Elon Musk's 6 Rules to Get Ahead of 99% of Businesses | Ep 262
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Most CEOs struggle to run one company. Elon Musk runs three. And SpaceX specifically, they move faster than anyone. They literally launch a new rocket every couple of days and they are rewriting the playbook for aerospace. He has six rules that keep SpaceX ahead of everybody else in the industry. So what I want to do is I want to break these down for you, these six rules.

So by the end of this video, you will know how you can apply pieces of these rules to your business so you can move faster, you can make sharper decisions, and ultimately you can build a world-class business in your industry. So let's get into it. The first key idea is that he is mission obsessed.

so much so that almost the entire world knows what Elon Musk wants to do. He said, "Everything we do, from designing rocket engineers to shipping Starlink kits, must push us closer to Mars." So this is an actual end game for him. It's not just a slogan that he has pasted on the wall that he's never going to look at, which is what a lot of people do. It's a daily commitment and it is referenced in everything they do and everybody that works there can say they know what they're doing and how it leads to how we get to Mars.

So what do they do, right? How does SpaceX actually live out the mission of making humans multi-planetary? I want to break down the three ways that they keep Mars front and center every single day. So if you're a business owner and you're watching this and you're thinking, yeah, you know what? I need a mission that's so compelling that I can talk about it. It doesn't just stay pasted on my wall, but I can

integrate it into how all of my employees work, then please listen to this because Elon has put together a masterclass in terms of how to orient people to a mission. And you don't need to be going to Mars to get people to orient to yours. The first one is Starlink as fuel. One of the most fascinating parts is that they treat Starlink revenue like fuel for Starship and Mars ventures. Every satellite launch, every new subscriber, it's all budgeted to move that needle towards the bigger goal. So they're not just selling the internet,

They're literally financing a path to another planet. So they understand the bigger that Starlink becomes, the more money they have and the more resources to get to Mars. The second is that they have Musk's North Star question. So another big piece of the puzzle is Elon's constant ask, does this task...

move us closer to Mars? And if the answer is no, there is zero debate about it. That question cuts down distractions and it forces everybody from the engineers to the finance department to the HR to justify

how their work inches SpaceX closer towards Mars. If you are in a company and maybe you're a leader in a company and you're thinking, "How do I advocate the things that I'm doing to the top level leaders?" Well, your boss, anyone who runs a company, they want to know how the thing you're doing impacts the greater mission the company has.

i think this is a fantastic filter is for people when they have ideas and they work in a company and people who have companies where they're trying to deploy ideas is the question is this new thing that you're trying to pitch to your team or your boss does it get you closer to the bigger goal and if it doesn't then it makes sense as to why you're trying so hard to shove it down people's throats because they see there's incongruency now the third and last way is that this mission so

serves as a filter. It repels the wrong people from the company and it attracts the right people from the company. Think about it like this, right? Most companies, if we're honest, they just like slap a generic vision on it and they're like, "Let's call it a day. We want to help kids. We want to help people make money. We want to deliver people clean teeth." It's something and it's bullshit and it doesn't have a lot of life into it. Whereas SpaceX, their mission is outrageously bold, okay? They want to colonize Mars.

And what does that do when you have a mission so bold? It justifies extreme innovation. It justifies brutal hours, and it justifies speed and pace that leaves most people lost in the dust. So what this does for him is it is like a giant magnet for top performers, people who thrive knowing that they're going after a massive world-changing challenge, and people who like pressure, people who like to perform. And what it does

is it pushes out everybody who doesn't want that. Anybody who wants a nine to five, I'm sure they're not like, you know what, I should go work at SpaceX. If you see anything he posts on social media, if you see anything that company is talking about, if you see the way that they speak about the company and you are somebody who is lazy, there's no way in hell you're gonna apply to work there. So how can you apply this? Here's the thing, if you have a mission,

You can always change it. There's no rules. You can change your mission. If you're listening to this and you're like, I don't have a compelling mission that ties everybody to this North Star, that's okay. You can change it. And if you don't have one, then this is a great time to build one because there's no better way to align your company and to align yourself in the marketplace and to stand out than to have a really compelling mission.

The second rule is lead from the front lines. Let me paint a picture for you. Imagine walking into the factory at 3:00 AM thinking that you're the only one there, only to find out that you see your CEO sprawled out on an engineer's desk asleep. And I'll give you a quote from him. - I think it's important

for a leader to be at the front lines. My biggest challenge is ramping up production. And so what's that about? It's about being in the factory and understanding where the issues are. And so I want the very opposite of being up in an ivory tower. I want to be in the middle of the battle. And so that means putting my desk in the middle of the factory. So that's where it is. It's a noticeably clean desk with the exception of the award. Yeah, I mean, it's got...

