How Elon Musk Thinks About AI, Wealth, and Multiplanetary Life | Eric Jorgenson

26:40What would you do? pick something that is truly the most important thing to you that you can't imagine quitting, like a goal for which you'd run through any obstacle. Um, then put your back to the wall, burn the boats, whatever you think, like put enough skin in the game that the stakes of failure are so overwhelming that you just push through no matter what. This is the, you know, asking universe for something in the way that the universe understands. Like you dropped yourself in the jungle, you become a very different person, uh, in order to find your way out. And some of the stories that I think resonate most are the people who, who really did that.

27:16It's not the right thing for everybody, but if that's the journey that you want to go on, like, you know, your husband's a seal, right? Like imagine who the person is who signs up for that before and after they go through buds or training or deployment or whatever it is. Like there are situations you can put yourself in that make you more hardcore guarantee everybody coming out of that is more hardcore than they, they were going in. Um, so those environments absolutely exist and get around more hardcore people, just change what is the norm for you. It's so true. And also like, I do think the more hard things you do, the more hard things you can do and the less everything seems hard.

27:50You know, it's fascinating because you can tell a lot, we hire a lot of employees. If let's say we got a hundred employees right now, uh, I can almost tell who's going to find things harder by what their history is. So, you know, if they were a green beret or a nuclear sub operator or investment banking or worked at McKinsey on their acquisitions team, I just know they're going to be able to handle a lot. And if they've really only worked in corporate jobs, or especially if they've only ever freelanced, I know, oh, they're actually not going to be able to handle that much. They don't understand the monotony of continuous work, which is like, I think David Foster Wallace talks beautifully about how that is sometimes the hardest part of life.

28:29And so I think it's reading a book like this can reframe what you think hardcore is. Like Dave and I were talking and we were laughing. David's my producer. And he was like, I told him we're hardcore here. I giggled because I was prepping for this. And I was like, hardcore, we should define that. And then I was like, when was the last time anybody here stayed until like 9, 10, 11, 12? And I'm almost embarrassed to say, not often ever. And so like defining what hardcore is for yourself, but seeing like a real, you know, level of hardcore, I think also puts things in perspective when things are really tough.

29:05So like, this is maybe even a book worth reading when you're struggling, when life's really hard to put in perspective what hard is. Yeah. And hard is variable. Like we work a normal day and kind of like have a normal life and there's nothing wrong with that. But if you're like, all right, we're going to set a crazy goal. One of his things is like, uh, order of magnitude goals. You know, you're not going to hear him ever say like, I would like you to increase that by 20%, please. You'd be like, drop that. The cost of that should be 1 % of what it is. Or I want you to increase the e-com sales by 20 X.

29:37And like, that just totally breaks your normal set of like, Oh, maybe we can optimize this or that, or like the normal playbook. So you have to scratch, rethink, question all the assumptions. And that's like, all right, we're going to, we're going to like 12 hours a day war room until this metric, whatever the key thing to drive for the business is is gone 10x like get in there call your families everybody go call your family and tell them you're not coming home until like we have a plan for x like not every company should operate that way not every person will respond to that well but like if you want to be hardcore like try some hardcore shit see how it goes yeah my husband always says you want to be cool gotta do cool shit so that's all right what about he um i i love this quote that's in your book too um um, Elon says, if you need encouragement, don't start a company.

30:27Yeah. Why do you think he believes that? And do you think that that mindset for him, like, is that how he motivates his employees to like, does he only find people who already want the thing? I think he filters like these cultures filter for people who are missionaries and zealots. And like, you know, oh, if you're going to Tesla or SpaceX or XAI, like you're going to get your absolute maximum potential squeezed out of you. And there's people that want that. And in particular, want it in certain chapters of their life. I worked so hard in my twenties and like, I worked so hard on things that ended up not working.

31:06And I worked so hard on things that were like kind of the wrong direction. And there's something really awesome about being like, I want, I just want to go to the, I want to go through Bud's training. I want to become a seal. I want to go somewhere that's going to max out my potential. I feel like in particular for engineers, like these organizations are that it's just such a, it's such a different environment. And once you get exposed to that level of excellence, like you can carry that off. If you want to go start a company and you want to operate at the pace and cadence and with the sort of tools of thought that have made these companies successful, you know, that, that SpaceX mafia or the Tesla mafia are going to be like a really incredible set of companies are going to tackle much bigger problems than we've seen startups tackle in the past.

31:49If somebody's listening to this and they're like, one day I want to be a billionaire. If they're young and they're like, I want to be a billionaire one day, I want to be as big as these guys. What would you tell them they have to do? What does it take to become a billionaire and an icon? Intense focus over a long period of time on something that nobody else can do. I think if you want to follow the Elon path, like pick a problem that adds a new capability to humanity, a benevolent solution, uh, that for you to know other people are working on and work on it intensely over a matter of decades. Like that's what he did.

