The Pros and Cons of Musk's "Demon Mode"

0:00I mean, it sounds like, yeah, classic, typical Elon Musk. I mean, if you think about what he did when he acquired Twitter and he just came in there and went just ape, you know, and kind of gutted everybody who was essentially middle management and then looked and said anybody who was on the development team who had not contributed code in like the last, you know, 60, 90, 180 days or something like that.

0:30Hey, everybody. Welcome to another episode of the Business Lunch Podcast with your host, myself, Roland Frazier, and the inimitable but sometimes attempted it to be imitated Ryan Dice. Often imitated on social media channels, primarily by Bitcoin scammers. It's great. I wanted to tell you, Ryan, that I recently took your advice to invest in Bitcoin and it's gone down. So I'm very, very unhappy with that experience. Yeah. And it's not just that you want to invest in it, it's that you want to send it directly to me. Yeah, that's it. I was a little surprised that given that you have the channel Ryan Dice that you went with Ryan Dice, Big Daddy, Big Bitcoin.

1:14But I mean, you know, who am I to criticize? You know, right. It's a branding exercise. So I wanted to talk today about something that I thought was kind of interesting. And it's a combination of things from Elon Musk. So Mark Andreessen recently said that Elon Musk solves all of Tesla's and SpaceX's biggest problems in a week. And then repeats that 52 times a year, which sounds like quite a feat. But then we have the, you know, the pundits saying, you know, this is a guy who built an AI center that, you know, service center or excuse me, server center that should have taken four years to do. And he did it in 19 days.

1:57He's talking about solving all of the challenges of government waste and efficiency and all kinds of other things. And is, in fairness, the richest person in the world, almost hitting, you know, that half trillion dollar mark, which is kind of crazy. So we are talking about quite a special human being. And the question I have is, does this work for anybody who's not Elon Musk? So the basic gist is that he talks directly with, basically finds out what are the biggest problems in the companies, talks directly to all of the people who are able to assist in solving that problem. problem and are dealing with that problem and then creates the solution and has it implemented and then it's fixed.

2:49And then he goes on to the next thing and he does that week after week. So he's getting 52 iterations of each of his three primary companies that he's CEO of happening every single year. Is that, well, I guess the first I'll go with your thoughts. I mean, it sounds like, Like, yeah, classic, typical Elon Musk. I mean, if you think about what he did when he acquired Twitter and he just came in there and went just ape, you know, and kind of gutted everybody who was essentially middle management and then looked and said anybody who was on the development team who had not contributed code in like the last, you know, 60, 90, 180 days or something like that.

3:33He just was like, cool, you haven't contributed any code and yet you call yourself a developer? You can go now. And everybody assumed that stuff was just going to crumble and what do you know, it was just fine. I do believe that people assume that organizations are more fragile than they really are. And I think that organizations in general are incentivized to perpetuate the myth that they're very, very fragile, especially the people who are propping up those organizations and doing very little except for maintaining the politics of the organization. So, I mean, it sounds very Musk-like. I'll tell you, I think the key there, though, it's less that I'm less impressed with his ability to solve the problems.

4:19I think that's good. I think we should delve into how he does that, how he's willing to go straight to the source. What I think he's particularly great at and what I've, in my experience, what I think most entrepreneurs, most human beings are particularly bad at is actually identifying what the real problem is. So often, and I know we deal with this just with the entrepreneurs that we work with, people in founders board. I say people tell them all the time, you know, the answers that you get are directly correlated to the quality of the questions that you ask. And most people just ask really bad questions.

4:55And it's the same with leaders that they're trying to, the reason they can't solve anything is because they're solving for the wrong problem or they don't even know the real problem that they're solving for. And I think what he is particularly great at is identifying from a first principles perspective, what is the actual problem to be solved? I can't tell you how many times I've been in a meeting with a lot of very smart people, all talking about stuff. And we're 15, 20 minutes into this thing. And I'm like, hey, Time out. Pause. What is the problem that we're solving for? Why are we here? It's unclear to me.

