With some downtime in the last 10 days, I’ve been able to kick my reading into high gear. Last week I read two books on COOs (more on this later) and the very long and gossipy, Elon Musk by Walter Isaacson. I came away from the book with more respect for Elon and less for Isaacson. I was surprised by how small-minded, judgmental and snarky the author thought was appropriate for him to be in the pages of a book about the richest and most accomplished human of the last 1000 years. If you ever write a biography of someone else, remember that the readers are there for the subject, not your feelings on Trump, woke politics, or any other topic at all.
Musk, however, impresses. Previously to reading the book, I sort of knew things about him overheard from others. I’d listened to him on a podcast once and realized that he’s on the spectrum, but didn’t hear him say anything too interesting. I honestly thought he was a hype-boy and riding a bubble of the hype he was creating. I was wrong.
Obviously, we take for granted that he’s smart, rich, a genius or what have you, but I don’t honestly think the guy gets the respect he deserves and will be awarded by history. Let’s look at the shortlist:
He envisioned and received a patent on placing a business listing on top of a map for navigation and commercial purposes. He received a patent as the first person to do it and sold that company (ZIP2) for a personal profit of about $20m which he poured into what became PayPal.
He invented internet banking by insisting that people be able to email money to each other without fees with PayPal. His partners tried to go a different way with the company, made it smaller and less functional, but his product vision ruled the day and created the $1.5 billion in exit proceeds for the company, and $100m for himself which he invested in SpaceX.
At SpaceX (where we are early investors), he’s built a company that has privatized space. They have built the first privately funded fully liquid-fueled rocket to reach orbit, the first privately developed liquid-fueled rocket to put a commercial satellite in orbit, the first private company to successfully launch, orbit, and recover a spacecraft, and the first private company to send a spacecraft to the International Space Station (ISS). Most of these achievement have been done at a time when NASA and national space programs have not been able to make similar accomplishments. In paying for SpaceX, Elon formulated the plans for Starlink, a satellite based internet provider which has deployed more than 5,000 Low Earth Orbit satellites to deliver internet service anywhere on earth.
As if that wasn’t enough, Elon joined others to found Tesla Motors which he eventually took over as Chairman, CEO and Chief Engineer to completely revamp a hobbyist’s idea for an electric convertible for the rich into the world’s most valuable car company today. Instead of just building a cool car, Musk and his team have reinvented the way that manufacturing of consumer goods is done today. They’ve reinvented batteries and battery charging technology (and then open sourced it to other car manufacturers for free), how factories operate and are powered, the entire notion of supply chain for large manufacturing endeavors, how objects (like cars … and robots) can physically sense and respond to the world, how machines can do the work of human thinking (AI), and how humans and machines can interface together … and each of those have become futuristic forces in their own right.
As AI began to gain steam and power, Elon co-founded OpenAI as an antidote to the power hungry Google founders who refused to acknowledge that AI will play a significant and different role in the development of humanity. He wanted to remove the profit motive and seeded the non-profit to develop ethical and usable AI for the masses. That company, following his removal, went on to release ChatGPT, the software with the fastest adoption in history.
Additionally, he founded Neuralink, a company exploring the frontiers of bringing human brain governance to the machine world with an implantable microchip. That may sound scary to some but what about those who are locked inside their heads who might use the technology to control a computer, or robot or device to interact with their loved ones? It’s in clinical trials now, sign up here if you’re interested!
If you have AI, you have a treasure trove of data on mobility in the physical world, you might as well have robots. Musk founded Optimus as a robotics company to take advantage of the megatrends being spun off by his other companies. The robot will be available for consumer purchase to do both manual and cognitive tasks at the direction of their human owners.
Along the way, Musk seeded his cousin’s company, SolarCity which completely reengineered the roofing industry to provide attractive solar roofing tiles to power homes and feed the power grid. When that company faltered, he folded it into Tesla and they now represent 35% of the solar roofing market.
