The Book of Elon with Eric Jorgenson

Eric Jorgenson is an investor, author, and the CEO of Scribe Media — best known for his mission to distill the ideas of the world's most consequential thinkers into books anyone can read. Obsessed with the idea that the best way to understand a great mind was to read everything they'd ever said, Jorgenson spent years compiling Naval Ravikant's writing, podcasts, and interviews into a single coherent volume. The result — The Almanack of Naval Ravikant — was released for free, spread virally, and has been read by millions of people around the world. He never charged a dollar for it. That project established a model. Rather than waiting for great thinkers to write their own books, Jorgenson would do it for them — hunting down every interview, essay, and conversation, finding the signal in the noise, and shaping it into something permanent. The Book of Elon followed. Drawing on decades of interviews, Jorgenson assembled the most complete portrait of Musk's thinking ever put in one place — how he reasons, how he recruits, how he sets goals that seem insane until they aren't. His work sits at a rare intersection: rigorous enough for serious students of business, accessible enough to hand to anyone. In an era of content overload, Jorgenson's instinct runs the opposite direction — that the most valuable thing you can do is take a lifetime of wisdom and make it impossible to ignore. Show notes: https://www.davidsenra.com/episode/eric-jorgenson The Book of Elon giveaway: https://elonbookgiveaway.com Made possible by Ramp: ⁠https://ramp.com⁠ Deel: https://deel.com Axon by AppLovin: https://axon.ai HubSpot: https://hubspot.com Chapters (00:00:00) Book Reveal (00:00:39) Build Useful Things (00:02:19) Engineering Talent Edge (00:04:26) Wired for War (00:06:47) Tip of the Spear (00:08:47) Burn the Boats (00:13:13) Facing Fear (00:15:16) Origin Story Myths (00:18:19) Know Business A to Z (00:22:17) Simplify and Fail Fast (00:25:35) Reality and Physics (00:28:18) The Algorithm Begins (00:30:34) Delete and Simplify (00:34:25) Starlink War Room (00:36:52) Repetition as OS (00:38:18) Step Three Simplify Optimize (00:38:43) Question Every Requirement (00:39:13) Tesla Battery Pack Delete (00:40:43) Repetition Installs Ideas (00:42:02) Step Four Accelerate (00:43:26) Design Org for Speed (00:46:06) Step Five Automate (00:46:29) Control and Clean Sheet (00:48:54) Vertical Integration and Costs (00:50:47) SpaceX Incentives and Mars (00:57:11) Frontier Unlocks Starlink (01:00:26) Time as True Currency (01:03:58) Speed Triage and Bottlenecks (01:10:11) Internalized Responsibility (01:12:56) Avoid Serialized Dependencies (01:14:31) Aligning the Team (01:15:07) Time Is the Constraint (01:16:00) One Metric Focus (01:18:03) Directional Predictions (01:19:06) We Must Make Stuff (01:25:39) Manufacturing as Moat (01:26:23) Speed and Direct to Customer (01:28:41) SpaceX Feasibility Study (01:33:07) Edge of Sanity Leadership (01:37:10) Bottlenecks and Integration (01:40:01) Design and Simplify (01:45:15) Catch the Rocket (01:48:14) Capitalism and Closing 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.

• 0:02David Senra?

  All right, so I have an advanced copy of your book, The Book of Elon, Elon Musk's Useful Ideas in His Own Words. You just said something that there's only four of these copies in the world. Who has them?

• 0:12Speaker 01

  It's a pretty special list. It's like Naval Ravikant, Mr. Beast, Ivanka Trump, and you.

• 0:19David Senra?

  Okay, so the idea for this is you spent five years, thousands of hours studying Elon. He's been a hero, a personal hero of yours for a very long time. I just want to like, I obviously read and reread the book. I'm just gonna like run through a bunch of highlights and ideas like that I thought were interesting and just kind of throw them to you and you see like what you find interesting about it or like add additional context. So something we were talking about when we were having coffee this morning is the importance of encouraging as many people as possible. Like, we have enough dealmakers. We need people making products and building companies. You don't need to be doing deals all day long. And that is like a main theme that Elon talks about all the time. And so he says this quote in the book, which I loved. "I do not start companies at the standpoint of what is the best risk-adjusted rate of return or what I think could be successful.

• 1:02David Senra?

  I just find things that need to happen and I try to make them happen. I thought these things needed to get done. If the money was lost, okay, it was still worth trying." What is his mindset around what he chooses to spend his time and energy on?

• 1:16Speaker 01

  He seems to attack problems that nobody else is working on that have a positive impact on the future. That's his philosophy and mindset going into everything he does, which is, I think, unique. A lot of people assume that he's money motivated or a lot of people are money motivated. And you hear entrepreneurs all the time talk about like, "Oh, like, this is a great business model. This is a good place to go in. I'm gonna go start self-storage because like the failure rate is so low." And it is not how he thinks in any way, shape, or form. He literally says, "Nobody else is crazy enough to try space, so that's the company I have to go build because nobody else is working on it and I can't."

• 1:47David Senra?

  He has a great line in here. He's like, "Don't start a company because you want to be an entrepreneur or because you want to make money. It is better to approach from this angle. What is a useful thing you could build that you wish existed in the world?"

• 1:58Speaker 01

  Yeah, I think there's a paradox there of like, the thing that you can do that nobody else is working on is actually more likely to be successful. Like, it forces you to try to do something unique that also ends up being more valuable for everybody else because you're solving a problem. You're adding a capability to humanity. You're not just starting another commodity business of some sort.

• 2:19David Senra?

  Yeah, I think it's important to point out the context in which he started SpaceX and Tesla.

• 2:24Speaker 01

  He's been thinking about these problems since he was in college, literally, even younger as a kid. He was very influenced by sci-fi and thinking about things that are possible. He talks about engineering as magic. He's like, if you build something that couldn't previously exist, that's like being a magician. And like, who wouldn't want to be a magician? Like, there's a whole section, not just a chapter, like a section in this book about the value of engineering. And the fact that excellent engineers are the fundamental constraint on building and growing civilization. And the constraint on advancing these companies. He's like, I have all the money I need. Like, the constraint is not capital. The constraint is truly excellent engineers.

• 3:02David Senra?

  Does he go into detail how he finds truly excellent engineers?

• 3:05Speaker 01

  Yeah, his interview process. I mean, part of it, a lot of it, just comes from him being a really good engineer himself, right? So you can take the questions, like, he looks for evidence of exceptional ability, he says. He looks for people who've really solved a specific problem. And he asks detailed questions about a hard technical problem that you've solved in the past. And he's got a good bullshit radar. Like, you could ask those same questions, or I could ask those same questions, and not have the same ability to scrutinize and determine who's truly excellent, but he does, because he's so close to all this all the time. But that's his advantage. He really biases towards hiring young, unproven engineers and then giving them like a shocking amount of accountability and responsibility.

• 3:48Speaker 01

  And that's part of the benefit of the iteration rate of these companies, is he can figure out who knows what works. You know, it's like in wartime, how you get these like skip level promotions. You just find competent people and like give them more responsibility as fast as you can. Like, that's how these companies operate.

• 4:02David Senra?

  I was just talking to Luca Ferrari, who's the founder of Benning Spoons. And he said something that was interesting. He wants to hire young, like, young interns or young people. And he says, once you find somebody competent, you just saturate their capacity. Which I thought was an interesting description. This idea of finding people that it's better to have somebody like that has no habits than bad habits. So like recruiting from existing incumbents. Like, that's something that reappears throughout the history of entrepreneurship. Another thing that reappears throughout the history of entrepreneurship, maybe my favorite. Favorite maxim of all time from the history of entrepreneurship is that excellence is the capacity to take pain. Elon has a great way of saying this. He says, "My way of dealing with mental problems is to make sure you really care about what you're doing and take the pain."

• 4:40Speaker 01

  Yeah, I think it's so funny that the most productive person on earth does zero, zero, zero of the like meditation, journaling, morning routine. Like he wakes up and picks up his phone and goes to war like every day. Like that's his routine.

• 4:53David Senra?

  Goes to war.

• 4:53Speaker 01

  Yeah.

• 4:54David Senra?

  In this book, we have Isaacson's biography of Elon, which you and I both have read and reread. I've done an episode on that book as well. Yeah, he has this great thing that he would repeat for decades, that he is wired for war.

• 5:05Speaker 01

  Yeah, like we were trying to come up with any sort of analogous founders and like the closest thing we can come to is like Napoleon. He's not analogous to other founders. They're sort of like operating companies as though like with standard best practices of today. He is like moving around constantly, moving people between companies, like moving the fronts, looking at supply lines. Like it is a very unique operating situation. He has no, he fired his scheduler because he's like, I want complete, perfect control of my time. I want to be able to like work on the most important thing immediately. I want to be able to move whenever I want to the problem physically. That's like one of the big tenants of his productivity.

• 5:48Speaker 01

  I think there's so much to be said about doing the right work at the right time. It is a multiple order of magnitude productivity increase, not a percentage.

• 5:56David Senra?

  Say more about moving around resources and people.

• 5:59Speaker 01

  I mean, one of the underrated advantages, like all the time you see problems getting solved by people from other companies. And so when there was like a real constraint on Raptor engine productivity at SpaceX, the guy who, the engineer who was in charge of that, a young, really talented engineer, brought in the head of production from Model 3 and that like walked the line with that guy and he was just like. Sobbing because like the aerospace best practice even at SpaceX was like way, way, way, way behind how they thought about the volume production. The guy from the Model 3, he was just like, how is this your most efficient thing? Like, we can, there's so much room for improvement because of what they learned on Model 3 production, which is like producer die very, very quickly.

• 6:42Speaker 01

  And that's why SpaceX has like reached this volume production that nobody in aerospace ever has.

• 6:47David Senra?

  So we have a friend named Max Olson, who's writing a book on SpaceX that is not released yet, but he just did this excellent essay that me and you both love and we actually printed out, there's a bunch of notes in front of us. It's, he, he calls this, uh, these memes that spread through Elon's companies. And he, at the end of the essay, he has these five memes. Number one was tip of the spear focus. Always identify and attack the biggest limiter. Don't spread effort across secondary problems. Laser in on the single constraint that if removed would unlock everything downstream. This is my favorite line from this section. This is true at every level. Each SpaceX site has a single dominating objective, right? To simplify, simplify prioritization. A NASA manager who visited SpaceX observed that when a new problem appears, it looks like a flash mob appears in the hallway.

• 7:33Speaker 01

  Yeah, that essay is excellent and it asks a really important question, which is, you know, a lot of people have talked about, and this book is really an answer to like, how does Elon get so much done? This essay in this book is really an examination of like, why is SpaceX so special? Like, how has nobody been able to replicate what they've been able to do? The path that they've been on has been proven for years. Like, there's lots of people with more engineers and more money, so like, why can't they catch up? Like, they're not even really getting closer. Like, there's been more mission failures at Boeing since SpaceX. Like, it's not, it's not good. And so this is unpacking that and the answer, the deepest answer is like the culture and the habits and the routines, the selection of the people, and then the memes that spread through the organization, how they work and how they attack problems.

• 8:18Speaker 01

  And so I think that is a great description of like, the whole organization learning to operate like Elon does, which is a combination of two extremely important skills, which is like, find the most important thing to work on and then absolutely attack it. Like, what's the limiting factor? Go ape shit on it immediately.

• 8:35David Senra?

  I know he's mission oriented. He's like, I have a mission in life, this is what I want to do. But does he talk about anything other than, I'm going to do this and essentially persevere through pain?

• 8:47Speaker 01

  Oh, he's got some absolutely killer lines about this, like. I don't, I don't ever give up. I'd have to be dead or completely incapacitated. The one you just read about like my way of dealing with mental problems is to just care what I'm, care about what I'm doing and take the pain. Come hell or high water, we're gonna get this done. Like, there's so much unlocked when you have a mission that you know you would never give up on. Like, so few entrepreneurs, I think, would make the bets that Elon has made because they're not truly, purely as ideologically and philosophically motivated as he is. Like, to think about, you know, his third company, Tesla and SpaceX, fourth company,

• 9:27Speaker 01

  to start with $200 million and put your entire, like, generational wealth and reputation, but maybe even more importantly, on the line, is, like, how many entrepreneurs that you know that have risked going back to zero and public humiliation once they reach a nine-figure net worth? He's the only one I can name.

• 9:49Speaker 01

  And that happened at like the lowest of the low point. And he, he was all in before he asked anybody else to put in any money. $200 million into these own companies. And that ability to not give up and not even think about giving up and just burn the boats and keep pushing and keep pushing comes from this maniacal devotion to the mission because it is a truly important mission. Like, getting us to a new planet could mean the difference between like consciousness continuing or not continuing. Like, if you are truly in on that mission, of course it's worth risking public humiliation. Of course it's worth risking $200 million. Of course it's worth working 100-hour weeks and living in the factory and

• 10:31Speaker 01

  recruiting anybody that you possibly can and demanding the most of them and firing anybody who's like feels like they're slowing down progress. It's a really incredible test, actually, to give yourself that, like, if you can imagine giving up on what you're doing. Would you, should you even start it? I know you talk like this all the time. You're like, "Death is my exit strategy." You'll pry this mic from cold, dead hands. Like, you are unquestionably on the mission of your life. And that's a really, I think it's a really interesting question to reflect on.

• 10:58David Senra?

  He talks about burning the boats constantly. And he did this from like, day one. Like, even with Zip2. I do think there is some kind of like, very advanced understanding of human nature. That if you truly are putting your back against the wall and not giving yourself any options, like, you will come up with ideas or like, push yourself to, in a manner, into an extreme manner, in which you just can't. If you're optimizing for like, optionality. It's like, "Oh, if this doesn't work out, I have like, a Plan B." I love Jeff Bezos's quote on this. Bezos is like, "The Plan B should be to make Plan A work."

