did you ever read Jimmy Soni's biography of Claude Shannon?

Not yet.

I think it's called A Mind at Play.

Yeah.

And Claude Shannon, famous for coming up with information theory, gives this great talk in this biography. He wins this award, and he's like, “It's really weird that history celebrates conquerors—

Yeah.

—and politicians.” He's like, “We should actually celebrate innovators, inventors, engineers,” and he gives this whole speech. That was probably 60 years ago.

Yeah. And Claude Shannon's an incredible example.

Here's another thing we've already talked about, but I think it's really important. 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.

There's actually a great story that I think is a really replicable tactic that's underrated and that people can really use, which is when he was considering starting SpaceX. This was after he had his bad experience in Russia, and he was thinking about entering the launch market. He doesn't just say, "I'm starting a company." What he does is call it a feasibility study.

So he pulls in a bunch of engineers who have worked on the great launch vehicles, starts reading all the books—as you say, devouring the entire shelf—and talks to all the people he can. He sets up a series of meetings with these experienced engineers to basically vet the idea: How good could launch be? Let's start with first principles, with a clean sheet of paper, and figure out what's possible in this market.

And almost at the same time, through this work, they came to the conclusion that massive, order-of-magnitude breakthroughs were possible. That was when they actually sold PayPal. So he's kind of like, "All right, I got a bunch of cash, and we've vetted this idea with these experts."

But I think it's really worth drilling down on the fact that, at this point, he was almost 30, if not more. He had only worked in software. He studied physics in undergrad, but had not built hardware, and he just learned how to become a rocket scientist, essentially, by reading the books, talking to people, and going after it.

And he says, "Most people self-limit their ability to learn. I never studied rocket science, but I picked it up along the way." He's a powerful example of what is possible. Once you've identified a meaningful mission, you just become who you need to be in order to accomplish that mission.

He's obviously very high agency. What I loved about 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.

I mean, that was the press, but also his friends. I'm sure that many of them would deny it now, but they were all trying to talk him out of it. There's only a graveyard in this particular space. People were showing him rocket videos. It's not that nobody had ever attempted this before; it's just that everybody had failed. Yeah.

I mean, I find this guy, Andy Beal, fascinating because there's so little known about him. Andy Beal made money independently in another industry and then tried to start a rocket company. He wound up burning, I think, a couple hundred million of his own money.

It was actually a big motivation of Elon's: "Even if I fail, even if I lose this money—and that is the most likely outcome, not just by a little, by a lot—" he's like, "I will have moved the ball forward." This is an important mission, and he went in with the idea that he would burn this money on the Mars mission.

He's like, "Even if I waste my money on advancing progress in space-launch technology, at least I will have made progress." In the same way that Andy Beal left some infrastructure behind that helped SpaceX, these things do build and compound. Going back to the sort of fragility sense, even when entrepreneurs fail trying to move the ball forward, the ecosystem moves forward. That's part of the beauty of the human system that we have.

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's a great visual, yeah.

You think he's doing that right now?

Yeah. An underrated piece of him, again, is that I think he keeps doubling down and taking massive risks. 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 and got the biggest comp package in history because it was the riskiest, and now he's doing it again.

He'll get a trillion dollars if Tesla becomes a trillion-dollar company, but nothing if it doesn't. Again, it's 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 no option but forward at max speed.

As I'm here listening to you talk, I'm leafing through the book to see what other interesting stuff comes up. What you said matches up perfectly with the subheading of the page I happened to turn to, which is called "The Edge of Sanity." I just need to read some of this stuff to you because he's hilarious.

"Question: How do you prioritize with so many things going on at once?"

He goes, "Prioritizing is usually made out of desperation, not selection. It's not, 'Oh, let's sit back and leisurely decide how we should spend these resources.' It's, 'This isn't working. If we don't make it work, we're going to go bankrupt, so we better make it work.'"