I guess this is my phototrend award, my sunglasses and coffee. Yeah, this is my desk. That is what true leadership is. It's being willing to get in there with your team when your team is struggling. It's not about telling them what to do. It's about showing them what to do. It's not about telling people you're accessible, but making yourself accessible. And so the byproduct of this, right, is people ask like, why do that? Because the troops per se are going to fight a hell

hell of a lot harder if they see the general on the front line than if they think the general's in some cushy tent in the back of the troops. Like nobody bleeds for the prince in the palace, okay? You have to get out there on the front line and show them that you care enough that you're going to

push. So let me explain why this actually works for him. People don't want to just go up to him and be like, let me tell you all the problems that are occurring. He has figured out by now what many CEOs take years to figure out, which is everyone tries to hide problems from you. And especially the more public facing you are, the more of a brand you have, the more intimidating you are, the more people are going to try and hide things from you.

So instead what he's done is he's just embedded himself in their problems in real time in the environment. And then what they get from that is they see his obsession. They see his work ethic. They see the hours he puts in. So it works both ways. If there's a supplier issue,

He can pick up the phone and he can listen to the calls himself. If production slows down, he can dive straight into what's going on and know the nitty gritty of the design process. He doesn't need to delegate. He doesn't need to say, "Hey, can we get this done by Friday?" He can be like, "Let's fix this right now." I think there's this like fallacy in business, which is like a problem occurs and it's like, "Oh my gosh, okay, let's put together a plan and then let's get a meeting and then we're gonna solve it by Friday." What the fuck? We could solve it right now in 10 minutes.

Why do we need a meeting for a 10 minute problem that we could solve right now? And why is it that every time a problem comes up, do we need to delegate every single problem or could we solve it right now ourselves? Let everybody watch and then say, great, next time you can solve it because you've seen me do it.

And I think by him having his desk in the factory floor, this allows him to do that, demonstrate rather than tell people what to do, which I think is a fantastic way to teach. And so if you're watching this and you're thinking, how does this apply to me? I think that one of the best things that I did when I was growing my first company is I never lost touch with the frontline of the company or with the customer. And I think what him putting his desk there allows him to do is continue to connect with the team, also connect with the real problems that they have, as well as hearing what's going on with the customers.

Now, the third rule that Elon or SpaceX follows is keep teams lean and technical. So the key idea here is that they have smart, ultra-competent groups that outperform bloated org charts. A lot of people that have worked with Elon talk about one thing that he did, which is he constantly questioned every hire that they made. Now, why is this?

Typically, what humans do is they tend to overestimate how long something will take or how hard a task is, especially when somebody themselves is overwhelmed. This is what they do. They feel very overwhelmed. They might have only two tasks that they need to do, but those two tasks have set them over the edge and they say, you know, I've got to hire somebody to do this. Okay, but those two tasks might only take five hours a week.

So now you have hired somebody to do five hours a week of work. Could have hired a contractor. Could have put a process in place. Could have said this is a project for next quarter. So what he does is he's ruthless about the headcount and ruthless about the effectiveness of every role. So how does this apply to when he's interviewing people?

something that he asked of the people that he's interviewing is he says tell me about some of the most difficult problems that you've worked on and how you solve them now what's the rationale behind asking this question okay it's a couple things which is one say they say oh the most difficult problem was i had an upset customer he's like yeah that out the window right it's like that was the most difficult problem you solved so the magnitude of the problem that somebody presents is one of the first things the second is the solution that they present present

And then the third is probably being able to recall the details of that to show to him that this person actually did the thing they're saying that they did. They're not just making up an answer on the spot. And so I think it's a really fantastic way to ask somebody a question because a lot of people ask, tell me about a time that you did this. Tell me about a time that you did that. But like, tell me about the most difficult problem that you ever solved.

That tells you a lot about a person's abilities because if somebody hasn't solved a very difficult problem, they're probably gonna have a hard time working there. Now the second thing that this does is essentially the roles have to produce or they're out. People that work there at SpaceX, they have to essentially earn their right to stay because coasting is not an option there.

