Restructure Your Business Like Elon Musk with Former Tesla President Jon McNeill

Click the link below to come see me speak live and use promo code "ED30" for 30% off! https://lifesurge.com What if the biggest thing holding your business back… is something you’ve never even questioned? In this conversation, I sit down with Jon McNeill, former President of Tesla and CEO of Lyft, and I’ve got to tell you… this one hit me differently. I’ve read thousands of books and interviewed some of the greatest minds in the world, but what Jon lays out here is a true operating system for winning in business and life. We’re not just talking theory. We’re talking about how Tesla went from 2 billion to 20 billion in revenue in just 30 months, and the exact framework they used to do it. Jon breaks down what he calls “The Algorithm,” a five step framework that challenges everything you think you know about how businesses should operate. And I mean everything. From questioning every assumption you’ve ever accepted, to building systems that prioritize speed, efficiency, and real innovation, this is the kind of thinking that separates the elite from everyone else. What really hit me is this… most of us are not losing because we lack effort. We’re losing because we’re solving the wrong problems or following outdated rules. We get into some unbelievable stories from inside Tesla that prove this works in the real world. One of them completely blew my mind. Faced with a challenge to cut production costs by 50 percent, Jon and his team didn’t tweak the system… they reinvented it. What started as a simple idea inspired by a toy car led to a manufacturing breakthrough that changed the entire auto industry. That’s what happens when you stop accepting “the way it’s always been done” and start thinking differently. But this conversation goes deeper than business tactics. We talk about leadership, culture, and what it really takes to build something meaningful. Jon shares why the best leaders “eat their own dog food,” how to identify the one or two things that truly matter in your company, and why humility combined with confidence is the ultimate competitive advantage. He also opens up about the personal cost of operating at that level, and the importance of knowing when something is no longer aligned with who you are. This episode is for anyone who wants to think bigger, move faster, and stop playing by rules that no longer apply. If you’ve been feeling stuck, overwhelmed, or like you’re working hard but not breaking through, this is the reset you’ve been waiting for. Jon doesn’t just give you ideas… he gives you a blueprint. Key Takeaways: Why “question everything” is the first step to breakthrough innovation The 5 step Algorithm that drives speed, efficiency, and massive growth How Tesla cut production costs by rethinking the entire system The danger of following legacy thinking in your business Why great leaders focus on only one or two truly critical priorities The balance of humility and confidence that defines elite performers What the future of business and AI really looks like and why opportunity is still massive ⁠👉 SUBSCRIBE TO ED'S YOUTUBE CHANNEL NOW 👈⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ → → → CONNECT WITH ED MYLETT ON SOCIAL MEDIA: ← ← ← ➡️ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠INSTAGRAM⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ➡️⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠FACEBOOK⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ➡️ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠LINKEDIN⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ➡️ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠X ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ➡️ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠WEBSITE⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ed Mylett?

  I hear so many small business owners say the exact same thing. They just never have enough time in the day. Well, I measure time differently. I've compressed, condensed, heck, I've bent time. My first day is 6:00 a.m. to noon. My second day starts at noon and goes till 6:00 P.M. And my third day, 6:00 P.M. to midnight. I now get 21 days a week. Stack that up over a month, over a year, over five years, and my life's completely different than it would have been otherwise. And if you want to win as an entrepreneur, you have to compress your time, too. And you definitely can't afford to waste it. Waiting weeks on a big bank for capital? Your best bet's to work with my friends at Cardiff. They know how to compress time for entrepreneurs. They get your business approved in minutes and funded the very same day. They're America's favorite small business lender, and for good reason.

• 0:45Ed Mylett?

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• 1:03Speaker 01

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• 1:34Speaker 02

  This is the Ed Marlin Show.

• 1:37Ed Mylett?

  Okay, welcome back to the show, everybody. So today is going to be tremendous. I just finished reading this book. I have to tell you all, it's probably read 2,000 books for the show. I put this in the top 1% of all the books I've read doing this show. The author, he's had a little bit of success in his life. He was the president of Tesla. You've heard of them before. CEO of Lyft. He sits on the board of General Motors and Lululemon. He's had a bunch of exits himself. This is a true, I'd call it like a masterclass in business with a theory and a philosophy that you'll be able to follow today. So it's heavy note-taking as well. I'm really excited to have him here today. And then I didn't know he was a Boston dude as well. So it's great to have you here today, brother.

• 2:15Speaker 03

  Yeah.

• 2:16Ed Mylett?

  John McNeill, welcome to the show.

• 2:17Speaker 03

  Thanks, thanks for having me, Ed.

• 2:18Ed Mylett?

  Yeah. I, uh, I've told you, I've taken screenshots of the book and sending it to friends of mine. As someone who's built some businesses and exited, I think I know when I read something true. But I think I also know when I've read something I've not read before. And so the book, you guys, is the algorithm. Want to make sure I get that in early. And it's really like a five-step algorithm that you talk about that. I was asking around like, is this his? Did he learn it from Elon? You know, kind of back and forth. And so why don't we start with where this comes from? I know from reading the book. And then a brief overview of the five steps of the algorithm.

• 2:51Speaker 03

  Yeah, so where this comes from is a framework we developed while we were trying to grow Tesla from two billion in sales to 20 billion in sales in 30 months.

• 2:59Ed Mylett?

  Crazy.

• 2:59Speaker 03

  So 10x in 30 months, no playbooks for that. Uh, no like case studies you could go read. So we were really kind of inventing it as we went. And we started to see these patterns in, in attacking challenges. And so we, we baked that down into what we called the algorithm. So that we could communicate it. So people would know, like if we were, if we were working with the team, what we were up to. But we also wanted the teams to know they could use this tool too. It didn't require Elon. Uh, it didn't require me. Uh, and so I would say it, it was something that we cooked up and invented while we were on this journey. Uh, the whole company together.

• 3:37Ed Mylett?

  And part of it like, is we'll go through the steps here in a second. More and more as technology's changed, now with the advent of AI, I think this is even more relevant. You correct me if I'm wrong, but part of this is about speed and efficiency, I would almost call.

• 3:50Speaker 03

  It's a lot about speed and efficiency because you have to move so fast. You know, in our case, we were growing from 4,000 people to 40,000 people. So you've got to have 40,000 humans making very rapid decisions, way faster than we could make them. Uh, and so part of the goal here was to equip the front lines. And that's why the book is told through the stories of the people that are on the front lines.

• 4:09Ed Mylett?

  Yes.

• 4:10Speaker 03

  Uh, because you can see normal, everyday people are doing this.

• 4:13Ed Mylett?

  It is, and um, one thing, and again, I'm teasing the five. We're going to get into the five parts of the algorithm here in a minute. By the way, the reason I'm willing to do that is I want you all to know this. The book is so thick with information that just knowing the broad overview of the algorithm is not sufficient in, in learning what's in the book. So I think we're comfortable going into it.

• 4:32Speaker 03

  Okay.

• 4:32Ed Mylett?

  But I wanted to start out, one thing that surprised me. When Elon hires you, right, this is a rule for business that I didn't think of. He says to you, you say in the book that he was looking for another entrepreneur to be kind of his right hand and a guy slash that was used to almost running out of cash most of the time.

• 4:51Speaker 03

  Yeah.