Once while looking at a map of a city, he realized that twentieth century sprawl happened because cities only develop and grow in 2D, not 3D. So he started a tunnel-drilling company, called The Boring Company, which builds tunnels to support the direct and high-speed connection of points in a city below ground. He plans to include a Hyperloop, super fast train inside these tunnels to connect megacities with one another.
Almost as a distraction, Musk bought Twitter for $44b in cash, renamed it X.com and set about restoring its original promise as the free-speech hub of the digital public square. After taking over, he reduced the workforce by 80% and then a month later, reduced the remaining workers by 50%, all while developing and deploying more and better features and technology than the company had done before.
Inside of X.com lay a treasure-trove of trillions of tweets from the last 15 years on every imaginable topic. Structuring this data into a Large Language Model has allowed X.com to introduce its own AI chatbot, X.ai. Tying that featureset to a annual pro subscription for Twitter provides revenue and serves to identify and verify the user, a big problem at pre-X.com Twitter.
Lastly as a catch-all for other IP whose promise has yet to be seen, Musk funded and founded the Musk Foundation as a non-profit holding company. It holds about $6b in IP from Tesla, some from SpaceX and recently received a $100m grant to start a university in Austin focused on STEM education.
“If something's important enough, you should try. Even if - the probable outcome is failure.”
Elon Musk
The question that repeatedly comes up when you consider someone like Musk, and some of the other really highly successful people that I know, is HOW they do what they do. When you ask most of them in private conversation, they really don’t know, just follow a gut sense for what they think can and should be done. Unsurprisingly, Musk attributes all of his progress to what he calls the Algorithm, a series of 5 rules that he follows anytime he tackles a really big problem.
The Algorithm has been developed over time but can be suited to whatever the looming development and manufacturing problems are at the time.
Question Every Requirement
Begin by identifying and understanding each existing requirement in your processes. Ask why they exist and hold them accountable for achieving their purpose. Find out who (personally who) the individual responsible for each requirement to ensure accountability and clarity. If a requirement is stupid or counterproductive, fight it as hard as you can.
Musk emphasizes the importance of this step in the algorithm, stating, "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 Redundant Processes
Delete. Delete. Delete. Once you’ve compiled the list of requirements and have formed your process for development, begin focusing on eliminating any unnecessary parts, even if it means going beyond your comfort zone. Delete until you’re terrified that it’s not going to work. The goal is to streamline operations by removing inefficient excess.
Musk advises, "You may have to add 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
Only after completing the first two steps should you start simplifying and optimizing the remaining processes. This ensures you're not wasting effort on parts oft he process that aren't needed in the first place.
Musk cautions against premature optimization, saying, "A common mistake is to simplify and optimize a part or a process that should not exist."
Accelerate Cycle Time
The fourth step involves increasing the speed of your processes. This should only be done after thorough questioning, deleting, and simplifying of the processes.
Musk reflects on his experience, noting, "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
The final step is to consider automation for the streamlined and optimized processes. This should be the last consideration after ensuring that all necessary steps have been refined and validated.
Musk warns against premature automation, stating, "Automation comes last. The big mistake in my factories 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."
It seems simple enough until you compare it with how things are usually done. Typically a group will circle a problem and begin throwing out solutions and then add on additional requirements that may have nothing to do with the solution at all. All of this adds up to inefficiency, of course, and when you are putting robots in homes, making self driving cars, or delivering families to Mars, inefficiency kills.
As an object lesson on how powerful this process can be, SpaceX and the Space Force both leased launchpads from the USAF at Cape Canaveral that had to be rebuilt to meet the specifications of the missions they were launching. SpaceX spent $4.2m and launched 9 missions with 1 failure on its biggest rocket. Space Force has currently spent $44m and hasn’t had a launch scheduled yet, its still working on the pad.
“I think people can choose to be not ordinary. You know, they can choose to not necessarily conform to the conventions that were taught to them by their parents. So, yes, I think it’s possible for ordinary people to choose to be extraordinary.”
—Elon Musk