Elon Musk: How to Start a Business (Elon Musk 2017)
You. Have to make it compelling and. This is really at the key of Tesla is a car that you will covet that you want to draw it that happens to be very, good for on the environment yeah, exactly I think this is sort of general, you, know advice, I'd give to people, starting companies entrepreneurs in general is really. Focus on making a product that your customers, love and, it's so rare that you can buy a product and you love the product when you bought it this is this. Is there are very few things. That fit into that category and if you can come up with something like that your, business will be successful for sure but. It is generally true that, innovation. Comes from. Questioning. The way things have been done before and. If in the education, system you're. Taught not to do that that will inhibit. Entrepreneurship. There's colonies elsewhere in the solar system and ultimately extend, beyond the beyond, our solar system and and. So there's the defensive reason of, protecting. The future of humanity and sharing that the line of consciousness, is not extinguished should. Some calamity before, the earth that's, the defense of reason but personally, I find the more, the word what, it. Gets me more excited is, is the, fact that this would be an incredible adventure, maybe. Like the greatest adventure, ever mm-hmm and, it would be exciting and inspiring and they, need to be things that excite. And inspire people yeah, after your you know reasons, why you get up in the morning it can't just be solving, problems it's got to be yeah. Something something great is gonna happen in the future yeah people, want to be more like you. So. And, therefore. The, fate of humankind I, think it would be great to have more, Elon. Musk's, what do we need to do to become more like, Elon. All. Right I don't know if it's I think it maybe sounds, better than it is. There's. A friend of mine he's got a great thing about creating. A company created, trying, to build a company and have it succeed is like eating glass and staring into the abyss so. I mean what can happen is it's sort of quite exciting, for the first several, months of starting. A company and, then, then reality sets in, things that go as well as planned customers. Aren't signing up the technology, or the product isn't working as well as you thought and. And. Then. Can that consumers, be compounded, by a recession, and. It. Can be very. Very. Painful for several years frankly. Starting, company. Advising. People to have a high pain tolerance. Do. You fear that maybe. An in this generation or the younger generation, that they don't have that, perseverance. Ingrid, to take on these really, tough challenges. I think. Some people do and I. Think. It is, definitely sure that I mean, maybe they tional. E companies, that get created work, where, there's, not an extended, period of extreme pain. But. But I'm not aware of you, know very many sort of such instances, so. But. I do think that, the. New. Great entrepreneurs, are born of every day and. Will, continue to see amazing. Companies, get built yeah. But, I would. Definitely. Advise. People there's, not any company to expect. A. Long. Period of quite, high, difficulty but, let, me song as, people. Stay super. Focused, on creating an absolute best product or service that, really delights, their end customer, if, they stay focused on that then, it. Should. Basically if you get a such that your customers, want you to succeed, then. You probably will all right you have to focus on the customer delivering, for them yeah. Make sure if your customers love you you will your, other success, or dramatically. Higher yeah so I noticed I picked up two kind of themes from from, what you were discussing one was. That, somewhat, audacious goals, and the other was I don't think I heard used word profit and anything. That you spoke of but you seem to be each, each thing is pointed, that reinvigorating. In industry or bringing, back space. Missions how, much of your, success do you attribute to having. Really audacious goals, or, versus. Just, not being focused on the. Short term you. Know money coming in or their, investors, approach, one. One does have to be focused. On the. Short term and money coming in when creating company because otherwise the company will for die so.