• 4:51Ed Mylett?

  That just surprised me. Normally I'd be thinking, I'm the entrepreneur, I want to hire an operator. But that's absolutely not what he was looking for in you.

• 4:58Speaker 03

  No, he tends to hire orthogonally is what he calls it, like people that have not been in the industry or role before. So the entire management team, really nobody had been in the car business. And when we were getting to know each other, I kept saying to him, I don't think I'm your guy. I think you need a big company guy. I mean, your, your, your company's bigger than, twice as big as my biggest company. And he said, no, no, no, that's exactly what I don't need. And I said, why? He said, I need, as you said, he said, I need a fellow entrepreneur. Cause you know what it's like to carry the burden of payroll on your back. And going to sleep at night, making sure that you can make payroll the next week. That's a pressure that, that big company people haven't faced.

• 5:38Speaker 03

  And he said, you need to know the entrepreneur's kind of life burden.

• 5:44Ed Mylett?

  Yeah.

• 5:44Speaker 03

  Which is in his, in, in his words, it's staring into the abyss while chewing glass. He's like, I need somebody that's been through that. And he said, the other thing that entrepreneurs know how to do is allocate capital.

• 5:55Ed Mylett?

  Yeah.

• 5:56Speaker 03

  Cause you have, you don't have unlimited capital. You can't go to the market typically as an entrepreneur. So he said, I run this place like a private company.

• 6:04Ed Mylett?

  Yeah.

• 6:05Speaker 03

  And so we don't carry much cash on the balance sheet. Every nickel has to matter.

• 6:09Ed Mylett?

  Well, not only do you not carry a lot of cash on the balance sheet, this blew my mind. This is Tesla, right?

• 6:14Speaker 03

  Right.

• 6:14Ed Mylett?

  And now, as we fast forward, we're looking at, in his case, arguably probably the first trillionaire in the country.

• 6:20Speaker 03

  Yep, he's on his way.

• 6:22Ed Mylett?

  He's on his way. He's, he's the odds on favorite if we're gonna have one, right? But the company actually had three months operating cash at any given time.

• 6:31Speaker 03

  Right.

• 6:31Ed Mylett?

  That's incredible to me. Three months cash on a company on that scale and that scope that wanted to grow that quickly.

• 6:38Speaker 03

  Yeah. And again, this is his mindset as an entrepreneur. If you, if you fill the balance sheet with a lot of cash, people get soft, in his words. So, he said, you know, I want imminent death around the corner.

• 6:50Ed Mylett?

  Gosh.

• 6:51Speaker 03

  And it was even tighter than that. And we had three months worth of cash. We had 70 days of payables.

• 6:56Ed Mylett?

  That's crazy.

• 6:56Speaker 03

  So we had 20 days of cash.

• 6:58Ed Mylett?

  That's crazy.

• 6:58Speaker 03

  There is no room for error in this equation.

• 7:01Ed Mylett?

  You know what, maybe, I wasn't, this isn't in my notes, I wanted to ask you, but I want to ask your opinion about this. It's not in the book.

• 7:07Speaker 03

  Okay.

• 7:07Ed Mylett?

  We'll shift just for a second. Based on that and that experience and that philosophy, you know, you know, the world we live in now. Everybody's raising money.

• 7:15Speaker 03

  Yeah.

• 7:15Ed Mylett?

  Everyone's giving away equity quickly. It's a raise, raise rate, literally.

• 7:19Speaker 03

  Yeah.

• 7:19Ed Mylett?

  Almost daily, probably like you, I'm getting hit with some raise for some thing. And I've always felt like sometimes these folks that are raising money prematurely are, they've got a false sense of reality in terms of success of the business, in terms of cash, cash on paper, et cetera. Do you kind of think that culturally, that's a, almost a perversion that's happened in the business marketplace?

• 7:39Speaker 03

  I think it's a real watch out. And I talked to young CEOs about this, about this very topic. Like, if you load your balance sheet up.

• 7:45Ed Mylett?

  Yeah.

• 7:45Speaker 03

  Everybody in the company knows that. And so therefore, people aren't rubbing nickels together.

• 7:50Ed Mylett?

  Yeah.

• 7:50Speaker 03

  They're not being efficient. Uh, they're being expedient. And when you're expedient, you're burning cash. And when you're burning cash, as an entrepreneur, you're giving away your equity.

• 7:59Ed Mylett?

  That's absolutely.

• 8:00Speaker 03

  It's so expensive.

• 8:01Ed Mylett?

  It is. This is so good. Okay. So based on all of that, now with that backdrop, talk to us about the algorithm.

• 8:06Speaker 03

  So the algorithm, we basically, we came up with these five steps that were, that are core to how we drive innovation and solve problems.

• 8:12Ed Mylett?

  So good.

• 8:13Speaker 03

  So, uh, so I'll just run through the five steps, then we can talk through some examples of these. But the first step is essentially question everything. Question every requirement that somebody's given you, question the status quo, uh, question, question, question. So you can rip into what the essentials are that you need to, you need to deliver. Once you know that, then, then you develop a process from end to end that delivers that the most efficiently. Then you optimize the heck out of that just by doing it manually. And we'll get into some examples of that. And then you apply speed.

• 8:47Ed Mylett?

  Yeah.

• 8:48Speaker 03

  Because you cannot have a process deliver quality with speed or without, you can't have speed without quality.

• 8:54Ed Mylett?

  Okay.

• 8:55Speaker 03

  So you get both. And then this is surprising, the last step, given that we're tech people. The last step is automate last.

• 9:03Ed Mylett?

  Yeah.

• 9:03Speaker 03

  Because if you automate upfront, you're pouring concrete around your process and if you discover improvements, it's really hard to improve it because now you've got to go blast out the concrete or the software you developed. So, so those are the five steps of the algorithm.

• 9:18Ed Mylett?

  Let's talk about the application on them. And by the way, everybody, you've got to get the book because the level of the stories that are in the book sort of illustrate the principles better than even probably what you and I will be able to do today. But one of the stories in the book, I've tried to do business in China a couple of times.

• 9:32Speaker 03

  Yeah.

• 9:33Ed Mylett?

  And it's sort of known and I don't, I'm probably overstating this, I've got to be careful, but it's sort of known in the business world. It is the hardest place of the developed nations to try to go do business.

• 9:44Speaker 03

  It's really hard.

• 9:44Ed Mylett?

  And in your case, if you're going to go over there and build a factory, they're getting a piece of it.

• 9:48Speaker 03

  Yeah.

• 9:49Ed Mylett?

  And you have this great story in the book where Elon says to you, no, we're going to own everything in there and you go over there and get this thing done. So to me, that follows, that falls under question everything.

• 9:58Speaker 03

  Yeah.

• 9:59Ed Mylett?

  Is it true that that's the case?

• 10:00Speaker 03

  Yeah.

• 10:00Ed Mylett?

  Can you tell them that story?

