Elon Musk's methods: lessons from his biography
Several years ago I read the biography on Elon Musk from 2017 written by Ashlee Vance and I remember finding it very inspiring. Recently, a colleague recommended the 2023 Elon Musk biography by Walter Isaacson, and I found it equally inspiring. I can highly recommend it.
In particular I enjoyed reading about how Elon Musk runs his companies. He meticulously works to simplify his products and their production processes, cutting down the number of components, their prices and complexity. Some examples are the Cybertruck which doesn't need to be painted since it's made out of stainless steel, the rockets that are caught on ground so they don't need landing gear, and the reduction of staff at X/Twitter.
Elon Musk wants leaders in his companies who are still connected with what's happening on the floor. Otherwise it would be like a medieval general who doesn't know how to wield a sword or ride a horse. At one point in the book he mandates that managers shall keep programming 20% of their time at work. And at another point, after Tesla had acquired SolarCity, he mandated that all engineers should do some time installing solar panels on roofs at customers' sites to better understand the pain points of the technicians.
Repeatedly through the book we see Elon Musk apply what he calls The Algorithm. It's his process of scrutinizing all requirements, finding out who's responsible for each requirement, tracking down if they can be ignored, reducing the complexity of the products and processes, and removing as many parts as possible.
Eventually when you delete too many parts, the product will stop functioning correctly. If you realize that you need to add 10% back of what you deleted – then you have deleted enough. But if you didn't need to add anything back – then you didn't delete enough.
He also has something he calls the idiot index. It's the markup on a component above its material cost. For instance, if a component is made out of $10 worth of steel, but sells for $100, then it scores 10x on the idiot index. Using this analysis method, he identifies components to produce themselves at Tesla and SpaceX.
It was also inspiring reading how Elon Musk viewed the production pipeline to be something to set him apart from the competition. He wanted to automate the whole production line of the Tesla cars, and saw Tesla's ability to build factories that build cars to be one of their unique selling points. Although he later reduced automation in areas where it made more sense to have humans – in order to cut costs and complexity – it was still interesting to read about that meta level of optimizing factories that build cars.
The reduction of complexity is also something we see being talked more about within the software development industry. More and more people are starting to question old truths like the microservices architecture and building frontends with SPAs like React. People are instead looking at the monolith architecture and simple HTML frontends. I think there is a lot that can be learned from this biography that apply to other domains.
Being from Sweden, it was also fun to read about how quickly he hires and fires people – a business practice that wouldn't be allowed in Sweden. Elon Musk repeatedly fires people who don't support him completely or don't reach his ambitions.
It was also interesting to read about the attitude he has at his companies and the environment he wants to create. At SpaceX, employees wear jeans and t-shirts and are encouraged to think creatively and work hard. While at their competitors, it's shirt and tie, slower processes and more bureaucracy. The author describes one person who left a competitor to join SpaceX because his previous job was too boring, and he wanted more speed and influence over his work.
Another recurring theme I enjoyed in the book was Elon Musk's sense of urgency. He gets disappointed when something takes too long to complete and often says he wants to see the result of it within his lifetime, be it colonizing Mars or implanting chips in brains at Neuralink. He also often sets ridiculous deadlines, to reach a goal faster, to force his employees to reduce the complexity of the solution to reach the goal on time, and to motivate his employees to work harder.
All in all, it's a very good book about running businesses and fueling yourself with motivation.