Why Is Elon Musk So Successful?

Elon Musk's continuing success - and his ability to push through setbacks to ultimately still succeed - comes down to a set of core principles on which he operates. 

I don't claim that the following post is the exhaustive, definitive explanation of Elon's success and achievements through his companies. Nor is this an analysis of how he structured his operations or financing to get here. But rather than spout cliches or armchair psychoanalyze the man, here I present what Elon himself has said over the years in interviews and speeches that provide insight into his mindset, expanded with my interpretations...

Now...

First Principles

First of all (*smirk*), Elon constantly focuses himself on "thinking from first principles" - approaching challenges with a mindset from the realm of Physics...

“First principles means you look at the most fundamental truths in a particular arena – the things that really are almost indisputably correct – and you reason up from there to a conclusion. And if you see that that conclusion is at odds with what people generally believe, then you have an opportunity.” ~ Elon Musk

Elon Musk and then-Secretary of the U.S. Department of Energy Dr. Steven Chu at ARPA-E Energy Innovation Summit 2014, quote @ time: 29:07

For example: Elon's mindset at the conception of SpaceX was not:
"Building rockets is, has always been, and always will be mindbogglingly expensive, and that's just the way it is to build something so high-level complex... So clearly, I'm screwed if I try that."

His approach instead was basically to question all the fundamentals involved:
"What are the exact components of a rocket?"
"OK then, are those parts really that costly individually?"
"Are there alternative cheaper sources of the same quality components?"
"What would it take to assemble rockets ourselves?"
"Is total assembly really that difficult to justify the final price of the rockets these other corporations are making?"
"What does it REALLY take to build a functioning rocket?"
"What are the inefficiencies that can be safely eliminated?"

...And this approach eventually led him and his team to find solutions and build rockets for far and away less money than all other competitors, down to this day. (In fact, SpaceX's technical superiority is only growing with time.)

Negative Feedback

Elon always seeks and listens carefully to negative feedback. This allows him to see into his own blind spots and harvest ideas that he just didn't think of. This practice allows him to detect if there's any mismatch between his intentions and people's experience with his products; and thus to make meaningful improvements constantly...

“When friends get a product, [I say to them], “Don’t tell me what you like, tell me what you didn’t like.”
Because otherwise your friend is not going to tell you what he doesn’t like. …
You really need to sort of coax negative feedback, and you know if someone is your friend or at least not your enemy and they’re giving you negative feedback, then they may be wrong, but it’s coming from a good place.
And sometimes even your enemies give you good negative feedback.
[View] positive feedback like water off a duck’s back: really under-weight that, and over-weight negative feedback.” ~ Elon Musk

Elon Musk interviewed by Kevin Rose, Episode 20 of the Foundation podcast, quote @ time: 21:04

Crucially, Elon also seems to be able to not take criticism of his company's products or operations too personally - as attacks on him directly as a human being, despite his intimate involvement in design and management.

This is a critical failing most of us seem to come preloaded with that makes us tend to shy away or react badly to professional criticism, to our ultimate detriment. Elon, and by extension his teams, don't have that problem - at least for the most part, or they seem to not let such feelings influence them for any significant length of time.

A Grand Vision

Musk is powered by grander-than-normal visions and intentions for the world long-term in building his companies and their products than simply maximizing profit, important and appropriate as that is...

“…It’s really kind of like a relevance optimization: “What do I think is going to make the biggest difference to the future of humanity?”
And then I try to see if I can have the value of the output be greater than the cost of the input, which is necessary for any ongoing enterprise.
But it’s definitely not from the perspective of this is the best return on investment or anything like that.
If one were to rank order return on investment and the amount of effort required, I think Space and Cars would be really low on the list. It is extraordinarily difficult to make an economic return on a Space endeavor or on a Car company.
It’s certainly possible and thus far actually it has turned out to be a good economic return – but at great difficulty. If I’d done, say, another Internet company, the effort would have been easy relative to the return that it would have yielded.
So it’s just from the standpoint of, am I working on things that I think will have the biggest impact on the future? And then making the economics work is necessary just because if you don’t make the economics work then you’re not going to have any effect on the future.”

~ Elon Musk

Elon Musk Lecture on SpaceX's journey to date and long-range plans + Q&A, quote @ time: 38:43

While making money and being profitable is great, necessary, and totally fine obviously, taking his PayPal fortune and starting an electric car company AND a rocket company with it were not decisions motivated by wanting to "maximize return on investment." 

Those were literally *the worst* businesses to get into at the time if slam-dunk financial success was his driving force.