• 10:01Speaker 03

  Yeah, so we're, so in the US, we produce 15 million new cars a year and historically we've been the biggest in the world. China's twice us, they do 30 million new cars a year. So if you're running a car company that's tight on cash, eventually you want to get to China because it's huge market. But as we sat down with our China teams, they said, hey, you have to realize that every American company that goes to China has to have a joint venture and the requirements of the joint venture are you split the cash 50/50, the profits. And so that meant we were going to get half of it than we thought we would. So, so the first step of the algorithm is question everything. So we started to question our China team and said,

• 10:45Speaker 03

  Is there a way that we could do this without a joint venture? And they said, no way. No way. No way. Uh, this has never happened. GM doesn't have that, Procter and Gamble doesn't have that, Coca-Cola doesn't have like, no, there's no way this is gonna happen. Uh, and so Elon, every once in a while, he gets this twinkle in his eye and he, and he and I kind of riff on stuff and I could see he's getting this twinkle in his eye. Turns to me, he's like, how would you, how would you be up for, or would you be up for the first joint venture in China? That doesn't share any economics. I said, I don't know how to do that, but I'm, if challenge accepted. So I went to China and sat down with our team and said, explain to me the Chinese system. So that I could understand the base assumptions.

• 11:28Speaker 03

  And they said, okay, two things. One is that in America, the best students typically go off into business. They go to Wall Street, they go to consulting, they go to tech. Uh, that's not the way it works in China. Half of the best students go into business, half of the best students go into government. They're sort of split into two groups. And they, uh, as their new graduates of the top schools, they get a neighborhood. Uh, and they're the party official in that neighborhood and they have one goal. They get a base salary and they get a two to three X their base salary and bonus for job growth. It's the only metric. Grow jobs in your neighborhood, now you get a part of a city. Do that in a part of a city, now you become a mayor.

• 12:11Speaker 03

  Do that as a mayor, grow jobs, now you're a party official in the province. And it goes all the way up to the top. So they have a system of government where everybody is operating off the same metric and that is job creation. Okay. Super powerful and really simple. And they said, so industry and government are working hand in hand all the time to create jobs. Cause the way you, it survive in a single party system is you gotta keep everybody employed. So that's why this is important. So that, it said, that's thing one is creating jobs is a big deal. I said, okay, good, check the box, we're gonna create a lot of jobs. Second thing they said you need to understand is every year they produce a five-year economic plan of industries they want to enter and eventually dominate. And this was 2015 and they just published their five-year plan.

• 12:56Ed Mylett?

  Okay.

• 12:57Speaker 03

  I said, what's, what's in the five-year plan? They said, five things. I said, okay, what are they? They said, electric cars, batteries.

• 13:03Ed Mylett?

  Wow.

• 13:04Speaker 03

  async chips, autonomous software. And I'm like, okay, we have, we got like four of the five. We are in a strong negotiating position here because every party official wants us because we can help them check their boxes. So we negotiated hard for a year, kept saying in these negotiations, we want a JV with no economic sharing. And eventually we got it.

• 13:26Ed Mylett?

  That's unreal.

• 13:27Speaker 03

  Because we questioned that first assumption, but then you gotta like learn what's the, what's the, what's the chessboard look like and how can you maneuver through this to get to your goal? It's not just you can will something into, into existence. You gotta like figure it out.

• 13:40Ed Mylett?

  Do you think that was easier because you were a, essentially a startup company as opposed to implementing this algorithm into General Motors or GE or someone listening to this who's they've, they've owned 25 dry cleaners in their family for 40 years, right?

• 13:57Speaker 03

  Yeah.

• 13:57Ed Mylett?

  And now, I don't even know that they know what their legacy thinking has become, right? Like, how do you, how do you step back and say, question everything? What are the things you should question? That was kind of the thing for me reading the book, like in some of the businesses I own, like, well, we've just always done it that way.

• 14:12Speaker 03

  Uh huh.

• 14:12Ed Mylett?

  You know, everything is, we've just always done it that way and it seems to work pretty well. Or, I always want to wonder, are we, are we winning in spite of the fact that we've always done it this way or because we've always done it this way?

• 14:23Speaker 03

  I, it can be both, but I think it is, to your point, it's easier to do it in a startup than it is in a 150-year-old company like GM. But, uh, but GM has done this. Uh, as they've introduced their latest models, it used to take them two to three years to develop a car from idea to coming off the line. And so they decided to hand a young engineer named Josh Tavel, 37 years old, uh, their first Hummer EV project. So this was going to be their halo car that they're bringing to the market, has every feature imaginable. And, uh, and Josh had this goal, I'm going to take a 36-month process and make it an 18-month process. And to do that, the president and CEO of the company said, what do you need?

• 15:07Speaker 03

  And he said, I need you to suspend the rules. Because there are a bunch of like, way we've always done it, things around here that aren't productive at all. And, and so he was able, and his team were able to suspend the rules and put a team of ninjas together that actually delivered the car in 14 months.

• 15:25Ed Mylett?

  That's crazy.

• 15:26Speaker 03

  And it's, it's, so it can be done in a 150 year old company, too.

• 15:29Ed Mylett?

  It can be done.

• 15:30Speaker 03

  Yeah.

• 15:30Ed Mylett?

  Speaking of putting a car together, you know, I read the book based on these questions, right? So I just, I poured into this thing. Can you tell them about the casting example in the book? Because to me, this was a pivotal thing in the development of the company.

• 15:43Speaker 03

  Totally.

• 15:43Ed Mylett?

  And there's one way to do it, and then maybe there isn't anymore, right?

• 15:48Speaker 03

  Right.

• 15:48Ed Mylett?

  This is a, this is a pivot point almost in the company's history. This episode is sponsored by Ro. A lot of people assume GLP-1's cost a fortune, and that assumption keeps them from even looking into treatment. Ro helps people find a more affordable path to FDA-approved GLP-1 treatment. Ro wants to help people lose weight. That's why they have more affordable GLP-1 options, whether you're paying with insurance or cash. Ro's free insurance checker makes it easy to see if you're covered for GLP-1 injections. Just submit your insurance card and Ro handles the rest. No paperwork, no waiting on hold, no confusing phone calls. And if insurance doesn't cover treatment, there are still options. Ro offers the lowest cost cash pay FDA-approved GLP-1s, such as daily pills and multi-dose pens.

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  I use products by Ro, and you should too. Go to ro.co/milet to see if you qualify. That's R-O dot C-O slash my let to get started on Ro. For side effects of GLP-1 medications, including boxed warning, go to ro dot C-O forward slash safety, ro dot C-O slash safety. So when I, when I ended up buying the island, we had to do all of our outdoor decorating, and I spent a fortune in the first half of the place. And I'm like, I don't want to do this anymore, but I want the best stuff. And that's where Wayfair came in. My wife wanted to get this new garden bed, and Wayfair was the place that offered the perfect solution. Wayfair also helps you create a home that stands up to real life with quality products, great value, and trusted reviews. Wayfair verified products are hand vetted. By product specialists, they use a 10-point quality inspection system. Here's all I can tell you.

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• 17:51Speaker 04

  Wayfair, every style, every home.

• 17:54Speaker 03

  So Elon, his method of leadership is to set crazy goals and then have people around him that will accept the challenge of the crazy goal and try to figure it out. So we were in a management team meeting one day and he said, guys, like to compete with the Chinese. This was after we'd started our Chinese factory and we could see how efficient the Chinese auto industry was. He's like, to compete with the Chinese, we had to take like 50% of the costs out. And so he turns to me and Doug Field, who was the head of engineering at the time, now Doug runs EVs at Ford. He turns to us and says, guys, can you figure out a way to take 50% of the cost out? So Doug and I go for a walk and we go for a walk in the factory and the factory is about two kilometers long. So it's 1.3 miles, basically 1.2 miles.