That The I think. That a lot of times people think like. Creating company is going. To be fun I would say it's not it's really not that fun when their periods, of fun and their. Periods of where it's where it's just awful and, particularly if you CEO of the company you. Actually have a distillation, of all the worst problems, in a company there's. No point in spending your time on things that are going right so, you only spend on things on your, time on things that are going wrong and, they're. Things that are going wrong that other, people can't can't take care of so you like the worst give, a filter for the crappers problems in the company, the. Most pernicious and, painful problems so. I wouldn't say it's I think you have to feel quite, compelled to do it, and. Have. A fairly, high pain threshold and, there's a friend of mine who. Says like starting companies like staring. At the abyss and eating, glass there's some truth to that. We're, sharing it's the best part is that you're going to be constantly facing the. Extermination. Of the company because. Most most startups fail now. It's like 90 percent ugly. 99%, of of startzville, so. I, so. You that, that'sa staring into the abyss plug you can't constantly, saying okay if. I, don't, get this right the company will die and and, then you're. Eating glass parties you've. Got you've got to do you've. Got to do the problems you're gonna so you're gonna work on the problems that the company needs you to work on that problems you want to work on and. So. That the, unit. Working on problems. That that you'd really wish you weren't, working on and, so that's the eating glass part. Then. That goes on for a long time so, how do you keep. Your focus on the big picture when, you're constantly faced with we. Could be out of business in a month. Well. It's, just a very small percentage of mental. Energies on the on, the big picture like you know you know you know where you generally, heading, for and the. Actual path is going to be some sort of zigzagging thing in that direction. It. Try not to deviate, too far from the path that. You, want to be on but you're going to have to do that some degree. But. I don't want to I don't want to diminish that I mean I think the product the profit motive is a is a good one if the, rules of an industry are properly set up so. It's only fundamentally, wrong with puppet in fact profit just means that, people. Are paying you more for, whatever. You're doing then, you're spending to create it. That's. A good thing, and. If you're not if, that's not the case then. You'll be out of business and rightfully so. You're, not adding enough value. Now. There are cases of course where people, will. Do bad, things in order to. Achieve. Profit but but that's actually. Quite. Unusual I mean because, because usually the rules, are set up mostly. Correctly like not completely, with mostly correctly, how, do you spend your days enough like, what what do you allocate. Most of your time to my. Time it's mostly split between, SpaceX, and Tesla, and, of course I try. To spend, it's. A lot of every week at opening I basically. Half a day at opening I most weeks but. Other than that it's really ideal, when you're a little extra Tesla like what is your time look like there. Yeah. It's a good question I, think, a lot of people think I must, spend a lot of time with media or on. Business, new things but actually almost all. My, time 80%, of it is spent on engineering. Design, engineering. And design so it's developing. The next generation product. At. That's. 80%. Of it you. Probably not remember it's a very long time ago many many years you took me on a tour of SpaceX, and the. Most impressive thing was that you knew every detail of the rocket and every piece of engineering that went into it I don't think many people get that about you yeah, I think a lot of people think I'm kind, of a business person or something it was fine I like Fitness is fine but a, guy.
Really. You. Know if I get SpaceX, Gwynne. Shotwell is chief operating officer she kind, of manages, legal. Finance sales, and. Kind, of general business activity. And then my time is almost entirely with the engineering. Team working. On improving, that. The Falcon 9 and the. Dragon. Spacecraft and, developing the most colonial architecture. And. That Tesla, it's. Working. On the model 3 and. Some. In the design studio took. A. Half. A day a week dealing. With aesthetics. And and. Look. And feel things and then. Most. Of our week is just going through engineering, of. The, car itself as well as engineering, of the factory. How. Should someone figure out how they can be most useful, whatever. The things that you're trying to create what, would what. Would be the. Utility. Delta, compared, to the current state-of-the-art times. How many people it would affect