5:36I don't even know what we're trying to solve for. And I don't think that that's unique across most organizations. Yeah, it's interesting. I guess that the challenge is in terms of replicating that style. So let's say that, okay, we're doing Elon style problem solving. You are the CEO. You are now the chief problem solver. You're going to be plugged into every aspect of the company. You're going to deal with every major problem personally. You're going to talk directly with the people. It seems like that obviously it has been great for him and the stockholders of his companies. I haven't read a lot, so I'm not speaking with any knowledge about the employees, but it would have to be pretty demotivating to not be allowed to effectively solve the problems.

6:29Maybe he's more collaborative than, you know, than what we have seen lets on, but, but it does seem like a way to be, to never really be able to get away from the company. So that, that's a, that's a challenge, I think. What do you think though about the idea? Like the Andreessen was saying, normally it takes CEOs and companies years to solve problems like this or a full year. Whereas he's, you know, Musk is doing it 52 times every year. I mean, is it even possible to do that? It's like, we have a manufacturing supplier challenge. Can you solve that problem in a week? Or is maybe solving the problem means coming up with a plan and setting the wheels in motion as opposed to actually completely rectifying?

7:19What are your thoughts on that? Well, I think if you're willing to go directly to the source, then it's far more possible than if you're trying to work through the supposed chain of command. And I think the issue in most organizations is leaders are more afraid of hurting people's feelings than they are with solving the actual problem. And I've dealt with this at my, you know, at our own companies where we've got, there's an issue, right? There's an issue, there's a thing. And it's like, well, you know, let's ask so-and-so about it. It's like, well, I don't want to ask them, you know, I'm going to go ask, you know, their manager and, you know, and see if they know about that.

7:57And, you know, we got a meeting coming up about that. I'll just ask it about that. And I'm like, no, we got Slack. Like, I'm just going to DM them now and see if I can get that answer now. Now, here's the reality. More times than not, that works out just fine. And I get the answer. Every now and then, that person is like, what the heck was that all about? I don't know what's going on. You know, and their manager freaks out and it creates this like kind of, you know, chaotic chain reaction that absolutely creates more problems than the one that I just solved. And it wouldn't surprise me if in the solving of the 52 problems or however many he solved that he simultaneously created a lot of other problems as well that he probably was less concerned about because it wasn't his job to solve those problems.

8:45Yeah, or they were less important than the one that he had elected to solve, right? He prioritized. It just seemed it's fairly disempowering. Also, Grimes, basically, and Walter Isaacson that wrote the big book on him said that he has a demon mode, which I've heard before. and it said during these periods which is not unlike what you heard about uh steve jobs as well or a lot of other well-known get stuff done managers it said during these periods musk is likely to unleash his rage on employees or order up a work sort surge um that's isaacson saying that and then grime said that despite the darkness associated with demon mode it's also the mode where he gets shit done.

9:31So, uh, interesting because I think that to get things done very often, you appear to be a demon, even if you're not, and you are, if you're not walking on eggshells, trying to keep everybody happy, you're just focused on nothing but solving the problem. You're going to have collateral people damage along the way, but maybe you're going to get the problem solved faster. And I guess it's a balance of what's more important, right? Yeah. And I do think that's, that's kind of like meth though. You know, you're going to, you're, you're going to get some stuff done. You know, you, you go and you take a little bit of meth, you're going to be really productive for a little while.

10:14But it doesn't scale well. And, and, and I think that if you have the cult of personality, and if you're frankly running companies as successful as, you know, Musk and Jobs, you can get away with it. You can get away with it. And I would just be very, very, very cautious for most business owners, especially small business owners of thinking that you can take leadership cues from Elon Musk and Steve Jobs, right? You don't quite have the, you know, the cultural and organizational equity that they have to go in there, to go in demon mode, blow things up, and then walk in the following Tuesday and have everybody still ready, willing, and able to support you in the mission.