• 18:39Speaker 03

  And a car factory is kind of divided into two. First half of the factory is a bunch of robots putting the skeleton of the car together. And the second half of the factory is people hanging parts on that skeleton. And in the first half, it looks like an orchestration of hundreds of robots, because it is. And there are hundreds of parts that are getting welded together to create the skeleton of the car. And Doug and I are in the middle of the factory between the two halves and we're looking at this end of the factory that's all robots and building the skeleton.

• 19:12Speaker 03

  And Doug says, I think I have an idea to get rid of 50% of this.

• 19:16Speaker 03

  And I said, what is it? He said, I gotta go home and do some studying and reading about it, but I think I have an idea. See you tomorrow morning.

• 19:23Speaker 03

  So he comes in the next day and he says, here's the idea. And he rolls a matchbox car across the table at me. I'm like, Doug, what's this toy car? It's as big as my thumb. He said, yeah, this thing isn't welded, it's casted. Meaning they pour metal into a mold to create the car. And I said, well Doug, the reason they can do that is because the pressure you have to have to keep molten metal in place is super duper high. You can do that for something as big as your thumb.

• 19:54Ed Mylett?

  Scale.

• 19:55Speaker 03

  You can't do that on car parts. They're too big. Like you blow this factory up, literally trying to pressurize that molten metal. He's like, I think we could figure this out. Are you willing to go on like an exploratory journey with me to figure this out? I'm like 100%. What do you want to do? He said, do you have anything in the factory that is excess aluminum that we could melt? And I said, yeah, we've got a bunch of like scratch and dent wheels that we pull off cars because they're scratched and dented and we put them out back. And a recycler comes by every week and picks them up. He's like, awesome. Tell the recycler not to pick them up anymore. I'm going to put like a smelter back there and with a few engineers, we're going to start dumping these wheels into the smelter. And we're going to melt metal and we're going to put them into molds. And so

• 20:40Speaker 03

  we literally start to do that. Like we're literally chucking wheels into this smelter. It's melting the aluminum and then we're pouring it into a mold as big as our hand. And pressurizing it and getting that to work. And then we're pouring it into something that's maybe a couple of feet wide. And we go step by step by step until we get to the point where we've got a machine that's super powerful and sophisticated that can take half of the car's skeleton and mold it.

• 21:06Ed Mylett?

  Unreal.

• 21:06Speaker 03

  And this is called castings. And so if you were in the Fremont, California factory, you'd see that half of the place is robots and it's building these skeletons. If you go to the Austin factory where they're building the Model Y, there is no half of that factory. Factory's half the size because they're just building castings. And all you do is stick these two things together.

• 21:28Ed Mylett?

  Unreal.

• 21:28Speaker 03

  And you got a car.

• 21:29Ed Mylett?

  Unreal.

• 21:30Speaker 03

  And so we figured this out and it meant that cars were a lot easier to manufacture. One of the toughest things in car manufacturing is get everything to align.

• 21:37Ed Mylett?

  Sure.

• 21:38Speaker 03

  And that's because when you have a skeleton that's got several hundred parts, it's really hard to do that. But when you've got a skeleton that has two parts, it's super duper easy to do that. So it made the manufacturing quality go up. And there are all these benefits from that. But like it's eight years later now. We invented this eight years ago. The car industry is trying to do this and you cannot buy a casting machine anywhere now. Because Toyota is trying to figure this out. Ford's trying to figure this out. GM is trying to figure this out. Castings are the thing, but it came from...

• 22:05Ed Mylett?

  Why can't you buy the machine?

• 22:06Speaker 03

  Because there's such demand and there's so few of them.

• 22:08Ed Mylett?

  Okay.

• 22:08Speaker 03

  Yeah, because car companies now are like, gosh, these guys really totally have changed the industry.

• 22:12Ed Mylett?

  Isn't it unbelievable when you're listening to this, everybody, that a company like Tesla, like a pivot point like that, I got an idea. Let me think about it overnight. He rolls a little matchbox car at you and that completely transformed the ability to build these cars at scale and with the efficiencies in them.

• 22:27Speaker 03

  Totally. Doug's like, one of the things I loved about being on these teams is like, people were like pretty analytical, but really creative too. And Doug's one of those. He's absolutely a creative genius. And so for him to come up with that, he completely changed an industry with that one thing. But it also came from a leader saying, I'm not setting a goal for 10% or 5% or 20%. I want you guys to whack 50% of the cost out of this thing.

• 22:50Ed Mylett?

  Yeah. Yeah. It's amazing that, we'll get to that in a second. But what's amazing to me is all of these companies essentially had legacy thinking the entire time. All of them had the means, the capital, the engineers, all sitting there that could have done what you guys ended up doing.

• 23:06Speaker 03

  Yeah.

• 23:06Ed Mylett?

  But because they don't question everything, because they're not thinking about efficiency, because they're not running the algorithm, that's what I mean by the blind spot in your business, everybody, that you, even if you're a real estate agent, it's just every, what is it that everybody's always done that doesn't need to be done anymore?

• 23:21Speaker 03

  Totally.

• 23:21Ed Mylett?

  It's so, it's, it's mind blowing to me. The other part I want to ask you. So he throws this thing out, 50%, let's cut the cost. First off, he set a tone, I assume, in the company where bad ideas were okay as well.

• 23:35Speaker 03

  Yeah, yeah.

• 23:36Ed Mylett?

  And that's something in most companies too. People are afraid to kinda, because if you just kinda fall in line, you're probably gonna get a paycheck that month. I assume one of the good things, I'm sure there are other things that weren't good. But one of the things about working with him is he fostered an environment, is it fair to say, where ideas were welcomed that questioned tradition.

• 23:55Speaker 03

  Totally. Like, we would fail constantly. And if you look at his other business, SpaceX, I don't know, I mean, dozens of rockets they sent up into the sky that exploded.

• 24:04Ed Mylett?

  Right.

• 24:05Speaker 03

  Like, the total mission fails. And there's hundreds of millions of dollars blowing up in the sky, literally. And it wasn't like people got fired. It was, what can we learn from that? Because we knew we were on this learning cycle, and humans aren't perfect. This side of heaven, you're gonna screw up. So, uh, we, we wanted to learn from this, uh, from the failures. And we kinda had this mantra, which is, which is learn from the failure, don't repeat it. Uh, and if people were repeating failures, that's a problem. Uh, but if they're learning from it and incrementally getting better, that's what we wanted. Because the goals were so high that we knew you couldn't achieve them on the first whack.

• 24:41Ed Mylett?

  Was it an environment there, you said in the book that he has blind spots as well, and this interview's not about him.

• 24:46Speaker 03

  Yeah, we all do.

• 24:48Ed Mylett?

  Was it hard, I don't mean that, I, I had friends that are pretty close, so, did you sometimes feel like you were the adult in the room?

• 24:57Speaker 03

  I was trying to be the steady hand in the room, for sure.

• 24:59Ed Mylett?