32:24He was thinking about electric cars and space travel in college. Like the ideas that you have, even as a really young person can be the ideas that you take really seriously all through life. I've been really surprised by like how often that's the case, you know, that, uh, Seth Rogen wrote super bad when he was like 15 And James Cameron had the idea for avatar when he was a teenager. And like the adult, it just takes the children's ideas seriously and sticks with them and perpetuates them all the way through. But what's made Elon like truly unbelievably uniquely successful is focusing on these problems that were obviously solutions that humanity needed, but nobody else was working on and being so dedicated to them that he funded them himself.

33:05He stuck with them. Um, he worked through all of these different challenges and the world eventually sort of came to realize that the solution existed and i think it's hard if you if you do add a new capability to humanity that is meaningful at scale like that's who becomes billionaires it's true yeah i mean you have to provide trillions of dollars worth of value in order to get a billion of dollars of value to yourself. The equation just mandates a hundred to one ratio at least. So it's interesting. You know, one story I loved that was in the book is about why you in some ways never want to burn bridges with your ex-employees and why if you're thinking about leaving your job or to go to the next thing, you always want to try to keep people of power in your back pocket.

33:56Can you tell that story about paypal so uh the brief version elon started x.com back in the like 1999 um and peter teal had started confinity um and they were they ended up sort of competing with each other directly for like email online payments um and they were just slugging it out beating the shit out of each other and eventually they decided they should just merge and the combined teams then included like luke nozick and roloff botha and max levchin and reed hoffman and david sachs and i'm sure many other people keith roboi like dozens of luminaries of the valley these days um and eventually elon was ousted he went on a honeymoon trip and he was ousted by peter thiel and the board like the rest of the team was like this guy's too crazy like he's pushing risky strategies like We don't think we should do that.

34:50And so they ousted Elon as CBO, and then they ended up selling the company. And Elon says, I've worked really hard to make that relationship good. I could have been bitter. I could have been angry. But he immediately sort of turned the other cheek and intentionally rebuilt that relationship. And years later, I think more than a decade later, Founders Fund came in with an investment in SpaceX at a really, really critical time that helped save the company. And one good turn deserves another. SpaceX is one of Founders Fund's biggest positions over multiple funds. And they're going to have an unbelievable windfall with this IPO.

35:25Yeah. It's so good. And Peter Thiel is in charge of Founders Fund, if people don't know. But I think the part that I think about a lot is I thankfully got lucky in finance. It's very normal when you leave a company for your employers to fund your next company or ask where you're going next. So I got taught, I didn't know it intuitively, not to birth bridges. So I kept a lot of them. Now they've been investors in my stuff. We've stayed friends for a decade plus. But then I see this younger generation. I'm like, man, I wish somebody would have told me if I hadn't learned it this way, that you just want to be really careful the way you exit just about anywhere.

36:02Because that reputation is important. And at the top, it's so small. I mean, like, you know, you and I probably know every single one of those guys you've mentioned from the PayPal mafia. And, you know, a couple of them live here in Austin. And, you know, if you want something big out of life as a young person, I think there's so much bad. There's so many bad TikToks out there that are like, do you leave? Fuck them. You don't owe anybody anything. And that's a really bad way to make a lot of money in life. So I love that story. Yeah. I just trusted like the good karma network of, you know, you just do the right thing.

36:39And nobody wants to work with anybody who has turned on other people in the past. And it's so easy to play that, like, you know, the one round game and to think that it doesn't matter. And anybody that you talk to who's been around any game for a long period of time is like those relationships matter so much that your reputation is your ultimate currency. And, you know, Warren Buffett's career is an incredible example of that. Oh, yeah. A hundred percent. And it's deals nobody else does. Yeah. And he can famously do them on the back of a napkin because he likes to keep it so simple and has such a high trust index.

37:10I want to talk about a different index, which is the idiot index, which I had never heard about before reading your book. Can you talk to me about the idiot index from Elon Musk, what it is and how it makes him more money? Yes. So if you're a young engineer who goes in to have a meeting with Elon Musk and you are responsible for like one system, he will ask you like, I want to know every part in the system you're responsible for ordered by the idiot index. And what he means is the highest idiot index part is going to be the one with the biggest difference between the cost of the raw materials and the final cost of the product.

37:43So one famous example, and these were all over aerospace, but SpaceX, the story of SpaceX is basically the story of taking really, really expensive aerospace parts and finding a super, super, super cheap way to build them. So, uh, the half nozzle jacket is like a big piece of steel. And to buy one from an aerospace supplier is like$13 ,000. And he's like, why is that one piece of steel$13 ,000? Well, it's aluminum. It's aerospace grade. It's shaped. And the actual answer is that there's like a subcontractor and a subcontractor and a subcontractor and everybody's like sort of passing along profits and adding layers of overhead and expense and inefficiency.

