00:59:06 · Luca Ferrari, David Senra
To to do something amazing even even before looking for people who are brilliant. Obviously, you wanna have both if you can, but you can never have a think... I think a high performance team where more than a small fraction of people lack extreme ownership. So that's really number one. And then there's, you know, many other things that are important, but secondary to this. [00:59:26] S0: What are some of the things that also important?
00:59:28 · Luca Ferrari
[00:59:28] S1: Yeah, one thing that we call relentless simplification, we believe that most things don't matter. Most things do more harm than good. However, humans have a tendency to add complexity, do things and do those things that destroy value. So if you leave an organization, almost any environment, let's say unattended, and you don't provide guidance in this regard, it will tend to become more complicated. People will be adding parts. And when I say parts, it could be expanding a team, it could be adding a step to a process, adding an entire new process if it's a product, adding a feature to the product, new rules. I'm making a general point, but it applies to almost any human endeavor. People will tend to add pieces, very rarely remove pieces. And with every piece that you're adding to this ensemble, this system, you're not adding complexity linearly because you're not just adding with the piece, you're also adding interdependencies, interconnections with some and sometimes all of their pieces. And so if you go from three to four pieces, the system is not getting, say, 33% more complicated, it's maybe getting 40% more complicated or 50% depending on the connections and how these new connections impact the other connections. Most human organizations, if you don't make a conscious effort to achieve simplicity, so avoiding this increasing complexity and embodied with strong complexity, we'll go down that path. That's how we got to our modern society with all the bureaucracy and complicated regulation. A lot of it, or almost all of it, probably when it was introduced, it was meant to be a good thing and maybe in a vacuum it was, but then people fail to account for the cost of these interconnections and frictions. So we have this value or this principle whereby we ask everyone who works here to first of all, every time someone is suggesting that we should be adding complexity, the burden of proof is on those making that suggestion. The people who support the thesis that we shouldn't be adding that complexity don't need to prove it. They're done. It's just to raise a flag and say, I don't think we should. So the burden of proof is on those who want to add complexity, which helps reduce the addition of complexity dramatically, and the complexity you add tends to be hopefully more often not good complexity because you have to prove it.
01:01:52 · Luca Ferrari
And so hopefully, if you're intellectually honest, that should be a good idea. Then the other part of relentless simplification is that we want people to be on the lookout for existing complexity and suggest that we should be removing it. Understanding how we operate and the biases that accompany us throughout our lives is very important. Charlie Munger famously studied biases, and I think knowing your weaknesses or likely weaknesses is 50% of avoiding them or overcoming them. So knowing that we as humans tend to be this thing called consistency bias, also inertia bias. I mean, I've heard it, you know, slightly different things called with with slightly different names. Essentially, we tend to assume the status quo is fine and we focus on deltas that happen, new things that are added or changes. We stop seeing, we become blind to our surroundings as they stay the same day after day. And so we ask our colleagues and all of us to make a conscious effort to question what's already there. The longer it's been there, the more we should be questioning whether it's still an F positive so we can look for things we can get rid of.
01:03:01 · David Senra, Luca Ferrari
[01:03:01] S0: Have you paid attention to how Elon talks about this at all? Maybe, maybe not. Okay. I mean, it's one of the things that he probably repeats the most. Obviously, he has that famous, like, four part algorithm that he applies to every company he does. But there's, like, emails from him, and I think he might even treated as it's just like, go ultra hardcore on deletion. He is obsessed with exactly what you're saying. You call it relentless Simplification. His is just like he wants to delete, delete, delete as much as possible. Simplify, simplify, simplify. We had Toby Luca on the podcast a few months ago, and he said something that was very interesting. He's like, well, in technology, the world belongs to the fast. It's to these teams that actually actually can get ahead by reduction. He's like, very few teams have... Understand the skill and the genius of getting ahead by reducing. And the the illustration of his point, which he did beautifully, he's like, well, the modern day Picasso would be the picture of the Raptor engine that SpaceX designed, where it's like, see the first one [01:03:55] S1: It got super simple.
01:03:55 · Luca Ferrari, David Senra
[01:03:55] S1: It got super simple. [01:03:56] S0: Yeah, it's got all kinds of weird shit and wires coming out of there, and then the second version's a little less, and then the third one's just beautiful. And I accidentally... I actually posted the clip, like, two days ago of Toby saying this on the podcast, and then I just quote treated it with the picture of the the raptor, and then somebody asked for Elon's explanation. He goes into and responds to, like, how he thinks about this process. But he's completely obsessed with the going ultra hardcore on simplification, on deletion. [01:04:21] S1: It is superpower. Super, super powerful. Because, yes, it breeds speed, scalability also, besides which is a slightly different thing. [01:04:30] S0: But you just nailed it. It's like, even goes into, like, well, if I have, like, the complexity is nonlinear, like you just said. If I have a 100 parts in this engine compared to if I have five, like, does the supply chain look like? What does the manufacturing look What is repairing it? Figuring out what actually went wrong? There's just a million other things that get more complicated with more complexity.
01:04:50 · Luca Ferrari
[01:04:50] S1: Both people don't focus on simplification. For some reason, I think it's really probably there are anthropologic reasons. There are certainly societal reasons, but people do not focus on simplification unless, again, they're, you know, unusual, you know, radical lateral thinkers like Elon or or you teach them. But when they do, the second problem, they tend to be incremental in it. But often, by far the biggest wins in terms of simplification is complete removal. For example, just said Elon is a master, in our context, I remember we were banging our heads against the wall a decade ago, approximately, with job titles. So we, like pretty much every company we had, we were very small, but still enough people that job titles were a thing. So you wanted to, you know, maybe have the senior this, staff that, or director. And we were trying to develop definitions, who should be a director. You know, like you need to... If that exists, if it's a thing, you probably need to define it. Spending time trying to define it. And then you assign someone that title, whether it's senior engineer, and then the other guy who's not senior engineer is disappointed. Why is she senior engineer and not senior engineer? Well, because of this or that, so you need to have that conversation. Then it's emotional draining. At some point, we were looking for ways to streamline it and simplifying it, and someone said, why do we even have titles? What's the benefit of titles? And and someone else is like, well, you need titles. Everybody has titles. And why do people have titles? Let's really try to dig deep into the root cause, because I agree. I mean, everybody has said probably there's some benefit. I mean, let's not be arrogant. There's probably some benefit. What what... What's that benefit? And we ultimately determined that the benefit was that people really needed titles for, let's say, bragging rights. It feels good to be able to to show progress in one's career, and they're useful if you need to find a new job, to be able to very conveniently and efficiently convey a level of experience or capability you have achieved. And so we were like, okay, but all we're saying here is probably true, but also not something that the company needs to be involved with. Right?