  Yeah, that's like what I mean, yeah.

• 25:00Speaker 03

  Yeah, just to, and, and oftentimes, take the other side of the argument. Like, if, if he wanted to produce a car, which he did when we, when we launched the Model 3 in 2018, he was, he wanted to take the steering wheel and the pedals out because he thought we were that close to autonomy. And, so I had to pull him aside and say, let me take the other side of this argument.

• 25:19Speaker 03

  If we don't get autonomy done... Now we've got a bunch of cars without steering wheels and pedals and we're going to cause our own extinction event.

• 25:26Ed Mylett?

  Whoa.

• 25:27Speaker 03

  Do you want to be the source of the extinction event?

• 25:29Ed Mylett?

  Hmm.

• 25:30Speaker 03

  He's like, no, I don't. I said, yeah, I don't either. So how about we hold off on this? Because even if we do get autonomy, I'm not sure the government's ready to put cars on the road. But that's... So I said, there's two strikes against us. I don't want to cause the extinction event here. I know you don't either. And he would come back and say, thank God we had that discussion.

• 25:47Ed Mylett?

  Okay.

• 25:47Speaker 03

  Yeah.

• 25:48Ed Mylett?

  You... One personal thing you share in the book and then we'll get back to the business stuff. But I've met you. You mean, you've... You walk in a room, you know, you acknowledge everybody. You've got tremendous people skills. You've got great energy. But it sounds to me as if over time there, at least your wife says to you at some point, you were... You're losing who you are. I'm misquoting her here. You can clean it up for me. But I don't recognize this guy or I'm losing you.

• 26:14Speaker 03

  Yeah.

• 26:14Ed Mylett?

  What... The downside of working with someone who, you know, Elon's had mental health issues that he's been very honest about. The downside of working in an environment like that long-term is... Is what? And what did it do to you? Why did you ultimately decide this is the end of the road for me?

• 26:30Speaker 03

  I... I found myself, and Walter Isaacson writes about this in his book. Walter was writing his book on Elon and he called me and said, hey, I want to talk to you about Elon's mental health challenges. And I said, I'm not sure I want to talk about those.

• 26:45Ed Mylett?

  Yes.

• 26:46Speaker 03

  He said, well, Elon actually gave me your number. He wants you to talk about those. Because he wants people to know that if they're struggling, there's... There are other people that are struggling too and he's one of them. And you can be successful even if you have mental health issues. But I said, Walter, like, this stuff is so personal. Can you just... Why don't you give me a few hours? I'm going to call Elon and make sure he's okay with this. So I called Elon and I said, look, he wants to talk about this. Are you okay with me going there? And he said, yeah. Because I want it... I want people to know if they suffer from bipolar that... That they can get through this too and have a successful life. So I got back together with Walter. Walter said, tell me about the implications of dealing with somebody with bipolar.

• 27:28Speaker 03

  And I said, well, the implication for me was I'm pretty good at running businesses, but I have no skill set in helping somebody through severe depression and bipolar. And I found myself dealing with that more and more. And I was trying as best as I could to help him, but I didn't have the skill set. And eventually, my wife saw the symptom of that, which was, she said, you are stressed out and upset all the time. And I didn't recognize that, but she was, she had enough perspective to recognize it. She said, why do you think that is? And I said, I think I know why it is. I'm trying to solve a problem for which I have zero skills. This is like me getting thrown into a major league baseball game.

• 28:12Speaker 03

  And I'm on the mound and I have no idea how to throw a ball 90 miles an hour, much, much less make it move. And I said, I feel like I'm failing at this. And she said, you need to, you need to decide whether this is the role for you. So I actually went and sat down with Elon and said, I love you and I love this job, but this job has become more about helping you with your mental health issues than it is running Tesla and I, I'm not equipped.

• 28:35Ed Mylett?

  Wow.

• 28:35Speaker 03

  Yeah.

• 28:36Ed Mylett?

  That had to be one of the hardest decisions of your life.

• 28:37Speaker 03

  Totally hard. Totally hard. Yeah.

• 28:39Ed Mylett?

  You, what is it like? What's the other side of it? Sell us the dream or the nightmare. I was, I've had friends of mine that I've asked, I've had, I've been fortunate that I've been involved compared to you. It's ridiculous, but I've had some small exits and some success in my life. And, and, but I've had other friends where we've gathered and talked about that journey and had people ask us, you know, if you had to do it all over again, I think the guy who was running Nvidia said this or something. If you had to do it all over again, what advice would you give me? And he says, I probably wouldn't do it all over again. And I'm wondering, what is it like, take us into, what's it like emotionally, physically, the good and the bad of being, watching the dream happen for a company, coming in when it's an idea.

• 29:22Speaker 03

  Right.

• 29:23Ed Mylett?

  And then taking it to a place that's, what is that like? Like, all these entrepreneurs have a dream. You've been involved with Lyft, you've been involved with Lululemon still, you've been involved with Tesla. I mean,

• 29:33Speaker 03

  Yeah.

• 29:34Ed Mylett?

  Your resume is bananas, right? But even in the test of the case, what is this process like in your life when you go through it and you see it happen?

• 29:43Speaker 03

  I think maybe the core skill entrepreneurs have is problem solving. And problem solving, you get to go like use the right side of your brain, left side of your brain. Left side of your brain is like you're analyzing the problem, right side of your brain is you're creating solutions. And you become this like ninja problem solver. And out of those solutions, then stuff gets created. And so the, that for me was the satisfying part was we're solving, we're knocking down these problems and now we've got the ability to build a car for half the cost. And if we can do that, a lot more people are going to be able to afford to buy the car. So now this dream is starting to become a reality. The second piece of the satisfaction for me though, was teaching people how to do this and then watching them do it.

• 30:27Speaker 03

  And then seeing that they had, they were able to do much more than they thought they could do. They just had never been in the situation where they were challenged and equipped with the tools to do it.

• 30:37Ed Mylett?

  You say challenged, is it being pushed?

• 30:39Speaker 03

  I would say, I'll give you an example. There's an example in the book of this woman Nikki and Nikki, Nikki ran delivery at the factory. So people would fly to the factory to get their cars delivered right off the line, which is a pretty cool experience. And she was doing this a couple of dozen times a day and had a team doing it. And then at the end of the quarter, hundreds of cars would come off the line and they'd do it several hundred times a day. And I watched how effective a leader she was. And we had this challenge worldwide where we didn't know how to deliver these cars very well and efficiently. And so I gave Nikki a battlefield promotion. I said, Nikki, you're going to be in charge of this globally.

• 31:16Speaker 03

  And she looked at me for a second and, and looked like, she had a look of terror on her face. She's like, I'm not sure. And I said, no, I, I think you can do this and we're going to help you. Like we're going to surround you, we're going to teach you, teach you how to do these things, teach you the algorithm and the tools. And about six months later, she had mastered that. Then we had a problem in the factory that was so vexing that even Elon and I and everybody else that was wrestling with, we couldn't fix it. So I said, Nikki, you're going to get now your second battlefield promotion. You're coming to the factory with me, we're moving our desks down there, we're going to solve this together, but you're going to lead it. And so that is not necessarily a push. It's more of a pull. It's pulling somebody onto the playing field and saying, I believe in you. I'm right behind you.