38:22And he's like, how much is the steel in that part worth? If you just weigh it and look at the spot value of steel, it's$200 worth of steel. And so an engineer who comes in and says like, ah, that part is$13 ,000 is like wrong. That part is worth the price floor of that part is$200. I would accept maybe$600 at any, which would be an idiot index of like three. I will not accept an idiot index of like a hundred. So this part should not be a hundred times more expensive than the raw materials. And so for reference, like your iPhone, like the raw materials of your iPhone is like 30 % or a car is like 30%.

38:58So that's like a good ratio for a complex manufactured product. Uh, but aerospace, when he looked into rockets, the rocket as a whole, the index was like a thousand was well over a hundred, you know, 1 % of the cost is the raw materials. And so he's, this has to be a horrifically inefficient manufacturer process. It's a tool for understanding how efficiently a part is made and you know, you stack ranking the things that you're producing by the idea of the next is a really effective, this is useful no matter what you do and where you are. So like, just look at all your expenses and then try to rank them by like, basically how much margin are you paying?

39:35How much money is somebody else paying because you don't understand the fundamental cost of the thing that you need out of them? Yeah. It's such a good point because it's true. Everybody thinks about it in manufacturing, but it's just as true in services. And that's why I think he's so good at getting to the truth. Especially in the age of AI. Like AI totally changes that math around like, what's the idiot index of moving pixels around? It's now very close to zero. Yeah. And so how often, I mean, how are you going to stay in competition if you don't understand what the real cost of things are?

40:03And so I think half of your job as a CEO is going around and saying like, how long did that take us to do? How expensive was that? And then I love his lines that you probably know better than I do. But, you know, is it illegal to move faster? Is it against the laws of physics to move faster? Or is this just like a personal preference or a business decision that we're making? Right. Yeah. This is one of his superpowers is not starting with the current best practice. Like this is one of the things I've taken away is like when I hear, well, best practice is X. I'm like, oh, we're already lost. Like we're starting from a bad place because only incremental improvements are going to come from like, well, how do we do it today?

40:37where he starts with is like, what is the theoretically maximum, most efficient, most effective, like perfect thing now show me your excuses for not getting closer to that. And that's how you like actually evaluate critically those obstacles between you and the theoretically perfect and move through them. If you're finding this as useful as I am, please do me a huge favor. Subscribe to the channel. This is how we continue to get bigger and bigger guests on maybe even Elon Musk one day. If you do the subscribe button right now And tell me in the comments, if you did it, I want to say hi to every single one of you that's a new subscriber here.

41:11I mean, and you can even take this outside of business context. I think about what does this bench cost? And how much of the things are we marked up on life that we're spending more money on and thus more life on that we shouldn't be? Because actually, we could probably get it for one fifth the cost from another marketplace if we just change the logo on top of it. How about weddings? Like the inflation adjusted cost of average cost of a wedding over the last 50 years. If what you actually need is like a ring and a bouquet and a minister, like do it in your backyard, like your grandparents. I got married in a parking lot.

41:40I'll have you know. Really? Yeah. I'm not a fancy broad. Yeah. Parking lot of a DMV because we keep it classy. That is a first principles. Well, I am a little. I mean, I'm so glad you wrote the book because I learned so much from listening to him because he's like 10 X order of magnitude, more intelligent and effective than I am. And so if I could just steal one X that effectiveness, I'm going to be an outlier in my industry, which is how I'm thinking about this whole conversation. Like, how do we just take one X of his efficacy and apply it to our lives? And if we could do that, then it could change a lot of things.

42:14You know, Elon is so obsessed with speed. What are his rules for moving faster and getting more speed in business? Yeah, the speed of all of these companies is an absolutely fundamental trait. So what's interesting there is he designs his organizations to minimize the overhead of communication. So he puts people who need to share information next to each other, puts engineers and designers like on the line next to people who are manufacturing things. So my phrase for this is collapse the gaps to communication. Just get rid of anything that is between people who need to be interfacing. Every organization has this, right?

42:54There's natural tensions between sales and product or service and engineering or whatever it is. And just like move the off, literally you sit next to you now and you listen to each other all day. And like, I just need higher bandwidth communication between you two. An interesting thing is that, uh, sort of communication delays stack. So if it takes you one hour to reply to an email as like, you know, the first rung, you've actually pushed out the final communication by like maybe 24 hours um and so learning to like drop shortcuts like chutes and ladders information around organizations directly to people who need it is incredibly important um weekly reviews like just the cadence of the things that get checked and how often they get checked um the returns to speed like he's got this great line simplicity delivers both reliability and low cost and things can be so much faster when they are simpler like when you're just eliminating steps um it's one of the very counterintuitive things to like you subtract something and everything gets better it doesn't cost something uh but eliminating the cost makes improvements itself it's alchemy it's absolutely um one of the core things here and I think that creates speed.