Why? Because they have minimized non-technical management layers. So what that means, for example, is like Elon can talk straight to the engineers, as can anybody else. When you have less layers of management, it's harder for people to hide. What I do like about this is that when there's less places to hide, there's more productive people. Because when people feel like they have multiple layers between them and somebody who's going to hold them accountable, they tend to not work as hard. Now, the third thing is that they have speed because

because they have fewer layers. When you have a small specialized team that has quick access to decision makers, iterating happens faster than when you have all these levels of bureaucracy. And so a question that you can ask yourself is, does this role add real value or does it just add overhead? And if that question doesn't help you, ask yourself this question. What problem does this person solve? A lot of people

do not hire people to solve problems. They hire people to complete tasks, tasks that you could automate, tasks that you could outsource, tasks that you could get somebody else to handle. And the reality is, is that when you're trying to create a lean organization, you need to think about hiring by what problem does this person solve rather than what task do they manage? The fourth rule that SpaceX has is keeping a culture of urgency and hardcore execution. So what does this look like and what does this actually mean? At SpaceX, they have a default mode, which is act now,

not discuss eventually. So what that means is that they try to compress deadlines and create a sense of urgency around everything they do. It's kind of like what I mentioned earlier in the video, which is a lot of people see a problem and then they're like, oh, I must continue doing these meetings about non-problems and then I will get to the problem on Friday or maybe next week or maybe the week after when it's like,

The most important thing that we could be doing in a business is solving problems. And so I really like the idea of act now because I'll tell you something that how this applies to me is I remember one of my first mentors told me this. It was 2016. He said, Layla, if you can solve the problem in five minutes, you better do it right now.

And that stuck with me since then, which is like, I always try, if I can, solve it in five minutes. And if I can't solve it in five minutes, I can at least get it started in five minutes. I can book the call. I can set the meeting. I can reach out to the person. I can make somebody aware. I can send a Slack message. I'm always trying to be in action mode because a lot of the times,

companies are slow because they're not acting, they're just debating. When you talk about a culture of urgency, you have to uphold that in all different ways. I think one that was publicized as of recently was Elon saw people standing in line. It was interns standing in line to get coffee. And he went up to them and he said, "If you're just standing there, you're in the wrong company."

Now, why did he do that? He was trying to prove a point that every moment counts. And if you're going to stand in line for 10 minutes to get a coffee, do you really understand how important and precious your time is? People went nuts over this. Everyone was like, oh my God, he's so evil. How could you do that? Oh my God, I don't understand. Put aside the fact that

most companies do not have a starbucks inside of their company like i do not have a starbucks i'm like the fact that people are saying you're evil when you have a starbucks for your employees is beyond my i do not understand i cannot comprehend this right but

I think that having that mentality towards time is one that is actually very admirable. If you show people that 10 minutes here, 10 minutes there, 20 minutes here, 20 minutes there, if you're like, that's acceptable, that's what he's thinking. He's thinking if this problem multiplied, what would it look like? If people did this all day, what would it look like?

When you are trying to get shit done and you have a sense of urgency, you see that there's leakage everywhere. And so I understand where he was coming from when he said, why are we standing in line doing this? Now, when you think about time and you think about time in your company, you want to think of it like gas. Gas expands to the size of the container. So if you give people a quarter, it'll take a quarter. If you tell people they have a month, it'll take a month. And so it's your job as

the founder, as the CEO of the company, as the leader to constantly compress the container because those accomplishments add up. Those building blocks add up over quarters, over months, over years, and now even for him over decades. And he gets that. A lot of times in the game of business, one of the only advantages that you can have is speed. It's speed against your competitors, speed against the market.

Speed against technology. All of these things are changing quickly. If you do not compress time of how long it takes your company to do and ship things, then you are constantly going to be behind of all those other forces that are going faster. So how can you apply this? I do think this can be applied by asking a question.

which is, are we actually moving something forward or are we just burning time? Because there's a lot of companies where people exist and they just burn time all day. They don't actually move anything forward. They don't actually get anything done. I think it is smart to reward people for solving hard problems, for moving the needle, and for doing things that maybe it doesn't take a week. It might take only an hour, but it's more important than the eight hours of work that they thought they were going to do. The fifth rule is have direct, aggressive feedback loops.

At SpaceX, they have a five-step framework to ensure that feedback loops aren't just about identifying issues, but actually solving them at their root issue. So here's the first piece of it. Make your requirements less dumb.