10:59You just probably don't. And so I don't know that you necessarily get to play that card. Or maybe you only get to play it once. A little extra context that Andreessen said that Musk identifies the biggest problem the company is having that week and fixes it. And then he does that 52 weeks in a row. So each of his companies has solved the 52 biggest problems that year in that year. So the biggest problem of the week might, maybe that's a different, maybe it's, let's say that we're paying too much for batteries, right? So the solution is let's build a factory. That's a long-term solution. Maybe there's also, well, have you thought about getting them from this place, that place, doing this, making them differently, et cetera, et cetera.

11:50If it's solving a problem that's the biggest problem that week, that feels different or more temporally compressed than solving like a giant problem. Does that make any sense? What I call BS on is there's no way that every single biggest problem is solvable in a one-week time period. You know, I do believe that... I beg to differ because Marc Andreessen, who is way more famous than you are, said that's true. This is true. Yeah, I mean, here's what I love and what I'm a big fan of. Two things that I think are great takeaways from that. The first thing that I absolutely agree with is I believe that the fundamental job, the single most important job that any CEO has is determining what is the company's right next thing.

12:38Yeah, it was Fred Wilson that said the job, the role of a CEO is to set the vision, hire, train and retain the best people and don't run out of cash. Yeah, I find all those things. I say that all of those are secondary to what is this company's right next thing. And another way to say that is what is the most important problem to be solved? Right? How does the right next thing mesh with really Musk works on theory of constraints? Because he's eliminating bottlenecks. To me, that is always the right next thing. The right next thing is always just what is the problem? What is the bottleneck to be solved?

13:16That's always the right next thing. He looks at everything as a conveyor belt, a business conveyor belt. And then it's how, so he's straight out of the goal, right? Yeah, a thousand percent. So do I. So do we. Yep. So I 100 % agree with that. The other piece that I do agree with is shortening your unit of measurement. So all too often, people just arbitrarily use really long unit measurement where they'll measure things in months. I remember I was doing a consult with a fairly large company. You know, many, many hundreds of employees had raised hundreds of millions of dollars in revenue. And I was recommending that they make some tweaks to one of their landing pages to just optimize conversion rates and get more trials coming in.

14:01This was a software company. And I was like, how long do you think it'll take you to do that? And they're like, oh, you know, we should be able to get it done this quarter. And I was like, well, God, yeah, I would hope so. Because I mean, it was early on in the quarter. I was like, how long? And they're like, you know, probably about two months. And I was like, months? I was like, you're not allowed to use months as a unit of measurement. Like, give me weeks. And, you know, because this is the kind of thing that should have been done in like days. And so I was trying to just say, like, you can't even have months as a unit of measurement.

14:34And so I do love the idea of saying, like, we are going to solve this problem in weeks. To say that every single what is our biggest problem can always be solved in a singular week, though, I don't know, man, I'm not buying it. I'm not buying it. What I do like about it, though, is that he's in terms of so it is disempowering to middle management for him to cut through the layers. But it's also incredibly expeditive. Right. It goes it really makes things go faster to say who is the where is the problem? The problem is with in the receiving department. Great. Or let's say the parts department. The problems in the parts department.

15:16OK, great. what is the problem? The problem is we don't have enough parts to fix the Ryan's bumper when the bumper falls off of his Tesla. Okay, great. True story. Great. Who's responsible for that? It's Jimmy. Okay. Jimmy is in parts logistics management. Great. Elon goes in, disregards anybody that Jimmy he reports to, talks directly to him and says, okay, give me the full layout. Then applies first principles to say, what if we were not limited or constrained by anything? How would we eliminate this constraint? Well, if we could make our own, great. Can we do that? We can't do that today. Let's put that on the board to talk about as a big thing that we'll do as an initiative maybe.

16:06What can we do today to solve this problem or minimize it to eliminate the constraint that we've got? Well, we could source parts from these other guys. We'll pay a little bit more, but we'll be able to put our cars out or fix the cars or fix Ryan's car finally after six months. Then it is solved. And the benefit to Jimmy and Jimmy's direct reports and his department is, wow, that guy cares. He came in, he, you know, he's a big famous guy doing all kinds of stuff, which is whoever you are in your organization, you're the big famous person, you know, and I say guy, uh, gender, you know, irrespective.