44:11And then the speed then leads to increased efficiency on your, like you turn over cash way more often. And Elon says like a factory moving twice the speed is equivalent to two factories. And so you've doubled the value of your working capital. The relentless focus on speed from him as an operator on decision-making on the pace of manufacturing on like it is, it is absolutely throughout these whole, all of these organizations. the learning rate is just the ultimate thing that you're trying to engineer. What about for all the people who, and I hear this all the time, people say, well, but if you move fast, then you're breaking stuff.

44:52If you move fast, quality drops. If you move fast, you make bad decisions. There seems to be this immediate reaction by us as humans that to go fast is to do things sloppily. If you can move faster, you just have the ability to make more mistakes, but it's okay because you find out the truth faster. And thus, because cash is moving more quickly, you, you just have more long, you have a longer runway to fix the mistakes. I think this is true in hiring too. Like, uh, he gets his reputation as being like hardcore and an asshole. And, uh, in the same way that Steve Jobs did in part for firing people quickly and sometimes summarily or with very little judgment.

45:31And what I realized is like erring on the side of firing too quickly is actually so rare. And so we have such like an emotional reaction to it. Oh, that's unfair. But actually 99.9 % of organizations on the planet are erring on the side of firing too slowly in some cases by a day or a week or years or never. That was a mistake, but we're a culture that prizes speed. We move really quickly and like we are going to make mistakes of speed and they're better than making mistakes of slot. The formula to know if you're going too fast and making too many mistakes is like, you should have at least 10 % of the things that you regret in some way, or 10 % of the things that you have to add back later, Elon would say.

46:13And so maybe if you're too much over the 10, that could be problematic. But if like 80 to 90 % of the decisions you were correct on, and you only needed to go a little bit slower on 10 to 20, your speed of the 80 is so much bigger than the mistake of the 20 that you're winning. So there's probably some formula there even. Yeah. And I think that like the trilemma, right, that like you can have it fast, cheap or good. Choose to like rejecting that is a really helpful thing. Yeah. So like reject the trilemma entirely. Reject the trilemma because speed lowers cost. And so if you hold the quality bar and just move faster, you should be able to lower costs.

46:52This is my love language is talking about speed of business and slow rate of cost. Like, I don't know if everybody else is hot and bothered right now. Let's say this. I hope you are. I know you won't, but I do think this just like these moments when you understand this in business and your life, it's hard to ever look at the world the same again. Yeah. Rejecting the trilemma is a huge, like that feels like a paper wall. Right. And then when you, once you have that in your head, when you hear people on your team, you're like, Hey, I'm asking for this thing. I know it's hard, but this is, this would be a big innovation.

47:22This would be a breakthrough for our company. This would be a new successful product line in your leadership team. to be like, well, you know, we, this, that, these are the trade-offs. This is like, nope. Like, or you're getting it from a contractor, um, somebody that you're hiring a supplier that you're evaluating. And you're like, I'm going to push it. I'm going to hold you on a quality bar and I'm going to push you on speed. And like the cost should be there. Like, isn't there a way that moving faster reduces costs? And a lot of times there is, so there could be. Yeah, this is really good. There's a lot of tension in the book and in Elon in general, which I love.

47:55He's obsessed with truth, direct feedback, and reality. He also has this take of maybe some people think he's anti-empathetic or he's too tough on feedback. In your studying him, what parts are you like, we should all emulate this? And what parts are you like, I think even he would have regrets on this or are there any and it's just public you know sort of uh perception of him i think the one of the things he i mean he is unique in the fact that he is on the spectrum right he has asperger's he's been public about this and to some extent he has a little bit of a biological advantage in discounting sort of like the feelings or emotions of others right and peter teal has an interesting tape.

48:40It's like, we should ask ourselves why all of the great business builders seem to have some sort of this pattern. There's a thing in the Valley of being like fashionably autistic. He like, it's so weird. Like, why does it take that, uh, that type of person to like be an innovator? Uh, we should be celebrating these people. We should be socially rewarding them. But when they're disrupting something, you know, the status quo, everybody's sort of attached to the status quo in their own ways. And I think what Elon does, which is so he has a knack for it, but anyone can do it in the proper context is have empathy at the level of the mission, not empathy at the level of the individual.

49:18Right. And so that goes back to the, like, are you firing too slow, too fast? Do you have the right team? Like if what you really care about, if the most important thing in the world that you bet your life on is, you know, getting, making life multi-planetary, that is a mission. That's very easy to be like, I'm so sorry. you're not cutting it. There's a better person for this seat and the team deserves to have the best person in the seat because this mission is just so important. Like that is a really, uh, holding the empathy at the mission of the individual, even though you, you, you know, you look like an asshole and you have to have a lot of hard conversations.

49:49Like that's what, you know, leadership is in a lot of these cases. Yeah, no, I've certainly felt the same thing. I always do giggle though. I do think this is like a little victim mindset to say, but I do think like women get a rougher edge on this one. Like they're not, it's not seen as good of a thing when you're non empathetic. Like Alex Cooper's getting trolled in the news right now for being like too hardcore of a place. Like she's like one of the top podcasters in the world, totally create an ecosystem. I bet she's tough. I bet she's not super nice all the time. Like why are we shocked by this?

