An outstanding biography.
Some fun excerpts:
p. 284. "I became a broken record on the algorithm," Musk says. "But I think it's helpful to say it to an annoying degree." It had five commandments.
1. Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from "the legal department" or "the safety department." You need to now the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb.
2. Delete any part of the process you can. You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, you didn't delete enough.
3. Simplify and optimize. This should come after step two. A common mistake is to simplify and optimize a part or a process that should not exist.
4. Accelerate the cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted.
5. Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.
The algorithm was sometimes accompanied by a few corollaries, among them:
All technical managers must have hands-on experience. For example, managers of software teams must spend at least 20% of their time coding. Solar roof managers must spend time on the roofs doing installations. Otherwise, they are like a calvary leader who can't ride a horse or a general who can't use a sword.
Comradery is dangerous. It makes it hard for people to challenge each other's work. There is a tendency to not want to throw a colleague under the bus. That need to be avoided.
It's OK to be wrong. Just don't be confident and wrong.
Never ask your troops to do something you're not willing to do.
Whenever there are problems to solve, don't just meet with your managers. Do a skip level, where you meet with the level right below your managers.
When hiring, look for people with the right attitude. Skills can be taught. Attitude changes require a brain transplant.
A maniacal sense of urgency is our operating principle.
The only rules are the ones dictated by the laws of physics. Everything else is a recommendation.
p. 457. Musk also explained why he wanted to "open the aperture" of what speech was permissible on Twitter and avoid permanent bans of people, even those with fringe ideas. On talk radio and cable TV, there were separate information sources for progressives and conservatives. By pushing away right-wingers, the content moderators at Twitter, more than 90 percent of whom, he believed, were progressive Democrats, might be creating a similar Balkanization of social media. "We want to prevent a world in which people split off into their own echo chambers on social media, like going to Parler or Truth Social," he said. "We want to have one place where people with different viewpoints can interact. That would be a good thing for civilization." It was a noble sentiment, but he would end up undermining that important mission with statements and tweets that ended up chasing off progressives and mainstream media types to other social networks. [Note: Isaacson was once CEO of CNN and Editor of Time Magazine.]
... "There seems to be more and more group-think in the media, toeing the line, so if you weren't in step, you're just going to be ostracized or your voice will be shut off." For democracy to survive, it was important, he felt, to purge Twitter's woke culture and root out its biases, so people had the perception that it was an open space for all opinions.
p. 476. "If China gets to the moon before we do again, it will be a Sputnik moment," he told the NASA directors. "It's going to be a shock when we wake up and realize they got to the moon while we were suing each other." Musk said that when he visits China, he is often asked how that country can be more innovative. "The answer I give is to challenge authority."
p. 500. "Our goal is to make a useful humanoid robot as quickly as possible," he told the audience. Eventually, he promised, there would be millions of them. "This means a future of abundance, a future where there is no poverty. We can afford to have a universal basic income we give people. It really is a fundamental transformation of civilization."
p. 566. "You want me to whistle-blow on your own company?" the journalist Matt Taibbi asked Musk somewhat incredulously.
"Go to town," Musk replied. "This is not a North Korean guided tour. You can go wherever you want."
Over the years, Twitter's content moderators had become increasingly active in banning what the considered harmful speech. Depending on your outlook, there were three ways to view this: (1) as a laudable effort to prevent the spread of false information that was medically dangerous, undermined democracy, provoked violence, stirred up hate, or perpetrated scams; (2) as an effort that was originally well-intentioned but had no gone too far in repressing opinions that dissented from the medical and political orthodoxy or offended the hair-trigger sensitivities of Twitter's progressive and woke staff; or (3) as a dark collusion between Deep State actors conspiring with Big Tech and legacy media to preserve their power.
Musk was generally in the middle category, but he came to harbor darker suspicions that pushed him toward the third category. "There seems to be a lot of stuff swept under the rug," he said one day to his fellow anti-woke warrior David Sacks. "A lot of shady stuff."
