00:37:02 · Eric Jorgenson, Ty Morse
[00:37:02] S1: Yeah. The reward for Work. Is more work. Is more work. Right? And so if you achieve things, will be given more responsibility immediately. That's all that anybody's running a company is trying to do. Find somebody who's competent at executing things and give them more responsibility and more responsibility and more responsibility until they break. Like, that's the game. And if you are trying to rise up in those companies and be as useful as possible, that's your goal too. It's like, wanna I wanna solve the problem in front of me. I wanna build more stuff. I wanna get things done, and I wanna do that at the highest level that I possibly can for as long as I can. Let's talk about [00:37:31] S0: the algorithm. Elon didn't have this for a very long time. I'm not sure exactly when he created it. I think it was, like, twenty nineteen ish after the, 2018 model three production ramp where he was just realizing all across over the course of many months. Yeah. That there was a bunch of automation that didn't even... Like, automating processes and parts and stuff that didn't need to exist. And he had been super all in on automation, and then he started going just line by line and trying to tear out as much of... As many of the machines. He would just, like, take a, like, an orange spray paint can and just on a machine, and then they would haul it out in the parking lot, and they, like, apparently bored a hole through one of the sides of the, I think, the Fremont factory [00:38:13] S1: Yeah.
00:38:13 · Eric Jorgenson, Ty Morse
[00:38:13] S1: Yeah. [00:38:13] S0: To do this. But, yeah, how did how did the algorithm actually come together? Like, when did he figure that out, and how did he kind of, like, rank which one made sense, you know, which part or process made sense first?
00:38:24 · Eric Jorgenson
[00:38:24] S1: Yeah. The algorithm was the loot box for surviving Fremont. You know? Like, he he says that he learned this by making all of the mistakes in reverse order. Right? So I'll I'll explain. The algorithm is a five step process that he installs in all of his engineers and all of his engineering companies. He's got signs on the thing. He'll repeat it in meetings. It's his method for breaking bottlenecks. Right? And so it is start by questioning the requirements. Question every requirement. Doesn't matter how smart the person is, except no requirements from departments. They have to have individual human names attached to them. You get requirements from all over the place, right? Because some come from government partners, customers, internal, whatever. So question every requirement. You want the fewest possible and highest quality requirements, delete all the ones you can. The second step is to delete, simplify, like, delete anything you possibly can, delete, delete, delete. The most useful heuristic here is that you have to over delete. And if you're not adding back 10% of what you delete, you haven't been deleting enough. But the reason to simplify is simplicity gets you both reliability and low cost. You want fewer parts, you want fewer lines of code. So complexity is recursive, like each additional element that you have causes more complexity and causes more effort and causes more work. Right? So those first two steps actually in my mind carry 80% of the weight because number three is just optimize, which is sort of the typical engineering work that we think of as, like, making the right trade offs and optimizing the system. The fourth is accelerate, which is go faster. And the fifth is automate. And the problem is that almost everybody, Elon included, and he says this is the mistake he made at Fremont over and over and over again, is doing all five steps in reverse order. So he would automate something. His original vision for the Fremont factory is we're gonna automate the whole production line from the very beginning. It's gonna be amazing. No humans at all. Super low marginal cost. Everything will be great. But... And then he'd try to make it go faster, then try to optimize. So there... There's many parts that he would try to automate, then try to make the robot go faster, then try to optimize the path, that the robot was following.
00:40:35 · Eric Jorgenson, Ty Morse
Then it would turn out you could delete the product, and you didn't need the robot or the or the particular part because nobody had questioned the requirements in the first place. Yep. And that is just... Like, figuring out one of those epiphanies is a... Maybe a $10,000,000 win because... But it just comes from deleting something that didn't need to exist in the first place. And once you have that experience of, like, addition by subtraction, like, [00:41:00] S0: when the [00:41:01] S1: answer is deleting something and the upside is is eight figures, you're like, oh my god. This is mana from heaven. Like, I've gotta delete everything that we possibly can. And it is it is shocking. Once you sort of start to try to run this in your own company or in your own life, it is unbelievable how frequently... Like, how hard it is to do, how different your mental pattern is from actually how that works. And as we talked about with the Starlink story, like, there's huge benefit to doing it and doing it well. And this is, I think, a very generalizable, not just engineering process, but way to approach problems in life. [00:41:38] S0: I love this quote. If conventional thinking makes your mission impossible, then unconventional thinking is required.
00:41:45 · Eric Jorgenson
[00:41:45] S1: It it is an amazing quote, and it summarizes Elon's sort of intolerance of obstacles. One of the stories that he ascribes to that quote is the building the tent in the Model 3 parking lot is basically like realizing that the production line that existed was not gonna be able to meet their number. And so he's like, fuck it. We're building the tent, and we're gonna, you know, buy some more tools, buy some more robots, hire some more people, and we're gonna build a second production line in the parking lot. And I think I'm sure they ended up getting, like, tickets and permit fees and all kinds of stuff for that. But he's like, we had to we had to make the number or Tesla will be dead. Unconventional thinking. Like, this is over and over again, like, the intolerance of obstacles, the questioning of requirements is, I think, some of the source of his his magic and mystique. Another one is like, you know, oh, it's gonna take a year and a half to get this permit. He's like, alright. Grab somebody, sends him to the permit office, and says, do not come back until we have this permit. Like, I refuse to believe it takes eighteen months to get this permit. And time after time, it's like, oh, it comes back three days later with a permit. Unconventional thinking, that accelerates your timeline and saves you potentially like a year and a half of burn and potential bottleneck. Like, that kind of unconventional thinking, that kind of high agency, is just so... I think to people who seek to be effective in the world, those stories are so encouraging and inspiring and refreshing and just like, oh, thank god. Like, somebody who's... Just tears down all the walls, all the false perceptions, all of the cruft, and just, like, cut straight to it and gets things done.
00:43:28 · Ty Morse
[00:43:28] S0: Something I think a lot about is how Elon might play the game if he was born at a different point in time. I think you've referenced him as similar to Napoleon and a bunch of these other characters. I would think of him in a similar vein, but I kind of wonder how, you know, the the Napoleon of today wouldn't necessarily go kill a bunch of people. Same thing with like Cornelius Vanderbilt. He wouldn't necessarily hire some assassin to go kill someone and take back his ships. And I wonder how Elon might have played the game if he was born like three hundred years ago.