Rather, Tesla's *fundamental* mission is to "help accelerate the advent of sustainable transport" by putting out the best electric cars they can make at as large a scale as possible, therefore demonstrating that electric cars are feasible, profitable and desirable. This will thereafter push the other car manufacturers into transitioning more quickly to electric vehicles, accelerating by decades what will be a long process no matter what...

Then we have the ultimate core goal of SpaceX, which is to either be the space transport provider that does it, or at least help technologically to pave the way for humanity to "become a multi-planet species."

These aims, I would imagine, are much better fuels to power him and his teams forward through any and every challenge, rather than the limited motivation of just "turning a profit"...

Dream Teaming

Speaking of him and his teams: Elon strives to hire and keep high-performing, high-quality people and inspires them into dedication to the cause, doing his best to lead them well. Crucially, he's honestly aware of how much he depends on his people and acknowledges it openly: He deflects *praise* onto others, not blame...

“There’s certain things that I really believe need to happen, and I was able to convince a lot of great people to join me in trying to solve those problems. And a lot of the time people ascribe to me things where the credit is really due to a much bigger team. … 
If you can get a group of really talented people together and unite them around a challenge, and have them work together to the best of their abilities, then a company will achieve great things.” ~ Elon Musk, DellWorld 2013 on-stage interview

LEARN

Next, Elon doesn't *self-limit* his own ability to learn whatever he has to learn to accomplish his goals...

“[I spent most of my career focusing on software], and then I said, well, didn’t seem like people are really solving the electric car, or the space thing. So I figured I’d give it a try – probably lose the money I put into it, but I thought it was worth giving it a try. That was really the only thing.

And then I had to learn how you make hardware. I’d never seen a CNC machine, or laid out carbon fiber – I didn’t know any of these things. But if you read books and talk to experts, you can pick it up pretty quickly.

In fact, I think people self-limit their ability to learn. It’s really pretty straightforward: Just read books and talk to people.

Particularly books. The data rate of reading is much greater than when somebody’s talking. … The main reason I didn’t go to lectures in college was because the data rate was too slow. [Laughs] I was like, “Why are they reading the textbook to me? This is like a bedtime story or something! Ridiculous!” [Ends laughing.] ~ Elon Musk

Baidu CEO and chairman Robin Li interviewing Bill Gates and Elon Musk at the Boao Forum, March 29, 2015, quote @ time: 38:23

...And of course, as evidenced by that last quote, it also helps that Elon's a freakin' Genius too. He really did literally learn rocket science by reading books and interrogating engineers...

Never Give Up, Never Surrender

At the end of the day, I believe the deepest root of his compounding achievements, his success at guiding exceptional teams into building the visions he aims for, is this:

Once Elon has rationally determined that "success is one of the possible outcomes" of an endeavor, as he likes to say... because the challenges he undertakes to solve are all Truly Important Work to him... His determination to persevere in those missions - and his high pain threshold - are simply second to none...

Scott Pelley: “When you had that third [rocket launch] failure in a row, did you think, “I need to pack this in”?”
Elon Musk: “Never.”
Scott Pelley: “Why not?
Elon Musk: “I don’t ever give up. I mean, I’d have to be dead or completely incapacitated.”

CBS 60 Minutes Feature in 2012, quote @ 8:25

This was not a truly exhaustive breakdown of all the factors and principles involved of course, but these are in my view and in Elon's own words, the bedrock upon which Elon Musk has built his success.

Don't Be a Broke E-Celeb or a Lawyer in Golden Handcuffs (Commentary on How to Get Rich by @Naval, Part 1)

This is Part 1 of my commentary on Naval Ravikant's viral tweetstorm, "How to Get Rich (without getting lucky)".

We start with Naval's advice on wealth vs. money and status...

"Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy."

~ Naval Ravikant

Money is a means of quantifying the value of time and wealth, and dividing it into easy-to-use units in order to exchange that for other things of value as desired.

Whatever money or currency we have at hand ready to spend is by definition a finite sum just sitting there - a representation of a particular amount of time we spent doing a particular amount of work. Or it represents a portion of wealth we've cashed out (like a business or an apartment building you've sold.)

Especially over the long term, money cannot be considered a lasting asset, if only because of inflation.

McDonald's Menu, 1972. Remember kids, inflation is real

Only ever earning money and not building wealth/gaining assets, is a treadmill you can never step off of, which is what's wrong with the common societal focus on Making Money. 

It's a trap even some high-income earners get caught by (see: most lawyers, doctors and executives.)

At the same time, we all desire some degree of status. Many people seek money mainly just to raise their status.