And then he goes, "I felt like Indiana Jones running down the temple. There's a huge boulder chasing you, and you need to jump across a giant pit in the ground. If you slow down, the boulder will crush you, and if you don't make the leap, you'll die in the pit. That's prioritizing."

It is how scaled entrepreneurs feel. When you interviewed Brian Armstrong, that's how it sounded. He's like, "We hit product-market fit, and all I could do for years was wake up and stay alive. Just try to keep up. The servers were on fire, the support tickets were coming in. Like, oh, my God, I just have to stay on top of it. I just have to keep running and jump across the pit."

"How do you motivate the team?" "I told them we have to go ultra-hardcore."

Yeah.

Which is funny to me. "I lived in the factories for 3 years," talking about the Tesla production hell. "I lived in the factories for 3 years, running around like a maniac through every part of the factory. I was living with the team. I slept on the floor."

This is actually smart: "I slept on the floor so the team going through a hard time could see me on the floor and know I was not in some ivory tower. Whatever pain they experienced, I experienced more."

It comes straight from his study of military history, right? Generals lead from the front line. Wherever the general is, the troops are going to fight better. These are things Napoleon exemplified, and he even says in there, "Not only did I sleep on the factory floor, but I slept outside the conference room."

It's not like he slept at the factory. I've talked to employees, and they're like, "There's a hotel across the street." It would've been fine if he had just gone to the hotel and come back. His presence would've been the same, but he wanted people to see him sleeping on the factory floor.

He doesn't just not have concern for his personal comfort; he sacrifices his personal comfort for leadership, for the credibility of his engineers to build trust in that. That is part of how he gets so much out of people: these conspicuous, visible, tangible, obvious displays of self-sacrifice.

And he does it over and over again. He pushes himself so hard. I mean, "The Edge of Sanity"—he says, "I've worked to the edge of sanity." You've talked about Talulah Riley in the 2008 thing. He's having night terrors. He'd wake up screaming and puking, like—

Talulah Riley was his wife at the time this was occurring, so she's seeing this. They're in bed, and he's trying to sleep—

Yeah.

—and he's just yelling in his sleep, and—

Yeah.

"The Edge of Sanity" is not a euphemism for "I worked hard." It is like a Herculean test.

And a direct quote from him on the page I just flipped to: "I worked to the edge of sanity."

Yeah. It is a very meta lesson from the book and from his life that anybody can take away. 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 and push yourself to the edge.

I'm not advocating that this is the right path for everybody. I think some people are Jason Fried, and some people are Elon Musk.

I don't know anybody else who could withstand as much pain and torment as he has.

Yeah.

I can't think of another entrepreneur living who has.

No, but people can probably take more than they're currently taking. If it's not a blueprint, is it an example of what's possible? It also, I think, is an antidote to envy. I don't want to live through what he lived through, and that makes it very easy to be like, "I don't want to compete with that."

But it does show you what's possible. That's what maximum effort really looks like. I think that's a really helpful lesson to know.

Yeah, maximum effort always, everywhere, is the way I really think about him. I just came across another paragraph that I underlined that ties a lot of these ideas together: the fact that he's obsessed with speed.

Mm-hmm.

Obsessed with control, and if you're obsessed with control, it's going to lead to vertical integration. Then you really should just design from a blank sheet of paper—

Yep.

—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 drivetrains ourselves. We vertically integrated because the pace we needed 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 costs, and their technology." He's talking about Tesla. The exact same thing applies to SpaceX, though.

You can't make 2 orders of magnitude improvements if you rely on the existing supply chain. One of the things we were talking about this morning is that the most interesting thing is to identify the limiting factor and work on the bottleneck. It's almost so obvious that it's trite, right?

But no one does it.

One, people don't do it, but two, it's a more nuanced thing than it appears at first blush, right? If the limiting factor is energy, it's like, okay, what's the peak load? Where does it come from? What's the cost-optimized thing? Oh, if turbines are the cheapest way to do it, what is the actual—who's manufacturing the turbines? Where do they come from? Where do they exist? What piece of the turbine makes it more difficult?