so. That's why I think having. Something that has that's, that has a mix, makes a big difference but effects a sort. Of small to moderate number of people is great as is something that makes even, a small difference but it affects, a vast number of people like the area yeah you, know under the clothes yeah, exactly the area, under the curve is would, actually be roughly similar for those two things. I mean, I think there's. A lot of things I mean I sort of I mean certainly you. Know. Listen. Listen, more to critical feedback I. Mean. Like a lot of things I learned in college actually are pretty helpful I mean the thankful physics approach to thinking is very good like the first principles approach, and. You applied that in broadly yeah. Applying, the first principles approach to thinking is. I think a good, way to, figure. Out the, counterintuitive. Situations. And. I. Thought. That I thought that I was that was really a helpful thing to learn whereas, there's many things that need fixing in the world and students, here probably to think of a long, list many of which you could probably imagine. Solutions, to using, the physics first principle approach but has there been any, framework. Or idea if you've used to filter out what you don't do what. You don't pursue I mean. Would if sort, of followed, or. What it initially, was you. Know I. Won't. Go back to like college, Santa's working on. Energy. Storage technologies, for electric vehicles and that's, what I was going to pursue at Stanford actually with work work on like, advanced capacitors, and batteries to, improve the. Energy, density for, electric vehicles, and. Then the. Internet was kind of happening it was like the internet was happening like back in 94. 95 and I. Wasn't. Sure if what I worked on in the PhD would actually, be, useful so. I was like I was really concerned that if I'd line timing. Or what was intuition, meaning, I think it, could be academically, useful, but not practically. Useful like. Thank, you you, could result in a PhD and adding. Some leaf. To the tree of knowledge but. Then then. Discovering that well it's not really going, to get. A matter like that's, is. It is it going to be a good. Enough thing to actually be used in an electric vehicle I wasn't sure I mean so it was like I was, uncertain as to whether success, was one of the possible outcomes like. I thought maybe it was but I wasn't sure and and then, I thought well if I watch, the internet get bill while. I'm doing this. That that, would be really frustrating, there's. A sense of that eminent, tining, like that was the time for the internet and maybe yeah, it was tough could wait or be in the back was it always there is like one day I'll get back to that or was it that'll. Probably get back to it and did. End up doing that a, bit yeah, absolutely. The. Internet, was happening, it. Like really taking off, all. The most people weren't aware a bit in 95 and. And. So I figured, like electric. Vehicle technology, energy. Storage technology, will be some sort of natural progression in that and I. Could come back to it later, but. The internet you know it was, really that, was the moment to really do something although. In 95, it wasn't obvious that you could actually make any money on the internet this was like, no nobody, until. Netscape, went public I think at the end of 95 at nobody. Even thought there was like you. Could make a valuable company, on the Internet melodia, says it seems now yes like now it seems really obvious but back then I was not at all and then, the Internet is also helpful because it's anything, to do with software is a low capital endeavor so. I didn't have any money, I just. Had a bunch of students dad but, but software you can just write like, by yourself and. You don't need a lot of atoms. Like you don't need a lot of tooling and equipment and. Such. Like capital intensive so.
The Ability to start a company, if. It's software related and it's the first company is much much easier. And. It. Seems obvious now but of course the easier. Place to start and maybe a more of a personal reputation and, had more personal capital, as some Marianne I know SpaceX, was, ill but was entirely funded by Elon, for, its first period, partially, from you. Know in an era when others, probably wouldn't have funded it right in those arrived two days oh and, actually I mean before the precursor, to to, SpaceX, was not the, idea, wasn't really to create a company it was it. Was to try to figure out why we. Hadn't. Gone. Ten people to Mars going. From PayPal so the next thing I was sort of thinking well, it. Is a some way to reignite, the dream of Apollo. That says, you have a useful company. So. Benign. In a high-growth scenario, you have a lot more inputs, for for, future outputs, so that you have negative cash flow and like, a