Chapter 49 - Elon Musk
Today’s Chapter is based on the book “Elon Musk” by Walter Isaacson, a biography of Elon Musk the founder of Tesla Inc. and Space X.
Here’s what I have learned from the book:
Hardcore
“Take a simple idea and take it seriously.”
— Charlie Munger
One of Elon Musks’s favorite words and concepts was “hardcore”, a word that can be used to define Musk’s success as a businessman. As a matter of fact, one of Musk’s main quality is his hardcore focus, an ability that allowed him to weed out the noise and to focus on his task at hand. A similar trait to many successful individuals such as Steve Jobs and Charlie Munger.
Musk mentions that “Ever since I was a kid, if I start to think about something hard, then all of my sensory systems turn off. I can’t see or hear or anything. I’m using my brain to compute, not for incoming information.”
Here’s an example of Musk’s hardcore focus: when he first bought a Commodore VIC-20, he completed the sixty-hours course on how to program in BASIC that was included with the computer in just three days. And, at the age of 13, he was already able to code and to create a video game called Blastar which he later sold the code to the PC and Office Technology magazine for $500.
Furthermore, this attitude of hardcore focus on the task at hand became the working culture at all companies that Musk was leading, from Zip2 to Tesla. As a matter of fact, one of Musks’s favorite management tactic was to set an insane deadline in order to drive his colleagues to work fanatically. Musk believed that this fake sense of urgency was good as it encouraged his engineers to engage in first-principles thinking.
“A maniacal sense of urgency is our operating principle.”
— Elon Musk
A perfect example of Elon Musk’s maniacal sense of urgency came during the time he wanted to ramp up the production line of Model S. He wrote an email to his employees at Tesla titled “Ultra hardcore” and it read, “Please prepare yourself for a level of intensity that is greater than anything most of you have experienced before. Revolutionizing industries is not for the faint of heart.”
Similarly, Musk understood that during his hiring process, it was important for him to identify this maniacal drive in his potential hiree. As a matter of fact, upon his acquisition of Twitter, he realized that he had to fire many engineers in order to cut cost. His criteria was to only keep those that were maniacally driven.
Musk explains that he is a “big believer that a small number of exceptional people who are highly motivated can do better than a large number of people who are pretty good and moderately motivated.”
“When hiring, look for people with the right attitude. Skills can be taught. Attitude changes require a brain transplant.”
— Elon Musk
This concept of being hardcore reminds me of Steve Jobs, who often mentioned that his success at Apple was due to the fact that his company was filled by misfits and rebels. As Jobs would say about misfits and rebels, “About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.”
Similarly, J. Paul Getty, once considered the richest man in America, explains that “the men who will make their marks in commerce, industry and finance are the ones with freewheeling imaginations and strong, highly individualistic personalities.”
While Elon Musk may not be the most popular person at the office, especially when he’s in those state of maniacal urgency, it cannot be denied that this trait of his is critical in his success of achieving what others have deemed impossible. Musk once said “I thought about the things that will truly affect humanity. I came up with three: the internet, sustainable energy, and space travel.” Through his work at Paypal, Tesla and SpaceX, it is fair to say he has done more than enough to revolutionize these industries.
First Principles Thinking
“I don’t know what’s the matter with people: they don’t learn by understanding; they learn by some other way—by rote or something. Their knowledge is so fragile!”
— Richard Feynman
As we have learned from Charlie Munger, first-principles thinking is a great way of reverse engineering a complicated problem. By breaking down the complicated problem into basic components, it will become much easier to find creative ways of solving the issue at hand.
Similarly, Musk, when faced against a complex problem, always tried to reframe it by using first-principles thinking. His work at Space X is a great example of this. Considering that rockets are absurdly expensive, Musk knew that he had to find a way to build cheaper rockets to send people to Mars.
As such, he implemented an “idiot index”, which calculated how much more costly a finished product was compared to the cost of its basic materials. By consequence, he realized that a rocket, which has a high idiot index, was around two percent of the typical material price. This was often due to inefficient manufacturing. As Musk would put it, “If the ratio is high, you’re an idiot.”
By consequence, Musk knew that the solution for cheaper rockets was for Musk to build them himself. If he could device a more efficient rocket manufacturing technique, he would be able to make rockets at a fraction of the cost.
“I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first principles basis. They’ll say, “We’ll do that because it’s always been done that way.” Or they’ll not do it because “Well, nobody’s ever done that, so it must not be good. But that’s just a ridiculous way to think. You have to build up the reasoning from the ground up—“from the first principles” is the phrase that’s used in physics. You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn’t work, and it may or may not be different from what people have done in the past.”