• 32:00Speaker 03

  Uh, I'm gonna support you, but you can do this. Uh, and she proved time and time again that she could step up and do that.

• 32:06Ed Mylett?

  It's interesting.

• 32:09Ed Mylett?

  I came here today wanting to learn myself, you know, but challenge my own thinking. And if you would have asked me, one of the great qualities of an entrepreneur, the first thing I would have said would be like vision.

• 32:20Speaker 03

  Yeah.

• 32:20Ed Mylett?

  The ability to stretch.

• 32:21Speaker 03

  That's true.

• 32:22Ed Mylett?

  But you said solving problems. That's the first thing that came to your mind. Do you think that that's the difference between a president and a founder? Or do you think that that's just? Why would that your answer, do you think? Cause that was clearly your first answer.

• 32:34Speaker 03

  Well, I, we, for a living now, I start companies. And so before I met Elon, I had six companies, not in, uh, not same time, but, uh, six companies kind of in a row. Where we, uh, wrote the business plan on my, uh, kitchen table, scaled the company, sold it to a public company, did that six times in a row. And now I invent companies, uh, for a living. Uh, I'm back to my roots. And the reason I say problem solving is because we'll typically start with a big, a big opportunity area. Uh, and we'll say, we gotta create a company in this area. We gotta figure out how to do that.

• 33:07Ed Mylett?

  Yeah.

• 33:07Speaker 03

  We're gonna create a vision eventually. But first we gotta figure out how to, how to really make this company come to life.

• 33:14Ed Mylett?

  That's interesting.

• 33:15Speaker 03

  And, uh, and a lot of that's problem solving at the very beginning. So I'll give you an example, like we saw that in the, uh, in the cyber or, or in the, yeah, in the cybersecurity market. Last five years have been about 1,200 companies created in cybersecurity, all focused on the cloud. Which I totally understand, because it's easier to write software for Amazon, Azure and Google than it is, uh, your local dentist who could have any, any, any form of a tech stack. And so we said, hmm, how many, how many cyber companies have been created for the local business? None. Isn't it interesting that most of the ransomware is happening in small and medium sized businesses? Yeah, because they're totally vulnerable. And they're vulnerable because their tech stacks are really hard to figure out.

• 33:58Speaker 03

  Uh, and so we just took this challenge and said, let's go create a vision. Here's the vision, let's create a cyber company for the main street business. To do that, we have to solve a big technical problem, which is how do we, heck, do we do this for an infinity number of tech stacks?

• 34:14Ed Mylett?

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• 34:59Ed Mylett?

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• 35:42Ed Mylett?

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• 36:15Speaker 03

  That's where the problem solving comes in.

• 36:16Ed Mylett?

  Very good.

• 36:17Speaker 03

  And so we spent a year solving that problem and then boom, we've got a company and we look like visionaries, but it was like both and you gotta have the vision and you gotta like do problem solving to actually get there.

• 36:25Ed Mylett?

  It's really good. I've never heard that before. Everybody should rewind that last two minutes. That's new. That's, that's different. The other thing that you touch on in the book, in addition to the algorithm, five steps, I guess, or the five parts of the algorithm.

• 36:37Speaker 03

  Yeah.

• 36:37Ed Mylett?

  Is culture.

• 36:38Speaker 03

  Yeah.

• 36:38Ed Mylett?

  Which is a big thing. If you go to any, if I go give a talk at, you know, Harvard or some business school, I mean, obviously culture comes up and everything, but you actually break it down into like three different components as well. So just, if I said to you the word culture in a company, you would say what back to me?

• 36:52Speaker 03

  I would say like, there's this secret sauce, uh, kind of secret ingredients to cultures that I, that, that I think are super successful. And both of them are really about creating feedback loops. So the first is, does leadership eat its own dog food?

• 37:05Ed Mylett?

  This is so good in the book.

• 37:07Speaker 03

  Meaning, do they use the product?

• 37:08Ed Mylett?

  Yep.

• 37:09Speaker 03

  And I was with a group of bank CEOs and I said, hey, raise your hands if you guys use your app, your bank's app on a weekly basis.

• 37:16Ed Mylett?

  Yep.

• 37:17Speaker 03

  No hands go up.

• 37:18Ed Mylett?

  Hmm.

• 37:19Speaker 03

  And I said, to be honest, I wasn't surprised by this.

• 37:21Ed Mylett?

  Hmm.

• 37:22Speaker 03

  Because I'm a customer of a couple of your banks and your apps suck. And if you use them, they wouldn't suck for another day because you'd be so embarrassed, you would, you would haul yourself down to the people that were responsible for that app and fix it. Um, but you don't use them, so you don't know. So you don't have a feedback loop and the customer, the company doesn't have a feedback loop and they think if it's acceptable to the CEO, it's acceptable to everybody else.

• 37:44Ed Mylett?

  Very good.

• 37:44Speaker 03

  And, and so I believe you gotta use your own product. So I'm a board member at Lululemon. I've been in five stores the last two weeks, uh, because I wanna shop, I secret shop and I send our head of stores, notes, uh, on every store visit. Like here's what, here's what went great, here's what didn't go great. And it's a feedback loop that she can get them to fix stuff.

• 38:05Ed Mylett?

  Very good.

• 38:06Speaker 03

  But the message there is, Rather than sitting in headquarters, you want your leaders to be out doing that same thing. And Tesla had this approach where we took a car off the line. If you were a senior management team, we took a car off the line every night and we would drive it home, drive it back to the factory the next day. And within a half an hour, we'd have notes to the engineers. And so the feedback loop of using your own product is super important. And I'm shocked most people don't do this because it's just an easy hack. That's thing one. Thing two is, there's a reason Elon can run so many companies. And that is, he'd spend a lot of time thinking about, what are the one or two, and there

• 38:50Speaker 03

  can only be a handful, existential issues for this company? And for him, he says, I'm only working on those two. I'm going to delegate everything else in the business, but those two, I'm personally involved. And so like in the car business right now, he's determined that there are two existential issues for Tesla. One is autonomy. If you don't have a car that's a chauffeur, and another company gets there first, you're going to be out of business. This is like a flip phone to iPhone moment. And he really does believe this, I think, that if you're a flip phone maker like Nokia, Motorola, BlackBerry were, when the iPhone came out, your market cap didn't fall by half. It went to zero. Zero. So that's existential.

• 39:35Speaker 03

  You've got to, you've got to be first in that technology. So what that means is, is that every week, when he shows up at Tesla for one day, he's there a day a week, he is only talking to the teams that are responsible for that issue. And because it happens weekly, there's weekly forward progress. Because teams, when they meet with the CEO, don't bring their B game. They bring their A game. And they come with solutions, and they're moving that problem forward just incrementally, incrementally, incrementally, incrementally. But because the CEO is personally involved, he can resource those, uh, those needs, uh, and, and really drive forward progress.

• 40:15Speaker 03

  And essentially what Tesla and SpaceX do then is they're creating a compounding advantage versus their competition every week.

• 40:21Ed Mylett?

  Yeah.