• 11:27Speaker 01

  Yes. Like, Schwarzenegger says the same thing. And I think it's worth, like, Zip2 is a good example. Most people don't, like, remember that he started a company at, whatever, 20, and went all in on it. Unbelievably hard. He was a little, actually. But like, he was doing these insane, like, surges and deadlines and things. He set their initial launch date for PayPal on like, Saturday of Thanksgiving weekend. And he's like, "Get your ass in his office. Like, we have a deadline. Like, why do we have to launch on Thanksgiving? Because I said, we're launching on Thanksgiving weekend. Like, get in here, work 24 hours, like, let's get it done." It's been an operating principle that is an outcome of who he is and has been consistent through all of these companies.

• 12:09David Senra?

  I want to tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable private businesses in the world. And one of the main themes in the history of SpaceX is constantly attacking and questioning your costs. Ramp helps many of the most innovative businesses in the world do exactly that. The median company running on Ramp cuts their expenses by 5%. And one thing SpaceX has demonstrated is that a religious dedication to controlling costs can help actually increase revenue because you can pursue opportunities you couldn't otherwise. And we see that in the Ramp data, too. The median company running on Ramp also grows their revenue by 16%. So when you're running your business on Ramp and your competitors are not, you have a

• 12:51David Senra?

  massive competitive advantage that compounds over time. Ramp is the only platform designed to make your finance team faster and happier. Many of the top founders and CEOs I know run their business on Ramp. I run my business on Ramp, and you should, too. Go to ramp.com to learn how they can help your business save time, save money, and grow revenue. That is ramp.com. He talks a lot in the book, or you profiled him in the book, about fear. He says, "Feel the fear, do it anyways. Look fear straight in the eye and it will disappear." "The nature of fear is that people don't look at it. Look at it directly and it will be gone." These are direct quotes from Elon. "When something's important enough and you believe in it enough, you do it in spite of fear. It is normal to feel fear. If you don't feel fear, you definitely have something mentally wrong.

• 13:36David Senra?

  Just feel it and let the importance of your mission drive you to do it anyway."

• 13:42Speaker 01

  I think the purpose-driven nature of these businesses is an extremely powerful piece of their success. Because that's not just Elon. It attracts people who feel the same way about the mission and who want to be pushed. Like, how many people go into their jobs and they're like, "I really, I want this company to just wring all of the potential out of me. I want to give everything possible to this mission." It's not what most people think, but it is how the people who go work at these companies think. And that's an incredibly powerful thing to drive the success of the company, but it's also great for the people who want to opt into that environment. Like, that's why Tesla's taking the rest of the auto industry's ass, and will continue to.

• 14:22David Senra?

  Yeah, that was interesting when I asked you, like, what do you hope people take away? Like, you know, they buy the book, they read it, or they give it to somebody else. Like, what is the point? Like, what do you want to happen at the end? And what was your answer to that?

• 14:34Speaker 01

  I have many hopes for this book, but the overarching one is like, I hope that this book can generate like 1 million musks. Like, I don't mean go follow his life blueprint. I don't mean start an electric car company. But I mean, figure out a unique problem that nobody else is working on and dedicate your life to solving it. Like, a thing that adds a new capability to humanity. Build a new thing. Biggest lesson of Elon's life to me is like, we are all capable of so much more than we think.

• 15:01David Senra?

  That is what you said to me.

• 15:02Speaker 01

  He's special, but he's not superhuman. He's just figured out how to get an unbelievable amount out of himself. And, you know, he had a lot of disadvantages. Like, a lot of people listening to this are gonna have a lot better hand to start life with than Elon did.

• 15:16David Senra?

  Explain some of the disadvantages, because a lot of people think that he was like privileged. It's something you'll hear, like, a lot of his critics say.

• 15:23Speaker 01

  Yeah, I don't think that's a particularly, like, well-informed take. His dad was an engineer and an entrepreneur, and he had ups and downs in his career. But the more defining trait of his dad was that he's... Uh, I've never met the dude, but like by all accounts in the Isaacson biography, he did have like a lot of surface area with him and from accounts from Kimball and Elon, he was like a narcissistic, abusive, manipulative, grandiose.

• 15:51David Senra?

  I think Isaacson say like compulsive liar.

• 15:53Speaker 01

  Compulsive liar, fabricated a lot of things.

• 15:58Speaker 01

  He had brilliance, but he was also really dark. He's unreliable and he would lie to the kids all the time. I mean, Elon at like eight would stand in the living room and be berated by his father for hours. It's not just like a mean comment. He'd scream at his face and call him worthless and useless and stupid and like as a young, young boy. Like imagine what that, the fuel that that fills you with as a kid and the,

• 16:28Speaker 01

  I mean, Elon figured out how to like make the demons pull the plow. Like he turned that into something really productive and really positive for the most part. And there's another case where he got beat up very badly. Like this is not like lost a fight, like stomped by a gang of kids and was in the hospital for like a week, unrecognizable face. And his dad sided with the bullies and like called him stupid for picking a fight. And that is, that is unbelievably brutal place to start. And so I think some of these rumors about like how privileged he was actually come from his dad, lying and trying to take credit for some of his success. And they've had a strained relationship and all kinds of weird stuff has happened over the last couple of decades.

• 17:08Speaker 01

  But Elon arrived and as an immigrant to Canada at 17, paid his way through college, graduated with student debt, dropped out of Stanford graduate school to start his first company in the early internet boom and like basically made, I forget the exact first number.

• 17:24David Senra?

  Twenty-two million.

• 17:24Speaker 01

  Twenty-two million.

• 17:25David Senra?

  He says a great line in the book, cause they sold for 307 million in cash to Compaq Computer.

• 17:30Speaker 01

  Yep.

• 17:30David Senra?

  And he goes, my bank account went from $5,000 to 22 million and $5,000.

• 17:36Speaker 01

  Yeah. So which is just like, he's like standing in the mailbox, holding this check, being like, wow. And he, that like paid off his student debt. And so he made his first like fortune by himself. In that era was like, he said he couldn't afford an apartment and an office, so he leased an office and he showered at the YMCA, like, worked constantly. All he had was a laptop and, like, some books and student debt. Like, that's his starting place and he earned his first seed money from, and everything, most of what he made from Zip2, he rolled right back into starting, like, the week later, starting X.com, which became PayPal.

• 18:09David Senra?

  Yeah, there's a great line in the book, I think he might have been in college, where he's like, he figured he's either gonna be broke or wealthy, but nothing in between.

• 18:16Speaker 01

  Yeah, and he rolled that dice like a bunch of times.

• 18:19David Senra?

  You do a really great job of breaking down the ideas and essentially under like these headings of maxims, and you know I'm a sucker for maxims. Uh, one of them actually came from Founder's Podcast, which I appreciate. And it says, "If you know your business from A to Z, there's no problem that you can't solve." Why did you apply that to Elon?

• 18:36Speaker 01

  I started with the, the full list of maxims, according to me, which is like 107. And I checked, I went down the list and I checked all the ones that I felt like Elon was a good example of, which is like 75. And then I went down again and was like, what are the ones that he's like, could be an iconic exemplar of? And it was like 15 or 16. So I think that's a good testament to like, the, not just Elon as a well-rounded entrepreneur, but also like the ability of the maxims to describe the traits that become an incredible entrepreneur.

• 19:05Speaker 01

  The business from A to Z, I think Sam Zemri is the one who like best exemplifies this, like the banana man.

• 19:11David Senra?

  Yeah, the book, so people know, it's called, uh, is it?

• 19:14Speaker 01

  The Fish That Ate the Whale.

• 19:15David Senra?

  The Fish That Ate the Whale. Uh, it's one of my favorite books. It's by Rich Cohn. I've read it like three times.

• 19:19Speaker 01

  It's an incredible book of like high agency and deep expertise. And this guy was like, running a banana empire from the farms in, you know, Honduras and Guatemala and stuff. And so Elon is like the modern manufacturing example of that. He lives, lived on the line. He goes to the problems. He has a really deep understanding of not just the product, but like the physics behind the product. There's so many stories of him having this deep intuition for what the materials, you know, thing can do, where the threshold is. And pushing engineers and designs over and over and over to like get to that failure point and find what the true like most elegant, most simple, most efficient version of the product could be.

• 19:59David Senra?

  Can you give us some examples of that?

• 20:01Speaker 01

  One is the thickness of the stainless steel welds on Starship, right? And so the design engineers gave one number and then he went and talked to like the guys actually doing the welding and they were kind of like, we think maybe like four and a half millimeters would be like getting to sketchy and he's like, let's try four millimeters. And four millimeters worked. Even the move to stainless steel, like most rockets previously had been made with carbon fiber. It's just really hard to work with and it's big. And he had this intuition and knew that stainless steel at low temperatures gains strength. And so, once a rocket's actually up in orbit, it's stronger, which is an easy thing to forget. And so he's like pushing people over and over again to like use things that are cheaper, use things that are easier to work with, reduce the moving parts.

• 20:44Speaker 01

  My summary of Elon is, is David Goggins level like intensity? He's Richard Feynman's level of like unconventional technical brilliance? And he's Napoleon's strategic genius and insane bias to action. Those three traits combined make him just incredibly singular. And the volume of time that he puts in, like even if you put in this amount of time, starting to know your business from A to Z as without that deep technical intuition or sense of the fundamentals of the physics and the materials, like you couldn't make the calls that he's making or you couldn't push on the things that he's pushing out. And of course, he's not always right. And of course, the engineers are always the ones like doing the highest volume of the real work.

• 21:28Speaker 01

  But as you say, like the founder is the guardian of the company's soul. And he is there to raise the bar and push people. And I think he has this really keen sense of, I love the line so much, failure is essentially irrelevant unless it's catastrophic. And so he pushes these things to the breaking point, pushes the materials, pushes the designs. He wants to reach the point where he knows for sure that it's the most efficient version of the design because the mistake or the failure that reveals that information is going to pay off a million times. We're going to make 10,000 of these engines and I don't want an inefficiency in there that we're going to replicate 10,000 times. I want to make the failure, I want to fail 500 times on every single design decision

• 22:12Speaker 01

  so that I know that we have the most elegant thing as we scale up and ramp up.

• 22:17David Senra?

  Yeah, I think one of the things that will surprise people is just how much Like I said in the Isaacson, the episode I did in the Isaacson book, it's like half the book is just him yelling at people to simplify and to delete.

• 22:28Speaker 01

  Yes.

• 22:28David Senra?

  And there's a maxim for this, it's just like genius has the fewest moving parts. And you see this with the, there's that meme of like, I think that's the raptor engine design and there's like three different ones over time. And it's like this convoluted mess and it just gets to like this simple, this beautiful simplicity. You just mentioned it where like, um, I was reading about the, the decision to do stainless steel instead of carbon fiber. And like, well, to do carbon fiber, it's more expensive, it's harder to work with. You have to build in like giant autoclave. He's like, we can weld stainless steel in a tent.

• 22:56Speaker 01

  Yeah. Yeah. He's literally building these rockets in a tent in a parking lot. Um, you know, which is a very, it's a very Elon thing of like, let's do just what we have to do to make progress on the product. I want to linger on, on failure for a second because I think it's a really underrated piece. I think these, some of these maxims and some of these taglines that Elon uses, if you kind of put them next to each other, show this pattern of he's like, he's designing these organizations to create small failures as quickly as possible. Right? So, um, if you're not adding back in 10% of the things you removed, you're not taking out enough. Right? So like fail, that is, that is a, a mandate to go create

• 23:38Speaker 01

  something that doesn't work and then figure out why it didn't work and just add that little bit back in so that we know it's the most efficient version of the design. When he sets deadlines, he's like, I want to pick a deadline that I'm 50% likely to make. We're going to miss half our deadlines and I'm totally fine with that because it means we'll be moving as fast as we possibly can. And we're going to make some deadlines that nobody thought we were going to make. If we're making a hundred percent of our deadlines, then they're way too far out because we'll always consume at least the amount of time that we give ourselves. And I think people have this inherent bias, especially like if your job is on the line or if you want to like look good in front of your peers or you just want your company to work, you don't want.

• 24:17Speaker 01

  To be seen as failing, like you make so many decisions, engineers in general, like I don't want my product to fail, I don't want my part to fail. And he's so much of what these cultures reinforced and these these sort of maxims reinforces, like you should be failing. He says when he hires people, like if you don't, if you can't tell me the four ways you fucked something up, then you weren't the one doing the real work.

• 24:38David Senra?

  I was literally searching for that quote right now.

• 24:39Speaker 01

  Yeah, it's a, it is a great one, but it, all of those kind of line up behind like, if you're not engineering your organization to have these small failures, you're creating, this is the anti fragile idea, like you're creating

• 24:53Speaker 01

  this sort of fragility and this inefficiency in the global thing, if you don't learn to fail along the way, iterate extremely quickly towards a better product.

• 25:02David Senra?

  I had a conversation with Michael Dell, it was one of the first episodes of the show. And he was talking about that too. He's like, listen, when you're inventing a new business, using new technology and a new business model, there's no playbook. You can't go read a book and says, here's how you do it. And he's like, and you can't even hire people from adjacent industries because they're just going to do it the way that you used to do it. So he's like, the only way to do it is to experiment and I think he used the word into it. Yourself, he's like, you have a hypothesis and then you test the hypothesis. And the point he was making is like, so therefore you want mistakes. You actually want to make mistakes because that's the way you learn, but you want to make them small and you don't want to make the same mistake over and over again. Which I again, is like an echo of what you were just saying about Elon. I guess this ties to the part of the book that's right in front of me, where it's clear that Elon's companies, he wants to use reality as a validation tool. So he talks about that. He's like, getting to the truth is really important.

