Elon Musk's Complete interview at Air Force Space Pitch Day

we would like to invite general thompson and

elon

musk

on stage ok good morning everyone we have about 30 minutes with

elon

here love the soundtrack we listen to you guys all day we have the theme or the soundtrack to Martian, the dinner soundtrack, the wine cellar, even the Stranger Things soundtrack, so I hope that lightened the mood a bit and I hope everyone had a chance to enjoy the exhibit, some of the public

pitch

es and some of the panel sessions that have occurred throughout the day our guest today needs no introduction on the forbes innovation list for 2019 he was the number one code on that list with mr.

Jeff Bezos and if you want to comment on that later, you'll have the opportunity, but I'll keep quiet because he's obviously the founder of some companies that everyone may be familiar with, like Tesla Motors and SpaceX, he also spent time on the board. of an open AI nonprofit and sponsored groundbreaking competitions like the Hyperloop initiative Ron, thank you very much for being with us today, so we'll dive in unless anyone has any objections to that. I just have a few questions that we're going to answer. I'd be talking mostly about innovation, but interspersed in between some of our questions about innovation would be some questions about leadership, some questions about culture, and especially in the small business environment that grows into a big business and I myself never got these questions until It's been five years but I can throw you a couple of questions about work/life balance, questions about quality of life, so without further ado Ilan a critical question that every company faces when facing challenges during product development. is whether we invest the time and resources to do this work in-house or outsource it and hire an external partner to do it for us.

Can you talk to the audience a little bit about the kind of decision process you're going through? Whether you decide to do it at one of your companies or contract it out to someone else, we initially tried to outsource those things, but at Tesla and SpaceX we started out with most of the things outsourced, which was unsuccessful, so we in the chain of

space

supply isn't great it restricts you to actually working with us companies that are very difficult to work with non-American companies through

space

rockets or consciousness technology so we have a limited set of suppliers and so it usually has inherited parts that it inherits. legacy costs and constraints so it

force

d us to outsource most of the rocket probably only less than 10% of the rocket comes from space my chain at this point automotive supply chain is better consumer electronics is much better whatever be this love competition this fly string is better so it really depends on the part but it's important that lazy components limit costs if you don't have something revolutionary you can't do catalog engineering yes catalog engineering is so the legacy industry base can't adapt fast enough to Wired which you're trying to do so at the source there are special techniques or cultural aspects of that in sourcing that you find to be particularly beneficial in Tesla or SpaceX, well it wasn't just like you want to advance technology, you have to hire the best engineers in the world and then create an environment that l is allow to be as innovative as possible so you know the reward structure you really need to reward and encourage innovation and punish lack of innovation so you have oboz this is the second feature risk reward asymmetry bold moves are if they come out badly punished and but like keeping your head down isn't punished but that's not good that will result in a conservative so it has to be significant progress and just the lack of doing something significant feels wrong so yeah this gets really conservative over time and really the government is a borderline company so the company yes we have some big companies in the audience but we have a lot of small companies in the audience so we don't It's part of the legacy supply chain for rockets or any other innovation, it was a company that you're associated with. that you might be producing with, is there any advice or advice that you could give to as many small businesses on how to market to growing space associations like SpaceX or other companies that might be willing to admit them into the supply chain if they don't have that? old thinking or that old process mentality well basic for Tesla I mean if somebody has a component that's better than what we're doing we love to buy back sure just reallocate the resource ces they were working on that component to to do something else so i put you on the landing legs and they were hired by Racing racing cars today you did a good job better than us so we are working on things so this is by no means like it would be crazy for us wanting to continue making it part of ourselves internally.