He gave this example and drilled all the way down, and he's like, there's actually 1 machined part that is the fin of the turbine, the portable piece of the generator, that is the bottleneck of compute infrastructure for xAI right now. And so he's like, "It's actually 1 part of a thing," drilling all the way down and identifying with super-high specificity where the bottleneck is.

Wait, wait. Essentially, explain that to me again. So he's trying to find out the limiting factor for xAI?

Yeah, and the limiting factor is energy, right?

Okay.

We bought the chips. We need the building. This is when he was running the first supercluster, and somebody told him it was going to take 2 years to get it up and running. He's like, "Nope. If we don't do it, there's a breakpoint. If we don't do it in 90 days, we're dead—or 6 months, maybe, we're dead." And they spun up the whole thing.

They found a building in Memphis. They bought the chips from NVIDIA. Then they needed cooling, and they needed power. You can't get a grid interconnect done in 6 months, so what do you do? You go get these turbines, which are portable energy generators, and you just line them up all along 1 side of the building. You can't get that much cooling installed, so he went and hired mobile refrigerator trucks to line them up against the other side of the building.

It was just like, what is the fastest possible way to get this thing done, and what's the limiting factor of the limiting factor of the limiting factor, drilling all the way down to figure out truly where to attack? That kind of five whys all the way down to figure out the limiting factor of the limiting factor of the limiting factor.

It kind of relates a little bit to just paying attention to the smallest details.

Yeah.

This is something that I think is really important, too. He's like, "Most people don't consciously notice the small details, but they do subconsciously."

Mm-hmm.

"Your mind 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,' but we cannot break down why. Pay attention to little details. Train yourself to notice them."

When I read that section, I thought about—it’s what Steve Jobs was, I think—

Yeah.

—maybe the best in history at. And he has this great way of describing this. He says that "a great product is better than it has to be."

Yeah. I think Elon is underrated in his design sense, actually. There are a lot of times when you hear Elon quotes that sound exactly like something Steve Jobs would've said.

There's an important piece of the design, in particular for cars. He thinks about it like an algorithm, right? There are certain specific things, ratios that have to exist between the product, or it needs to feel bigger on the inside than it looks on the outside, that he absolutely insists on.

There are stories, especially from early Tesla, of him being unreasonable about design decisions that he just puts a finger on. He's like, "It has to be this way, or it's not good enough. It's not beautiful enough. It's not aesthetic enough," in the same way that Steve Jobs was very much like, "No, put a handle on that computer because it changes the relationship that somebody has with this kind of new foreign machine."

Something I thought about when I was reading your book was the idea that we're going to have a single organizing principle to see, to track the progress on this particular product—

Mm-hmm.

—or this particular company.

Yeah.

He kind of breaks things down to a singular objective or a singular something he repeats. There's a line in Sam Walton's autobiography which I thought was very interesting, because we're talking about how Elon has not only started the companies, but now these companies are at scale.

Yeah.

And Sam's like, "Listen, it's in human nature to overcomplicate things. As your company grows, you are going to add bureaucracy—"

Yes.

—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 ebb and flow will never stop."

And 1 way that Elon talks about this in the book, which I thought was interesting, is 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're not, then you stop those efforts."

It's an easily forgotten truth. Tesla doesn't advertise. They're just putting all the money back into the product, or all the money back into the next product.

There are stories about the rift between him and his cousins doing SolarCity, because SolarCity was a very sales-driven organization. So, door-to-door sales. They weren't as focused on product differentiation, and he was on the board, and he just came in like a maniac on their product and was like, "Why do these clips exist? Why do these roofs take so long to install? Why are they so expensive to install?"

He was adopting that super-Steve-Jobs approach: make a beautiful product, make it an obviously better thing, get rid of these salespeople. I don't want the organization to be better at selling a mediocre product. I want it to be better at creating an excellent product that sells itself. That is his whole ethos.