• 25:47David Senra?

  So he says, in business and personal life, wishful thinking causes a lot of mistakes. You have to ask whether something is true or not. Wishful thinking is a natural human tendency. Again, these are direct quotes from Elon. It is a challenge to tell the difference between believing a new idea and persevering or pursuing an unrealistic dream. The real test of any startup is how well it responds to adversity and adapts. When most things start out, they don't make much sense, but as long as you adapt quickly, you can make the company work. Being tenacious and super focused on the truth is extremely important. You should look for feedback from all sources.

• 26:20Speaker 01

  The iteration towards reality as the teacher is, it was another like great element of Max Olson's. And Naval is super particular about this, like applying David Deutsch's ideas to company buildings. Like, your goal as a company is to discover new knowledge, which means interact with reality, and then instantiate it into a product. And this cycle of iteration and experimentation is how you check against reality, right? This is how all knowledge is created. It's gene mutation and selection. It's scientific hypothesis and testing. But people don't usually think about their organization in terms of like how much new knowledge is being created. How many experiments are we running? How quickly and how cheaply can the failures be created?

• 27:04David Senra?

  He has another great line. If you have beliefs that are incompatible with the rocket getting to orbit, the rocket will not get to orbit. Physics is a harsh judge, the no love myself, he repeats over and over again, like, physics is a law, everything else is a recommendation.

• 27:15Speaker 01

  Another branch off of that is like physics doesn't care about your feelings. And so that is a line that he repeats over and over again with more like, how can you be, you know, so quick to judge people or to fire people or to like get the team? And he's like, we have, we have one test, we have one bar to clear. Like, does the rocket fly? And how much payload can we get to orbit? Like, there is one metric that we're optimizing for. And I will do what I have to do to march us towards that piece, to clear that bar. I mean, this is where the Asperger's comes out, you know? Like, in a truly advantaged way, like, he says, being, the need to be liked is like, is huge disadvantage that so many people have. And I do not have that. He straight up says like, I do not have that weakness. And Peter Thiel has an interesting observation about that.

• 27:59Speaker 01

  He was like, why are so many of the successful tech founders like seem to be somewhere on the spectrum? Like, why do they all have this sort of biological advantage in dismissing the opinions of others? What does that say about like our society? That that's a skill that you need to have in order to be an innovator and build something new and build a great organization?

• 28:18David Senra?

  So I guess that leads into the next thing I was gonna ask you about, which is the algorithm. Which is the first step of the algorithm, algorithm is what?

• 28:24Speaker 01

  Question requirements. Make your requirements less dumb is like specifically how he says it a lot. And there are so many requirements. I think it's a really, that was a hard-earned. First step.

• 28:36David Senra?

  Yeah, explain what he had to go like how he learned.

• 28:38Speaker 01

  The most common error of a smart engineer is to optimize something that shouldn't exist. And there are many places that requirements come from, right? Sometimes they come from inside the organization. Sometimes they came from a team. Sometimes they came from legal. Sometimes they came from a design partner like in NASA. Like if you're going to shoot up a rocket and the capsule of the vehicle is going to like dock with the space station. They have all kinds of requirements about your latches and like how things go in. If you're going to launch from a specific pad, you've got requirements around sound or timing or all these things. And he he's like so much money and time and effort is wasted trying to accommodate requirements. It don't make any fucking sense in the first place. So the first thing to do is like shorten your list of design requirements. So that you've got the maximum possible space to play in.

• 29:22Speaker 01

  And there's so many times, uh, many stories and the latch is like a true one. That's in Max's essay, which is like the requirement said, you got to buy this specific like Omni latch from an aerospace company made of these materials. And it was like super expensive. And they sort of questioned that requirement and they were like, all right, well, it's fine. As long as it like does this and this, it's fine. And so they bought off the shelf parts from like McMaster car and they did the job just fine, which were like two orders of magnitude cheaper. There's also times when the requirement is legal or regulatory and he'll assign somebody. He's like, go, it'll take a year or a year and a half to like get this permit. And he's like, assign somebody's like, go fly to this office and sit in this office until you get permission.

• 30:07Speaker 01

  Like sign on this sheet. Come back, don't come back without a signed sheet. You're fired. Like that is a way to question the requirement or a dismissal or a waiver of this requirement. It doesn't make any sense. And there's, there's things that he's like, we are forced to comply with so many regulations from 20 years ago, 50 years ago, they just don't make any damn sense and they're not helping the consumer. So let's remove as many of them as we can so that we can design the best possible product for the cheapest possible price.

• 30:34David Senra?

  What's the second?

• 30:35Speaker 01

  Delete, delete, delete, simplify. Um, there's a, I mean, the canonical line about this is like, the best part is no part. The best process is no process. And I don't know exactly the number, but the, the Number of times combining parts has happened over the course of the Model 3 or eliminating them. Like, I think when he started, there were over 10,000 parts. And that has come down steadily as he's combined parts. Because every time two things need to be attached. Not only are there two things that need to be attached, but maybe they need to be glued, maybe they need to be screwed, bolted, riveted, whatever. The way the metals interact needs to happen, they need to be actually assembled. And then there's like a tolerance that could change whether other things fit. He's like, the number of expenses, changes and risks that come from additional parts

• 31:20Speaker 01

  or additional attachments is so, so, so high. Simplicity gets you both reliability and low cost. That is, the best part is no part. Simplicity delivers both reliability and low cost. And so between those two things, you have to delete as much as humanly possible. And so he goes to great lengths to combine parts, simplify things. He says, go ultra hardcore on deletion and simplification. That's how you see that, like Raptor meme, where things get more and more and more simple. And that's how the Model 3 has gotten simpler, more reliable, cheaper to produce and better. And maybe the most famous example of this is his decision to cast entire, the front third and the back third. And he got that idea from toy cars.

• 32:04Speaker 01

  Like, toys are cheap, reliable, scale quickly, how do they make them? Like, let me, let me steal an idea from this industry. And it turned out that nobody had ever made casting machines that big.

• 32:12David Senra?

  Okay, so this is an important part, because then he combines these ideas together. So we just talked about first principles thinking, which, you know, I think he was the one, basically he popularized it. Now, everybody talks about it, very few people actually do it. But in that book, and I actually made a clip this from one of my episodes, because that was so interesting, where he's like at Tesla, he's just playing with like a little toy Tesla. And he, and he talked about like learning from Legos and like how precise it has to be. And they're like, why can't we just cast the entire, I think, underbody? And he was like, because there's no casting machine that's that big. He's like, well, how many companies, he breaks it up, how many companies make casting machines? I think there was like something like six in the world. Five, he's like, well, let's go talk to them about it.

• 32:52David Senra?

  Five said no, one said maybe, and Elon goes, I took that maybe as a yes.

• 32:58Speaker 01

  Yeah.

• 32:58David Senra?

  And it greatly simplified, simplified like the production. There's another story from the books, and I think he talked about this on a couple of podcasts too, where it's like, They had a, when they were trying to solve production hell at Tesla, they had to literally knock a wall. They were throwing out so many robots and disposing them so fast. They knocked a huge wall in the side of the factory. Just threw out like, I forgot how many, hundreds of robots.

• 33:23Speaker 01

  Yeah.

• 33:23David Senra?

  Cause he found weird shit like, hey, this one robot picks up this piece, hands it to another robot, that robot then turns around and hands it to another one. He's like, why don't this robot just hand it to that robot? Why is this guy in the middle? And it's complex. He's like, just rip it out of there.

• 33:38Speaker 01

  Yeah, and that's in the production system. Yeah, I mean, this is why automate is the last step of the algorithm.

• 33:43David Senra?

  Cause he did, he used to do that first, right?

• 33:45Speaker 01

  Yeah, his original vision for Tesla is like, we're gonna automate everything. This is gonna be like a pure robot, you know, dreadnought autonomous line. And he's like, that was a huge mistake. We didn't, we didn't have it refined. Like, we, we didn't have the design refined. We didn't have the manufacturing design. We hadn't questioned the requirements. We hadn't deleted enough parts. We should not have automated until all of these other steps had been gone through. He said, there's many times where he did every step in exactly reverse order. Something was like automated and then tried to done faster and then optimized and then ended up being deleted because nobody had questioned the requirements. That's why we do these things in this order over and over and over and over again. And, well, there's a great story of taking Starlink was like a mess, right?

• 34:29Speaker 01

  It was ten times too expensive and they were building one tenth of how many they needed. So like two orders of magnitude of off success. He's like, I've had it. I'm fixing this. This is now the bottleneck. He grabs Mark Jankosa, which is one of his like super talented early hires from SpaceX. This is a rocket scientist. This is not a guy who's ever worked on satellites. He grabs a team of engineers that he trusts. They fly up to Seattle, they fire the entire Starship leadership, or Starlink leadership team. And they sit down in a war room, which I think is an underrated like tactic. And they start running the algorithm. What is the first principles of like satellite design? How simple can we make this thing? Why, why, why, why? Why does this exist? Why are these two things so far apart? Why do we need this much energy? Why do we need this manufacturing process?

• 35:12Speaker 01

  And over the course of like a few months, they make this two order of magnitude leap. Like Mark Jankosa, these people who had never encountered this design before, but just by applying the algorithm and working with maniacal urgency towards this extremely high design bar, they created this product that's now, you know, if it was a standalone business, it'd be worth tens of billions of dollars.

• 35:32David Senra?

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• 36:17David Senra?

  That means faster speed, better service and total accountability. Deal has built AI teammates that take action. Most HR AI stops at chat. Deal puts AI inside the workflows themselves so it can run real work across hiring, payroll, mobility, IT support and reporting. Grounded in compliance vetted knowledge, Deal AI takes action to help teams move faster without adding headcount. Deal is trusted by over 40,000 businesses. Learn how they can help your business today by going to Deal.com. That is D E E L dot com. I did this episode of Founders called How Elon Works. And I think in the description, maybe even the intro, I was like, listen, I can usually, I've read 400 of these fucking biographies.

• 37:01David Senra?

  Like, I can usually find an historical analogy to an entrepreneur living today where like that person was very similar to this person maybe 50 years ago, 100 years ago. I think Elon's singular, and I think that he was like singular living or dead. I can't really find a historical analogy to it. It's like, if that's the case, and he repeats, he says, this is a paraphrase of a quote from Elon in that book, where he's just like, "I would say the algorithm so much and I repeat it so many times that people in the meeting would start to be able to predict what's coming out of my goddamn mouth." So, why don't we think about, this guy doesn't have, he's a singular character in the history of entrepreneurship, and he repeats this over and over again, like, maybe we should... Should spend a little bit more time and we should think about this over and over again. To the point that that was a great illustration of the story.

• 37:47David Senra?

  I think the maxim here is like repetition is persuasive.

• 37:50Speaker 01

  Yes.

• 37:50David Senra?

  It's like you have to repeat. One thing that's that's that is reoccurring throughout a lot of these founders. Like they have, they had to identify a handful of principles. If we go through all the notes, all the books, everything we have in front of us, it's not 25 ideas. He's got a handful of principles that he uses over and over and over again. And I love this idea that he built like this, almost like this, it's almost like another form of a meme. It's like this operating system where these are four steps and we can apply it in space, in cars, in tunnels and everything else. Let's go to step number three.

• 38:21Speaker 01

  So number three is simplify and optimize, which is, I think that's what most engineers just like do as a standard. But that is the thing that like you should only do after you know for sure that the thing exists. And you know for sure you've got your requirements as clean and short as you possibly can. The other thing that's actually really important about the requirements is that a single individual's name has to be attached to every one of them. He's huge on direct individual accountability. And so there's no such thing as like a requirement from legal. There's like a requirement from Jan in legal so that you can go ask her and be like, why does this requirement exist? Please explain it very thoroughly. Can we throw it out, et cetera? Right? And so many times he found requirements that were like created by an intern who left the company two years ago. Or a department where nobody in the department actually agrees with the requirement.

• 39:07Speaker 01

  So once you get there, it's like the very normal engineering work of like, let's figure out the trade offs. Let's optimize this thing.

• 39:13David Senra?

  Yeah, there's a great story from Tesla where you had the battery pack and I had something like, like a layer on top of it. This was for sound and one part of Tesla thought it was for sound and the other thought it was for like fire prevention. Am I remembering this correctly?

• 39:26Speaker 01

  Yeah, like the fire prevention team thought it was for sound baffling and the sound team thought it was for fire protection. And like, once that was established, they actually, they tested it. They put a mic in the car and like, nobody could tell the difference. They're like, delete. But it was the bottleneck at that particular time.

• 39:41David Senra?

  But like, again, it's like this department said this and this department said that they're not agreeing. But then I think, not to skip over this part because I think it's the most important part. Elon's solution was very. Like, simple. It's like, well, does it reduce? Like, inside the cabin, is it louder if this thing's not here? How are we gonna figure that out? We'll just put a fucking microphone.

• 40:00Speaker 01

  Yeah.

• 40:01David Senra?

  And we'll test it.

• 40:01Speaker 01

  We'll test it, and six hours later, the part is deleted. And like, this whole thing that was slowing down, you know, they pulled more robots off the line, and it sped up. And that increased the throughput of the entire production line. Then it was millions, maybe tens of millions of dollars worth of decision. Like, he says there are times when a single half-hour meeting has added $100 million to the enterprise value of Tesla. Every single minute of thinking is like worth a million dollars. A high-quality minute of thinking. And these tools are the things that he does in those minutes that actually have that kind of effect. Which is, to your point of like, this is a singular greatest entrepreneur of our generation. This is the thing that he talks about most often. Maybe it's useful.