profitability, and which we currently have a Tesla, but. In, the long term of course that has to be that that, has to be fixed they can't be negative cashflow and long term and. That there needs to be a net. Positive output, which, is sort of profits, in the long term but. In the short term when there's high growth that that, doesn't it, isn't the most sensible thing when you have this thing. That every employee and customer knows, is the purpose of the company how do you see that flowing, through to benefits for the company I think. Having a purpose, suddenly is. Going to attract the very best, talent, in the world because, if. People, can do, something it's intrinsically. Enjoyable and the, branch. Rewards, are good but then also it's. Something that's going to genuinely change the world and that's I think that's pretty powerful motivator, and. But. I don't think you like everything, needs to change the world you know you know honestly like there's. Lots of like useful things that people do and I, mean. I think it really it should be like, a usefulness. Optimization. Like, just say like is. What I'm doing as useful as, it could. Be you, tamen through the goal of an organization, well in general yeah and. You. Know just, even if something isn't changing, the world that could make making, people's lives better I think that's that's, great and, you. Know if, even if some things like making own. People so it's only slightly better but it's a large number of people and, kind like the area under the curve is, is, quite good and. That, mathematical. First principle the point utility. In number, ugly yeah. Like. I mean it's sort of like the point it's like so, like it's like some app really, making people's lives better fit specially but if it's affecting a lot of people even. In a small way then, yeah these, sort of area is good. It's. Always really, tricky to predict the future. Alright, some of its pretty obvious like computing, power is going to be just, crazy and, really. The big change is the. Cost of computing power hmm not, so much the sort, of circuit density so the Moore's Law thing, but. If you if you look at say what is the actual. Dollars. Per instruction. And, and that that is. Dry. I mean that that that cost is is dropping exponentially. Anything. About it like you, making a computer just you're rearranging silicon. And copper you. Know so one. On a little chip and once. The capital cost of the development. And the the chip plant is paid. For, the. Act I mean the module, cost of a chip is very very tiny, so.
I Think we'll see, massively. Parallel. Computers. And. Kind computing power and storage being you. Know as. Really as much as you want it is interesting I to start, with that like it's like I don't, know what else to predict but as a foundation, we're sure of this seems, like the safest starting you, know premise, but then what, is that ripple through to and feels, like genetics in AI which you mentioned autonomous, driving. Space. Related topics I mean. Just ubiquitous, computing everywhere. I like. AI is going to be incredibly. Sophisticated in. 20 years hmm. The. When. The first it like, it seems to be accelerating and that the tricky thing about predicting, things, when there's, an exponential, is that next potential looks like looks linear closed. Off, and. And, it's actually it's, not linear so. And. A I appears, to be accelerating. That's. What I can see, engine. So that you look at autonomous, driving and, point, a is, like this theory like functionality, as you have guideposts, well I had sort of debate about someone like is AI accelerating, or not and the. Key thing like you think well what's the y-axis you know if you different accelerating. Your. T on the x-axis but what's what the y-axis as well thought about that I think you. Can have a recursive y-axis. So, that. If, at. Any point in time your predictions. For AI are, coming. Sooner or later, that. That, actually would help to find whether it's, accelerating. Or not whatever that axis was so you magically get didn't ever immersive, access like so if in any given year if. You, find your predictions, are going. Further out or coming for the river coming closer ran that. That actually you. Know it was one way to think of acceleration. Because like because, otherwise what's the what's. The quality verbal quantitative measure of AI. And. I can, certainly see that with with autonomous, driving you, know three years ago I thought it was ten years away and. At two years ago I thought it was five years away now, I think it's three. Years away or less than three years away Wow. So. Any. Me say away like like like release the market available, for consumer, adoption is as opposed to prototyping, no I mean like like the technology, works there's a sort of second question as to when regulators.