There's a virtual 5 that's available externally that matters, so we'd love to do better than SpaceX, so they'd like to talk to you. Ok Elon given his extensive experience in the nonprofit space with companies like open AI that I mentioned in the introduction and his ability to tap into the academic environment that cutting edge innovation in our environment with things like Hyperloop competition are smart ways to the people in the audience this community of space professionals to engage with different sources of innovation in the ecosystem how can we best cultivate those sources of innovation so that we can leverage them in our nation's space capabilities well yeah of the night in the morning wouldn't sound like a nonprofit expert, but the opening was really intended to mitigate the risk of artificial general intelligence. but I hope it reduces the risk now that I have a base that reveals the ONC, an expert in this, what I try to do the most is to discover the set of actions that increase the probability that the future will be good and make choices. there are techniques that you personally use to identify sources of information, I mean, it's just reading or seeing what's out there, you have ongoing market research in your companies or in your private life about what there is that I should sponsor or leverage to do things better than we are i do zero market research ok like carl big rocket you know ok like where is the platonic idea we have seen the perfect rockets or car what features would they have and then what we do and then i find if you do that people buy it well and it's that and you know we're going out with the cool cyber van or truck i mean he looks like an almond person i'll take you for sure yeah that's how they do it Other people too, it's going to look like a wire from a movie set, okay, I hope to see it sometime in the future. they make products they think others would love they don't love themselves if you don't love the product you shouldn't expect others to agree very well so from a leadership perspective you obviously started as a small business leader and grew a number from small companies to large companies so from your early days at zip2 and PayPal leading very small teams of developers sometimes doing a lot of the development yourself practically nowadays as you need very large companies like Tesla Motors and SpaceX has their leadership approach changed at all or are they managing those small teams to try to keep that culture and their leadership style the same all the time it definitely has to change as companies grow Tesla has about 45,000 people and SpaceX has almost 7,000 people and you know when a company is little then your skill as it is something like an individual engineer dual can make a big difference a Cafe is big you have to teach a lot of people to do it but you have to be a

force

multiplier rather like if you have a small gang like you know if you like a dozen swordsmen or something in your day then ok sure that will make a difference in a small battle but not if it was 12,000 like you so you have to try and teach people about different mass approaches and just make sure that the correct behaviour, the structure to Getting the name right is incredibly important.

It's not like that statistically speaking it's definitely going to happen so the whole structure has to be sensible and this sounds very obvious but in most organizations they want this to mean the structure is not right it's less and less about For the engineer to talk to the program manager one on one in a very small team setting and it turns into conversations between different teams in your company much larger groups of people than there are in many organizations there is a trend that seems to be developing and if the Leaders have to manage those skins or insist their teams manage those skins, how you've managed the seams and the big companies you currently manage in any given product, you can see that bug, organizational bugs manifest, and bugs in the product for that you can see like the one you know and i see the stage products is like a battery top cover and we have a c bottom deck in the c Okay we should just have a deck we don't need a box in the box but there's the bathroom gear and the chat and the body of little possibilities so they made a deck you know you see a sort of flanges and gaskets and several things they didn't do. sense or things duplicate and we have subsystem optimization in system optimization so to counteract that which is not easy I actually insist that teams step on their toes so if propulsion to the team The engine part has to go part way into the plane and the plane kit has to go part way into the engine it's just but it's hot it's hot if I were to do that now and basically they have to offend other people in the company and they ended up well this is very important to try to propagate is that everyone should be a chief engineer like everyone everyone should have at least a superficial inside understanding of the whole rocket the whole car even though they may have a lot of experience in a field that they do that they built to know if if they are optimizing for the product as a whole so you can finally summarize the key features of each discipline you can simplify it into a few principles ios, it's like Richard Hyndman needs to say he really knows his subject if you can explain it to a smart ten year old, but if you try to disguise it or experiment with obscure language, rockets coming back from orbits have a pressure and a center of mass like Sara and it sounds very complicated but basically you just have a seesaw of a roughly equal dance it's just going to be if you put the dough on one side it's going to angle that foot out and it's going to take the other side and just as you see it , then we will see that mass distribution even makes sense, doesn't it?

It doesn't make sense, the fins are too big on one side or the other, there are many other examples, but I think the principle is that everyone should have a broader understanding of particles and that's correct. the culture of broad understanding between your teams and the culture of not caring too much about offending people on another team is to make those kinds of difficult discussions so you know not to travel risk downstream and identify problems early are there others aspects especially in growth? your small businesses into big companies that have been really important from a cultural perspective, whether it's to you and your leadership team or your entire workforce.