• 40:43David Senra?

  Well, I hadn't made that episode in probably like six months. And I was listening to it again to prepare for this conversation with you. And I'm like, I should listen to this every month. Like, it's just like, it's an hour and a half. You can listen at 1.5. It's an hour if you're at 1.5x speed or whatever it is. It's just like, oh, I forgot like some of these ideas. And I think that's where the repetition is so important.

• 41:01Speaker 01

  Yeah, I mean, that's why I really design all my books to be read and reread. Like, I want them to be handbooks and reference guides. And I love when I see like just a beat-to-shit copy that's been in and out of somebody's backpack like every day for years. And is like dog-eared and flagged and all the highlight on every page. Like, these ideas, repetition doesn't spoil the prayer. Repetition is persuasive. Like, you have to work to install these ideas in your head so that they're there when you need them. So that you ask the right question or have the right instinct as an operator when you're confronted with one of these decisions.

• 41:31David Senra?

  Are there any other interesting stories that you can think of that come from the third step of the algorithm?

• 41:36Speaker 01

  I think the third step is the least interesting, honestly. I think the like question requirements and delete are probably 80% of the lift. I think to simplify and optimize the accelerate and the automate are the things that people leap to naturally. And the algorithm is really designed to get them to, you know, sharpen the axe before they start chopping down the tree. Or be sure you're chopping down the right tree. Be sure chopping down the tree is the right next step at all, anyway.

• 42:02David Senra?

  What's step four in the algorithm?

• 42:03Speaker 01

  Accelerate. Go faster. However fast you're going, you can go faster.

• 42:07David Senra?

  Is there anything else to it?

• 42:09Speaker 01

  Not really.

• 42:11David Senra?

  Just go faster. He has that line where we, what do you say? A maniacal sense of urgency is going to be our operating principle?

• 42:17Speaker 01

  Yeah. But like the example here I would use is probably going to the tunneling machines. He's like, if you want to accelerate, like the machines that are currently tunneling, even instead they are tunneling, are nowhere near their power or thermal limits. So just like crank them up, go, put it, make them go as fast as they can. Like can the robot, the interesting thing about when everything is actually automated is like, how fast can the robots move is a way higher limit on that than how fast can humans move. And so if you actually do accelerate everything, he's been talking about this a bunch with AI. Like if you can remove the human element and then you can automate everything, you can do it to a degree that is like superhuman level of speed.

• 42:55David Senra?

  You have a great way to describe this in the book. I'm just going to read, this is Elon's description of step four from the book, which I love. And so he's talking, he's like, then and only then, step four, accelerate cycle time. Once you're moving in the right direction and moving efficiently, you're moving too slow, go faster. You can always make things go faster, but do not go faster until you've worked on the other three things first. I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted. Speeding, this is hilarious. Speeding up something that shouldn't exist is absurd. If you're digging your grave, don't dig it faster, stop digging.

• 43:25Speaker 01

  Yeah. This is in the designing the organization section of the book, and I feel like it is really underrated that he applies the algorithm to his own companies. Like he minimizes the distance between like the designers, the engineers, the manufacturing engineers and gets rid of as much stuff in his companies as he possibly can. He makes the companies go faster. He questions the requirements of, of the companies and the structure themselves. And you can, he talks about it, you can see the flaws in the organization in the product. So if there's a battery team building a box for the battery. But a chassis in the car right above it, like they'll put a lid on the battery because it makes sense to design

• 44:08Speaker 01

  a complete battery with a lid, there's a car on top of it. So you don't actually need a lid on the battery case. You end up with like a box in a box. Where the most efficient thing to do is like have enough interactions between all those people that you are not duplicating parts or responsibilities or materials. Because if you allow individual pockets to make too many optimization decisions, they'll optimize for their own tiny unit, but not how the unit exists in part of the broader system. You'll have like a bunch of disparate metals that have to come together, or a bunch of insane design decisions that don't make the full system optimal as a whole product.

• 44:41David Senra?

  Yeah, he talks about the opposite of that. I think he calls it ivory tower engineering.

• 44:45Speaker 01

  Yeah.

• 44:46David Senra?

  He's like, I'm going to design a product or process, I'm going to throw it over the wall and you can engineer and manufacture. And he's like, no, you have to be able, the engineer and the manufacturer should be able to call or designer, like, why did you do it this way?

• 44:59Speaker 01

  Yeah, going back to the iteration speed and the number of failures that you can correct and identify. You know, moving the Raptor production, he had their whole team move their desks to the Raptor production line. So as they're like sitting there designing or working on it, whatever they're working on, they're like watching the machine, the engine get manufactured like right next to them. And they're like dialoguing, just like the feedback, the bandwidth between the people actually moving the atoms and the people designing the product are super, super, super high. I mean, I think he talks about traditional aerospace is like designing a file that then gets parted out, that gets, goes to subcontractors and those subcontractors delegated to subcontractors.

• 45:40Speaker 01

  And you have to go five companies down before you find a guy who's actually like cutting metal or touching the material. And then it kind of goes all the way back up and everybody's adding like complexity and confusion and overhead and cost and profit. And that's part of the reason why. SpaceX was able to do something that was orders of magnitude more efficient and cost effective. And that's before you even get to the fact that they're like iterating so quickly on the design that they're removing all this unnecessary stuff.

• 46:05David Senra?

  All right, let's go to step five. I think I mistakenly said there's four steps. I've done 10 episodes on this guy, you should know this by now. So let's go to step five.

• 46:13Speaker 01

  Step five is automate. It is the holy grail, but you want to be sure you're automating the right thing because automation itself, the process of creating the automation is expensive and difficult to adapt. So yes, things should be automated, but they should only be automated after you've rigorously applied the other steps of the algorithm all the way through.

• 46:29David Senra?

  You just mentioned something I think is a huge like theme that runs throughout like his entire career, that he wants to control everything always.

• 46:36Speaker 01

  Yes.

• 46:37David Senra?

  Can you talk about like why that is so important?

• 46:38Speaker 01

  Well, he had a tough experience in the early days of Tesla. I think like sharing responsibility or power over this, over this company. And the beginning of Tesla was kind of a messy experience. Like he was the main investor and chairman, but he wasn't actually CEO, but he spent so much time like getting deeply involved in the product and like trying to drive a good outcome there that reached the bar that he had for his vision for electric cars, that it just didn't really work in the long term. And the company was heading down this, this tough path and wasn't really making the kind of progress that it needed to. And so he talks about his like reluctance to step in as CEO of Tesla. He's like, if I didn't do that, the company would have died. I provided most of the money.

• 47:22Speaker 01

  I've been as involved as you could be in creating the actual, like contributing to the product. But eventually he's like, if this is going to work, I've got to, I've got to take control of it and I've got to go all in on it.

• 47:37David Senra?

  Yeah, he talked about the mistake of trying to, because originally they used like the Lotus, right?

• 47:41Speaker 01

  Yeah.

• 47:42David Senra?

  The Lotus chassis, I think is what it was. He's like, we should just design this from a blank sheet of paper. It's always better if you're going to do something new, like just design from a blank sheet of paper.

• 47:51Speaker 01

  It is a really good lesson and actually a big theme of his is like go for the strong form of the technology. Don't try to adapt what came before. Try to like think in limits, go to first principles and build like a true Leap in technology that totally leaves behind the constraints of the past, not just the past sort of designs, but the past entire supply chain. Like even if you're counting on the existing suppliers in the industry, it's going to be really tough to like fully innovate in the way that is possible. If you start with a truly clean sheet of paper, you question every requirement. You start with like the platonic limit of like, what is the maximum ideal possible product? And then work backwards from that. How do, how close can we get to that?

• 48:35Speaker 01

  Not start with an analogy of like, how can we be 10% better than what exists in the field? How can we do 20% better? Like, what does perfection look like? What is the absolute ideal and how close can we get to that? And if anybody gives you a reason why you can't do that, start asking why. Start building down, start questioning requirements, start pushing on those assumptions.

• 48:54David Senra?

  Well, I think it's important to like hammer on this point though, because it's obvious if you read, like if you just study history of business entrepreneurs, like they're all, they all line up in the same place. It's like, is vertically integrated as possible?

• 49:05Speaker 01

  Yeah.

• 49:05David Senra?

  They're going to control as much of their business, their raw materials and everything. And what I couldn't help but notice is this is how the car industry started. Like Henry Ford, they made almost all their parts themselves. Obviously they were making it by hand. This is before he figured out how to mass produce a car. And that was like his, his main idea.

• 49:24Speaker 01

  There was no auto supply chain.

• 49:26David Senra?

  No, you start doing it and then you have control. He's also obsessed with control. He went and buying out his investors. I think in 1919, Henry Ford owned 100 by 1919, he owned a hundred percent of Ford Motor Company. It was just like the equivalent of you owning a hundred percent of like a 20 to 40 billion dollar company today. He was so obsessed with control, he, he bought a railroad. Like he bought already, it's like, not only do I want to like control all, every single like design and part that goes into the Model T and all of my cars. It's like, I want to make sure that all those parts get to me and I want to control the logistics of them getting to me. And what was fascinating about Elon is like, he just went and like, Bucked the trend of the American automobile industry at that time, which was like subcontractor, subcontractor, subcontractor. He talks about this over and over again. Like they're just not even making their own shit.

• 50:09Speaker 01

  Yeah.

• 50:10David Senra?

  And he's like, I'm just gonna go back and do it the way it used to be done. But I think the reason that it's so important is like, not only do you have control, but it's like how you make a cost efficient product. Because if you're having subcontractor to subcontractor, I think when he did the initial calculation, he wasn't calling it the idiot index, which we could talk about.

• 50:27Speaker 01

  Yeah.

• 50:27David Senra?

  But at the time with the rockets, he realized that like 98% of the cost of a rocket was not from what it was made out of. He's like, where the hell is the money going? And he was like, oh, it's going from this contractor, who's this subcontractor actually hired another subcontractor who hired another subcontractor who hired another subcontractor before I get to the actual person, like you said, bending the metal or making the thing.

• 50:47Speaker 01

  There's actually a very important like a meta to that, which is he has a completely different vision and set of incentives. So the whole aerospace industry to date have basically been supported by cost plus contracts from the government. And so what is their incentive? Their incentive is to spend as much fucking money as they can because they make a percentage of the budget. And they're not actually incentivized to succeed. They're not incentivized, or maybe they're incentivized to succeed, but they're not incentivized to succeed economically. And they're not necessarily incentivized to succeed on the original deadline. What Elon did is went to the people actually awarding these contracts and said like, we want an outcome based contract. I want to be incentivized to drive down the cost. I want to be incentivized to hit the deadlines. Like, he wanted to compete on low costs.

• 51:32Speaker 01

  Like, for all the talk that happens about him doing things that have never been done before, he is all, the things that he's doing that have never been done before are because he drives cost down. And he drives cost down because the vision is not make as much money as I can. It wasn't start a new aerospace company that's as profitable as possible. It was get us to Mars, which means drive down the cost of getting a payload off Earth as low as possible, which means. I want to be incentivized to build a system that is as low cost as possible. And once he did that, he did start winning all these contracts and winning these like get actual outcome based things, which by the way, better for the government, better for taxpayers. That is a heroic thing to go in and say, I know I could get paid X to be to do mediocre work or to do marginally better work, but I actually want to take the risk.

• 52:16Speaker 01

  I want to burn the boats. I want my back to the wall. I want to know that we have to clear this threshold that nobody has ever crossed before. And I want to go tell my team that because that's how we're actually going to achieve this objective that everybody thinks I'm crazy for setting, which is get us to Mars. We just make this very massive orders of magnitude leap in the efficiency of like a human engineering system. It is such a different approach and that goes all the way back to his like, his sci-fi dream and his purpose driven nature. It's the same thing with Tesla, but he didn't go out and say, I want to make a profitable electric car company. He's like, I want as many human beings as possible driving electric cars because that's how we're going to solve climate change.

• 53:01Speaker 01

  That's how we're going to put a dent in this. And so all of his decisions are not, how do I maximize profits while making electric cars? It is how can I get as many people as possible driving electric cars? They have to be as cheap as possible. I have to drive that down. I need to simplify the product. I need to get a massive volume so that the scale of the manufacturing supports a really, really, really low price point. And so he just keeps making these like principle driven decisions from a very long-term view. Like his, his view is so zoomed out that it's actually really difficult to relate to. And he keeps doing these things that seem crazy or stupid or visionary or counterproductive, but isn't a counter to the prevailing wisdom of the industry. But it's not from a sense of like, they're doing this, so I'm going to do this.

• 53:46Speaker 01

  It's not even from a sense of like, this is a strategically optimal local thing. It is like, I am working on this gigantic mission and I will make every decision possible through the service of this gigantic mission. And that's why he's so strategically differentiated. Like it is it is back to the paradox of like when you're doing something that a shooting for a target that nobody else is even shooting for. You are incentivized by these completely different set of systems. And those incentives drive all of these decisions. And that's why Tesla and SpaceX both have the same dynamic where they're doing things that nobody else is doing.

• 54:23David Senra?

  There's two things that come to mind when you're talking about that. One, I want to talk about that I think people should heavily invest and maybe practice on their ability to like distill ideas and communicate like something complex in a simple way. And I think Elon's, you know, maybe arguably one of the best people in the world at doing that. The second part, which is a theme throughout everything, especially and I think it's most notable in SpaceX is like cost making cost control an obsession is not something you like graft onto the organization after. It was there before the organization even started.