16:47Um, but you know, you're the, you're the head person that everybody looks up to. And, um, no matter how small your organization is, you're the most important person to them in their career, right? So now that person has come in and shown that they care, they're focused, they know who you are, and they're actually going to roll up their sleeves and be shoulder to shoulder with you, figuring out how do we work through this instead of blaming you or writing you up or asking you to write a report. And that I think is really, really great. The question would be, how do you involve those other people who are managing that person so that they hopefully identify this problem in advance later the next time a problem comes up so you don't have to be there?

17:35Because, you know, Musk also says he works way too hard and he has no life. And, you know, and that's not a particularly healthy way to be either. So I think that's the good side of it is the I care. I show you I care. I'm going to get it done. And I'm going to focus all of my brain power and my organizational power on this problem to solve. Yeah, I don't think it necessarily has to be a bad thing or perceived as bad thing to the people who the problem is being solved for, if it's positioned right. And so if you're a leader, and if you decide that you're going to take on the role of solving a particular problem in your team, I don't think that's necessarily a bad thing.

18:18Because frankly, your people probably are at, you know, are above full capacity already. You know, they showed up and they've got work to do that day. There's just a general whirlwind, the maintenance of the business. And so to go to them and say, look, I know you're busy. I know you're at full capacity. And yet I know that this issue, this challenge that we're dealing with over here is the next big thing that we need to solve for. To ask you to stop doing what you're doing, to solve it would mean that too many plates would come crashing down because the work that you do is valuable. At the same time, to ask you to keep doing that and also to solve this problem would be completely unfair because I know that at some point you want to sleep at night.

19:01So what we're going to do is I'm going to come in and I'm going to solve this problem. I may have to ask you some things because you own this area. And when it's done, I'm going to tell you what I did, because frankly, we can't have this happen again. Right? So I think that that can absolutely be, like you said, empowering to that person. I'm thinking, oh, thank God, you know, this is, this is great. And it can be seen as, you know, almost a godsend when you come into somebody's department and you fix something, not, you know, not a negative, not, not the bobs are here kind of thing, like an office space type deal.

19:37I think, but you got to, I would position it just like that ahead of time. I would make sure that, that they do know that. And so when you say they, who, who is they? Whoever's the leader of the department that you're going in and fixing, quote unquote, their problem. I think making it clear that this is the company's problem. This is everybody's problem. It's not just yours. The fact that this bottleneck, this issue, this challenge happened to appear in your sphere of influence doesn't necessarily mean that it was your fault. It simply means that this is the next right thing for us to solve. Once we solve for this, guess what?

20:12It's going to move somewhere else. That is the nature of constraints. And the solving of this thing means that it's going to create another constraint somewhere else. And that simply is what growth and scale looks like. I liked what you said that one of the good explainers for the people that are getting kind of cut out of the management hierarchy so that you go directly to the bottleneck is to say, you've got lots of other things you're doing, and I don't want any of those balls to be dropped. I want to go solve this problem. And then we're going to do a postmortem as to why did that problem come up to be something I needed to solve?

20:51Not in a blame allocation, but in a proactive solution going forward kind of way that would also help management learn how you solved the problem. And if you're taking the time to truly postmortem it, to reverse engineer why did that problem come up in the first place? How do we stop it from happening in the future? And now we have a benchmark. We have a process for identifying that, dealing with that. We have a benchmark of this is how we look proactively to make things like this not happen in the future. And that's also a measuring point for us to measure management's capability to be a good manager because if it happens again and they didn't follow that process, then you've got the wrong people in those seats and you got to move them out or, you know, reallocate them to a different place.