- Your requirements are definitely dumb. It does not matter who gave them to you. It's particularly dangerous if a smart person gave you the requirements because you might not question them enough. - Yeah, you might take it as like gospel. Like I have to do this thing. - Everyone's wrong, no matter who you are, everyone's wrong some of the time. - Musk has been quoted many times telling people that their requirements are dumb and it doesn't even matter who gave them to him at SpaceX. What he's trying to do with this

is show that no idea is sacred and aggressive questioning of every requirement ensures the team doesn't waste time on a flawed premise. And so I really like the fact that he pushes back. I mean, maybe I would use a different word than dumb, but I think it's really cool to be able to push back on requirements for projects. Now, the second piece to this

is delete parts or processes. So they are ruthless about elimination. If you're not occasionally adding things back, you're not deleting enough. I have heard this quoted by Elon so many times and I've applied it myself, which is essentially what you want to do is you want to strip away enough from a system that you feel like you got rid of too much.

And that's when you know that you've eliminated unnecessary bloat. Because a lot of times what people do is instead of just like cutting once and cutting deep, they just do a million little paper cuts over time. But then you don't get back all the bandwidth that you could have if you just cut once and cut deep. So for them, what they see is that when you cut once and you cut deep when it comes to process, elimination, et cetera, bloat, you get back all that bandwidth and you gain back a ton of speed.

of speed. And what that does is when you don't have bloat is you have speed and you have agility. So you want to constantly be throwing everything off the boat that you don't need. Now, the third piece to this system is simplify or optimize. And this is after deleting. Elon talks about this. He talks about that the most common error of a smart engineer is optimizing something that shouldn't even exist. Why would people do that? Well, everyone's been trained in high school and college

that you've got to answer the question. Convergent logic. So you can't tell a professor your question is dumb, and you'll get a bad grade. You have to answer the question. So everyone's basically, without knowing it, they've got a mental straitjacket on. That is, they'll work on optimizing the thing that should simply not exist. Right. I actually have seen this a lot in companies, which is they're trying to optimize a process, and when you question the process, you find out that they don't actually really use it that often.

It's a process that maybe they use once a month, and if you just got rid of this thing because it actually doesn't drive any value, then you would get rid of the problem of needing a process in the first place. Direct feedback forces the teams to avoid over-engineering, and instead it focuses them on cutting out unnecessary work before they streamline a process that you don't even need. The fourth piece to this is accelerate cycle technology.

So SpaceX has a feedback culture that thrives on urgency, and their approach is to identify roadblocks early, fix them, and then enable rapid iteration cycles to drive innovation. Something that I do in my company is I talk about test and learn. It's kind of the same concept here, which is just like quick iterations rather than perfection.

And I think that's exactly what they're trying to drive home here. And then the fifth point is automate last. Elon, he talks a lot about this, which is he talks about that automation is often mistakenly prioritized. He talked about he's automated something that didn't even need to exist. And I have done the exact same thing when I'm operating my companies. People want to automate something right off the bat. I'm like, I don't want to automate until we've had a person do it. And we've justified that it's so important that we actually need a person dedicated to this process.

And if we don't think it's important enough for a person to be dedicated to it, I don't want to spend time automating it. So overall, what this does is these feedback loops help prioritize addressing inefficiencies directly rather than prematurely adding automation or amplifying problems or creating things that don't need to exist in the first place.

So if you notice the theme around this, the theme is about creating efficiency. If you've studied SpaceX, if you study Elon, that's one of the main themes you're gonna see is just complete efficiency. So what this means for you, if you're running a company and you're thinking about how can I apply this to myself? It's really thinking about being able to dig deeper when a problem presents itself, when there's a process, when people are working on something. It's not just asking why,

It's about asking why two more times after the initial. For me, at least, when I'm asking someone, I walk into a meeting, I'm like, what are you guys talking about? Here's what we're talking about. Why are you talking about that? Because of this. Well, why? Because of this. And then half the time, I'm like, why are we doing that in the first place? Why don't we just not do that? And I don't have a problem telling people that because I don't really think they want to work on things that don't have an impact either. And so I think what you can do is you can just ask why at least three times when you're investigating a problem.

when you're looking at a process, when you're talking to a person, when someone's telling you about something they're dealing with. And then don't be afraid to give direct feedback. Hey, maybe we don't need to do that. Hey, maybe I would do this instead. The sixth rule is tackle the hardest problems first, especially at the top. The idea here is really that leaders set the tone by essentially grabbing the toughest, the most painful, and the most disgusting challenges themselves.

So like Elon Musk even calls the CEO role the distillation of the worst problems. And particularly if you're the CEO of the company, you actually have a distillation of all the worst problems in the company. There's no point in spending your time on things that are going right. So you only spend your time on things that are going wrong. And there are things that are going wrong that other people can't take care of. So you're like the worst. You have a filter for the crappiest problem in the company.

