Blunt Talk From Elon Musk

After twice watching Elon Musk’s 2 ½ hour interview with comedian Joe Rogan, I can tell you one thing with dead certainty: he is nothing like any CEO I have ever worked with, seen or heard. That he smoked marijuana during the event got all the headlines Friday. That occurred 2 hours into the show and lasted all of 90 seconds, but soaked up all the press attention.

That’s a huge blind spot, because this is the longest publicly available conversation with Musk in years and comes at a critical time for Tesla and the man himself. Joe Rogan didn’t ask about the SEC investigation or other legal issues, but the format and wide ranging nature of the discussion give useful clues about Musk’s current state of mind and his baseline personality.

More importantly, Musk discussed a wide range of topics that merit attention given his position in the Tech community and far reaching knowledge base.

There is a link to the interview at the end of this note, but here are our 5 key takeaways from the interview:

#1. Musk is a highly intelligent/creative but deeply conflicted individual. The interview bookends with discussions about “What it’s like to be Elon Musk”. A few of his answers:

  • “I don’t think you’d like to be me.”
  • On the pace of his idea generation: “It’s like a never-ending explosion” and the hardest part is “It’s hard to turn off”.
  • As a young child he worried about being committed because his thought process was so different from his peers.

#2. Tesla almost went bankrupt in the Financial Crisis, something that still weighs on his mind today.

  • When asked about what keeps him up at night: “It’s quite hard to run companies. Especially car companies… It’s very hard to keep a car company alive…”
  • Back in 2008 Tesla used outsourced bodies (from Lotus) and drive trains to build its Roadster model. Musk described in detail how that almost sank the company since it was not entirely in control of its technology or product design. This clearly informs Tesla’s strategy today and may be limiting its potential partnering with existing car companies (something we see as important to TSLA’s long term survival).

#3. When asked about the biggest bottleneck at any of his companies, Musk answered, “I wish politicians were better at science. They are pretty good in China.” It was a fairly isolated comment, but taken with the rest of the interview the context is something like this:

  • The only time Musk appeared to grow emotional was when discussing the need to shift the world to renewable/clean energy.
  • His summary: “The momentum towards sustainable energy is too slow.”
  • In his view, internal combustion engines have an implicit subsidy since they do not pay for the undesirable externality of carbon emissions. Governments should therefore subsidize greener options to level the playing field. This is something Chinese policymakers currently embrace more than those in the US (hence his comment).

#4. Musk was an early and vocal critic of artificial intelligence, but after making his concerns known and being ignored he is now resigned to whatever comes and is taking a “fatalistic attitude”.

  • “I tried to convince people to slow down AI… to regulate AI. This was futile. I tried for years. Nobody listened.”
  • “I met with Obama for one reason… He certainly listened. I met with Congress. I was at a meeting with all 50 governors… No one seemed to realize where this was going.”
  • “How many years did it take for seatbelts to be implemented, required? … Eventually after many many people died, regulators insisted on seat belts. This timeframe is not relevant to AI. It can’t take 10 years from the point at which it is dangerous. At that point it’s too late.”
  • “It feels like we are the biologic bootloader for AI. We are building it. We are building progressively greater intelligence and the percentage of intelligence that is not human is increasing and eventually we will represent a very small percentage of intelligence.”
  • “It (AI) could be terrible and it could be great. It’s not clear. But one thing is for sure. We won’t control it.”

#5. “Happiness is reality minus expectations.” If you are looking for clues about Musk’s fundamental personality, this was the most telling thing he said in the whole 2 ½ hour discussion. It is an engineer’s observation: philosophy in a mathematical wrapper.

Funny enough, it is also Wall Street’s definition of what moves asset prices.

Summing up: we started this note by saying Elon Musk is like no other CEO we’ve ever met. The points we highlighted above show that, in everything from his personal openness to his expansive worldview and commitment to a specific commercial cause, he has no peer. That forces the question, however: “Is that difference too large to be sustainable over the long term?”

Link to entire interview, with video: https://www.youtube.com/watch?v=ycPr5-27vSI

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