How Elon Musk Thinks About AI, Wealth, and Multiplanetary Life | Eric Jorgenson

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What drives Elon Musk's risk-taking decisions?

Codie Sanchez 0:00
Elon is risk-seeking, so mission-driven that whether it's a tenth of a percent chance or a one percent chance that SpaceX was going to succeed, he didn't care. He's like, I'm just going to do it.

Why did Elon split his last $30 million between SpaceX and Tesla?

Codie Sanchez 0:08
He's like, this mission matters. And even if I fail, I will have been proud to contribute to the progress of this ecosystem towards this vision that is so important for humanity.
Eric Jorgensen 0:16
Today's guest, Eric Jorgensen, wrote a book called The Book of Elon.

How does Elon Musk overcome obstacles in business?

Eric Jorgensen 0:19
This conversation today covers why Elon Musk doesn't just accept fears, he moves through them. Why he doesn't just build systems, but he deletes things entirely to find the one thing that matters. We're going to steal his homework today. What does it take to become a billionaire and an icon?
Codie Sanchez 0:36
I think if you want to follow the Elon path, like pick a problem that adds a new capability to humanity that few to no other people are working on and work on it intensely over a matter of decades. That's what he did.
Eric Jorgensen 0:46
Can you talk to me about the idiot index from Elon Musk, what it is and how it makes him more money?
Codie Sanchez 0:50
If you're a young engineer who goes in to have a meeting with Elon Musk, he will ask you like,
Eric Jorgensen 0:57
So your latest book, Book of Elon, all about Elon Musk and what you can learn from him. Naval Ravikant, I think famously said, it's the only book an entrepreneur ever needs to read. So I think the big obvious first question is, what is the biggest lesson you've learned from Elon Musk that if somebody is young and hungry, they should take away today?
Codie Sanchez 1:17
I mean, I think he is absolutely the model for doing big things that have been considered impossible. He just totally changed what we think of as reasonable or impactful in entrepreneurship and company building. So not just the playbook has changed, but like the targets that people can shoot at has changed. And I think that is such an interesting and important shift that we're going through that I hope the whole next generation picks up.
Eric Jorgensen 1:42
Yeah. Is there like one story from Elon that really makes you think about how unreasonable he is?
Codie Sanchez 1:48
Yes. I love this. I think this is like the canonical story that characterizes Elon Musk. So late 2008, and I know you know this story, but for anybody who doesn't, like both SpaceX and Tesla, he was six, seven years in, he'd put his entire net worth, except he was down his last like $30 million, if you can imagine being in such a desperate position. And he'd been just stepped in to run Tesla after being chairman and main funder because the company was not working. And he's like, if I'm going to make this work, I have to take it over. I have to jump in. And he's already running SpaceX. And now he's doing them both in parallel. They're both in dire straits. SpaceX just had its third failure. It was out of money.
Codie Sanchez 2:29
They were down to spare parts and Tesla was about to go bankrupt. He said they would have gone bankrupt or they just paid their suppliers on time.

What is the 'Idiot Index' and how does it impact costs?

Codie Sanchez 2:36
Like they were no cash in the bank. The car that they were selling was negative gross margin. There was no DOE loan yet. There was no Daimler deal yet. It was almost all Elon's money. And his friends were like begging him to pick one or the other. Because if you put 30 million into either SpaceX or Tesla, it would have been a safe bet. And the other one would have died, but one for sure would have lived. And Elon being this like supernaturally unreasonable person took the narrow risky path. He split his money because he couldn't bear to let either one die. He describes it as like holding a kid in each hand off a cliff.

How does Elon Musk maintain a hardcore company culture?

Codie Sanchez 3:13
And he's like, rather than let go of one, I'm going to take the highest risk path. Even if it's embarrassing, even if it's financially ruinous, I want to give both of these missions a chance to succeed. And I can't name any other entrepreneurs that had nine figures of net worth and, you know, being as renowned and publicly sort of evaluated as he was. would take that risk of going back to zero just to fulfill the mission. And that I think sort of shows his purpose-driven nature, that he was so driven by these missions that the risk of losing the money didn't matter.

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