The most pernicious and painful problem. I think he actually said also being the CEO is like staring into the abyss and eating glass at the same time. And I completely relate to that many days of my career where I'm like, yes, I am literally solving all the worst problems that nobody else gets paid enough money to fucking solve. That being said, what do they do? First off, fix the biggest roadblock first. If Elon hears the same problem twice, he personally finds out who is responsible and removes the obstacle.

If it's a supply chain issue, it's like he's going to go ahead and renegotiate the contracts himself. If there's a production delay, he's in the factory working on the problem. Nothing is too high or too low for his attention. An example of this is when the engineers were complaining about a GPU shortage. Most CEOs would probably ask for a report, schedule a meeting, do something to push it off. And instead, what Elon did is he actually called

NVIDIA's CEO directly cutting through weeks of red tape and BS and solve the problem right there. And so again, it's about like getting to the root of that problem as quickly as possible. Now, the second thing he does is he doesn't spend time on what's working. So Elon says this all the time. He says, if something's working smoothly, why are you even looking at it?

And so I actually really love this philosophy of his because a lot of people want to look at the thing that's going really well and only pay attention to that. And then what they do is they disproportionately create more problems over here for the things that aren't working because they felt like avoiding them.

Which brings me to the last point of his, which is a glass eating culture. Okay, this is an attitude that trickles down. But when your team sees the CEO taking on the hardest task, as Elon calls it, like I said, staring into the abyss and eating glass, they're also willing to take on the hardest issues. There's no egos. There's no like, oh my gosh, I don't want to do that. When they see that he's taking on these terrible problems that sound awful, they're like, all right, well, if he's doing that, like the least I can do is pick up the phone and call this customer.

But it's because he's willing to put himself out there and do it first. And he's very honest about the fact that he's solving very hard problems that are very stressful to solve. You know, for myself, I look at businesses as solving a series of problems.

I don't look at it as like, how do I grow my business? I look at it as like, what problems if solved would allow my business to grow? I think it's just an inverse way of thinking because a lot of people think about their business. They think of like, I just set these big goals in order for my business to grow. But the reality is that you don't have to set these big goals. You have to solve these hard problems. And then if you solve those hard problems, it removes these barriers to growth. So for you, I think the question to ask yourself, if you're watching this video and you're like, how do I apply this to myself? It's, are you working on the hardest,

problems in your business. Do you even know what those problems are? Are you even working on problems at all? Because solving problems is what's going to allow you to grow your business. It's not setting these like really fun goals and focusing on all the fun stuff of like, oh, this over here and this. I mean, like, sure, if you want to just have a lifestyle business, but if you really want to grow your company, if you really want to do something amazing, if you really want to have an impact, then you have to focus on solving problems. And it's not fun because problems are hard. So here's what I hope

you take away from this video. Most companies think that building a great culture is about giving away perks, having ping pong tables, and having quotes on the wall. SpaceX proves that it's about something far more fundamental than that. They have a big, grand mission that rallies belief from people. They have leaders physically on the ground modeling what urgency and importance looks like. They have lean technical teams

where everyone feels indispensable and everyone is very clear about their work. They have an urgent get it done yesterday approach. There's nobody dragging their feet. There's no bureaucracy. They have brutal communication. And the biggest problems always get tackled at the highest level. There's no passing on the buck to the lower level people. So ask yourself this question. If you disappeared for a month,

Would your team know exactly what to do? Or would everything stall? Would they know how to make decisions? Or would they make the wrong calls? If the mission isn't crystal clear, neither is your leadership. When was the last time that you physically sat where the real work happened? When you went in the sales teams off

When you talk to the frontline customer support, when you met with your staff account, the magic doesn't happen on meetings. It's not going to happen with you reading reports. It's going to happen when you're on the ground with your team solving the problems. And that's one thing about Elon that I respect so much because I never want to be the CEO in the ivory tower. It's not who I am. It's not who I ever want to be. So this was a lot of information. And there's like a lot that you can learn from Elon, the way that he runs SpaceX. But I would ask you this. What is the one?

the one takeaway that you can go and you can walk away and do now. When I say now, I don't mean an hour from now. I don't mean a day from now. I mean, what can you do right now? Schedule that call. Send out that message. Take the first step. Doing one thing is better than trying to do all of the things that you learned in this video and doing them all really shittily. Okay? So start with one and then you can work your way up.