I can't say I'm good, but I'm not sure if really Seeing myself is that great, great expert on his show tonight. I will go. You know we're doing good, but let's look at a few. It seems that a lot of bugs were born. how is it possible you know when i was a kid i was actually thinking about a career in physics. I'd like the Clyde or something like that and I don't think I've been the best photographer, well coming from a culture that values ​​leadership my position is you don't get results and certainly when we've gotten results unless you have that kind of leadership ability, yes mon-sun so don't underestimate yourself is what i'm saying ok so with that's how you should always assume you are yourself and your goal is to be less wrong this is a very common state of mind the people tend to assume that their rights and there was evidence that they are right you are definitely wrong to some extent the question is how long and can you be less wrong tomorrow?

Okay, instead of leadership lessons from Abraham Lincoln or someone else, leadership lessons from the world of physics. Yes, the mental constructs of physics can be widely applied. This is correct. quantum mechanics and general relativity these great tools are nice we will have a textbook sale later after our session orfor those at this point just check out Khan Academy to find a lot of great stuff about physics ok Elo Let's move on to work life balance a bit. Do you have a deliberate focus on how to balance your work and the rest of your life or do you just have a feeling of hey, I'm focusing too much on work right? now i need a break or i need to go do something different well i think i could but that point of view is what i choose decision there in my case i actually could do as much as possible but if not taken a few breaks so you're kind of doing nothing is less the reason I take breaks to do more basically it was everyone's decision but - actions to inspire a stock - weekend errand as it was long lasting they had a vacation region to work for a week and I was like Well, like two thousand or two thousand in the hospital, so maybe I should take another break, you know, yes, but I think I probably would not recommend running to companies.

This is not the most fun. you and i had a conversation on a saturday morning and what i remember from the phone conversation on saturday morning was that we spent the first 15 or 20 minutes talking about the workouts we had just had that saturday morning would you mind ? to tell the audience a little bit about how you keep fit. I don't think I'm a good vice president to be honest, but the mentally fit question is this. I this is like looking good and running on a treadmill and that's like the only time I actually watched TV was like running for 15 to 20 minutes in a trailer.

I read that it said it was okay to watch TV when you were running. I'd like to see Space Jam's quest for a Space Jam soundtrack later this afternoon, okay I got you, how about I know you're a huge reader, but from a lifelong learning perspective, constantly trying to add to your toolbox to be a better leader? Best CEO Are there any recommendations you have for the audience on those kinds of things that you need to stay mentally sharp? I really like them these days and used to when I was a kid. They read to me all the time. newspapers as you know are like the Daily News.

I find a lot of noise and very negative, so I usually try not to read the daily news for a bit because they are jelly newspapers. er the question what is the worst thing that happened on earth today something terrible happened every day the guarantee was a great big plant also something great happened but dont answer that question so thats the daily news that tends to make my little robot be like scientists Science and technology periodicals are good quite interesting and usually you know if there is something being discovered it will be there and I think Twitter enlightens the Italians yes but there and talk with smart people all the time is very helpful because that can be a distillation of one of the cool things that's going on and I certainly like to try to ask people about the car, what are we doing wrong when they come over, the sex will get better, for usually, once everything is good, you know like the graph i'm saying, but what's wrong?