21:45So I think that key would be communication on the going in that you said, solve problem. I'm here for you. We're all part of the company. Nobody's too, you know, too big or small to pitch in. Then back to postmortem, SOP, KPI, measurement, and then monitor, then that kind of fleshes out the whole thing. And if we're doing it that way, it's probably a great way to do things. I also think the names matter. Yeah, for sure. I also think the names matter. So when we're doing this, we don't refer to them as problems or issues or challenges. We call them bottlenecks and opportunities. And so we maintain a running B and O list, bottlenecks and opportunities list.

22:33So it's not a problems list. It's just these are the bottlenecks and these are the opportunities for additional scale. Bottlenecks are always going to occur in any business that is growing, right? And so we call them bottlenecks and we call them opportunities. So if the bottleneck and opportunity has occurred in your particular area, that doesn't mean that something is broken. It means that something right happened somewhere else. So names do matter. It's only a problem if the same issue has occurred multiple times. Right. That's the distinction. Yeah. And I think that's why it's important to have that back end, to have that, like, because if you just go in and fix it and then you're on to the next and nothing happens, nobody learned anything.

23:16Maybe the people that you were working with directly, you know, maybe she or he learned something, but the organization didn't take a learning. And so I think if you put that back in and then you get that, right? And then you also get the right to hold the manager accountable if it happens again to say, we already did this, right? Oh, a thousand percent. Yeah. I mean, and that typically is the conversation. It's like, okay, so this was an issue, you know, this was bottleneck, but like we fixed it, right? And so, so we're good. And so if it goes back to the way it was like that, that's a, that now becomes a problem.

23:52Right? Yeah. Right. Okay. And so absolutely that, that, that's how you close the loop. Um, and this is how it just becomes the new normal. This is how it becomes the new standard. And this is how companies are able, uh, are able to grow in scale. So as far as Elon is concerned, like, I think the only thing that makes what he is doing unique is the pace at which he's doing and to a certain degree, the violence with which he's willing to do it. But what he's doing is simply, you know, I think what every CEO should be doing, you know, you should not be, you know, I believe that every CEO should be operating at about 30 ,000 feet, about three inches and nowhere in between.

24:35So you're living up at the vision or you're down, you know, solving the most micro of problems and, and you're kind of bouncing back and forth between those two states, never lingering, you know, in the middle, never getting caught in the trenches. And so if that's what you're doing as a CEO, you're probably doing something right. That's what he does. He just does it at a pace that is, I would argue, somewhat unsustainable. And if you just look at this person, I mean, he says, I, you know, my relationship suffer. I don't have enough time. I work too hard. It's not healthy. I mean, he's acknowledging that his obsession with this stuff is unhealthy.

25:15And God forbid it was only one company, not the three that are the big. But then there's also the Boring Company and all these other companies that he's running at the same time. So, I mean, my guy's got a lot going on. Yeah, we're looking typically to solve three per quarter, three major bottlenecks per quarter. Yeah, in one company. So, yeah, so 52 in a year. But, you know, he's also slightly more successful than me, just slightly, though. Just a bit. And probably a lot of that is luck. All luck. All luck. I love it. Well, hopefully, you guys, you found that helpful. I think it's actually kind of cool to look at something like this.

26:01We looked, depending on the posting of these things, we looked at Bear last time and said, you know, here's a different way of doing things. Now we're looking at Musk. I think that if you take what we're talking about and say, what of this can I apply to my company? It might not be, I'm going to go in and directly work with somebody and solve problems 52 times a year. Maybe you don't even have 52 problems a year, but taking that and saying there's a lot of good to take from it. There's a lot of things that probably won't work for you or that you wouldn't be willing to do and that's okay too, but it doesn't mean that the idea of it isn't useful to you.

26:41So take that and think about how I can implement it. And we've got some other cool things along these lines that we'll be talking about in episodes as we go forward. So hope you found it valuable. If you did, please share this with seven of your friends and assuming that you have that many. And if you don't, you got to get out more, work less, stop solving all those problems. And I think that's it. So anything else, Ryan, before we sign off? Yeah, I love what you said. Share with at least seven of your friends and go give us at least five stars. I like it. And we will see you on the next episode.

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