50:20So I kind of come back to that with Elon too, which is like, if you want to do really hard, big things, you have to make really hard, big, uncomfortable decisions that most people would probably find just, Just about as comfortable as sandpaper on skin. Yes. A lot of them quickly. Yeah. In back to back to back. Yeah. In spite of the feedback that you're getting that maybe, you know, it's, it's harsh or it's too fast or it's too off or whatever. Yeah. And so if you get that feedback, like, and you're listening, I guess it's like, just know that that's okay. And like, that is probably what it takes at the highest level of the game.

50:49One of my mentors, it gives me like, um, just when you're feeling stuck about a decision as an operator, it's just kind of like, do you know intellectually what the right thing to do is if nobody's emotions existed, if none of the feelings were going to be heard, if everybody understood and could perfectly understand your intentions and what you want, that you were well-intentioned and pure and, you know, mission oriented and honest in what you were doing, like is the right decision clear? And almost always the answer is yes. I just feel, I feel tangled in the perception or the feelings of other people.

51:19And once you've seen that, then it's just kind of an internal struggle of like, well, I have to, you know, it is my role to do the right thing for this organization or for this mission, regardless of how it might be perceived or felt by some people. That's hard to do. It's especially hard to do all the time, but I think you'd get better at it with reps. Yeah. I mean, I was talking to the CEO of YouTube, whose name is Neil Monahan, and he's an incredible dude. And it was interesting because he's like, they were asked, what's the hardest part about being a leader at your level? And I could only imagine for Elon, but he said, the hardest thing is by the time a decision has come to me, it's only two bad choices that are left.

51:53And so if it's easy choices, if there's any easy choice or good choice, somebody else has already made it. But when you're at the top, the only options are usually bad or not great. Otherwise, it would have been handled already. And I thought that was very well said. Yeah. Elon's version of that is like everybody thinks they want to be CEO, like from the outside, like you see the trappings. But when you're CEO, you get a distillation of the worst problems in the company. What does Elon Musk say about being in his head? I can't remember. Like he has a couple of lines about what it's like to actually be him.

52:23and do you really want to aspire to this do you remember that story yeah he's described his mind as like a non-stop explosion or a never-ending storm like an unhappy storm you know the rage demon in the skull like it's very um he says if you think you want to aspire to be me or do the things i've done like i don't think you do most of my life has been very hard and painful and a lot of that has been as a result of the decisions he's made because he's just chosen these grand quest i like to think of him a little bit as like a sci-fi hero like he's he is a genius and but in many ways he's like still boyish he's described that way in the like a lot of different ways sense of humor and taste video games and movies and like things like that and it's very like he has this sci-fi hero bent about him which like i don't care how long the odds are i'm just gonna like i'm gonna keep going on this grand quest and it doesn't matter how you know big the demons or how challenging the path, like I'm just going to keep walking it.

53:26Um, and that's partly, I think how he manages to have the success that he's had is like taking these hard, narrow paths. At one point, um, you know, Elon decides to take on X and buy it too. And, um, he has a couple lines from around that period about how, if you really want to sell something, salesmanship is showmanship what does he mean by that like why does elon sell so much how do we learn how to sell from elon musk i think he is one of his absolute top moves that is still underrated is demos like show don't tell like loaded up the rocket and drove it through washington dc on a truck bed he got the daimler deal in part because at tesla the tesla uh the executives from daimler were coming to visit tesla and he's like we have a slideshow we have a presentation like that is insufficient evidence so in like 30 hours you grabbed him engineers and had a i think it was like a smart car and they loaded an electric drive train into a smart car which absolutely ripped shit because it was like you know this tiny little light car and so it would zero to 60 and these guys are like experiencing acceleration that they've never felt before and that was that demo was in part what drove them um even the bad demos early in tesla where like stuff wasn't right because it was too hot and gave larry and sergey a ride in um one of the early roadster prototypes and it was like a bad demo but they still invested because they were like oh these guys are like really building stuff and over and over again this kind of show don't tell uh just show physical progress build a demo build a prototype um as quickly as you can like get out of powerpoint get off the whiteboard and like get your hands dirty and have something to show tangible is he does over and over again yeah you know what's interesting too is i think a lot of times like you get scared to do demos because guess what happens when you do a demo something can go wrong very little can go wrong in a powerpoint or in a presentation where you talk but if you want to make a big huge change having a little risk again seems to be the common thread like i loved when he had joe rogan shoot the bow at the car you know and it it like broke the window or it dented it or something you know and didn't he shoot a gun or something at the car and it broke the car window it didn't work but everybody remembered it and bought more cars yeah so it's it's almost like you can demo the thing and even if it doesn't work people reward the risk yeah the cyber uh the cyber truck reveal like threw the ball bearing at the window and it wasn't supposed to break and it did or whatever but and he laughed and he laughed and that became like somehow an even bigger story and me right than uh than it would have if it had gone right yeah that's a good really good lesson and i think you know we're even a visual media where i'm you know online showing stuff a lot and we still don't do it enough you know so often i fall back to the powerpoint as opposed to showing the thing live it just takes a little bit more creativity what actually i don't think elon gets enough credit for the creativity angle he gets a lot of credit for like brute force and then big missions but are there stories where you're like wow this man is actually incredibly creative as a storyteller or as a builder that you can think of and i think the ability to sort of see things that other people aren't and like push beyond that boundary is like he's um he's an example setter you know in a lot of ways um like who else is like talking seriously about building mass drivers on the moon so like on a frontier basis he's like thinking further out one of the tools that he talks about using like people don't realize spacex was not originally a company it was a philanthropic mission he had almost 200 million dollars from their sale of paypal and his first plan was to just shoot a rocket to mars um have a little greenhouse uh on the surface of mars and he says the reason he did this is people respond to precedents and superlatives.