• 40:22Speaker 03

  And so if you look in space now, they've been landing rockets, uh, parts of rockets, uh, and reusing them for six years, seven years. And nobody can catch up and, uh, because they're seven years ahead. They're already on to launching their own satellites and creating Starlink, et cetera. While like Blue Origins trying to figure out like, how do we launch one rocket and catch one fuselage? And so they've got, I think their launch costs are 90% less than the rest of the industry. So they've got 90% market share.

• 40:49Ed Mylett?

  Oh my gosh.

• 40:50Speaker 03

  And that just keeps compounding. So the second cultural

• 40:54Speaker 03

  secret ingredient is as a CEO, have you figured out what the one issue is in your company that is going to drive survivability? And are you working that every week?

• 41:05Ed Mylett?

  So good.

• 41:05Speaker 03

  Yeah. And if you do, you're going to start to create advantage.

• 41:08Ed Mylett?

  Do you hire for culture? In other words, when you're, when you're hiring, do you, is culture fit important to you or?

• 41:14Speaker 03

  Uh, we kind of hire for two things. Like we hire for, this is going to sound crazy, this combination, but we hire for humility and capability. And believe it or not, like everything you'd, you'd read about Tesla externally, you'd think, boy, this is big ego driven culture. It's really, it's very a humb, it's very humble culture in the sense that Elon will create these crazy goals. And the response from some of the most brilliant engineers in the world will be, I don't know how to do that. So it's a really humble thing up front. Like, I don't know how to do what you're asking me to do, but I'll figure it out or we'll figure it out. And so you want somebody who's got that humility, but also that quiet confidence to say, I think I can go slay this.

• 41:58Ed Mylett?

  I see that in you.

• 41:59Speaker 03

  Well, it's, it's, and so then they'll fit in the culture for sure. If they have those two attributes.

• 42:03Ed Mylett?

  Got it. That's interesting because my favorite people. Friends, I've started to deduce like who do I like to be around in my life and it's it's people with tremendous humility, but they nuance it because they also have a high level of self-confidence as well. They told that line.

• 42:18Speaker 03

  Yeah, exactly.

• 42:19Ed Mylett?

  These people that have tremendous confidence and bravado with no humility, they become exhausting.

• 42:24Speaker 03

  Yeah, they are.

• 42:25Ed Mylett?

  To be around. And then the people that don't have the confidence, you're dragging them through life and business all the time as well.

• 42:31Speaker 03

  Yeah.

• 42:31Ed Mylett?

  So it's a really unique nuance. This, you guys in the book, this eat your own dog food part will stand out to you and it's outstanding. Tell us about what you're doing now. I'm just sort of interested. Like, give us the name and I know it's in.

• 42:42Speaker 03

  Yeah, so we call this DVX Ventures and what we are is a group of people with an idea disease essentially for businesses. And we create businesses from scratch. So we're kind of inventors of companies. And we'll take these in, these have to be in big, kind of big opportunity areas where we feel like we're moving the world forward. And we've created 12 companies in five years. And we just have this systematic way of doing this where we will come up with the idea for the company, we'll get the first product into the market, we'll get it to post revenue, and then we go look for a second or third time entrepreneur who has had success, but they don't have their next idea.

• 43:23Ed Mylett?

  Yeah.

• 43:24Speaker 03

  And then we'll bring them in. And they can typically bend the curve of this business really fast.

• 43:28Ed Mylett?

  Have you had any setbacks the last 10 years?

• 43:31Speaker 03

  Oh, yeah.

• 43:32Ed Mylett?

  Can you explain one, describe one?

• 43:34Speaker 03

  Yeah, so like, one of the things I observed at, in the rideshare industry, was they have this genius ability to be able to price a ride for what you're willing to pay for it and what they can deliver it for at a moment in time, in a street corner, in a weather condition, whatever. Super sophisticated. And so they have these pricing engines that can determine what people are willing to pay. And every product company I've been a part of or sat on the board of doesn't have that capability. So Lululemon set their legging prices at a hundred and eight dollars like 12 years ago and it had, they don't know why and it hasn't changed. They don't know whether they could sell twice as many at 98 bucks or whether somebody is willing

• 44:14Speaker 03

  to pay 118. They don't know. And so I said, you know, we ought to take this insight from Rideshare and being able to price dynamically and bring this into the consumer market for products. So you could understand like, hey, if I lowered the price on this thing, could I sell more? And we'd actually done this at Tesla. We'd, we plotted out a demand and pricing curve and figured out that we could drop the price on the Model S by five grand and sell 25% more cars, which is really a great insight and important insight to have. So my idea was, hey, let's start a company to do this.

• 44:46Ed Mylett?

  Yeah, great idea.

• 44:47Speaker 03

  And we looked around and said, well, there's a bunch of carcasses around that have tried to do this. And they turned out to be consulting companies because they couldn't get people to buy software. So we brought a bunch of really brilliant people in, people that have worked at Boston Consulting Groups, Pricing Group, et cetera. And we start to build this product and we take it out to companies and companies like, yeah, we really want the product, but we want your consulting more because our business is so unique. And one of the diseases, I think, in business is people think their business is unique. It's really not, but they think it is. And at the end of the day, they thought it was. And we couldn't figure out how to create a software business out of this. It was going to be a consulting business and consulting businesses are tough. They're low profit, et cetera. So my team turned

• 45:29Speaker 03

  to me and said, we have to kill this idea. And we do this a lot. And, and I said, yeah, you're right. Like, I thought this was going to be applicable, but I was wrong. And, and so we killed the idea.

• 45:40Ed Mylett?

  You'll stop throwing good money after bad.

• 45:42Speaker 03

  Exactly, exactly.

• 45:43Ed Mylett?

  Do you, when you look at business right now, so there's things Elon said that scare me almost about what he thinks is AI is going to do to the world. So you, you're there that entire time, right? And you've obviously had, you've proven your algorithm and your success, not just in one place, but in multiple places. That's why it's a valid theory. When it, when something's pressure tested multiple times,

• 46:07Speaker 03

  Yeah.

• 46:08Ed Mylett?

  Then we know it works.

• 46:08Speaker 03

  In multiple contexts.

• 46:09Ed Mylett?

  Correct.

• 46:10Speaker 03

  Large, small, yeah.

• 46:11Ed Mylett?

  You got it. That's why I found, I sound like the better salesman for the book than you're, even your publicist is here today.

• 46:16Speaker 03

  You are.

• 46:16Ed Mylett?

  Just because I believe so deeply in the principles in the book, especially now. Give us just a peek. What do you think the next five years looks like? I mean, he's actually said, I think I quote him correctly, where he says, I don't think we're gonna have a workforce anymore. I think we're gonna have, you know, guaranteed minimum income. Everyone's gonna be kinda floating around and the robots are gonna do everything. I'm oversimplifying, but not by a lot. What do you see the next five years of business in general looking like? And the changes, the warnings, the sense of direction you would give someone listening or watching this today?

• 46:49Speaker 03

  I, my reaction's a little different. I think, I think the first part is right. I think humans are really good at seeing the first impact of technology, which is typically job destruction. We're really good at that.

• 47:01Ed Mylett?

  Destruction.

• 47:02Speaker 03

  Yeah, and we're really good wringing our hands at that. We are not good at seeing what's on the other side.

• 47:07Ed Mylett?

  Right.

