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Chapter 1: What drives Elon Musk's risk-taking decisions?
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.
Chapter 2: Why did Elon split his last $30 million between SpaceX and Tesla?
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.
Today's guest, Eric Jorgensen, wrote a book called The Book of Elon.
Chapter 3: How does Elon Musk overcome obstacles in business?
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?
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.
Can you talk to me about the idiot index from Elon Musk, what it is and how it makes him more money?
If you're a young engineer who goes in to have a meeting with Elon Musk, he will ask you like,
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?
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.
Yeah. Is there like one story from Elon that really makes you think about how unreasonable he is?
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.
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Chapter 4: What is the 'Idiot Index' and how does it impact costs?
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.
Chapter 5: How does Elon Musk maintain a hardcore company culture?
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.
Chapter 6: What is the importance of demos over presentations?
The risk of his reputation didn't matter. He asked the universe for something in a way that the universe understands. Like that is a test that most of us will never have to take. And he passed it. And I think that story is part of why he has such incredible devotion.
And people believe that he's so dedicated to these missions and they flock to his companies and they flock to invest in his companies because he's demonstrated that character so, so clearly on such a grand scale at such high stakes.
What do you think Elon Musk would say about the stakes?
They're an absolutely vital part of long-term success.
Chapter 7: What is Elon Musk's five-step algorithm for efficiency?
If you stack up a few of the kind of aphorisms that you hear him say a lot of times, he's actually encouraging these small failures. He's mandating small failures because that's how you find the limits of what works. You don't know if you have something really an elegant design until you've taken away more things than you need to. You see what breaks, then you add back the essential, right?
He says, if you're not adding back 10% of what you removed, you're not removing enough. So you have this clutter, you have mess, you have over-engineering, you have redundancy. And it's only when you push something to the point of breaking it that you learn what's really vital. He also says in hiring, he's asking for people like, what problem did you solve?
And what mistakes did you make along the way to solving it? What walls did you have to bounce off? He wants to work with people who understand how to make a mistake and iterate because reality is the ultimate teacher. And so the organizations are designed to iterate quickly, move fast, fail almost intentionally, and then learn from that failure as quickly as humanly possible.
Yeah, I do love the visual that he has of his very first, I think it's like the Falcon.
The Raptor engine.
The Raptor engine.
Yeah.
Then to where it is today, we can show it like on the screen here and how all of that complexity boils down to beautiful simplicity at the end. Does he ever talk about being scared and fear? Like does Elon Musk get scared or what would he tell you if you were fearful of taking a big jump?
I think that's such a funny question. He got interviewed and somebody asked him like, aren't you scared? And he's like, yeah, like I'm not crazy. Like these are insane risks that I'm taking. And he's very rational about the fact that they are insane risks. But he has this, again, I think this is a great quote, which like tattoo it on your eyelids, feel the fear and do it anyway.
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Chapter 8: Is Elon Musk happy, and what can we learn from his mindset?
But but my question, I guess, is. How does he work that is totally different from the average person?
The intensity and the focus on the bottleneck. So the summary of this, I think he's working on the right thing at the right time, which is right now, and he's making a huge improvement to it, not an incremental improvement. And those habits don't just add, they multiply with each other. And so he's
We know that if you're an investor, there's some investment you could make right now that would make you $10 million this year, $100 million. There's some stock is going to go 100x this year. If you know exactly where to put your money at exactly the right time and you stack that up, you'd be a billionaire in years. So that is the power of perfect information.
And that's obvious in an investing context, but it's not obvious in an operating context. And so when you're looking at operating a company... It is very, very rare to find a leader who's actually identifying and attacking the bottleneck of their business at all times, working intensely on doing it, doing it immediately and doing it so effectively that it's never a bottleneck again.
What story do you think most exemplifies that about Elon Musk?
Doing the right thing at the right time all the time. These heuristics that he has about like, well, probably Model 3 production hell is like the story that best exemplifies that. He knew that if you got to, I think the number was like 10,000 cars a week, that the company would live. And if it didn't, it would die.
And so he moved into the factory and the production line would have, you know, red or green lights and he would walk to the red. So anytime there's a bottleneck, you're just running up and down miles of factory, wherever there's parts piling up or wherever there's a red light, you would run there, you'd pull people in.
And he would solve that bottleneck and solve the bottleneck and solve the bottleneck and simplify and delete and like applying the algorithm. That's kind of where that whole thing emerged. And it was just very clear that like nothing else mattered in Tesla at that time, other than getting that production line to 10,000.
And so many CEOs that we know, so many operators are like, well, I've got, I've got a board meeting to prepare for. I've got a weekly meeting. I've got a status update. I've got to do this. I've got to do that. And they're sort of caught in the like minutia and maintenance of the company.
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