• 54:53Speaker 01

  Yes.

• 54:53David Senra?

  When he has this idea where he's just like, why the hell are these Russian ICBMs so expensive? And he starts doing the first principle thinking, which is, you know, everybody knows this story, which is interesting, but then him describing it in another way, which I found was way more memorable. He's like, why would Russia be the only way they can make a cost effective rocket? And you go, and it's in your book. And he goes, do we drive Russian cars? Do we use Russian appliances? Like, there's just no way that they, this country figured out how to make the most cost effective launch vehicle. And he goes, America's a pretty competitive place. We should have the most cost effective launch vehicle, which obviously now he's like absolutely dominated in that.

• 55:33Speaker 01

  Yeah.

• 55:34David Senra?

  But again, it's like speaking in that manner is like, you could say, okay, well, I broke down, you know, from first principles thinking all the the parts and looked up what it was on the commodities exchange, or you could say, why aren't we driving Russian cars?

• 55:46Speaker 01

  Yeah.

• 55:47David Senra?

  Is your dishwasher at home? Is your fridge Russian? No. Like, America makes great shit and we make it great and cheap. Why can't we do the same thing for this like domain that I want to operate in?

• 55:56Speaker 01

  The answer is because it had been like a government. Contract driven oligopoly for the last like couple decades, basically. And NASA was amazing in pioneering, but hadn't been hadn't like really applied themselves to this to this project. I think that is a thing that people forget is like the original vision for SpaceX was not start a launch company. Elon's original goal was to increase NASA's budget and he was willing to just burn $100 million on a philanthropic mission to display a greenhouse on Mars. So like shooting greenhouse to Mars with existing rocket technology. Get this photo on the front page of every paper. There was like a little plant on the red planet, the first time life had transferred to another planet. And he's like, that'll probably increase NASA's budget and like spur this wave of exploration

• 56:41Speaker 01

  and interest in space. And when he tried to do that, he discovered that the the space launch market was so expensive and un-innovative and hadn't been moving forward. And that's actually how he discovered the opportunity to start SpaceX. It was like, that's what's actually going to move this market forward. And then he sort of ended up almost accidentally, but as a byproduct of making that progress, moving into Starlink and now moving into like solar computing space.

• 57:10David Senra?

  So the Starlink thing is interesting. It's in the book and it's also in the Max Olson essay that you and I keep referencing, which like if you're not on the frontier, like Elon obviously wants to operate on the frontier and the domains that he's operating in. And the reason that it's important is not only because he wants to push his missions forward, but you also unlock opportunities you can't see unless you're on the actual frontier.

• 57:33Speaker 01

  Yeah.

• 57:34David Senra?

  And if they didn't have, you know, the ability to put up the idea to have, I think there's like 9,000 satellites in the Starlink constellation now, somewhere around there. It's like an insane number and obviously increasing. It's like that couldn't have happened when you're launching at the time and when he founded SpaceX. I think they said they were launching, what, like two, four launches a year or something like that? And I think there's now a SpaceX launch every like two days.

• 57:56Speaker 01

  Yeah. This is a concept of like induced demand of like, people have this perception that like the demand, the size of a market is always going to be the size of the market. And he's like, well, if you lower the cost like two orders of magnitude, there's a lot more use cases that are suddenly valid. And as Max talks about in the essay, like. Reaching volume production of rockets is actually a core part of SpaceX's strategy. Like, you need iteration and volume to cover the fixed cost. And so you come up with new use cases to drive the volumes. And what are you going to do with, you know, new tons of launch capacity every year? And the first thing, most obvious thing is like, all right, Starlink. And now the next most obvious thing is, yeah, this solar compute, like, build a Dyson sphere,

• 58:38Speaker 01

  build a moon base, like, all kinds of crazy stuff is going to happen. Like, there's, there's stacks of S-curbs here that are going to continue. And that, Elon deserves a lot of credit for not sitting on his laurel. You could have sat on Falcon 9 and just absolutely raked in cash for decades. Like, there's nobody else who can do it, and it's a super profitable business. But he is like all aggressive. As soon as that was even beginning to be obvious, and probably before, he was already like on to Starship. Again, back to this like purpose-driven nature of like, we are going, this is the business and the technology and the team that's going to get us to multiplanetary.

• 59:15David Senra?

  I found one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their new advertising platform, Axon. Axon is the most powerful advertising platform in a generation. Axon allows you to capture undivided attention. Axon ads are full-screen videos that are watched for an average of 35 seconds. Retention that blows other ad platforms out of the water, and you can launch in minutes. You set the goal, and Axon achieves it. No complex setup, no expertise needed. And Axon scales quickly.

• 59:59David Senra?

  They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. And most advertisers aren't even thinking about this channel yet. Less than 1% of advertisers have access to Axon. So you want to get started quickly, and you can do that by going to axon.ai. That is axon.ai.

• 1:00:26David Senra?

  I want to go to some more ideas directly from Elon. Again, the subtitle of your book, I think, is super important.

• 1:00:32Speaker 01

  Yep.

• 1:00:32David Senra?

  Elon Musk's most useful ideas in his own works.

• 1:00:34Speaker 01

  Yep.

• 1:00:34David Senra?

  It's like, when I was describing to friends, like, what I was reading, I was like, it's 200 pages, 200 pages of just Elon talking to you, directly to you.

• 1:00:42Speaker 01

  Yep.

• 1:00:42David Senra?

  And like, you're gonna be able to, like, you can read it straight through if you want, or you can just go to a certain chapter. And like, I think, keeping this book on your desk and reading, you know, a few pages every few days is like, a great idea, like, a tool for your career.

• 1:00:53Speaker 01

  It's set up as a, like, dialogue. I want it to feel like you're out to dinner with Elon Musk, actually.

• 1:00:57David Senra?

  Again, I like, I want to hammer on this idea, like, he's just completely, you know, he came to the same conclusion that most of his history as entrepreneurs did, which is like, vertically integrate, vertically integrate, control much of your business as possible. That also ties in, and they said it wasn't like, a philosophical thing for him. It was, these other companies move too goddamn slow.

• 1:01:16Speaker 01

  Yeah.

• 1:01:16David Senra?

  And I'm in the section of your book where he talks about time, and this was fascinating to me. The reason I invited you and I wanted to have this conversation with you is, like I said, I've read every book I could find on Elon. I've read countless books on the history of SpaceX. I've done 10 episodes on the guy, and yet I've found stuff in your book that I've never found anywhere else, which, again, goes to, I think, how thorough you are. But I want to go to, just to read a couple of things and throw it at you, see if it has any thoughts. We already mentioned this. "A maniacal sense of urgency is our operating principle." And he's, his whole thing is like, "Don't waste time. Get rid of all large meetings, unless you're certain they're providing value to the whole audience, in which case, keep them short."

• 1:01:53Speaker 01

  Yep.

• 1:01:53David Senra?

  "Also, get rid of frequent meetings, unless you're dealing with an extremely urgent matter." Meeting fre-- this is so good, such a good observation by Elon. "Meeting frequency should drop rapidly once the urgent matter is resolved." That makes me think of the observation by the guy at NASA who's observing SpaceX. It's like, wait, there's a problem, it looks like a flash mob.

• 1:02:11Speaker 01

  Yep.

• 1:02:11David Senra?

  Like, flash mobs don't stay there forever. Why are you having this reoccurring meeting? Walk out of a meeting or drop out of a call as soon as obvious you aren't adding value. It is not rude to leave. It is rude to make someone else stay and waste their time. This is, I've double underlined several things in your book. This is one of them. "The only true currency is time." And then he tells this story, because he talks about that speed is both offense and defense. And this was-- Fascinating story that I haven't heard anybody else talk about. He says, "The best offense and defense is speed. The SR-71 Blackbird is a military plane with almost no defense except acceleration. It was never shot down, not even once. Over 3,000 missiles were shot at the SR-71 Blackbird and none hit.

• 1:02:56David Senra?

  All it did was go faster. The power of speed is underappreciated as a competitive factor."

• 1:03:03Speaker 01

  This is actually, I think, both Tesla and SpaceX's core advantage. It's like how quickly they iterate and design new technologies. Like, he open sourced the patents for Tesla. Go ahead, go copy it. Like, good luck. Because by the time you're producing the things that they've open sourced, like, they're gonna be five, 10 years ahead. And there's a bunch of stuff in that book about what he's learned from military history. And he's like, "The decisive factor in most, certainly every modern war, but many wars, is the speed of technological innovation. Not tactics, not size, but this technology asymmetry. And the longer the war, the more important the speed of iteration becomes.

• 1:03:46Speaker 01

  Not where you started, but how quickly you're developing something new."

• 1:03:50David Senra?

  He continues, "A factory moving twice the speed as another factory is basically equivalent to two factors."

• 1:03:57Speaker 01

  Yeah.

• 1:03:57David Senra?

  And I love this, "I have a running triage of what I do at each company, constantly thinking, what is the most useful thing I can do?" Which goes back to that tip of the spear meme, that tip of the spear focus. Like, what is the limiting factor? Literally, get on a plane and go to wherever the limiting factor is, and don't leave until that is resolved, which is another form of speed.

• 1:04:15Speaker 01

  It's speed of identifying the bottleneck and then going to it and attacking it and resolving it. Like, every one of those steps is an increase in speed that pays off. And there's so many things, like, this is a tiny story, but I love it because I think it's an example. It's a thing that happens in every single company that usually takes two weeks that he does in an hour. Right? So he's like interviewing a machinist. And 20-minute, 30-minute interview.

• 1:04:39Speaker 01

  He wants to hire the guy, so he asks him how much he costs. Haggles right there. Come to terms. Somebody's like standing beside him with a offer. It's like, all right, fill in the blanks. Here you go. Signs it, goes to work.

• 1:04:52David Senra?

  Same day.

• 1:04:52Speaker 01

  Same day. And by the way, it's Saturday at like 6:00 PM. So like, your, your description of like, how he uses time? It's like, uses all of it. Immediately. Like, that's such an important insight. And he is, it's why these, not just he, but also these companies move so quickly. Like, when you combine, I feel like a lot of people talk about the tactics of like, yes, he moves fast. Yes, he has first principles thinking. Yes, he works on the bottleneck. But when you combine these things, it's, it's like a Lollapalooza from Charlie Munger, right? It is like, this is not a 10% on a 10% on a 10%. If you're working on the most important thing with manic intensity, and you're doing that 100 hours a week instead of 40 hours a week, you are orders of magnitude beyond the productivity of somebody else.

• 1:05:36Speaker 01

  And he's been doing this for decades. So no wonder he's so far ahead. Yes, he's smart. Yes, he's intense, but he's not superhuman. He's not orders of magnitude smarter than his competitors. But the way that he works and the, the methods that he uses, the mindset that he has, puts him orders of magnitude ahead.

• 1:05:54David Senra?

  I love that you, you describe it as a Lollapalooza. I think that's what I'm trying to get across from like the podcast I've been doing on Elon, the conversation I want to have with you, the conversation we're having right now, your book. It's like, you have to use all the ideas, because them combined, and they could be, you can apply to like, anything. I'm not building rockets. Literally, like, right before we started recording, like, there's this idea of like finding a limiting factor, even for like this show. Me and my partner, Rob, was sitting over there. It's like, we've identified there's two, we want to go faster and increase production. Well, what are our bottlenecks? We have two of them, and we're attacking both of them. I was just, you heard me talking to another team member right before we started recording. I was like, there's one thing that I'm, you know, not happy about. It's like, we need to drill down on this over and over and over again. It's like, you can use this for anything. There's something that you have in your book, which I read for the first time.

• 1:06:37David Senra?

  I think I read, this guy named Ashley Vance wrote this biography of Elon, I think in 2013 is when I first read it, maybe?

• 1:06:44Speaker 01

  The first one, yeah.

• 1:06:44David Senra?

  Yeah, it's the first episode of Founders ever. In 2016, I did an episode on it.

• 1:06:49Speaker 01

  Everybody should go listen to that, David will hate it.

• 1:06:50David Senra?

  No. The way I think is like, so we're talking about speed and time building products, companies, everything else, but he even applies it, and you just mentioned this, that he has this weird long-term view, that if you don't have that, you're not really going to understand the system he's making. It's like, so the way I describe this paragraph when I read it to you is like, this is how Elon thinks about money. And this I've never heard anywhere else. "In early SpaceX, I told the team, everything we did was a function of our burn rate. We were burning through $100,000 per day. In the same way, I expected the revenue in 10 years to be $10 million a day. Every day we were slower to achieve our goals was a day of missing out on that revenue." So, this is, there's a story in the Ashley Vance

• 1:07:32David Senra?

  book, where they're like, "I don't get Elon." It's like, "I just went to him and tried to get him to spend, you know, $25,000 on a part. He said no, because he thinks I could build it for 2,000, because the idiot index. That part should be 2,000 to figure out how to do it. Yet, he just let us use his jet and burn $60,000 of jet fuel to get a part to Hawaii that would save us a workday." And so, that makes perfect sense if you spend 60 grand, because that's, that day, 10 years from now, is 10 million.

• 1:08:02Speaker 01

  Yeah. And you unlock an entire team and all the infrastructure value. So, a thing that's underrated about Elon, in my view, is like, this, this hyperfluency across domains. Like, he, this is a simple example, but he studied both physics and economics as an undergraduate. He has been like, running his business and functionally being head of product at all of his companies. It's an extremely wide, like, multivariate set of trade-offs that he's looking at, and he deeply understands, to your point, the zoomed out view of opportunity cost and compounding. So, thinking about where a business could be in 10 years, where the bottleneck is today, what the burn rate is of all the money and equipment and time

• 1:08:44Speaker 01

  and attention, and what gets unlocked, not just today, but the potential future value of that, is really, really interesting. And that's, I think, a powerful source of the maniacal urgency, is because he's like, hair on fire all the time. So, there's, there's billions of dollars at stake every single hour of the day. Like, we can be working with such greater intensity, and the rewards for doing it go up every time we are able to move faster.