Many other people seek status, even achieve it and cling to it, without actually having set things up to make a lot of money out of it. E-celebs on social media are a prime example. Apparent status can bring income, definitely, but it often *implies* a much higher level of money-coming-in to the onlooker, than is actually there in reality.

Ultimately, because of their similar impacts on our psychology, and the fact that people generally use one to get the other, having Status and having Money are pretty much equivalent in my view.

Having Wealth however is superior, because it means having a reliably incoming flow of Money that doesn't require more time and work to earn it. 

It's lasting nature and the power that Wealth can afford you also makes it superior to seeking Status primarily. Status is temporary, fluctuating, fragile, and even toxic at times, and usually requires constant maintenance. 

Consider this irony to illustrate the difference between obtaining Status first vs obtaining Wealth first: The other 6 national leaders at the June 2018 G7 Summit are used to *repaying favors* to billionaires in their own countries, and becoming decently wealthy over the course of their time in office. What they're *not* used to is facing exactly such a Billionaire who rose up to be their peer - that is, a President Donald Trump. It must have been so disconcerting, lol.

And of course, in the end established Wealth can confer a stable level of Status anyway if desired. 

So. If you're going to be seeking something, seek wealth, not money or status.

I came up with this non-scientific but amazingly clever formula to express the message of Naval's tweet as seen through my own mental filter:

Wealth > Status ≈ Money

(≈ stands for "approximately equal to")

And with that, I think I've said enough on this from this angle. On to the next one...

“The light is before us brothers, so the devil workin’ hard

Real family stick together and see through the mirage

The smokescreens, perceptions of false reality

Who the real owner if your boss gets a salary?”

 ~ Kanye West, song: Saint Pablo, album: The Life of Pablo

How to Get Rich (without getting lucky): The Wit & Wisdom of Naval

Naval Ravikant - genius, billionaire, playboy, philanthropist... oh, uh, wait, that's Iron Man... Let's try this again...

Naval Ravikant (@naval), genius, 400-Millionaire, family man, and co-founder of AngelList, is one of the most successful and active angel investors in the world, having invested in well over 100 companies, including multiple “unicorns”. Naval is also a trailblazer and sought-after advisor in cryptocurrency investing and development.

The paragraph above having barely described his capabilities and accomplishments, what truly stands out to me about him is his ability, desire, and willingness to communicate with and teach the public from his wellspring of understanding in an amazing range of subjects.

And in that spirit, on May 31, 2018 Naval posted a thread on Twitter so valuable, it immediately went insanely viral. A thread so bigly, people have felt compelled to translate it into multiple languages.

Now without further ado, I bring to you:

How to Get Rich (without getting lucky)

by Naval Ravikant

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

Ignore people playing status games. They gain status by attacking people playing wealth creation games.

You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.

You will get rich by giving society what it wants but does not yet know how to get. At scale.

Pick an industry where you can play long term games with long term people.

The Internet has massively broadened the possible space of careers. Most people haven't figured this out yet.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Pick business partners with high intelligence, energy, and, above all, integrity.

Don't partner with cynics and pessimists. Their beliefs are self-fulfilling.

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Arm yourself with specific knowledge, accountability, and leverage.

Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

Building specific knowledge will feel like play to you but will look like work to others.

When specific knowledge is taught, it’s through apprenticeships, not schools.

Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.

“Give me a lever long enough, and a place to stand, and I will move the earth.”
- Archimedes

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.

Labor means people working for you. It's the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.

Capital and labor are permissioned leverage. Everyone is chasing capital, but someone has to give it to you. Everyone is trying to lead, but someone has to follow you.

Code and media are permissionless leverage. They're the leverage behind the newly rich. You can create software and media that works for you while you sleep.

An army of robots is freely available - it's just packed in data centers for heat and space efficiency. Use it.

If you can't code, write books and blogs, record videos and podcasts.

Leverage is a force multiplier for your judgement.

Judgement requires experience, but can be built faster by learning foundational skills.

There is no skill called “business.” Avoid business magazines and business classes.

Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.

Reading is faster than listening. Doing is faster than watching.

You should be too busy to “do coffee," while still keeping an uncluttered calendar.

Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.

Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.

Become the best in the world at what you do. Keep redefining what you do until this is true.

There are no get rich quick schemes. That's just someone else getting rich off you.

Apply specific knowledge, with leverage, and eventually you will get what you deserve.

When you're finally wealthy, you'll realize that it wasn't what you were seeking in the first place. But that's for another day.

Summary: Productize Yourself.

More To Come

In future blog posts, I will add my personal comments on and interpretations of specific tweets, and include other quotes that bolster the lessons being taught.