• 47:08Speaker 03

  And the reason is, is because we can't see what's on the other side because the, the world hasn't existed like that before. So I'll give you an example. I grew up in very rural America. I grew up in Nebraska. And, and the whole country looked like the place I grew up in, in the early 1900s. About 67% of jobs were in agriculture. And this thing came along called the tractor. And people started wringing their hands and said, 67% of Americans are gonna be out of a job. This is gonna be terrible, not good, terrible. So the tractors roll out, farming gets a whole lot more efficient. Today, I think less than 2% of our population is in agriculture.

• 47:48Speaker 03

  But somehow, on the other end of that, there was, there was a second order effect that we didn't understand. And the second order effect that we didn't understand was a couple of things. One is if, if mass production of food exists, it makes it a lot cheaper. So people need less income to afford food. And then, for if they have more income, they can invest in other things. The other thing that you could invest in was this tractor was the product of the beginnings of an industrial revolution. That then created all kinds of industries, cars and trucks and trains. And you go on and on to today to computers and pharmaceuticals. So what jobs get created? Well, car factories need people. And then you got to build roads. And so you have construction jobs that get created. And I watched this even in my own life.

• 48:33Speaker 03

  When I was a kid in this rural place, to make a long distance call, I had to push zero on the phone and talk to a human being. And I knew her, she was in my town. She was an operator for the local phone company. And what she did physically was take my call and plug a wire into the national system so that that could create a link for a long distance phone call. And she did this all day long. And then sometime in the seventies, really bright engineers at Bell Labs figured out an electronic switch that could connect those two systems without a human having to connect two wires or a wire on a plug on each side. And overnight, eight hundred thousand operators were out of a job. Jobs gone.

• 49:15Speaker 03

  So it looked a lot like AI, big technical revolution, all these jobs are going away. And this could be massive unemployment for these people. But we couldn't see what was on the other side of that. And some entrepreneurs, once they discovered that you could switch for free, said, oh, we're going to make long distance calls free. We're going to have this special area code. It'll be one eight hundred. And all of a sudden, you could dial anywhere in the country for free, dialing one eight hundred something, something. That created a need for call centers. And now there are millions, not eight hundred thousand people, millions of people employed in call centers. We couldn't see that on the on the front side. And so now we say, okay, AI is going to take all these call center jobs away because the AI does support really well.

• 50:00Speaker 03

  And there's going to be massive unemployment and we're going to have universal. I'm not sure that that's the case. If you look historically, every major technical breakthrough has led to an increase in GDP for humanity. So like I, I don't subscribe to the doom and gloom, we're not going to have jobs. I just don't think that's the way the world has worked historically. And I could, this could be the first time in history and I could be wrong, but I think we're going to see opportunities get created that we can't even imagine sitting here today.

• 50:25Ed Mylett?

  I'm glad to hear you feel that way. Okay, last question, so two parter.

• 50:28Speaker 03

  Okay.

• 50:28Ed Mylett?

  By the way, I've enjoyed today so much.

• 50:30Speaker 03

  Me too.

• 50:30Ed Mylett?

  It's we, we could do six hours and it would fly by.

• 50:33Speaker 03

  Yeah.

• 50:34Ed Mylett?

  A, commercial for the book, why should someone get the book? And then B, attached to it.

• 50:39Ed Mylett?

  I've always wanted to ask somebody other than my normal circle of people that we talk about. Entrepreneurial, I remember when Michael Gerber wrote the E-Myth, he called it having an entrepreneurial seizure. I don't know if you've read the E-Myth.

• 50:51Speaker 03

  Yeah, I did.

• 50:52Ed Mylett?

  He talks about having an entrepreneurial seizure. I think that's a great book as well.

• 50:55Speaker 03

  I did too.

• 50:55Ed Mylett?

  And that's, it's like the Vogue thing now on social media. Everybody wants to be an entrepreneur.

• 51:01Speaker 03

  Yeah.

• 51:01Ed Mylett?

  I'm curious as to your thoughts. So, commercial for the book slash finish with, who should be an entrepreneur? Do you think everybody can be? Do you think it's a genetic thing? Do you think it's a

• 51:12Ed Mylett?

  deal with the projection type thing? Just your thoughts on who should be one if someone's watching or listening today? And who maybe should be, not only being a number two and running a business of an entrepreneur?

• 51:21Speaker 03

  Yeah, so like the reason I wrote the book was I wanted, first of all, I wanted people to know how Tesla operates and this is largely how SpaceX operates too. And there's this operating system we use and it's called the algorithm and I wanted to get that out there, that framework out there. So that, so that we could drive more innovation in this country. And that was my primary motivation. I've read books like Gerber's books and other, other books where they've had a profound effect on me and my capabilities. And so I wanted to get this out there in, in the chance that that has that impact on somebody.

• 51:52Ed Mylett?

  It's going to.

• 51:54Speaker 03

  And then should people be entrepreneurs? Like I, I teach like you do in business schools and I'll have people, students come up to me at the end of class and I want to be an entrepreneur and my first response is, are you sure? Like, are you really sure? Do you know how hard this is? This is really hard. And it's really enjoyable if you're, if you're wired for it, but it's super duper hard. And I think when I was starting my career, there was, there was a guy that I was working for who spotted in me that I was an entrepreneur. And he said, you ought not to stay here as an investor. You ought to go be an entrepreneur. And I said, okay, what do you see in me? And he said, well, I see that you want to be hands-on solving problems. I see that you're a creative. You want to create.

• 52:40Speaker 03

  And you can't really do any of those in the kind of job that you're in right now. And so those are the first two things I ask entrepreneurs.

• 52:47Ed Mylett?

  Yeah.

• 52:48Speaker 03

  Tell me, tell me how, how creative you are. Like when you look at it. If you're looking at a situation, do people often say to you, wow, you look at that with a different angle than the rest of us are looking at it? That gives you the creative insight to create something that is going to be meaningful, important, and so that's the vision piece. And then essentially, are you stubborn as hell?

• 53:10Ed Mylett?

  Yeah.

• 53:11Speaker 03

  Because you're going to hear no 500 times for every one yes. You've just got to be able to ignore that. You have to have the kind of, you have to kind of like short-term memory and misplaced confidence that you can fix that. And so like if you're just stubborn as hell and you're creative, you're going to have a pretty good, pretty good chance of success. But if you're not, then this probably isn't the thing for you.

• 53:34Ed Mylett?

  So good. You said meaningful. Today was. This was really meaningful. I've done a lot of podcasts, brother. I'm really, really grateful that we did this today.

• 53:43Speaker 03

  Same.

• 53:44Ed Mylett?

  Yeah, I'm really grateful you wrote the book.

• 53:45Speaker 03

  Thanks.

• 53:46Ed Mylett?

  You guys get the algorithm. Just take my word for it. Get the book. You're going to be glad that you did. It's going to help you in your business, it's going to help you execute better, it's going to give you a philosophy and a theory that he's applied in multiple businesses, but particularly Tesla, which has done pretty good. Three months operating cash, that still blows my mind. John McNeill, thank you for being here today.

• 54:03Speaker 03

  Thanks for having me.

• 54:04Ed Mylett?

  God bless you, everybody. Share today's episode. Take care.

• 54:10Speaker 02

  This is the Ed and Myron Show.

• 54:17Speaker 05

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