Whatever you think of him, there’s no denying that Elon Musk is a fascinating person. He is currently the richest person in the world, with an estimated net worth of $222 billion, and is a co-founder of companies including electric car maker Tesla, rocket maker SpaceX, and tunneling startup Boring Company. His success rate is incredibly high.
Unlike Musk and Jeff Bezos, the second richest person in the world who has won big but has become famous on 57 different projects (and thankfully admits his “cascade of experiments and mistakes and failures”), Musk’s approach seems more like a gunshot then a gunshot. then a sprinkle gun. Musk and Bezos are the two richest people in the world, so both methods must have merit. But how does Musk keep building companies that never fail on a grand scale?
While you could attribute these consistent successes to his IQ, reportedly 155, there are plenty of people with an equally high IQ who aren’t billionaires. What makes Musk different is that he thinks differently, limited only by the laws of physics, after which, he said, “everything else is a recommendation.”
In addition, Musk uses specific mental models to solve real-world problems. Rather than being an anecdotal business theory, they have proven to work in practice at his various ventures. Four of these models are first principles thinking, imagining things in the limit, the platonic ideal and its optimization framework. Here they are in more detail.
1. Apply first principles thinking
A first principle is a fundamental truth that is “naturally known.” First principles thinking is where you remove subjective assumptions, biases and presumptions from problems and focus only on what is true. The goal is therefore to find the simplest truth that exists within the laws of physics, free from your personal limitations and beliefs. Once this absolute truth is defined, you reason from there. Cut, strip and build.
In practice, grab whatever answer you’ve come to and then strip away any assumptions. Musk thinks you will find a better answer or the same answer as everyone else. He admits, “I don’t do market research at all,” because it’s not useful and everyone is wrong. “It doesn’t matter who you are, everyone is wrong sometimes. All designs are wrong, it’s just a matter of how wrong.”
For example, Musk applied first principles thinking to battery packs. You may hear people say “batteries are expensive and they always will be.” But batteries are made of cobalt, nickel, aluminum and polymers, materials that are fairly inexpensive. What’s expensive is the fabrication of those materials, how they’re combined into a battery. Thinking based on principles leads you to realize that batteries are not expensive, but their production, which means that the problem to be solved is production.
2. Think about things in the limit
Thinking about things within the limit is a thought experiment in which each problem is scaled up and down to assess the changes taking place at both quantities. A recent example concerns Musk’s acquisition of Twitter, after which he indicated that the 280 character limit would be adjusted, tweeting that the “ability to do long tweets [is] Coming soon.” Thinking about Twitter’s character limit in the limit, imagine what the platform would look like with a tweet length reduced to say 50 characters and down to say 1000. Both limits would have different consequences for the social network.
Whether it’s a problem with your product, service, team, or results, think it over and over and play with the answers. For example, take a pricing problem where you’re trying to figure out why something is expensive, and imagine your volume was one million units. Would the product still be expensive? If so, there may be an economy of scale that needs to be addressed.
Continue with limits, both colossal and miniscule. If you only managed one person, would you still have your HR problem? How about ten thousand? What would change if you provided your service to five customers instead of a million? Incorporate the idea of small and large scale into any problem you have to think about it like Musk would. Make decisions without being constrained by legacy, rules, money or resources and see what’s possible.
3. Imagine the Platonic ideal of the perfect product
Imagining the Platonic ideal means visualizing your solution in its most perfect form before attempting to create it in reality. This means the focus is on the perfect product rather than the perfect application of what happens to be your existing skills.
When designing a product or starting a business, most people start with the basics of their tools, skills, and knowledge, then think about what they can build with them. Musk says you should instead work backwards from the perfect product. Conceptualize it and then look for the tools, skills and knowledge you need to bring that product to life. According to Musk, you should try to think of “the Platonic ideal of, say, the perfect rocket or car.” Think about the features it would have,” and then make that. And then I find when you do that people want to buy it,” he said.
Thinking this way means you create what is actually needed rather than simply what fits your skill set. It prevents you from being limited by your life choices and knowledge. It prevents you from being biased or clouded by your experience, which may not be relevant at all. What is the ideal solution for your career and company? The perfect office, the perfect service, the perfect product. Visualize that, get familiar with each part and work back from there. This may lead you to rethink processes, restructure your team, or rework your offerings, all based on the platonic ideal.
4. Follow these five steps when optimizing
Musk believes that the biggest mistake smart engineers make is optimizing something that shouldn’t exist at all. Therefore, you should first find out if optimization is even necessary. Follow these five steps to apply this method before trying to optimize anything. Step one is “ask,” or in Musk’s words, “make your requirements less stupid.” Here you wonder if your solution to the problem is the right one. Zoom out and look at the problem with perspective. Does it matter?
Step two is “delete”. Musk believes that when designing a solution, people tend to add things “just in case”. Falling for addition bias, where we tend to add rather than subtract, leads to an inflated result. Musk says you should remove anything that isn’t necessary, going so far as to say, “If you don’t add back at least 10% of the things you remove, you aren’t removing enough.” Remove, reduce, remove even more.
Step three is simply “optimize”. Now you have the best attempt at the right solution, optimize and simplify from there, while continuing to notice where there might be errors. Then there is step four, accelerating the cycle time and step five, automating.
While Musk and SpaceX have used this method to rethink rocket design (and create a “minimum viable rocket”), it can be applied to business, manufacturing, and all areas of product design. If you simplified your requirements and dropped everything before optimizing, accelerating and automating, how different would your business look?
Give yourself a shot at success on Elon Musk’s scale by solving problems in a similar way. Think how Elon thinks, read what Elon reads and approach challenges from first principles, the concept of limits, the Platonic ideal, and its five-step optimization framework.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.