• 1:09:10David Senra?

  I just flipped to this, randomly flipped to this page in the book, which I think speaks to what you're saying. I want to, before I read it... I think what you were referencing there is he talks about the fact that finance and engineering is in the same head.

• 1:09:22Speaker 01

  Yes.

• 1:09:22David Senra?

  Where like in most companies, it's separated. It's him. So he wants to make something, they want to know the costs or the potential growth of revenue. It's like, no, that that discussion is taking place with me. So then there, again, I can move faster because it's in one head.

• 1:09:35Speaker 01

  A sole decision. I mean, how many of the great founders of history are like that kind of sole decision maker?

• 1:09:41David Senra?

  Yeah, there's not many committees that make great things.

• 1:09:44Speaker 01

  Yeah.

• 1:09:44David Senra?

  Uh, in fact, I'm reading, I've never read Atlas Shrugged before, and the funny thing is, uh, I'm reading it. I actually might do an episode on it. I think it's an interesting thing. But in the beginning of the book, there's one person that is very much like an Elon character. And her brother is kind of her partner and he's the opposite. And, and she's made a decision to do something. She's like, well, how did you decide that? He's like, I just decided.

• 1:10:05Speaker 01

  Just decided.

• 1:10:06David Senra?

  Well, we have to check with the board and all these other people. It's like, no, we don't. We're just gonna make the decision.

• 1:10:11Speaker 01

  It's actually over, you'll see this as a pattern as you read, there's like a pattern of responsibility. And there's a chapter in, in my book called like internalized responsibility. And over and over again, you'll see like the hero characters in Atlas Shrugged. Everybody else is sort of trying to like find someone else to make a decision or like shove risk. And Dagny says like, I am responsible. This is me making this decision. I'm responsible for this decision. Like if it's right or wrong, hold it against me later. And like, you'll hear Elon do that in like launch rooms. It's kind of like, hey, this is like, we've identified a risk factor, go or no go. And like him in that moment, standing in front of like a rocket worth tens of millions.

• 1:10:50Speaker 01

  And like the public watching him in a launch is like running a calculation of like the physics, the risk, the economics, the market value, the speed of the company, when the next launch window is, and it'll be like, take the risk, like launch the rocket, let's go. Like over and over and over again, so many of those decisions that he's just like solely responsible for. And that's why I think these lessons are so valuable. Like, who else has lived this kind of experience and honed these lessons to, to deliver to us?

• 1:11:18David Senra?

  So going back, let's extend this idea of like how Elon thinks about money. Says Tesla is getting to the point where every high quality minute of thinking has a million dollar impact. You referenced this earlier. That is insane. That's Elon talking.

• 1:11:30Speaker 01

  Yeah.

• 1:11:30David Senra?

  If Tesla's doing $2 billion a week in revenue, that's about 300 million a day, seven days a week. There are many instances where a half hour meeting improved the company's financial outcome by a hundred million dollars.

• 1:11:42Speaker 01

  This is the highest leveraged man on earth. Like, when he Tens of thousands of engineers, how many billions of dollars of capital, billions of dollars of capex, factories, like, you know, that he says, well, it makes it hard to sleep. There's always something important to go do. And he's constantly running a trio. So what's the most important thing he can do? That's why he runs no schedule. His jet is him flying all over the world, like, whatever the most important thing is to do.

• 1:12:06David Senra?

  Yeah, I think there's a story in the Isaacson book where, I think he's dating Grimes at the time, and she talks, she was interviewed by him, and she's like, I've caught him up in bed, like, I'm sleeping, I wake up, and he's just sitting there in, like, the thinking man's pose.

• 1:12:19Speaker 01

  Yeah.

• 1:12:19David Senra?

  And he was thinking, like, when we went to sleep, he's in the thinking man's pose. I wake up, he's still in the thinking man's pose.

• 1:12:25Speaker 01

  Yeah. There's, I mean, there's hours of, like, many stories of, like, dressed to go to a party, and he's like, I'm just gonna go look at this, and then ends up, like, spending the night under a rocket, like, working in a tuxedo.

• 1:12:35David Senra?

  There's a great, those are early days of SpaceX history, where he shows up, and it gets like a Christmas party, and he's like fancy leather shoes or something, and they're like, they're like, you know, we're gonna be an hour late, we're two are like, we're not going, and now my fancy shoes are fucked up.

• 1:12:48Speaker 01

  Yeah.

• 1:12:49David Senra?

  Because I'm like, literally trying to help build the rocket.

• 1:12:51Speaker 01

  Yeah.

• 1:12:52David Senra?

  Just some random quotes from him, and I think this is great, this is almost like a maxim, "Avoid serialized dependencies."

• 1:13:01Speaker 01

  I mean, the most obvious one is just like, who starts SpaceX and Tesla at the same time? Like, that's insane. But both of these things are important, so I'm gonna, like, try my best to do them both. The story from PayPal is like a little more generalizable, which is, you know, we have like these regulatory boxes we need to check, we have these partnership integrations we need to run, and we have a product we need to build. And the same things to do is like, do one after the other, and these end up being like three-year things, because you're not like wasting time building a product if you don't know you're gonna get the regulatory clearance you need. And he just attacks this, like, we're gonna do it all in parallel, maximum risk, minimum timeline, do it all in parallel, and launch in a year, ready, go. So these things are, you know, Warren Buffett's quote, like, you

• 1:13:43Speaker 01

  can't get it maybe in one month by getting nine women pregnant. It's like, this sense of like, how many things can you do in a row to minimize the overall timeline? And yes, it comes with additional risk, and yes, it's more expensive, but back to the fundamental currency of time being the most valuable thing, like, that's actually the thing you should do. And that's a big part, I think, of why the pace of these companies, the velocity of them is so high, and... Over and over, many great entrepreneurs talk about like how underrated velocity is. And Elon talks about it too, not just like the pace of the company, but the team itself. So he talks about the team as being a vector sum. And so imagine like every employee as an arrow. How big the arrow is is maybe how high quality the employee is.

• 1:14:28Speaker 01

  How long the arrow is, is how fast they're moving. And then Elon's job is to like align them all on the same thing. And so he talks about how good the team is, how aligned they are and how hard they're working. Right? Like that is the vector sum of the team. And that is what's ultimately going to determine the progress of the company and how successful they are.

• 1:14:48David Senra?

  I want to bring up a couple of things you just mentioned about he's just constantly hammering on time, not wasting time. But I can't help but notice that in an episode dedicated to Elon, you mentioned you're getting nine women pregnant.

• 1:15:03David Senra?

  I don't know if you slipped that in there intentionally or not, but we're just going to move on.

• 1:15:07Speaker 01

  I haven't slipped anything in intentionally.

• 1:15:11David Senra?

  The one thing, direct quote from Elon here, thank you very much. The one thing you cannot replace is time. He goes on a few pages later. I often tell the team, it's okay to scrap equipment or money. It is not okay to scrap time.

• 1:15:24Speaker 01

  Minimizing the waste of each other's time, especially once you've identified the like exceptional entrepreneur or exceptional engineers are the fundamental constraint. The next is like, how effectively are you using them? How effectively are they aligned? And this is a thing where I think Elon is underrated actually as a communicator. Like he's not a super polished presenter like Steve Jobs, but especially when you read him and read a well edited transcript of him. The clarity that he communicates with is like extremely high. And he's got this amazing habit. You know, you talk about often about how clear and how repetitive good CEOs need to be, good leaders, good founders, like need to communicate super clearly and align the team. And he's got the power of one, like one metric that the entire team is working towards.

• 1:16:07Speaker 01

  And he's really methodical about like the beginning of every meeting, we are going to, this metric better be on the first slide. It's the thing that we're optimizing for. So when he was working on autonomous cars, it was like, how many miles were driven without interventions? When they're working on neural links, like how many electrodes are you installing per minute into a brain? So there's always like a single key metric that the team is driving towards that. Every decision is run through like, does it drive this metric forward? Does it drive this metric forward? And that's a really good way of aligning all those arrows and for him to sort of know that the team is working on the objective that he's identified as the most important and doing it as most effectively as they can. And for themselves to all keep each other honest and not get distracted by these like secondary objectives.

• 1:16:49David Senra?

  Yeah, I think that's again world-class communication. It's like, there's so many limited things that a human being can remember. And so if you can organize your entire company around one single thing, it's like, is this getting better? Like, this is how we're going to judge our success. Brad Jacobs has started eight separate billion-dollar companies. He said, "I've come to know a lot of extremely successful people in my life, and they all have one thing in common: they think differently than most people. All of them, to a person, have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails." What Brad noticed is that great business leaders are pattern spotters.

• 1:17:32David Senra?

  But you can't spot patterns if you can't see all of your data. Most businesses only use 20% of their data. Why? Because 80% of customer intelligence is invisible. It's hidden in emails, transcripts, and conversations. That's where HubSpot comes in. With HubSpot, all of your data comes together so you can see the patterns that matter. This is important because when you know more, you grow more. And that is a pattern that never fails. Visit hubspot.com today. That is hubspot.com. So you and I have been talking a few months. You were kind enough to give me an early copy of the book. So we've been talking about Elon for a few months, and you brought it up, I think, already in this conversation. You brought it up earlier this morning when we were having coffee. You've brought it up on the phone.

• 1:18:15David Senra?

  This idea of like, failures almost meaningless as long as it's not catastrophic. There's a line in the book that I thought was interesting, that he says, "The longer you do anything, the more mistakes you will make cumulatively."

• 1:18:28Speaker 01

  He's talking about his sense of prediction, but it's also cultivating these failures. Like, he does not mind being too early. He does not mind being wrong in a specific prediction. He talks often about, he's like, "I rarely correct specifically on the timing of a prediction." But the direction of the prediction is almost always correct. It's like, I might be a year off, I might be two years off, and sometimes I'm five. But like, being directionally correct, again, once you're zoomed out about the heading of the future and what we're working towards is massively more important than the specific breakpoints.

• 1:19:06David Senra?

  I want to jump to something else that you and I have talked about a bunch, which is your, one of your goals, stated goals for making this is like, you want to encourage more people to make stuff. To actually make products, services that make other people's lives better.

• 1:19:18Speaker 01

  To make stuff, to make important stuff, to make it as cheap as possible.

• 1:19:21David Senra?

  I talked to Toby Lukay on this podcast, which was one of my favorite conversations I've ever had in my entire life. It was very interesting. I didn't even think about it in these terms, but at the end of the conversation, he's like, oh, me and you actually have the same job. Our job is to increase entrepreneurs, to create more entrepreneurs. He's doing it through Shopify. I'm obviously doing it through reading all these biographies, taking this collective knowledge of history, great entrepreneurs, and pushing it down like the generations. So, in, in, in many cases, I do think there's going to be people that pick up your book and your series of books and be like, wait, I can like do something too. And take these ideas and apply it, even if it's in a small way. This section, there's only two pages here, it's like a page and a half. I think it's really important. I highlight almost the whole thing. But it's like, again, these are Elon's words that are super important. He says, "We must make stuff." "Manufacturing is underrated. It is hard."

• 1:20:05David Senra?

  "I've got mad respect for the makers of things." That's my favorite sentence on this book, or in on this page. He says, and this is why it's important. "Some people have an absurd view of the economy as a magic thing that just produces stuff." "Let me break it to the fools out there. If we don't make stuff, there's no stuff." "Some people have become detached from reality." "This notion that the government can just send out checks to everybody and everything will be fine is not true, obviously." "You can't just legislate money to solve things." "If we don't make stuff," he says again, "there is no stuff." "Technological progress is not..." Not inevitable. It's not some kind of abstract concept. Humans make technology.

• 1:20:43Speaker 01

  Yes.

• 1:20:44David Senra?

  If we don't do it, it will not happen. Somebody has to do the real work.

• 1:20:49Speaker 01

  This is the clip, I believe he was on the Joe Rogan podcast, where I was like, I must write this book.

• 1:20:56David Senra?

  Say more.

• 1:20:57Speaker 01

  It identified to me that he is like such a clear communicator and this is such an important idea. And I think about, you know, my, my like generation of entrepreneurs and the, the leaders that we had, the people that we look up to, the content we created. And that's just something that I want to install in as many people's heads as I can. Like you, you and Toby talk about like your job is to create as many entrepreneurs as I can, as you can. Like, I believe in creating entrepreneurs. I believe in spreading good ideas, spreading useful ideas, spreading correct ideas, like expanding knowledge into as many people as we can. And this is an unbelievably important meme. And if we all run around like creating info products or charging as much as we can while delivering as little value as you can,

• 1:21:43Speaker 01

  or starting commodity businesses, or worst of all, like trying to do as little as possible, while getting as much as possible, or legislating yourself, universal basic income and never working again or whatever, like this is not how we advance. This is not how we grow. This is not how we take care of each other. Like, we have to produce stuff and build stuff. I think the first sentence in the book is like, don't aspire to glory, aspire to work. Like aspire to be useful. Do something that is a benefit to all of your fellow humans. Elon has both really hard and really positive motivations. Like he burns clean fuel and dirty fuel at the same time, right?

• 1:22:24Speaker 01

  Like, yes, he's like trying to escape this really hard childhood he had and like.

