Elon Musk on How to Build the Future

I would be far more interested in how to build a successful business. Everyone asks Elon about his big ideas, but how do you turn those big ideas into reality, specifically? I have never seen anyone ask him those questions. I thoroughly enjoyed the interview with Jessica Livingston because that was the primary topic. A missed opportunity in my opinion. I hope the rest of the interviews are more about the nuts and bolts of how to build a successful business.

EDIT

Ask him about the early days at PayPal. What are the lessons he learned that he applied to Tesla and SpaceX? What worked for PayPal but not the other companies and why?

The way I see it PayPal essentially helped an established incumbent monopoly (US credit card companies) with issues at the time maintain and extend its global relevance, lock down domination of cross-border consumer payments, meaningfully extend US intelligence sector surveillance, and continue to fuck the little guy. Only Europe and China are building a resistance now, 15 years later. That you have 5 or 10 rich people coming out of that little cash-cow who feel like publicly playing god with humanity's future or that they deserve some kind of respect for the 'achievement' is pathetic. Any number of people could have built that better, or with morals. If they had any sense they'd be ashamed at what they've done, and how it has seemingly irrevocably crumbled in to bigcorp screw-the-customer service mode. Besides, we all know the real e-vehicle revolution has already happened, right here in China.

The problem is that even with a highly intelligent and driven person like Musk there also is a definite role played by luck and circumstances. Therefore it's highly unlikely to be able to garner some actionable insights from past successes other than the most general ones.

When you say resistance, you mean 'implementing a locally controlled version of the problematic US-controlled system they're resisting', right?

the biography by Vance covers the early Zip2 / X.com / PayPal stuff pretty well. would recommend.

Which ironically means that such people are not uniquely prepared to guide our future. Maybe we could pick selfless but intelligent people as our leaders. Any benefit that this "experience" gives to Mr. Musk is overwhelmed by his penchant for flashy, greedy narcissism. Exhibit: the hyperloop.

That would be the cynical (and probably realistic) interpretation, however because both the European (most of Europe, nearby countries) and Chinese network (nodes across much of the world, particularly Asia) are relatively internationally distributed (and thereby subject to multiple bureaucracies) they are somewhat less prone to centralized interference/monitoring. Further, neither region has as bad a record as the US in using financial systems for aggressive political gain.

Have you read the big feature about him on WBW? http://waitbutwhy.com/2015/05/elon-musk-the-worlds-raddest-m...

I think that's exactly what you're interested in.

It sounds interesting. Could you give some pointers to read more about this?

Unfortunately, it only covers about Musk till his Paypal days. From Chapter 5 about SpaceX, he just has a guest appearance in the story, which mostly goes to describe the factories, the deals etc. I really expected the book to hold what Elon thought during Tesla's low times. His motivation that kept him going in SpaceX even after subsequent crashes etc.

There are numerous reports from NGOs about the social impact of the credit card system and some reports from European Parliament detailing the use of financial systems for US surveillance, most recently around the fiasco resulting in SWIFT2 (aka SWIFT1 with a different name and more servers). A key recent instance of the political use of financial systems is the blocking of Iran from SWIFT, well documented to have been campaigned by Israel via the US defence establishment. They eventually convinced Europe to sign off on it too... amusingly India just said "we'll stop using cash for oil and ship them gold instead". Also http://www.scribd.com/doc/215642587/Finance-and-the-Future-B... (my talk from HAR2009)

>What worked for PayPal but not the other companies and why?

Amusingly if you read chapter 1 of Founders at Work quite a big part of what worked at PayPal may have been firing Elon Musk. Max Levchin largely built PayPal tech wise using Unix and then it was merged with Musk's X.com and Musk became CEO and wanted to switch everything to Windows.

>Levchin: The three of us are pretty good friends now. At the time, already I had hated the guy's guts for forcing me to do Windows, and then, in the end, I was like,"You gotta go, man."My whole argument to him was, "We can't switch to Windows now. This fraud thing is most important to the company. You can't allow any additional changes. It's one of these things where you want to change one big thing at a time, and the fraud is a pretty big thing. So introducing a new platform or doing anything major—you just don't want to do it right now." That was sort of the trigger for a fairly substantial conflict that resulted in him leaving and Peter coming back and me taking over fraud.

"Selfless" is the Keyword!

> Amusingly if you read chapter 1 of Founders at Work quite a big part of what worked at PayPal may have been firing Elon Musk. Max Levchin largely built PayPal tech wise using Unix and then it was merged with Musk's X.com and Musk became CEO and wanted to switch everything to Windows.

I encourage you to read "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future." Musk talked about PayPal and the Windows switch in detail in Appendix 2:

“As for the technology change, that’s not really well understood. On the face of it, it doesn’t sound like it makes much sense for us to be writing our front-end code in Microsoft C++ instead of Linux. But the reason is that the programming tools for Microsoft and a PC are actually extremely powerful. They’re developed for the gaming industry. I mean, this is going to sound like heresy in a sort of Silicon Valley context, but you can program faster, you can get functionality faster in the PC C++ world. All of the games for the Xbox are written in Microsoft C++. The same goes for games on the PC. They’re incredibly sophisticated, hard things to do, and these great tools have been developed thanks to the gaming industry. There were more smart programmers in the gaming industry than anywhere else. I’m not sure the general public understands this. It was also 2000, and there were not the huge software libraries for Linux that you would find today. Microsoft had huge support libraries. So you could get a DLL that could do anything, but you couldn’t get—you couldn’t get Linux libraries that could do anything.

“Two of the guys that left PayPal went off to Blizzard and helped created World of Warcraft. When you look at the complexity of something like that living on PCs and Microsoft C++, it’s pretty incredible. It blows away any website.

“In retrospect, I should have delayed the brand transition, and I should have spent a lot more time with Max getting him comfortable on the technology. I mean, it was a little difficult because like the Linux system Max had created was called Max Code. So Max has had quite a strong affinity for Max Code. This was a bunch of libraries that Max and his friends had done. But it just made it quite hard to develop new features. And if you look at PayPal today, I mean, part of the reason they haven’t developed any new features is because it’s quite difficult to maintain the old system.

“Ultimately, I didn’t disagree with the board’s decision in the PayPal case, in the sense that with the information that the board had I would have made maybe the same decision. I probably would have, whereas in the case of Zip2 I would not have. I thought they just simply made a terrible decision based on information they had. I don’t think the X.com board made a terrible decision based on the information they had. But it did make me want to be careful about who invested in my companies in the future.

“I’ve thought about trying to get PayPal back. I’ve just been too strung out with other things. Almost no one understands how PayPal actually worked or why it took off when other payment systems before and after it didn’t. Most of the people at PayPal don’t understand this. The reason it worked was because the cost of transactions in PayPal was lower than any other system. And the reason the cost of transactions was lower is because we were able to do an increasing percentage of our transactions as ACH, or automated clearinghouse, electronic transactions, and most importantly, internal transactions. Internal transactions were essentially fraud-free and cost us nothing. An ACH transaction costs, I don’t know, like twenty cents or something. But it was slow, so that was the bad thing. It’s dependent on the bank’s batch processing time. And then the credit card transaction was fast, but expensive in terms of the credit card processing fees and very prone to fraud. That’s the problem Square is having now.

“Square is doing the wrong version of PayPal. The critical thing is to achieve internal transactions. ...