57:24So when he's launching a product and you hear this in Apple all the time, it's the thinnest, it's the fastest, it's the biggest, it's the first, like something about us, like that's a headline. Um, we want it to, we want the best, um, or the thinnest or the fastest or the cheapest or whatever. And so he wanted to set this precedent that is like, this is the first life on Mars. He wanted, you know, the Sunday morning newspaper shot to be like a green plant on the red planet. And that that would like catalyze this, movement of, you know, an increased budget for NASA and new interest and a new age of space travel.

57:56Like this is another reason why we know that he's truly a missionary on these things. And it turns out that the reason that he couldn't do that was that the rocket technology wasn't there and wasn't cheap enough. And so he's like, Oh, the vehicle to get there doesn't exist or is too expensive. Maybe I need to conduct a feasibility study on like, can I build the vehicle? Uh, so pulled all these different rocket engineers and just kind of did a like Saturdays every Saturday, like feasibility analysis. Um, and then right around the time they were kind of like, Oh, this is going to, this, this could work.

58:25PayPal sold. And he's like, all right, let's, let's go to it. Do you think that you should do side quests in life to be successful? Like, it seems like Elon has a lot of side quests from like a flamethrower, you know, to a boring company tongue mall. Yeah. I want to say yes, because I feel like he does so many and I'm sitting here today because of my side quests right like um i think it goes against the kind of like maniacal focus thing that should seem like one of the big takeaways from elon um but that's how he has fun i think a lot like you could call twitter a side quest you could call doja side quest you could call um boring company neural link like these are all you know he will be known for teslas and spacex but so many other things, um, he just spins up and, you know, this is closer to a navalism, but I feel like just do the thing that you are most naturally inclined to do.

59:23Like trust your intuition a little bit. Um, and Elon said, I think, you know, people in his life have been like, too many side quests, like we got to get back to the mission. Um, so, you know, let's all hope we've got the people in our lives that can, uh, help us get on the right tracks if we happen to lose it. I don't know if you know the answer to this, but like, given how intense he is, does, do his companies have crazy turnover? Like, do people just churn and burn at his companies? And does he care about something like that? I think it's somewhat of a barbell. So I do imagine there's people who are like, you know, six months in and like are turned over quickly.

59:59I also know a lot of people who worked there for a two or three year, like tour of duty. You know, the rule of thumb in startups is like you, you're a different organization. every time you triple in headcount or roughly an order by two, right? And so what he says is like, what looks like a three-year churn is actually a full tour of duty. It just, at another company, it would take 10 years to do it and it would look like a normal, healthy career path. And here, like we covered that ground in three years because we're just moving more quickly. But I think the assumption that churn is always bad is something that he would reject.

1:00:30Yeah, I think so too. I also think, I mean, we found in our companies, we about triple every year. And that's crazy, by the way. Well, we've only been in business for like, you know, four years, but I think that originally used to freak me out. And I'd be like, my people who are here from my first day, you know, 90 % of them aren't here today. And so, you know, that makes you question yourself as a leader. And at some point, one of my better mentors told me that same thing. They're like, well, actually they either have to become three X better than inside of a year, which could totally happen.

1:01:01You could grow at the speed of the company or, you know, they're going to get outgrown by the company or their role might get downgraded at the company and somebody else might come in over you. And so I do think normalizing that, like in having those, I also like how he has all these formulas for everything. So it allows you to contextualize what's normal or not. Yeah. And there's some people who are happy at a 10 person company and aren't happy at a hundred person company. There's agency on the employee side too. Yeah. And people go through life changes and different priorities and like all of that is, you know, perfectly wonderful.

1:01:31I want to talk about the algorithm. We talk about Elon Musk's algorithm, what it is, what it does. Yeah. So this is his five step engineering process. He I would say it's the like gem that came out of the pain of Fremont. So Fremont was the factory was an early Tesla factory. And he's like, we screwed up everything. It was an absolute disaster. And it was because he got the algorithm backwards. And this is how he learned it. It was like, it's just catastrophic, you know, hundreds of millions of dollars mistake. The algorithm is five steps and the order is very important. So the first step is to question every requirement.