You are working much better. Do you know how we can be less wrong? That's great, but tell me about things that are very boring, okay, bad stuff, okay, so we have a similar culture and an air force takeover. We talked to our carriers about that. now so so this dominance the space dominance this ecosystem that represents today one of the challenges you face every day that you would face every day even if the stem production system in the United States or in the entire free world was perfect it's a competition strategy for talent, are there techniques that, as you grow from a small business to a large business, need to change in terms of how you reach and find that talent in the ecosystem? talent then the work itself has to be exciting, the best engineers want to work on the most innovative stuff and then as you add good stuff only the company will in turn recruit other great engineers and talent. of all kinds, so it's very important that what they're working on is intrinsically interesting and Joe, that there's a high energy environment if the work is intrinsically interesting and interesting and they're making progress then it's just that you attract more ecological engineers when you leave of doing really cool things then they go well and that's what they're pretty straightforward but you get what someone assures you but a recruiting feature which is very cool and if someone great wants to join the company they really get a

interview

this is one of my big sages i came from a coma teller i was alive today somehow if not we are doing something wrong and like me i'm not totally sure i'm getting it so if maybe we don't get it early , we should fix that and make sure we're not blocking the doors of talent, yeah, or they were looking for the right thing, so search in general. things that are like evidence of exceptional ability I capsule graduated from college or high school or whatever what evidence is exceptional ability they only give you three bullet points evidence of exceptional ability from college it's not that great yeah but you know the debate vote some really awesome device and tough very tough competition they come up with some great ideas so some really tough ones probably you know it's like what they do that was clear evidence of exceptional skill it's not necessarily a 4.0 GPA, that's right, that's concerning for a contract. occator yeah sometimes ok ok sure clear evidence of exceptional ability otherwise i really like him ok ilana i want to give you the last minute or so so you know Elon is Elon ok then you have to this is an Air Force Space Launch Day that has in the audience small companies developing new and innovative capabilities for the space domain that has operators from the Air Force Space Command Air Force Space Acquisition folks you have staff in Congress, you've got some media, you've got Valley experts in the audience, what's one or two things you want to tell them about Air Force Space Launch Day and what's it going to be like? successfully growing a small business to a large business is fine well I mean if I have I don't think it's inherently good to grow a small business to logic and sometimes the sports business should be a small business , sometimes companies should not exist and micro-enterprises as a group of people that I brought together with a purpose that is to create a convincing product or service if that product or service is not convincing there is competition but they are blinds that are forgotten is the point is to create a great product or service and then if it's just one person it's hard to do that more than one person so it's not about growing a business for the sake of growing a business you have to say what it is its important problem that you are trying to solve that really matters and then try to solve it with respect to space I think there is really only one problem one problem mainly that is rocket on rocket

complete

ly and fast reusable this is the this is the holy grail you know it's the basics we've made some progress in this direction with the reasonable straw and the fair but it's absolutely profound to have a reusable rocket as it would be to have it as ready to have reusable transport Domains from Norrell their bikes planes cars the forces are already usable so if you look at the cost comparison something like a plot is pc-12 a single engine turboprop has a payload of about once and It costs five million dollars. a 747 has a payload of over a hundred languages ​​and you can lease it for a flight from Sydney to and from services for half a million dollars so that's a total difference of a thousand in cost and it costs a ton to haul and actually that flatu s can't get to australia so we don't get there so what i say is a small a giant reusable ship it costs a bit senses if you just need to repeal something it's pretty much easier so You know what when I say it seems like a lot of rockets start absolutely and I think this is a thing that's Aubree's body that's what you know the program rocked the crosstalk which is pretty ambitious parsley than the cost of fuel and oxygen and it's a partisan depressurizing Disney million which is very around $900,000 light so the thing is going to wear $900,000 before something with tons to at least a hundred tons probably of time and should consider our operating cost Camargo dares the opportunity accordingly, but it was much less than even a small rocket and that's the thing is the What made the story, but this is little by little, it is to become a rocker and continue to be useful, only smaller cubes, like if only there were 720.

Hush there are prophecies you know they are popular sizes they are all reusable and if you stop. that a car company what would a single use car company use yeah who would say well that's pretty funny and you know though the silver lining is that you need to take off with your landing gear and you run until your tanks are dry do you you see? of extra range plate and then you drop the COG with a parachute and the plane crashes and that's how the Rockets work it was crazy well I'm on behalf of the barracks secretary dr.

Roper, myself and the entire Air Force acquisition team, thank you for joining us here today, everyone, Elon Musk.