Sacks suggested that he talk to Taibbi... "He seemed like someone who isn't afraid of offending people," Musk says, which for him is a more unalloyed compliment than it would be for most people.
...
Just when Taibbi was ready to unleash his first report, on December 2, Musk made a quick trip to New Orleans for a secret meeting with French president Emmanuel Macron to discuss, ironically, the need for Twitter to honor Europe's hate-speech regulations. When last-minute legal issues came up regarding what Taibbi planned to publish, the release had to be delayed until Musk finished his Macron meeting and could push back on the lawyers.
Taibbi's initial 37-tweet thread showed how Twitter had set up special systems for politicians, the FBI, and intelligence agencies to provide input on what tweets should be considered for deletion. Most notably, Taibbi included messages from 2020, when Yoel Roth and others at Twitter debated whether to block links to a New York Post story about what was purported to be (correctly, as it turned out) a laptop abandoned by Joe Biden's son Hunger. The messages showed many of them scrambling to find rationales for banning mention of the story, such as claiming that it violated policies against using hacked material or might be part of a Russian disinformation plot. Those were flimsy covers for censoring a story, and both Roth and Jack Dorsey would later concede that doing so was a mistake.
_____
The algorithm as described by Fortune:
https://fortune.com/2023/09/13/elon-musk-management-manufacturing-philosophy-the-algorithm/
One of Elon Musk’s biggest accomplishments happened during what he refers to as the darkest, most difficult time in his life.
In July 2017, Tesla had just introduced its Model 3 sedan, a more moderately priced electric vehicle compared to its earlier models. The company had a year to figure out how to produce 5,000 Model 3 sedans a week, the amount Musk had calculated was needed to keep the company afloat. But he didn’t have enough time to build more production lines, so he had to find ways to speed up the ones he already had. The turmoil led Musk to come up with what became known as “the algorithm —the five rules for overhauling Tesla and rescuing it from financial ruin,” according to a new biography by Walter Isaacson released earlier this week.
Question every requirement
Delete any part of the process you can
Simplify and optimize
Accelerate the cycle time
Automate
A time of “concentrated pain” and a floundering company
In a roughly year-long span from the summer of 2017 to the fall of 2018 Musk was in a difficult place both personally (Isaacson describes “foul moods that led to catatonic trances and depressive paralysis”) and professionally (Tesla was $2.2 billion in the red).
“That was the time of the most concentrated pain I’ve ever had,” Musk told his biographer in a new book released this week. “Eighteen months of unrelenting insanity. It was mind-bogglingly painful.”
At work he was struggling with circling short-sellers, investors who bet the company’s shares would crater because they believed his manufacturing goals were impossible. Outside of work he was facing the combination of a tumultuous breakup with the actress Amber Heard, who he told a Rolling Stone reporter he “really loved,” and troubling news from his dad. Errol Musk had impregnated the woman that he had previously raised as a stepdaughter. Things spilled over into public view, with Musk wondering aloud on Twitter (before he purchased the social media platform) if he was bipolar.
At the time, he was yet to become one of the world’s richest and most famous men. Musk was a wealthy but mercurial executive who had previously been pushed out of online payment service PayPal. In fact, his exorbitant wealth would only come about as a result of an unorthodox pay package at Tesla, which he would collect only after the company reached a valuation of $650 billion. Otherwise he would get nothing.
Just as Musk didn’t have the same status then as he does now, neither did Tesla. In 2017, it was a company with promising technology, but many investors felt it had overpromised on its manufacturing goals. Because Musk had told investors that Tesla was indeed on track to meet the production numbers, the company would risk a stock collapse if it didn’t meet the deadline he’d imposed. Skeptical of Musk, some big investors had begun shorting Tesla stock, certain that it wouldn’t make enough cars to be financially viable. Short-sellers “are leeches on the neck of business,” Musk told Isaacson.