• 1:22:31Speaker 01

  Prove to himself that he has this incredible value, but he also has these like really beautiful, massive aspirations. And he's inspiring so many people to do great work and helping them learn how to do it in the most effective way. Like he's raising and educating this whole culture, all these entrepreneurs who are going to come out of these companies. We're already seeing SpaceX founders do incredible things. And the intensity and pace and vision that these people are working with, I think is going to usher in like an incredible next generation of entrepreneurs. And I hope this book like helps people gain these ideas into their head and choose what they think is important and what they work on, who they work on it with and how they work on it.

• 1:23:09David Senra?

  I do, I do agree with you. I think it's one of the most important ideas in Max Olson essay. I love what he said. He's like, the output of SpaceX in particular is not cheaper rockets. It's people being trained to do difficult things and taking those ideas and putting it into different domains. And I think the important thing is like making more things, not doing more deals, not going into finance. Like you have the best entrepreneur on the planet, maybe the best in history telling you, what did he say? There is an over allocation of talent in finance and law. Too many smart people are going into finance. We should have fewer people doing that and more people making stuff. That is a dark hope. We should have few people doing finance and more people making stuff. Man, this is so important. Manufacturing used to be highly valued in the United States. These days it hasn't been as much, which I think is wrong.

• 1:23:52David Senra?

  Making cars is an honest day's living. That's for sure. Making anything or providing a valuable service, like good entertainment, good information. These are valuable things to do. And then I'll close the section with again that the quote, which I, my favorite part. I've got mad respect for makers of things.

• 1:24:10Speaker 01

  Going back to the, the kind of like founders archive in your head, like how many of the great founders were making things, manufacturing, building, moving physical stuff around?

• 1:24:20David Senra?

  I mean, if you think about like the most famous, like just go through like the robber barons where their names are known. It's just like, there's only one, there was essentially one robber baron that did finance and that's like J. Gold. But like

• 1:24:30Speaker 01

  JP Morgan.

• 1:24:31David Senra?

  I have a different take on that. We're like, if you read, I've read every single book I can find on JP Morgan. He is an interesting character. I found his dad to be much more of a formidable individual than, than he was. And there's a funny thing when um JP Morgan dies, they, his size of his estate is revealed. I forgot the number. It was like 50 million, which is still a ton back then. But Andrew Carnegie goes, oh, it's a think. He wasn't even a rich man.

• 1:24:57David Senra?

  But like Carnegie and Steel, Rockefeller and Oil,

• 1:25:00Speaker 01

  Yeah.

• 1:25:01David Senra?

  Vanderbilt and Transportation. There's not, you know, they were building things. They were creating, I mean, they were creating essentially the entire industries. If you really think about it, they were building the best company inside the industry, but they were really creating the industries.

• 1:25:12Speaker 01

  The closest analog for Elon is, are those names? Like, I don't think there's anybody else.

• 1:25:20Speaker 01

  Going back to like why he's singular, like we would have social networks without Mark Zuckerberg. We'd have search engines without Google. We would have operating systems without Bill Gates. Like, yes, they're some of the biggest companies on earth, but, and they were incredibly well executed, but I don't think they were singular. And I don't think we're going to see quite the same longevity that we see out of like both of these companies.

• 1:25:39David Senra?

  It's just refreshing for him to talk about how important manufacturing and building physical things are. I mean, he says in the book, manufacturing is the moat. Two things define manufacturing competitors, economies of scale and technology. If you maximize your level of technology and maximize your level of scale, that is obviously going to be the most competitive situation. That's why these plants are so freaking giant.

• 1:25:59Speaker 01

  Yeah, I mean Tesla is building a lot of things in the US and now working backwards into their own supply chain. Like they can't get enough lithium, so they're starting a lithium refinery in the United States. Spinning up, they're now, you know, starting to fabricate their own chips because that's becoming bottleneck. Like, they just keep attacking like up and down the supply chain as much as they can in order to be as efficient as possible and drive the product cost down.

• 1:26:23David Senra?

  So we've already touched a few times on the fact that he wants to take technology to its absolute limits.

• 1:26:28Speaker 01

  Yep.

• 1:26:28David Senra?

  And like be operating on the frontier.

• 1:26:30Speaker 01

  Yep.

• 1:26:30David Senra?

  You, again, you did a great job of finding quotes of somebody that like studies Elon for years that I've never heard anywhere else. And he was just talking about the fact that, you know, if you're developing technology, should we push the maximum level possible? And then he gives an example of somebody not doing that. And he's like, it was like building F-22 fighter jets and then selling them to people who roll them down the hill at each other. That's not the way to use the technology.

• 1:26:53Speaker 01

  Yeah, that was an outcome of his, his zip two experience where he was like, he was building software and then selling it to legacy media companies to kind of move newspapers online, like way back in the day. And he was just super frustrated by having to like. Sell to a slow moving old school company that was between him and customers. And that's where he came kind of, there was an early lesson that he's carried with him forever, which is like, go straight to the consumer, like own everything and let the, the customer is the one who's going to make the final determination. Like you want to take the technology straight to the customer.

• 1:27:20David Senra?

  The way I think about Elon is like, there's no work about work, just work. So he has this great quote, better to pick a path and keep moving than just vacillate endlessly on a decision.

• 1:27:29Speaker 01

  Also a PayPal thing, like make the decisions quickly as possible and then just like, keep moving. Like the back to like velocity, speed is everything.

• 1:27:37David Senra?

  What matters to me is winning and not in a small way.

• 1:27:41Speaker 01

  He's a competitive guy, like loves, loves to win. We are lucky that he's working on the things that he's working on. His inherent personality would dominate whatever industry he went into. And how lucky are we that he's like, working on some of the most important problems that humanity faces?

• 1:27:56David Senra?

  Yeah, he could use his talents for evil.

• 1:27:58Speaker 01

  Yeah, yeah. I mean, which goes back to like the incentive system, like, you know, thank God for capitalism. Like Napoleon didn't do a lot of good with his like massive energy and brilliance, right? He like, won a lot of land, lost a lot of land, a lot of people died.

• 1:28:12David Senra?

  Did you ever read Jimmy Sony's biography of Claude Shannon?

• 1:28:15Speaker 01

  Not yet.

• 1:28:16David Senra?

  I think it's called A Mind at Play.

• 1:28:17Speaker 01

  Yeah.

• 1:28:18David Senra?

  And Claude Shannon made famous for coming up with information theory. But he gives this great talk in this biography where he wins this award. And he's like, it's really weird that history celebrates like conquerors and like politicians. He's like, we should actually celebrate innovators, inventors, engineers. And he gives this whole speech and that was probably like 60 years ago.

• 1:28:39Speaker 01

  Yeah. And Claude Shannon's an incredible example.

• 1:28:41David Senra?

  Here's another thing we've already talked about, but I think is really important. This is Elon, a lot of entrepreneurial talent and financing goes to the internet. Other sectors like automotive, solar and space don't see new entrants. Not a lot of entrepreneurs go into those areas and not a lot of capital goes into those startups. This is a problem because innovation tends to come from new entrants to an industry. In an oligopoly, no one is forced to innovate. New entrants drive innovation more than anything, which is why I have devoted. In my efforts to building new companies in those industries.

• 1:29:08Speaker 01

  There's actually a great story that I think is a really replicatable tactic that's underrated that I think people can really use, actually, which is when he was considering starting SpaceX. So this is after he sort of had his like bad experience in Russia and he's thinking about entering the launch market. He doesn't just say like, I'm starting a company. What he does is do, he calls it a feasibility study. So he pulls in a bunch of engineers that have worked on the great launch vehicles. He starts reading all the books, as you say, like devouring the entire shelf, talking to all the people that he can. And he sets up a series of meetings with these engineers who are experienced to basically vet the idea of how good could launch be? Let's start with first principles. Let's start with a clean sheet of paper and what's possible in this market.

• 1:29:52Speaker 01

  And almost at the same time that they sort of came to the conclusion through this work that like massive order magnitude breakthroughs were possible, was when they actually sold PayPal. And so he's kind of like, all right, I got a bunch of cash. We've like vetted this idea with these experts. But I think it's really worth drilling down on the fact that like, you know, at this point, he was almost 30, if not more. He had only worked in software. He studied physics in undergrad, but like had not built hardware. And he just learned how to become a rocket scientist, essentially, just by like reading the books, talking to people and going after it. And he says, most people self-limit their ability to learn, like I'd ever studied rocket science, but I picked it up along the way.

• 1:30:33Speaker 01

  He's a powerful example of like what is possible. You know, once you've identified a meaningful mission, you just become who you need to be in order to accomplish that mission.

• 1:30:42David Senra?

  He's obviously very high agency. What I loved about the story from one of the biographies is how dismissive everybody was. It's like, oh, this is just a software guy playing with expensive toys. That's how he was described.

• 1:30:53Speaker 01

  I mean, that was the press, but also his friends, like I'm sure that many of them would deny it now, but they were all trying to talk him out of it. There's only a graveyard in this particular place. People were like showing him rocket videos who it's not that nobody had ever attempted this before. It's just. Everybody had failed.

• 1:31:08David Senra?

  There was a lot of failed. I mean, I find this guy fascinating because there's so little known about him, Andy Beal. But Andy Beal was, he made money independently in another industry and then tried to do a rocket company, wind up burning, I think, a couple hundred million of his own money. And then the reason it was related to Elon is because when they tried to find a place in Texas to set up, turns out they could lease this property that was previously utilized by Beal, I think it was Beal Aerospace.

• 1:31:32Speaker 01

  Yeah.

• 1:31:33David Senra?

  And so it kind of like jump started them.

• 1:31:34Speaker 01

  It was actually a big motivation of Elon's is like, even if I fail, even if I lose this money, and that is the most likely outcome, not just by a little, like by a lot. He's like, I will have moved the ball forward. Like, this is an important mission and going in with the idea that he'll burn this money on the Mars mission. He's like, even if I waste my money on advancing progress in space launch technology, at least I will have made progress in the same way that like Andy Beal, you know, who left some infrastructure behind that helped SpaceX. Like, these things do build and compound and there's, you know, back to the sort of fragility sense, like, even when entrepreneurs fail trying to move the ball forward, the ecosystem like moves forward. Like, that's part of the beauty of the human system that we have.

• 1:32:16David Senra?

  Another great quote that I haven't seen anywhere else. "I have a habit of biting off more than I can chew and just sitting there with chipmunk cheeks."

• 1:32:23Speaker 01

  That's a great visual, yeah.

• 1:32:25David Senra?

  You think he's doing that right now?

• 1:32:27Speaker 01

  Yeah, yeah. I mean, like, he keeps, an underrated piece of him again is that he like, he keeps doubling down and taking massive risk. Like, he took what seemed like that impossible pay package trade off at Tesla that everyone was like, oh my God, this is never gonna work. He did it.

• 1:32:44Speaker 01

  Got the biggest, you know, cop package in history because it was the riskiest. And now he's doing it again. Like, he won't, he'll get a trillion dollars if Tesla becomes a ten trillion dollar company, but nothing if it doesn't. Like, again, just all on the line over and over again, burning the boats, putting his back to the wall, putting himself in a situation where there's no option but forward at max speed.

• 1:33:07David Senra?

  So as I'm here, listening to you talk, I'm just like leafing through the book to see what other interesting stuff comes. What you said just matches up perfectly with the subheading of the page I just happened to randomly turn to, which is called "The Edge of Sanity." I just need to read some of the stuff to you because he's hilarious.

• 1:33:22Speaker 01

  Yeah.

• 1:33:23David Senra?

  Question, how do you prioritize with so many things going on at once? He goes, prioritizing has usually been out of desperation, not selection. It's thought, oh, let's sit back and leisurely decide how we should spend these resources. It's, this isn't working. If we don't make it work, we're gonna go bankrupt, so we better make it work. And then he goes, I felt, I felt like Indiana Jones running down the temple. There's a huge boulder chasing you and you need to jump across a giant pit in the ground. If you slow down, the boulder will crush you. And if you don't make the leap, you'll die in the pit. That's prioritizing.

• 1:33:56Speaker 01

  It is how scaled entrepreneurs feel. Like when, when you interviewed Brian Armstrong, that is how it sounded. You know, he's like, we hit product market fit and all I could do for years was just wake up and like stay alive. Just try to keep up. Like the servers were on fire, the support tickets were coming in like, oh my God, I just have to stay on top of it. Like I just gotta keep running and jump across the pit.

• 1:34:14David Senra?

  How do you motivate the team? I told them we have to go ultra hardcore. It's just funny to me. I lived in the factories for three years, talking about the Tesla production hell. I lived in the factories for three years, running around like a maniac to every part of the factory. I was living with the team. I slept on the floor. This is actually smart. I slept on the floor so the team going through a hard time could see me on the floor and knew I was not in some ivory tower. Whatever pain they experience, I experienced more.

• 1:34:40Speaker 01

  It comes straight from his like study of military history, right? Like wherever generals lead from the frontline, wherever the general is, the troops are gonna fight better. Like these are Napoleon things that he exemplified. And he even says in there like, not only did I sleep on the factory floor, but he slept like outside the conference room. It's not like he slept at the factory. And I've, I've talked to employees there, like, they're like, there's a hotel across the street. Like it would have been fine if he just went to the hotel and come back. His presence would have been the same. But he wanted people to see him sleeping on the factory floor. He doesn't just like not have concern for his personal comfort. He like sacrifices his personal comfort for leadership, like for the credibility of his engineers to build trust in that.