Would Approve a yeah yeah yeah yeah but, but, like look at that, technology. Works as a general solution so, like Tron was driving like crisscross anywhere, so it could be sooner for point things like highway only or, in, hi only we're already in public beta with, this Tesla, so we'll be hopefully, in the, next several weeks releasing. To to all, of the cars that happen the autopilot hardware, which is all car spoken like roughly the last 12 months and so. For, sure ubiquitous, computing, AI, that's, beyond anything, like. The public appreciated. Today I think, will have most. Of the. New. Vehicles, being produced being. Electric and will. Be probably, have the. Supermajority of energy, being produced being, sustainable. So I think I think we're on head of solar primarily, in your mom early solar yeah I think that those are sort of some good, things like I think will be and, hopefully. On a good path for sustainable, energy sooner. Is always better but I think by 2035, I think, will. Be substantially. Like, what most of transport. Most of new, energy, being produced will be sustainable. Broadband. Everywhere. Broadband everywhere yeah and hopefully. Hopefully. A small base on Mars or some school city on Mars in. 20 years years I'm gonna sit here, well, okay, fine town village. Of, you Hamlet. I. Mean. That's exciting I mean that. Could get people fired up about the teacher yeah. I do I agree, exactly, I mean for sure for, sure Mars and sustainable transport like those items I think are really, very. Sustainable energy those are I think really cool things I mean in terms of getting excited about having needs I, think, we'll probably start seeing like. More like truly. Sidewalk activity, like human. Brain in like, like the look range of your interfaces. Like. There's, a long side the AI is that are purely yeah yeah, I think so, the, only way we can relate I think, you know and have a conversation, and. There are amazing things happen like happening, these days like this they'll, be able to figure out how to do it auto fishel hippocampus. In. Rats. And monkeys and, and. Now they're looking at at. Doing that to solve, severe, epilepsy. About, half of severe epilepsy cases, originating at so. Hippocampus. By. Having sort of an artificially. Augmented, hiccup, hippocampus, they can actually solve. The. Severe, epilepsy cases, other board members asked and maybe they cheering, up kind of method with some quoting Bill Gates or somebody that said you know if you haven't, failed and you're not learning or so that's a paraphrase of the clothes and I remember your, reply and. I have it written as a quote because I want to put it on a placard given. The options I prefer to learn from success that me good I. Can. Come back and so I guess, Alec series in general what do you think of the Silicon Valley mantra fail fast fail often or, as Esther Dyson says always make new mistakes as, well as if failure is the crucible of learning and experience, if you have any further thoughts on that and that may be off-the-cuff comment you made out there I, mean. There are there are many bits. Or I mean I think it's sort of just like some entropic. Basis, but it's like there are many walk more ways to fail than to succeed so, you, have, to explore I mean take like for a rocket there's like a thousand, ways to think and fail in like one way it can work, so, you. Could you could have a lot of rocket fires to explore all the ways in which you could fail if it but I didn't think that one great, thing about, looking. At is failure. Is not a not a big stigma so it's like if you if, you try hard and it doesn't work out that's.
Okay Like, you can, learn. From that and you. Know do, another company and it's not a big deal and that's really one of the great things about talk about it interesting. Do, you also I'm, curious if either on the well, it seems to me that on the system design side you can accommodate, a likely. Failure of sub components and so, much of the elegance of what they have Falcon nine or a nine heavy at an. Ultimate incarnation of, this vision. Of how the rocket should be built to say hey parts will fail thing but here's other system can succeed and I'm. Curious if there's any other thoughts along that how to how, to accommodate. Anticipated. Failure and then also maybe inner like, in managerial II is there ways that you motivate, the team either in advance of failure to coach, them on it this is going to happen or in. The aftermath of failure to get them fired up to solve it and move forward when it might be dark times and like. For example you emotions, like failure to launch. You. Know exploding, on the paddy know there's all these it's. A very visual it's. Public spectacle, when you have a setback in the rocket industry you can curious how you manage around failure I mean, it's I think it's it's like quite, quite painful and difficult honestly, and. It, feels terrible, that the company is sort of looking to. You. Know me to you. Know rally them and I do, but. Honestly, feel super bad like, a punch in the gut yeah, yeah. Remembers. Almost like a tight like the stages, of grief I remember yeah, I mean it's just I mean it's. Particularly, with Rockets it's, just a really quite space is hard and rockets, tend to fail unfortunately. And even, when you've got a lot of really smart people working super hard to minimize the probability of failure it's still still. There and it's. And. It's no it's quite significant, every, lovasco nyquil wire wire rockets are, especially hard and. You're. Part of it is like everything. Has to work the first, time like there's there's no you can't do a recall you can't patch it. It's like nine minutes to orbit or it's over and. And. Then, the, that. You know what you can't you can never test the rocket completely, in the environment, that it's actually going to experience you can't. Fully recreate, something. That's moving super. Fast in a vacuum on. Surface. Of a like, you can only really record recreate that on in space so they limited the simulation, tools all, right is that a limit of the simulation tools today or that yeah absolutely other, if. There's, any error between the simulation, and reality. And there's always so amount of error then.