In a blog post in August 2018, Musk called Tesla “the most shorted stock in history.” While that may have been an overstatement—there were some $13 billion in Tesla short positions, according to S&P Global Market Intelligence—it was still a huge sum. Short-sellers who bet against Tesla alternated big paydays (making $1 billion in a single day in August 2018) and substantial losses (taking $1.3 billion in paper losses on one occasion).
Musk coped with the stress of possibly losing his car company and a complicated personal situation in one of the only ways he knew how. “In times of emotional darkness, Musk throws himself into his work, maniacally,” Isaacson writes.
To help Tesla reach the ambitious production targets he’d set for it, Musk began working in the factory to identify every single facet of its assembly lines that could be sped up in order for the company to hit its production goal. It ultimately led to the creation of “the algorithm” that would become a mantra for him and all of Tesla’s employees.
Tesla’s scrambles create the algorithm
Whenever one of Musk’s companies is given one of his incredibly difficult, possibly unfeasible orders, he expects his employees to work around the clock like he does. Musk calls these bursts of condensed effort “surges.” Isaacson says Musk likes to think of himself as a field general “personally surging into the breach with an all-hands-on-deck cadre of fellow fanatics.”
It was under these circumstances that Musk honed “the algorithm,” ramping up production at Tesla’s gigafactory in Nevada and its other plant in Fremont, Calif. Musk admits he repeated it to an “annoying degree.” When he did so, “his executives would move their lips and mouth the words, like they would chant the liturgy along with their priest,” Isaacson writes.
The algorithm is a step-by-step process that requires employees to question every aspect of a given process—safety regulations, the number of bolts in a car part, whether a task should be automated or not.
Throughout the process Musk patrolled the factory floors, personally inspecting the assembly lines and troubleshooting problems as they came up. On one occasion he demanded a machine installing bolts move faster, so he rewrote its code on the fly. “Factory settings are always idiotic,” Isaacson says he told employees, after he reconfigured the machine to go more than three times faster.
Musk also took a series of unorthodox approaches over this period, to mixed results. Ignoring conventional manufacturing practice, he insisted on designing Tesla’s Fremont factory by installing machines to automate every task from the outset instead of first using human labor and then automating where possible. After that turned out to be a disaster, he reversed course and became fixated on removing robots he felt were too slow. When he realized the factory floor had insufficient capacity he ordered the construction of a massive tent in a parking lot to house an additional assembly line.
Eventually Tesla would produce record numbers of Model 3s in the second quarter of 2018, according to the company.
Tesla stock soars, as working conditions come under scrutiny
In the aftermath of the crunch that ultimately stabilized Tesla, Musk became the world’s richest individual. His Tesla holdings were worth an estimated $90 billion as of August, according to Nasdaq data. The company’s stock price has climbed from $20.88 in July 2017, when Tesla rolled out its first Model 3, to $267.48 on Tuesday, an 1,181% increase. Tesla now has an $838 billion market cap.
But the gung-ho tactics Musk employed came at a distinctly human cost. Tesla has an injury rate that is 30% higher than the rest of the car industry, according to the book. Employees also alleged they were pressured to cut corners by using electrical tape to cover cracks in plastic brackets that hold electrical parts within the car and forced to work in smoky air during California’s wildfires, CNBC reported. The company denied these claims.
Tesla’s soaring stock price and some of the tactics Musk employed to keep it high drew scrutiny from regulators. In September 2018, Musk and Tesla paid $40 million to settle an SEC lawsuit that he manipulated the company’s stock when he tweeted that he was taking Tesla private. As part of the settlement he was also forced to step down as the company’s chairman, although he remained CEO.
More recently, Musk has applied the same all-in approach when he bought X, the former Twitter. Soon after his acquisition last year, he reportedly sent employees an email demanding they work “long hours at high intensity.” So far, results have been mixed, with ad revenue down, and few subscribers to X’s paid offerings. But given that analysts and commentators had similar doubts about Tesla, it may be a similar chips-are-down moment for the eccentric executive.