Yeah, I like the point that you made that he applies the same idea at the product level and at the company level.

Yeah.

So this idea where he's like, "Please go ultra-hardcore on simplification and deletion."

Yeah.

It's a great idea in both the product and the company. He repeats the same idea in different ways, too—

Mm-hmm.

—which I thought was interesting, like, "Eliminate what isn't necessary to solve the key problem." And so he gives an example of what he is talking about there.

"Early versions of Starship didn't even have doors. We didn't need doors. 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.

Yeah.

We're seeking the limits, so we are going to fail at things. And then he talks about, again, this 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."

Yeah. This is the same logic that he applies to factories, right? The inherent value of scale. Just make something extremely big, diminish the fixed cost as much as you can, and maximize the value of volume.

Making these leaps between different products and different S-curves, and having it be profitable at each sort of stable equilibrium, is a really important piece. For all the talk about how he's a visionary and builds these great products, he's still really economical about how he goes about it, which I think is a very underrated piece of his genius.

Well, another thing you do a good job of in the book is giving multiple examples of the same idea.

Mm-hmm.

And again, all these ideas relate to each other.

Yeah. This is the same logic that he applies to factories, right? The inherent value of scale. Just make something extremely big and diminish the fixed cost as much as you can and the value of volume. Like making these leaps between—

Well, another thing you do a good job in the book of is you give multiple examples of the same idea.

Mm-hmm.

And again, all these ideas relate to each other. And so, he talks about why they removed the landing legs. I think this is Starship 3. And he says, "Again, here we try to think to the limit of physics."

Yeah.

"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 planes landing, and then they immediately take off again. That's what we want to do with rockets.

Yep.

"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," 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."

That is a great story because it exemplifies a few different things, right? There's the thinking-in-limits part, like what is the Platonic ideal? How good could it be if we were just dreaming? And then it seemed impossible, and he's got a really specific tactic he uses.

When he's exploring, he says, “What's possible within the absurd?” And so he takes these crazy ideas and throws them out, and people are like, “That's crazy. That wouldn't work. That would be absurd.” And he asks, “What would it take? Don't tell me no; tell me what would have to be true. What would it take to make it possible?”

What he finds, and this comes up over and over again in the stories, is that what first seems impossible gets pushed back on, and he sort of gives it a day. Then people start to churn on it a little bit. Then he asks more questions, questions more assumptions, asks what it would take again. And then within a week, people start to be like, “Wait a minute, this might be possible.”

I think he's been through this loop enough times where people are like, “No, that's crazy.” They dismiss it. He pushes back. He says, “What would it take?” He says, “Do the brainstorm.” He says, “Just spend a day or spend a week designing it. Just assume that it's possible and start working on it to see how far you can get.”

So many times, he's like, “What seems impossible—there's no fundamental law of physics reason why this is impossible.” I think all of this actually goes back to his belief that engineering is magic and the laws of physics are the limit of the magic. And so, not analogy, not “what have we designed before,” not what problems have already been solved, not what do our current methods let us achieve, but what is the limit of what's theoretically possible? He's just going to be unreasonable in pushing as far as he can toward that.

He's seen over and over again that when he holds that line and asks, “What would it take,” and says, “Keep trying. I know it's hard. Keep trying. You've just got to muscle through. There's no reason this isn't possible. Show me why it's impossible or keep working on it,” people respond to those pushes and do achieve things that seem impossible over and over again.

I think the book that you wrote is really important. What I want to do is end our conversation with what I think is most important to you and me, and what we're both trying to do with work.

Yeah.

This entire reason I'm doing this new show is a celebration of capitalism. It is a love letter to capitalism. It's, “Hey, you know what? If you want a role model, how about somebody that started a company, built a product and made somebody else's life better, created wealth for their employees, created jobs, and created wealth for themselves and their family?” These things should be applauded.

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.

Thank you for having me. I'm honored.