Then. That that can result in failure it's, a really really tricky one it's like in, a software analogy, it would be like if, you had to write a whole bunch of software modules, and you. Can never run them together, and. You can run them on the target computer look like when you're testing them you'd have to test them individually and not. In the actual computer, that they're going to run on gotcha. Then you put them put all the modules together run. It for the first time in a completely. Different very. Different computer and it, has to run with no bugs. That. Is difficult the software analogies to rocket, design are deep, modular. Reuse I mean many of these like those, who are in earth it's. Not like this is an aerospace engineer. By. Traditional training coming but but is in fact radically, changing industry I think applying, ACS, perspective, to industry. After industry I'm, like how would how would you know computer scientist or a physicist approach the problem which oftentimes the, solution very unlike the. Industry incumbents, there's there's a certain elegance, to it at, least from the outside what do you look for in design, and, related. If you'd like what do you look for in art design. Might be more immediately. There lord I, mean. You. You, want to make something beautiful you want to. Trigger. Whatever, whatever, fundamental. Aesthetic, algorithms. Are like it in your brain you, have I think some intrinsic. Elements. That represent. Theory and. And, let that trigger. The. Emotion of appreciation, of beauty in your, your mind, and. I. Think that these are. These. Are actually relatively. Consistent. Among, people I mean not completely, so. If you like not, everyone likes the same thing but, there are there's a lot of commonality, and and. There yeah, and they're worth it but but I think it, is important, to combine. Aesthetic. Design with functionality, like, if you say like what was really hard about the, Model S or the Model X. Was. To, combine. Aesthetics. And. Utility. So. To balance, the two you, can make a car look very. Good by giving it sort. Of, certain. Proportions, I keep, making it sort of low and slim and. If.
You If. You do that the utility. Is significantly. Affected and, so the big challenge with the set, of Model S was trying to figure out how do we get five, adults plus two kids because I wanna have from, 17 a big challenge with the like with with es was having. A car that had a high utility and, look, good, and. The same with the X so. Like it's like with, the tomato, sports car look good is relatively, easy but. To make a sedan look good or an SUV look good it's because quite difficult and I, think another principle, is you, want to have it feel bigger on the inside then, it looks on the outside, and. That, that's also really hard thing to do, and. Then you. Really, pay attention to, the little details. The. The. Nuances, of design. And shape and form function and the, way it looks in different lights and when, something's off the, little thing how, do you experience that there, drives me bananas, yeah. I mean. It the, problem. Is like if you you. Can train yourself to to, pay attention to the tiny details I think almost anyone can. Although. It this, is a very much double edged sword because then you see although we'll be fit and. Then little things driving crazy. So. But. Like, most people don't they don't see they don't consciously see, the small details, but they they. Do subconsciously. See them like you sort, of your mind takes in a result of the overall. You. Know the overall. Impression. And and, you know if something is appealing. Or not even though you may not be able to point. Out exactly why, and. It's it's a summation of these many small details so. Most of us experience it as a way, that's ugly or I think that's beautiful or like wow that's elegant but ya can't break it down, you. Mentioned something in passing like you can train yourself in this though yeah you can train yourself I think you, can make yourself, pay. Attention to why. You. Essentially bring. The. Subconscious. Awareness into, conscious awareness I wish. I could do that how do you do that. Just. Paik really close attention almost. Like a meditation on the object, trying. To find the details like why do I not like this is, that what yeah, look look closely and carefully mm-hmm. And. If. For any given object its that it's, geometry. There's. Always something wrong somewhere all the time and so as, long as, people. Say super. Focused on creating an absolute best product or service that, really delights, their end customer, if, they stay focused on that then if. Your customers love you you will you're, a success, or a dramatically. Higher.