Elon Musk
by Walter Isaacson
Walter Isaacson, renowned for his biography of multiple innovators including Steve Jobs, Benjamin Franklin, and Leonardo Da Vinci, recently dropped a new biography on Elon Musk. As someone who loves tech and innovation around Tesla and SpaceX, I could not resist diving into the biography and sharing some of my takeaways.
I will mainly focus on these areas…
Elon’s management style
The idiot index
The Manufacture Algorithm
Elon and other CEOs
Twitter saga
Management Style
Elon was born in 1971 in South Africa. He had a difficult childhood as 1). He was constantly bullied at school 2). His father was abusive towards his mother (Maye) and the children (Kimbal, Elon, Tosca). For instance, rather than helping Elon when bullied, his father would call him a “loser” and side with the bullies.
To cope with these measures, Elon would
Immerse himself in books
Shut off his emotions
The effects of this type of childhood are he’s super independent, a risk taker, and can tolerate high amounts of pain, but will neglect most of his emotions when making decisions.
These traits would become very important when he manages his companies, like treating employees coldly and firing them. Other execs like J.B. Straubel (Tesla) and Gwynne Shotwell (SpaceX) have to deal with his dynamic emotions (child-like vs demon mode).
Elon has two grand missions.
To transition the world to use sustainable energy
To make human civilization a multi-planetary species.
Initially, many people (including Elon himself) thought these missions would fail. Peter Thiel called his businesses crazy bets and Reid Hoffman said “What I didn’t appreciate is that Elon starts with a mission and later finds a way to backfill in order to make it work financially”.
To make these grand visions happen, Elon would set unrealistic deadlines and ask everyone what they accomplished day to day. If it didn’t make sense, he would insult and fire them. The reason for this is because he believes people tend to put out their best efforts when there is a tight deadline. Furthermore, he doesn’t want people to feel comfortable with the belief that innovation just happens. Elon believes innovation is not guaranteed and ever since the moon landing in 1969, the U.S. hasn’t made much progress in space exploration.
Elon strongly believes that a small number of highly motivated engineers is much more productive than a large group of mediocre engineers because one mediocre engineer could hold the entire team back.
The interesting thing is he also participates in these crazy sprints himself. For instance, sleeping on the floor at the Tesla factory and SpaceX. The reason for this is to be closer to the manufacturing process and to know every detail. This is also the reason why he puts engineers with designers; because design has to be practical and implemented in the real world.
Was the tight deadlines, cruelty, and harshness necessary? Isaacson relates this to one of Steve Wozniak’s experiences.
When I was reporting on Steve Jobs, his partner Steve Wozniak said that the big question to ask was Did he have to be so mean? So rough and cruel? So drama-addicted? When I turned the question back to Woz at the end of my reporting, he said that if he had run Apple, he would have been kinder. He would have treated everyone there like family and not summarily fired people. Then he paused and added, “But if I had run Apple, we may never have made the Macintosh.”
SpaceX and the Idiot Index
In the beginning stages of building SpaceX, Elon visited Russia in an attempt to buy two Dnepr rockets (old missiles). After a couple of rounds of negotiating, he thought he had a deal to buy two rockets for $18 million. But they said no, $18 million each. They even taunted him “Oh, little boy, you don’t have the money?” and suggested maybe they could do $21 million each. This angered Elon and he decided to reframe the problem using first principles thinking, grilling down the problem to the fundamental raw supplies, which led to the “idiot index”. The idiot index calculated how much more costly a finished product was than the cost of its basic materials. If a product had a high idiot index, its cost could be reduced significantly by devising more efficient manufacturing techniques. If a component built with aluminum costs $1000 but the aluminum composed of it only costs $100, then the idiot index is high and the manufacturing process is inefficient. Rockets had an extremely high idiot index.
Manufacture process
In summary, Elon Musk’s manufacturing process can be summarized as follows
Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from “the legal department” or “the safety department.” You need to know the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb.
Delete any part or process you can. You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, then you didn’t delete enough.
Simplify and optimize. This should come after step two. A common mistake is to simplify and optimize a part or a process that should not exist.
Accelerate cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted.
Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.
The process is followed by a few corollaries
All technical managers must have hands-on experience. For example, managers of software teams must spend at least 20% of their time coding. Solar roof managers must spend time on the roofs doing installations. Otherwise, they are like a cavalry leader who can’t ride a horse or a general who can’t use a sword.
Comradery is dangerous. It makes it hard for people to challenge each other’s work. There is a tendency to not want to throw a colleague under the bus. That needs to be avoided.
It’s OK to be wrong. Just don’t be confident and wrong.
