Money & Books (21 Jan 2024)

The inspiring lessons from Elon Musk

As an entrepreneur I am inspired by reading about Elon Musk in Water Isaacson's nearly 700 page book. It is making me think bigger, be bolder, and question every assumption. Just the stories make you broaden your perspective of what is possible. And the only way to do what he has done is by being mission driven. The guy believes that he is working for humanity. If he did not have that fanatical belief, people would not follow him, join him or fund him. You got to believe and then back that belief with skin in the game.

This book is huge, like reading three books in one. But it is all I am reading for the next few weeks so I will share what I learn as I go along. Here is what I have learnt so far:

DREAM BIG
Life cannot be merely about solving problems. It also had to be about pursuing great dreams. “That’s what can get us up in the morning.”

His desire to "have an impact" has been a central theme around everything he has done. He had conceived by then a life vision that he would repeat like a mantra. “I thought about the things that will truly affect humanity,” he says. “I came up with three: the internet, sustainable energy, and space travel.”

“We have to decide whether we are going to aim big,” he told his troops. “If you want to just be a niche payment system, PayPal is better,” he said. “But if you want to take over the world’s financial system, then X is the better name.”

IF YOU BELIEVE, OTHERS WILL BELIEVE TOO
“One of Elon’s greatest skills is the ability to pass off his vision as a mandate from heaven.”

"What interested him were the problems he wanted to solve. Even when it seemed like crazy talk, you would believe him because he believed it.”

“He just wanted people who would make things happen.” It was a good way to drive people to do what they thought was impossible.

YOUR FUZZY DREAM WILL  BECOME CLEARER THE MORE YOU WORK ON IT
“My initial thought was not to create a rocket company, but rather to have a philanthropic mission that would inspire the public and lead to more NASA funding.”

His first plan was to build a small rocket to send mice to Mars. “But I became worried that we would end up with a tragicomic video of mice slowly dying on a tiny spaceship.” That would not be good. “So then it came down to, ‘Let’s send a little greenhouse to Mars.’ ” The greenhouse would land on Mars and send back photographs of green plants growing on the red planet. The public would be so excited, the theory went, that it would clamor for more missions to Mars. The proposal was called Mars Oasis, and Musk estimated he could pull it off for less than $30 million.

“Hey, guys,” he said, showing them the spreadsheet, “I think we can build this rocket ourselves.” When Cantrell looked at the numbers, he said to himself, “I’ll be damned—that’s why he’s been borrowing all my books.”

“I’m going to colonize Mars. My mission in life is to make mankind a multiplanetary civilization.” Woolway’s reaction was unsurprising. “Dude, you’re bananas.”

BREAK PROBLEMS DOWN TO THEIR ESSENTIAL ELEMENTS
It was too expensive, of course, for a private person to build a rocket. Or was it? Exactly what were the basic physical requirements? All that was needed, Musk figured, was metal and fuel. Those didn’t really cost that much. “By the time we reached the Midtown Tunnel,” Ressi says, “we decided that it was possible.” He went to the Palo Alto public library to read about rocket engineering and started calling experts, asking to borrow their old engine manuals.

MAKE THE DESIGNERS WORK WITH THE ENGINEERS
“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?’ ” he explained to Mueller. “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.”

HAVE UNREALISTIC TIMELINES
“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,” he says. “That’s what makes him a force of nature.”

SpaceX - its goal, he said in an early presentation, was to launch its first rocket by September 2003 and to send an unmanned mission to Mars by 2010. Thus continued the tradition he had established at PayPal: setting unrealistic timelines that transformed his wild notions from being completely insane to being merely very late.

“Even though we failed to meet most schedules or cost targets that Elon laid out, we still beat all of our peers,” Mueller admits. “We developed the lowest-cost, most awesome rockets in history, and we would end up feeling pretty good about it, even if Dad wasn’t always happy with us.”

IT'S OK TO RISK IT ALL IF IT IS FOR THE RIGHT CAUSE
Peter Thiel and Hoffman once planned to write a book on their experience at PayPal. The chapter on Musk was going to be titled “The Man Who Didn’t Understand the Meaning of the Word ‘Risk.’ ”

“He’s amazingly successful getting people to march across a desert,” Hoffman says. “He has a level of certainty that causes him to put all of his chips on the table.”

“Look at the two companies he went on to build, SpaceX and Tesla,” says Thiel. “Silicon Valley wisdom would be that these were both incredibly crazy bets. But if two crazy companies work that everyone thought couldn’t possibly work, then you say to yourself, ‘I think Elon understands something about risk that everybody else doesn’t.’ ”

He liked risk. “If you’re trying to convince me this has a high probability of failure, I am already there,” he told Ressi. “The likeliest outcome is that I will lose all my money. But what’s the alternative? That there be no progress in space exploration? We’ve got to give this a shot, or we’re stuck on Earth forever.”

ITERATE ON A SMALL SCALE
“We’re going to be doing dumb things, but let’s just not do dumb things on a large scale,”

Musk took an iterative approach to design. Rockets and engines would be quickly prototyped, tested, blown up, revised, and tried again, until finally something worked. Move fast, blow things up, repeat.

“It’s not how well you avoid problems,” Mueller says. “It’s how fast you figure out what the problem is and fix it.”

Buzza and Mueller pushed their engines until they broke, and then said, “Okay, now we know what the limits are.”

WHAT IS YOUR 1 METRIC OF SUCCESS?
He focused on one key metric: what it cost to get each pound of payload into orbit. That goal of maximizing boost for the buck would guide his obsession with increasing the thrust of the engines, reducing the mass of the rockets, and making them reusable.

CUT OUT PEOPLE WHO THINK IT CAN'T BE DONE
As his team grew, Musk infused it with his tolerance for risk and reality-bending willfulness. “If you were negative or thought something couldn’t be done, you were not invited to the next meeting.”

ASK THE RIGHT QUESTIONS
When SpaceX began producing its first Merlin engines, Musk asked Mueller how much they weighed. About a thousand pounds, Mueller responded. The Tesla Model S engine, Musk said, weighed about four thousand pounds and cost about $30,000 to make. “So if the Tesla engine is four times as heavy as your engine, why does yours cost so fucking much?”

CREATE CHECKLISTS
He made his engineers question all specifications. This would later become step one in a five-point checklist, dubbed “the algorithm,” that became his oft-repeated mantra when developing products.

*These stories and ideas are from the book Elon Must by Walter Isaacson.

Harsh Batra
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I build businesses (EthosData, Happy Ratio), help investors 5x in 10 years with 1 proven strategy (Marcellus), and email what I learn every Sunday (sign up here).