— Elon Musk
Furthermore, Musk loved to question every requirements, especially when it came from regulators. In fact, a big reason why rocket components were expensive is due to the fact that they are subject to hundreds of specifications and requirements mandated by the military and NASA. Elon Musk would often asks his engineers, both at Tesla and at SpaceX, to always question these “requirements” through first-principle thinking. By doing so, one realises that more often than not, these requirements are not necessary.
As Musk would say, “Step one should be to question the requirements, make them less wrong and dumb, because all requirements are somewhat wrong and dumb. And then delete, delete, delete.”
By questioning requirements and seeing them as mere recommendations, Musk was not only able to save money, but he was also able to make his manufacturing of rockets and cars much more efficient.
“The only rules are the ones dictated by the laws of physics. Everything else is a recommendation.”
— Elon Musk
Elon Musk was so serious about this concept of questioning all requirements that he implemented a five-point checklist that was dubbed “the algorithm”. Here’s a summary of it:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.”
This concept of using “first-principles thinking” reminds me of what we have learned from Sam Zell. In his autobiography, Zell explains that one of his mentor, Jay Pritzker, often told him that “if there were twelve steps in a deal, the whole thing depended on just one of them. The others would either work themselves out or were less important. He had a laser focus on risk.”
By breaking down all complex problems into pieces, to their barest elements, Zell was able to significantly reduce risks in his business deals. By consequence, Zell had the habit of keeping things simple. As he once said, “Keep it simple. A scenario that takes four steps instead of one means there are three additional opportunities to fail.”
“I started negotiating the deal, which was complex beyond belief. I was creating structures and terms that had never been done before. I went to Jay and took him step-by-step through this incredibly complicated transaction. And damn it if he didn’t just look at me and say, “But, Sam, isn’t the real key to this whole thing just to rent the office space?” And sure enough, that’s what the whole transaction was predicated on. Jay’s level of intellectual rigor really appealed to me. And I immediately latched on to the understanding that I could cut right to the heart of something complex if I broke the problem into pieces. It was a matter of organizing my thinking. A discipline. It brought me back to seventh-grade social studies where I learned how to create an outline. It was the same core concept, just applied at a more sophisticated level. I still apply it today.”
— Sam Zell
Unconventional Thinking
"I am someone who believes that if a person limits themselves to the fixed ideas inherent in common sense, they will not be very creative.”
— Chung Ju-Yung
As we have learned previously from Harvey Firestone, to have an effective manufacturing operation within a company, it is important to ask yourself the question of “Is it necessary?” and to follow-up with the question of “Can it be simplified?”.
By using these two questions, Firestone noticed that the company were able to make better quality tires for cheaper and with less manpower. The theory behind this technique according to Firestone is that more often than not a lot of the “conventional” required manufacturing steps are not necessities but merely from tradition.
As Firestone once said, “Everyone told me that this aging was absolutely necessary, but no one could tell me why it was necessary. I suggested that we try going ahead without aging and see what happened. We did go ahead—and nothing happened. The tires stood up just as well as they ever had, and we saved millions.”
We also learned from Chung Ju-Yung that the surest way to encourage innovation and improvement is by “shorten the time”. Eerily similar to Elon Musk’s operating principle of “maniacal sense of urgency”, Chung would often take tours of his projects and would always seek to find ways to shorten construction times in unconventional ways.
Chung believed that clever solutions never come from people with conventional thinking. In similar fashion, Elon Musk once said, “If conventional thinking makes your mission impossible, then unconventional thinking is necessary.”
“When we worked on the Jubail project, we had to make 160,000 drill bits to build the breakwater and shore protection structures. If we built 200 every day, it would take us 800 days to make 160,000. But at the site, the workers were making them one at a time instead of using a mold to mass produce them. Their sorry excuse for this wasteful effort was that the molds weren't the right height to fix onto the end of the cement trucks.
When I saw this, I was furious. Why did these people have brains if they weren't going to use them? It didn't take a genius to realize that the outflow ramp for the concrete on the trucks needed to be raised to fit the molds. If they just followed this simple solution, they wouldn't need a crane, and they wouldn't waste time and energy. They couldn't think to adjust the concrete mixer truck, thinking it was unchangeable. Would the gods punish them for making some small adjustments? After I made the changes, we went from 200 per day to 350 per day.”
— Chung Ju-Yung
The above story of Chung reminds me of an example of Musk’s unconventional thinking illustrated in Walter Isaacson’s biography. In fact, when Musk did not have a conveyor belt at Tesla to move the unfinished cars to the next section of manufacturing, he decided to put “it on a slight slope, and gravity meant it had enough power to move the cars at the right speed.”