• 1:35:20Speaker 01

  And that is like part of how he gets so much out of people is like these conspicuous, visible, tangible, obvious displays of self-sacrifice. And it does, over and over again, he pushes himself so hard. I mean, the edge of sanity, he says, like, I worked to the edge of sanity. You've talked about to Lula Riley in, in the 2008 thing. He's having like a night terrors. He'd wake up screaming and puking like.

• 1:35:46David Senra?

  Jule O'Reilly was his wife at the time.

• 1:35:48Speaker 01

  Yeah.

• 1:35:49David Senra?

  So she's seeing this, they're in bed, he's trying to sleep and she's just yelling in his sleep and.

• 1:35:53Speaker 01

  Yeah, like it is like edge of sanity is not a like euphemism for I worked hard. It is like a Herculean test.

• 1:36:04David Senra?

  And a direct quote from him on the page I just flipped to, I worked to the edge of sanity.

• 1:36:08Speaker 01

  Yeah, it's a, it is a very like, um, I think a meta lesson from the book and from his life that, that anybody can take away. It's, it's the, it is Goggins of entrepreneurship. It is you are capable of so much more than you think. What you think is your best effort is maybe 30% effort and you're actually capable of so much more. If you make full massive use of time, if you push yourself to the edge, like, and I'm not advocating that this is the right path for everybody. I think like some people are Jason Fried and some people are Elon Musk.

• 1:36:36David Senra?

  I don't know anybody else that could withstand as much pain and torment as he, he has.

• 1:36:40Speaker 01

  Yeah.

• 1:36:40David Senra?

  Can't think of another entrepreneur living that has.

• 1:36:42Speaker 01

  No, but, but people can probably take more than they're currently taking. If it's not a blueprint, is it an example of what's possible, right? Like, um, it also, I think it's a, it's an antidote to envy, like, I don't want to live through what he lived through. And that makes it very easy to be like, I, I don't, I want to compete with that. But it does show you what's possible. Like that's what maximum effort really looks like. I think that's a really helpful lesson to know.

• 1:37:08David Senra?

  Yeah. Maximum effort, always, everywhere is the way I really think about him. I just came across another paragraph that I underlined, I think ties a lot of these ideas we're talking about. The fact that he's obsessed with speed, obsessed with control, and if you're obsessed with control, it's going to lead to vertical integration. And then you really should just design from a blank sheet of paper and do that in a first principles way. He says, there's a lot of vertical integration at Tesla. We make the battery pack, the power electronics and the drive change ourselves. We vertically integrated because the pace we need to move was much faster than the supply chain could move. That's a great line. To the degree that you rely on the legacy supply chain, you inherit the legacy constraints, including their speed, their costs and their technology. He's talking about Tesla, the exact same thing applies to SpaceX though.

• 1:37:46Speaker 01

  You can't make two orders of magnitude improvements if you rely on the existing supply chain. And one of the things we were talking about this morning is like the most interesting thing is identify the limiting factor or work on the bottleneck. It's like almost so obvious that it's trite, right? Like.

• 1:38:00David Senra?

  But no one does it.

• 1:38:01Speaker 01

  One, people don't do it, but two, it's a more nuanced thing than it appears at first blush, right? If the limiting factor is energy, it's like, okay, what is the, what is the peak load? Where does it come from? What's the cost optimized thing? Like, oh, if, if turbines are the cheapest way to do it, what is the actual, like, who's manufacturing the turbines? Where do they come from? Where do they exist? If the piece, what piece of the turbine makes it more difficult? So he did this example and drilled all the way down. It's like, there's actually one like machined part that is the fin of the turbine that is the like portable piece of the generator that is the bottleneck of compute infrastructure for XAI right now. And so it's like, it's actually one part of a thing drilling all the way down and like

• 1:38:46Speaker 01

  identifying with super high specificity where the bottleneck is.

• 1:38:49David Senra?

  Explain that to me again? So he's trying to find out the limiting factor for XAI?

• 1:38:54Speaker 01

  Yeah, and the limiting factor is energy, right? Like, we, we bought the chips, we need the building. This is when he was running the first super cluster. And somebody told him it was going to take like two years to get this building up and running. He's like, nope, if we don't do it, there's a breakpoint. If we don't do it in 90 days, like, we're dead. Or six months, maybe we're dead. And they spun up the whole thing. They, they found a building in Memphis. They bought the chips from Nvidia. Then they needed cooling and they needed power. You can't get a grid interconnect done in six months. So what do you do? You go get these turbines, these gas turbines, which are like portable energy generators. And you just line them up all along one side of the building. And you can't get that much cooling.

• 1:39:36Speaker 01

  So he went and hired mobile like refrigerator trucks, like line them up against the other side of the building. And so it was just like, what is the fastest possible way to get this thing done? And what's the limiting factor of the limiting factor of the limiting factor? Like drilling all the way down to figure out truly where to attack? That kind of five wise, all the way down to figure out the limiting factor of the limiting factor of the limiting factor.

• 1:40:01David Senra?

  Kind of relates to a little bit about like just paying attention to the smallest details.

• 1:40:07David Senra?

  This is something that I think is really important, too. It's like, most people don't consciously notice the small details, but they do subconsciously. Your mind takes in an overall impression. You know if something is appealing or not, even though you may not be able to point out exactly why. That sense is a summation of many details. Most of us experience this as, that's ugly, or that's beautiful, or wow, that's elegant. But we cannot break it down why. Pay attention to little details, train yourself to notice them. When I read that section, I thought about, it's what Steve Jobs was, I think, maybe the best in history at. And he has this great way of describing this. He says that a great product is better than it has to be.

• 1:40:39Speaker 01

  Yeah. I think Elon is underrated in his design sense, actually. There's a lot of times when you hear Elon quotes that sound exactly like Steve Jobs would have said. This is an important piece of the design, in particular for cars. And a lot of the, he thinks about it like an algorithm, right? There's certain specific things, ratios that have to exist between the product, or it needs to feel bigger on the inside than it looks on the outside, that he just absolutely insists on. And there's stories, especially from early Tesla, of him being unreasonable about design decisions, that he's just puts a finger on, it's like, it has to be this way, or it's not good enough, it's not beautiful enough, it's not aesthetic enough.

• 1:41:23Speaker 01

  In the same way that Steve Jobs was very much like, no, put a handle on that computer because it changes the relationship that somebody has with this kind of new foreign machine.

• 1:41:32David Senra?

  Something I thought about when I was reading your book was, you know, the idea is like, we're gonna have a single organizing principle to see, to track the progress on this particular product and this particular company. It kind of breaks things down to like a singular objective, or a singular, something he repeats. There's a line in Sam Walton's autobiography, which I thought was very interesting, because we're talking about, like, you know, Elon has not only started the companies, but now these companies are at scale.

• 1:41:57Speaker 01

  Yeah.

• 1:41:58David Senra?

  And Sam's like, listen, it's the human nature to overcomplicate things. As your company grows, you are going to add bureaucracy, and your job as a founder is to beat bureaucracy back over the line. And you're gonna beat it back over the line, and it's gonna creep back up, and you're gonna beat it back over the line, that ebb and flow will never stop. And one way that Elon talks about this in the book that I thought was interesting, he's just like, for any company, you just ask yourself a very simple question. Are the efforts that we're doing right now, are the efforts that we're expending resulting in a better product or service? If they're not, then you stop those efforts.

• 1:42:31Speaker 01

  It's an easily forgotten truth, like Tesla doesn't advertise. They're just all the money back into the product, or all the money back into the next product. There's stories about the rift between him and his cousins doing SolarCity, because SolarCity was a very like sales-driven organization. They're like door-to-door sales, they weren't as focused on product differentiation, and he was on the board, he just came in like a maniac on their product. And it's like, why do these clips exist? Why do these roofs take so long to install? Why are they so expensive to install? And he was like, adopting that super Steve Jobs, like make a beautiful product, make it an obviously better thing, get rid of these salespeople, like I don't want this to be, I don't want the organization to be better at selling a mediocre product, I want it to be better at creating an excellent product that sells itself. That is his whole ethos.

• 1:43:14David Senra?

  Yeah, I like the point that you made, that like he applies the same idea to the product level and at the company level. So this idea where he's like, please go ultra hardcore on simplification and deletion. It's like, and the product and in the company is a great, he repeats the same idea in different ways too, which I thought was interesting, like eliminate what isn't necessary to solve the key problem. And so he gives an example of what is he talking about there? Early versions of Starship didn't even have doors. We didn't need doors. We did need to be super focused on getting to orbit. Doors were just unnecessary complexity. The first 10 ships or more, we were not going to get back from orbit. So then again, understanding that failure is built into it, like we're seeking the limits, or we are going to fail things. And then he talks about, again, the genius has the fewest moving parts.

• 1:44:00David Senra?

  It's really hard to scale something that's complex. So he says, scale has value in itself. For example, the same computer that controls a tiny rocket controls the big rocket. The percentage of weight of the electronics is significant in a small rocket, but becomes vanishingly small in a big one.

• 1:44:16Speaker 01

  Yeah, which, this is the same logic that he applies to factories, right? Like the inherent value of scale, just make something extremely big and diminish the fixed costs as much as you can, and the value of volume, like making these leaps between, you know, that's why they started with sports car, because you can have like a unit profitable thing at small volume, then the Model S, then the Model 3. Same thing he's doing with the rockets, right? Falcon one to Falcon nine. The the ability to sequence the strategy through different products, different escars, and have it be profitable the at at each sort of stable equilibrium is a really important piece that I think for all the talk about how he's like a visionary and builds these great products, he's still really economical about how he goes about it, which I think

• 1:45:01Speaker 01

  is very, uh, very overrated or underrated piece of his genius.

• 1:45:07David Senra?

  Well, another thing you do a good job in the book of is you give multiple examples of the same idea. And again, all these ideas relate to each other. And so he talks about like, why did they move, remove the landing legs? I think this is of Starship Three. Uh, and he says, again, here we try to think to the limit of physics. The problem with landing legs is they add mass. We have to protect them during reentry and we have to get a giant rocket from wherever it landed back onto the launch stand. That is tricky. I was trying to think of the limit. What's the fastest way to achieve reusability? It would be to land on the launch stand. So he talks about, you know, planes land and then they immediately take off again. That's what we want to do with rockets. It would be to land on the launch stand. Why not just have it land on the arms of the tower it launches from?

• 1:45:52David Senra?

  So again, which is a crazy thing. When we talked about it first, it sounded batshit crazy. Direct quote from Elon. To custom build a giant tower to catch the heaviest flying object ever made with mechanical arms. Pluck it out of the air, but we did it. It is an epic sight. Giant robot arms catching a giant rocket.

• 1:46:09Speaker 01

  That is a great story because it exemplifies a few different things, right? There's the thinking and limits part, like what is the platonic ideal? How good could it be if we were just dreaming? And then it seemed impossible. And he's got a really, um, specific tactic he does when he's, when he's exploring, he says what's possible within the absurd. And so he takes these crazy ideas and throws them out. And people are like, that's crazy. That wouldn't work. That would be absurd. And he asks, what would it take? Don't tell me no. Tell me what would have to be true. What would it take to make it possible? What he finds and what there, this comes up over and over again is his stories is what first seems impossible and people push back. And he sort of gives it like a day.

• 1:46:54Speaker 01

  And then people start to like churn on it a little bit. And then he asked more questions, questions, more assumptions, asked what it would take again. And then like, within a week, people start to be like, wait a minute, this might be possible. And I think he's been through this loop enough times where people are like, no, that's crazy. They dismiss it. He pushes back. He says, what would it take? He says, do the brainstorm. He says, just spend a day or spend a week designing it. Just assume that it's possible and start working on it and see how far you can get. And so many times it's like, what seems impossible, there's no fundamental law of physics reason why this is impossible. And I think all of this actually goes back to his belief that like, engineering is magic and the laws of physics are the limit of the magic.

• 1:47:35Speaker 01

  And so, not analogy, not what have we designed before, not what problems have already been solved, not what are our current methods let us achieve, but like, what is the limit of what's theoretically possible? And he's just gonna be unreasonable in pushing as far as he can towards that. And he's seen over and over again that when he holds that line and asks, what would it take? And says, keep trying. I know it's hard. Keep trying. You've just gotta muscle through. There's no reason this isn't possible. Show me why it's impossible or keep working on it. And people respond to those pushes and do achieve things that seem impossible over and over again.

• 1:48:14David Senra?

  I think the book that you wrote is really important. What I wanna do is, I'm gonna buy a thousand copies. I will leave a link down in the show notes. So maybe the first thousand people that click that link, I'll buy a copy of the book for them. Cause I do think like, what you're doing is, like, think about how crazy it is. Elon has a 35-year career as an entrepreneur so far, something around that way. You spent five years and thousands of hours distilling the way he thinks about building companies and products and new technologies into a book somebody could read in five hours, 10 hours. Like, that is insanely valuable. I do wanna end our conversation with what I think is most important to you and I and what we're both trying to do with work. This entire reason I'm doing this new show is like a celebration of capitalism.

• 1:48:59David Senra?

  It is a love letter to capitalism. It is, hey, you know what? If you want a role model, how about somebody that started a company? That built a product and made somebody else's life better? Wealth for their employees, they created jobs, they created wealth for themselves and their family. Like, these things should be applauded. And it's exactly what Elon says here. So I want to close here. He says, "It is insanely hard to build and ship useful products to a large number of people." There's a hell of a lot of difference between a company that has shipped a product and one that hasn't. It is night and day. If you create great products and services which create wealth, that should be applauded. You increase the standard of living of the country and perhaps the world. Thanks for writing the book. Thanks for taking the time to have this conversation.

• 1:49:41Speaker 01

  Thank you for having me. I'm honored.

• 1:49:42David Senra?

  I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.