1:02:10He says, no matter how many requirements there are, question them, eliminate as many as you can. Every existing requirement must have an individual human being's name attached to it. The more requirements you get rid of, the less weird, unnecessary compromises you're going to make, the bigger your design space is for potential solutions. He says requirements from smart people are particularly dangerous because you take them more seriously. The second step is delete. Try very hard to delete the part or the process step. The third is simplify or optimize. The fourth is accelerate cycle time. So move faster.

1:02:45And the fifth is automate the fifth. And he's like, I have moved backwards on all five steps multiple times. I've tried to automate something and then I've tried to make it go faster. And then I've tried to optimize it. And then I ended up deleting it because I didn't question the requirements in the first place. And every time, every hour and every dollar on that time to solve that problem was wasted because it was just a whole big mirage basically of a problem. Um, and so applying that algorithm like over and over and over and over again to everything and that's how that's what he actually does when he goes through these weekly like technical review meetings is like having engineers walk through the algorithm and try this is how you like work through these road blocks and arrive at these radical rates you've got to figure out how to get into some of these meetings and then write about how he runs meetings because it's the most like it's gonna get no views on the internet but i think the way you run meetings and do readouts is really like how fast your blood moves through the veins of a company.

1:03:40And it's such a unique thing that's so hard to do. And then extra hard to get your team to do it as well as you. I mean, it'd be fascinating to see there's all of these stories are incredible, but I think the things we often don't get to see are the act, like talk about show, don't tell. We get told, told, told, told all the time on Elon, but God, if we could get behind the scenes and be like, well, actually let's talk about one, one here that I thought was amazing is he sends an email and he says his emails are some of my favorites but it's like to everybody subject please note if an email is set for me with explicit directions there are only three actions allowed by managers email me back to explain why what I said was incorrect sometimes I'm just plain wrong exclamation point to request further clarification if what I said was ambiguous three execute the directions if none of the above are done, the manager will be asked to resign immediately.

1:04:33Thank you, Elon. And like this email is such a great exact example of how he communicates. It's like one, any reaction to that. And two, are there others like that where just his, the actual artifact from Elon is worth dissecting? Yeah. There's a, there's a book that's like, I think it's like a dollar on Kindle that somebody just like collected a bunch of his emails and it's, uh, I went through it and it's, it's funny to read. And a lot of them are like that where you're like, well, that is unambiguous communication um that is very clear and of course 90 % of people who read it will be like what an asshole um and it's like fuck that guy yeah you're emailing a thousand people and you're trying to be like we are in wartime oh my god like you've got to communicate don't just ignore my shit like tell me what's going on um correct me or do it or like yeah um it that's a pattern actually you see like even creative people i i want to say it's george lucas where he's like he had three stamps on his desk and somebody would like send him a, it was in like the memo days of like a sketch.

1:05:32And it was like, yes, no, or speak. Those were like the only like responses that he had when you're, when you're one of these people's like in the nexus of a thing and you're trying to manage thousands of inbound communications per day, thousands of decisions per day. Like how else do you do it? But to be like, I got three slots like this, this, or this. You really can't. Yeah. And so I think especially, yeah as you're building anything trying to figure out what is your version of the three is it stamps like lucas you know is it an email that just says you only get to choose three options uh and i i feel this intimately because the world is getting so much faster and so if you don't learn how to become faster you're going to get left behind i think about a lot right now with looms like i love multiple looms said to me don't wait for a meeting give me the loom i'll two and a half x speed you i'll respond in almost real time to it you can have a feedback and if you we have more, we just go back and forth almost immediately because otherwise you have this compounding hour effect.

1:06:33Um, so that's so good. He's really thinks, I mean, it's, it's a very mathematical way of thinking about it. We think it's about like the bandwidth of communication, um, like back and forth. He's like the bandwidth, the bit rate of communication in speaking or in reading is faster than speaking. So he's like, I didn't go to lectures in college. I would just read because I could read faster than I can hear. Um, and you know, the, the, he's like, I hate email, like text is faster. Um, it just, the elegance of it, uh, it's just very, yeah, it's very interesting. Elon Musk has an algorithm that he uses to make more money and make ridiculous things happen.

1:07:08What is the best example of that algorithm at play? The example that I love because everybody, every organization has a version of this, uh, is it Tesla had for a period of time, like a bottleneck in their service center where they were training new employees and they'd hire somebody to work in the floor where people sell cars and they would have to go through like a month of training videos and quizzes and faqs and all of this and it became like the thing that was holding the company back from sales and the president john mcneil and the story is in his book was like applied the algorithm is like what is the theoretical maximum like efficiency it's like they can well they're effective on day one So I was, what does, what does a training program look like that allows an employee to be effective on day one at a new company?