Never ask your troops to do something you’re not willing to do.
Whenever there are problems to solve, don’t just meet with your managers. Do a skip level, where you meet with the level right above your managers.
When hiring, look for people with the right attitude. Skills can be taught. Attitude changes require a brain transplant.
A maniacal sense of urgency is our operating principle.
The only rules are the ones dictated by the laws of physics. Everything else is a recommendation.
Elon also does most things based on trial and error because that’s the best way to move fast and learn. At the end of the book, the Starship launch exploded midair, but Elon wasn’t mad because it was a good way to learn from the mistake and iterate fast.
Elon Musk and other CEOs
Jeff Bezos - Bezos's spaceship company (Blue Origin) was almost always in battle with SpaceX on winning contracts and seeing who could get into orbit first.
Bill Gates - a philanthropist said he makes great efforts to help out the environment but decided to short Tesla for profit. Elon shot him back saying Tesla’s goal is to create sustainable energy vehicles.
Larry Page - Elon and Larry were close friends until they had very different viewpoints on the ethics of AI. Larry was optimistic about AI surpassing human intelligence while Elon believed in preserving the human race. The two stopped talking when Elon successfully wooed Ilya Sutskever to join OpenAI.
Tim Cook - Elon almost went into battle with Tim Cook on Apple’s data privacy and Apple store tax issues until Larry Ellison warned him to not be on the bad side of Apple.
Parag Agrawal - started well but later had much friction in their tweet interactions. At the end, Elon fired him a day early so he could not exercise his stock options.
Twitter Saga
After the 2020 election, Elon felt like Twitter was biased towards the left and wanted to get involved himself to make it a public free speech platform. He also had always wanted to make Twitter into a multi-purpose superapp that would support financial transactions, similar to WeChat.
Initially, he joined the board but quickly realized he could not share the power, so he decided to buy it out for $44 billion. After thinking about the deal more, he realized he overpaid and wanted to back out or at least lower the price. However, Twitter sued to make sure he followed through. In the end, Musk stabbed the executives by closing the deal a day early and firing them, which meant they couldn’t use their stock options.
After buying Twitter, Elon Musk redefined the culture (from a psychological safety workplace to an aggressive workplace), reframed policies, reinstated many accounts which were previously banned, and laid off a majority of the engineers. However, the platform was quickly swarmed with bots (to test the limit of free speech). To combat this, Elon allowed creators to pay for verified accounts (blue checkmark) as a way to filter out bad actors. But this soon became problematic too because users could impersonate another person or business.
To prove that Twitter was previously not a very “free speech” platform, he invited journalist in to view the Twitter Files. Inside, they found important decision-makings around Hunter Biden’s laptop and the banning of Donald Trump. Around this time, advertisers also began leaving Twitter, and the brand impact started affecting his other companies.
Isaacson’s analysis on Twitter’s fallout is that Elon Musk is trying to run Twitter like a technology company similar to the way he built cars and rockets. Unfortunately, network effects propagate differently.
The Future
Musk has been focusing a lot on AI development. This includes creating xAI to combat OpenAI, full self-driving cars for Tesla, and humanoid bots (Optimus). At this point, he owns X (including xAI), Tesla, SpaceX, Neural Link, and the Boring Company.
“Sometimes great innovators are risk-seeking man-children who resist potty training. They can be reckless, cringeworthy, sometimes even toxic. They can also be crazy. Crazy enough to think they can change the world.”
Takeaways
One of the biggest takeaways for me is that you want to become the smartest outsider. Elon clearly wasn’t an expert in any of the fields he was working in nor did he have a formal education in rocket building, EVs, neural chips, etc. However, he was the smartest outsider and knew just as much about the field. For instance, after getting mocked by the Russian salespeople when buying the Dnepr rockets, he went back and did a full analysis of the entire rocket supply chain, and became an expert within just a few hours. Maybe not enough to build a rocket himself but enough to understand all the components and make clear decisions. With the amount of information on the internet today, it really only takes a couple of days to become smarter than 90% of the people in a field. With some practical experiences, the ramp-up period is only about a month.
Another takeaway is how can you dream big without falling into the fallacy of being an idealist? When Elon proposed his mission of getting to Mars to Reif Hoffman, he was confused, like “How is that a business?” But Elon finds a way to measure these grand ideas with clear metrics. For SpaceX, that is the cost per ton brought into orbit. For Tesla FSD, that is the number of miles driven without intervention. When you measure the problem using clear metrics, your objective becomes clear, and it becomes much easier to break down the problem into subproblems.
Overall, I really enjoyed the book and found the stories to be interesting. Highly recommend to anyone interested in how Elon Musk thinks.