Likewise to Harvey Firestone and Chung Ju-Yung, Elon Musk was laser-focused on keeping down costs. During his “maniacal sense of urgency”, Musk was often seen on the factory floors leading the way and questioning every single steps with maniacal intensity. Not only did Elon Musk question every single requirement, he often used unconventional wisdom to reduce cost and time.
“We are on a deletion rampage!! Nothing is sacred. Any remotely questionable tubes, sensors, manifolds, etc. will be deleted tonight. Please go ultra-hardcore on deletion and simplification.”
— Elon Musk
According to SpaceX and Tesla employees, Musk’s favourite sayings during his inspection visit of the assembly areas were “Why is that part needed?” and “Why can’t that be done faster?” Musk’s presence in the manufacturing line hustling was eerily similar to a general on the battlefield motivating his troops. As Musk once said, “It’s true that if they see the general out on the battlefield, the troops are going to be motivated. Wherever Napoleon was, that’s where his armies would do best. Even if I don’t do anything but show up, they’ll look at me and say that at least I wasn’t spending all night partying.”
For Musk, this fanatical desire to reduce cost and time wasn’t solely because it was his own money on the line. He truly believed that cost-effectiveness was critical for his ultimate goal of colonising Mars and of making electrical cars accessible to everyone. As such, unlike others in the car and aerospace industry, he decided that everything would be made in-house at Tesla and at SpaceX. This would allow him to control his own destiny as by being vertically integrated, he had full authority over quality, costs and supply chain.
For example, he once asked his engineers at Tesla why fiberglass pieces had to be installed between the battery and the floor pan. Upon learning that it was due to help cut down on vibration, Musk asked his staff to record the sound inside a car without the fiberglass and then with the fiberglass. There was no difference.
Another example happened where robotic arms tightening the bolts were considered too slow for Musk’s liking. He asked workers to see what settings were for the bolt drivers. He discovered that the robot was only running at 20 percent of its maximum speed as it was the default settings. As such, he quickly asked to dial the speed up to 70 percent capacity which allowed to cut the time it took to bolt cars by more than half.
Art + Engineering
“Industry at its best is the intersection of science and art.”
— Edwin Land
Elon Musk is often compared to Jobs, due to their similar cases of obsessive-compulsive disorder, which allowed them to be so successful in their field of industry. However, I believe the comparison goes beyond this maniacal obsession for perfection.
In fact, Musk laid out his factories by following a philosophy that the design, engineering, and manufacturing teams would all be clustered together. As Elon Musk would say, “the people on the assembly line should be able to immediately collar a designer or engineer and say, ‘Why the fuck did you make it this way?’ If your hand is on a stove and it gets hot, you pull it right off, but if it’s someone else’s hand on the stove, it will take you longer to do something.”
Similarly, Jobs also had the belief that design isn’t only about aesthetics; true industrial design has to combine the looks of a product to its engineering.
“In most people’s vocabularies, design means veneer. Nothing could be further from the meaning of design. Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers.”
— Steve Jobs
More importantly, Jobs built Apple with one principle in mind: to build products that they would want to use themselves. As a matter of fact, this is how the iPhone got to be created; it was driven by the fact that they all hated their phones and wanted to build a phone that they could use.
As such, it was important for Jobs for the product to be beautiful if he was going to use it, perhaps, due to his background in liberal art. He believed that it didn’t take that much more to put out a well-designed product except a little more time. In fact, even if he knew it was going to sell well as it is, he was not willing to put out a product that looked like garbage.
Jobs once said, “But the real big thing is: if you’re going to make something, it doesn’t take any more energy—and rarely does it take more money—to make it really great. All it takes is a little more time. Not that much more.”
Larry Ellison, the founder of Oracle, was on the board of directors for both Apple and Tesla. While there are similarity between Musk and Jobs, there is one factor that set them apart. Ellison explains that while both were maniacally focused, Musk, unlike Jobs, applied that obsession not just to the design of a product but also to the underlying science, engineering, and manufacturing.
This obsession of Musk to integrate all of his teams together could also be seen during his time at SolarCity. When seeing how difficult it was to install the solar roofs, Musk, who was livid, said, “We need to get the engineers who designed this system to come out here and see how hard it is to install. I want to see the engineers out here installing it themselves. Not just doing it for five minutes. Up on roofs for days, for fucking days!”
He then ordered that, in the future, everyone on an installation team, even the engineers and managers, will need to spend time drilling and hammering and sweating with the other workers.
Beyond the Book
Read "The Iconic Think Different Apple Commercial Narrated by Steve Jobs" by Farnam Street
Read "First Principles: The Building Blocks of True Knowledge" by Farnam Street