00:00Let's talk about the algorithm. We've heard about this before. It's basically kind of five points
00:03that I guess, you know, the lure, and you would know this, is that this has kind of been the
00:07hallmark of the way Musk has approached of building out his companies. Give me a sense
00:12of what those five points are. Yeah, it's like it's the operating system of Tesla. And basically
00:15what it does is it drives innovation and pushes innovation out to the edge of the company so that
00:19you don't have to be Elon Musk to be driving innovations. And so it's a basic framework that
00:24we use, question every requirement, delete every step you can, then manually run a process, speed
00:30it up. And this sounds surprising, but automate last. And that's surprising for technologists to
00:34say, but that's actually what makes it work. I'm surprised about that too. And I can understand
00:38how that might apply to a Tesla or SpaceX. We mentioned Lululemon in there. Yeah. That kind
00:45of threw me for a loop. How does that apply there? Well, you think about like product manufacturing or
00:49product development. There's a lot of automation that happens, but until you've optimized the
00:55process, putting automation into it is like pouring concrete around it. So you don't want to do that
00:59until you really have the process nailed. And talk to us a little bit about the process
01:04of writing this book. I have to imagine a lot of research went into this as well as your own
01:10experience. So just talk us through a little bit how it came together. Yeah. Probably the first
01:14question I got is, do you have to be Elon to do this? And so I decided to tell the
01:17story through the
01:19eyes of the people that were actually doing the work. So there are dozens of examples of frontline
01:23people who are actually applying this operating system to drive innovation. And the point is you
01:28don't have to be Elon. Like you can do this small business, large business, car business, space
01:32business, apparel business. This works across industries and it works across company sizes too.
01:38Yeah. I mean, it is an evocative question. Do you have to be Elon Musk? And maybe you don't have
01:44to be,
01:44but I mean, what value is there in having a CEO or a founder, you know, who is thinking those
01:51big
01:52thoughts and then translating it to the team who is, you know, actually executing on it?
01:56Yeah. What Elon really concentrates on is, is the one or two or three existential issues to a
02:01business. And so this, the opening example you gave of the Terra fab is a current example.
02:06If you can't get chips for satellites and rockets and cars and AI, that's an existential issue for
02:13those four businesses. So what do you do? And he starts to say, Hey, let me just ask a question.
02:18Let's question whether we have to buy these chips from others or can we produce them ourselves?
02:22The idea though, too, I mean, and particularly on the first and second point, which, you know,
02:26there's been some criticism, not only what Elon Musk has done, but of what a lot of folks in the
02:31tech industry has done. You go back to the old days of the move fast and break something or whatever
02:35the phrase was here. It's one thing to do something like that, that, you know, is going to benefit your
02:40business. But does that sometimes come at the expense of whatever the rules and regulations are?
02:45I mean, when you're building a car, obviously probably one of the most heavily regulated
02:49businesses out there for a reason. Yeah, exactly. So the first questions we'd say is like question
02:54the requirement and make sure it's not a question or a requirement of law, physics or safety. Okay.
02:59All right. So you put those boundaries around it. And then you find that things like a 12 page
03:04auto loan doc is filled with 11 and a half pages of paragraphs that aren't a requirement of law,
03:09aren't a requirement of physics or safety. And so then you can delete those. And then you're steps
03:15ahead of your competition who still thinks that 12 page loan doc is the way to go.
03:19But then also in this process, you talked about that you talk about in the book, the idea of sort
03:23of updating, you know, the internal processes. And I, I was reading, reading it over and I was thinking
03:28about this idea of how often we go through internally. I don't want to call myself out where
03:33you're sort of building on something that probably shouldn't be built on. Exactly. You're looking at a
03:38process and say, how do I make this better? But instead of replacing it, you're just kind of adding layers
03:42on top. So you're just making it worse. That's right. Yeah. So, yeah. So take that auto loan
03:46document example. Like if we would have built a digital business on top of that, it would have
03:50taken 64 clicks to buy a car. So we took that out and it takes 10 clicks to buy a
03:55car. Okay. So if
03:56you just delete something to your point, you're making the process way better and the experience
04:00way better for your customer. And I mean, that gets to one of the five step framework bullet points
04:05that you lay out, delete every possible step in the process. So sort of collapse the number of
04:10steps you need there. But I want to talk about the last bullet point and that is automate. You
04:15know, I have to imagine while this applies across industries, there are certain industries where
04:20maybe that works a little bit better than others. Yeah. In the factory setting, we would say don't
04:25bolt the machines to the floor until this is done. The founders of Amazon and DoorDash actually taught
04:31us this. So the founders of Amazon put up a website, but they had no means of fulfillment. So they
04:36would
04:36take orders and then run down the street to a bookshop, buy the book at retail, stick it in a
04:40box,
04:40and ship it so they could figure out what the process needed to be before they automated it.
04:44The DoorDash founders did the same thing. Computer science majors at Stanford put up a PDF of menus
04:50with a phone number at the bottom that rang on their cell phones. They would go pick up the food.
04:55They would go pay for it and deliver it so they could build this manual process before automating.
04:59So it works in a lot of contexts. And the reason you want to do that is you don't want
05:03to automate
05:03something that isn't perfect yet or close to perfect.
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