Elon Musk

Process

In today’s world, technological innovation is one of the most important drivers of success in the business world. If you’re not ahead of your competition with new innovation, you’ll lose. Some companies are able to achieve this innovation because they have strong leaders who are willing to take risks and do not believe in limits. Elon Musk is one of those leaders.

Elon Musk has built his entire reputation around innovating and taking risks. He does not like to focus on one thing for too long, but rather, have several projects going at once. While his exact process is hard to pin down, he has shared some insight into his innovating process.

Musk attended Stanford in 1995 for a Ph.D. in applied physics, but dropped out after only two days because he did not find it relevant. During his brief time at Stanford, however, he was introduced to the first principles thinking. The first principles thinking is “a mode of inquiry that relentlessly pursues the foundations of a problem” (Baer, 2015). It’s approaching problems from a different angle, a different way of thinking. It allows you to push beyond the obvious and remove all the distractions that can prevent you from viewing a problem with fresh eyes. With the first principles approach, you forget what has been done and tried before and focus on the problem in a different way.  You question a problem until you get to the core idea, or cannot ask any more questions. Musk has used this approach since his Stanford days and it’s evident in several of his businesses.

        The first principles approach was crucial to the start of SpaceX. When Musk and his team were trying to determine the price for the SpaceX rockets, they used the first principles thinking. Whereas other companies would use pricing from similar products on the market, Musk looked at the raw materials needed for all the parts of the rocket and determined cost for each. With this thinking, they were able to determine that they could build a rocket for about 2% of the typical price (Baer, 2015).

Musk has used the first principles thinking for most of his businesses, by asking questions and looking at problems from the ground up. He did not want to assume that what his competitors or others were doing was the answer. With PayPal, he asked why it should not be possible send money via email and then worked to “align all of the infrastructure required to enable that vision” (Troy, 2015). He also used this thinking with Tesla. Instead of asking how current technology could be adapted, he wanted to know what the best way to solve the design problem was (Troy, 2015). By using the first principles approach, he has been able to develop solutions that many had not even dreamed were possible. He’s pushed his teams to design better, stronger, more innovative products and this is what has helped him to remain competitive.

With all his innovative thinking, Elon Musk has been very critical of the patent process, deeming them a deterrent to innovation. He believes that a company should be out-innovating their patent applications. “You want to be innovating so fast [that] you invalidate your prior patents…If a company is truly relying on patents it means they aren’t innovating, or not innovating fast enough…” (Lindegaard). He famously ‘opened’ his patents for Tesla to the public, wanting to share the knowledge they had gained. He did this in an effort to increase the electric car market and hopefully encourage more consumers to adopt this technology. He also used this to stress that people are more important than patents. By opening the patents, he hoped to attract top talent since “Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers” (Lindegaard).  He also recently announced that he won’t have patents for his SpaceX company because “if we published patents, it would be farcical, because the Chinese would just use them as a recipe book” (Bhasin, 2012). He prefers to use trade secrets instead to protect his intellectual property, although his companies have collected numerous patents. Tesla alone has over 600 patents. Musk does have 4 patents himself personally, 3 of which are design patents (https://www.quora.com/How-many-patents-does-Elon-musk-have-What-did-he-invent-by-just-himself).