1:07:55It was like, well, it has to be a really short thing that aligns sort of their effort and their intention, even if they don't have a bunch of information. And so he shortened their employee onboarding to one sentence, which is be so good that the customer talks about you at dinner, give them such a great experience that it's remarkable. and they want to go tell their family at dinner. We hired you. We trust you to interpret that correctly. You'll learn everything else you need to as you go. And so like a month worth of time and paychecks and effort and backup, just delete it. Um, it, I found that so like, so obvious once you see it deleted and you're like, we thought it would break a bunch of things.

1:08:40Nothing breaks like hilarious another one is even like they they had a bottleneck around the service centers to say like we we don't have enough shops to do all the repairs that customers are asking us to do we need a hundred more service centers they're three million each this is a 300 million dollar like project that we have to undertake and they went to elon with it and he was like we don't have 300 million you have to find a different way to solve this problem like repair the cars without spending the money to build the service centers. And so the team goes and applies this algorithm and is like question the requirements.

1:09:16Like, do we need a service center in order to service the cars? Some of them. Okay. How many of them? All right. We're going to stand at a service center. We're going to triage every car that comes in. Could we do this repair without a lift? Could we do this repair without a huge toolkit? And it turns out that 90 % of the repairs could be done by a technician with just like a portable toolkit at the customer's home. and so they inverted their service model and they said this is better for customers we're going to come out to you we're going to repair your car in your driveway just send out one technician now guess what we don't have to wait two years to build more service centers we don't have to spend money hundreds of millions of dollars to build service centers we questioned the requirements of what the problem result and approached it with as few steps and as little expense as possible while maintaining the quality of the customer experience and keeping their experience at the center of every decision that we make.

1:10:09And it turns out that the best solution for the customer is actually extremely cheap and extremely fast and implement. And it doesn't matter that the entire rest of the industry is dealerships based around like, come on in, tour our new cars, bring your car in, we'll keep you here for six hours. Like Tesla wanted to do the thing that was best and cheapest and fastest and question the requirements and the problem changed entirely. It's actually crazy that the rest of the auto industry still has some tire dealerships with like whole, you know, parking lots filled with cars. And Tesla has just categorically rejected that and won.

1:10:42And the rest of the industry has seen that and gone, we're going to see with a really old expensive way. Innovators dilemma is brutal. The value of a minute of good thinking from Elon is like a million dollars a minute or more. Like that is just a wild, he's the most leveraged person alive. And so understanding that some, these are the tools that he uses in that minute or in that half hour, to like break these bottlenecks or unlock a new opportunity just feel these are the most battle-tested tools for operating the business that there are um and the result of like decades of extremely hard-won unique lived experience and so to me that that is just like such an incredible signal of the value of these things and how much better you can become by applying them like he's unique and special, but he's not 10 ,000 times smarter than anybody else who's ever lived, but he's 10 ,000 times more effective.

1:11:39And it's because of the software, I think. It's the method and the mindset. There's a lot of raw talent, but that doesn't explain everything. Do you think he's happy? I don't think he cares. I think he's proud of his accomplishments. I could be wrong. I don't know him personally, right? I've not like spent time with him. I don't think he prizes his personal happiness. I think he, uh, I think he judges himself by his contributions. Um, I think he judges himself harshly, I'm sure, because he continues to drive so hard, but I think he's contributed more than anybody else alive and, uh, will go down as one of the greats.

1:12:19Yeah. When everybody like always highlights those quotes about him, where he talks about the rage demon in his head. I also think that he is a very joyous person because you look at some of his, just even the iconic photo on the stage, that is a moment of joy for a human being. And perhaps he is not steady state, happy, or even content all the time, but I'm not even sure that's the point of life either. It's like, in my opinion, to have as much of the varied experience of life as humanly possible than to wash up sort of bruised and battered at the end. Then I think I just want to end with one last question, which is if somebody was going to read this book, what is the one thing you want them to take away from your five plus years now study of Elon Musk?

1:13:05I firmly believe every living human being can get something useful out of this book, no matter where you are, where you live, what mission you're on. And I think if you have a really clear direction in life, then the tools for success are going to be in there and you're going to learn from how Elon operates. And I think if you are looking for meaning and something to dedicate your life to, he has a really powerful way of sort of looking at the world and giving us a sense of what meaningful work is and what kind of missions are worth going on. And I found that that was a surprising piece of it to me.

1:13:39Like I knew he was effective, but his philosophy, his worldview, um, and how passionate he is about it and how broad the perspective is, I think is really interesting and powerful. And, um, I don't write books in order to like, there's no shoulds. Um, I just sort of put this forth and I hope you find something to enjoy in it, but everybody's going to take something different away. It's a fantastic book as are all of your books. Thank you so much for being here today, Eric Jorgensen. The Book of Elon out everywhere. Eric Jorgensen on X is probably the main place where people find you. He's also a great follower there.

1:14:18Thank you for being here. Thank you for having me.

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