Elon Musk on Tesla, SpaceX and Why He Left Silicon Valley | WSJ

[Music] elon let's just start right with uh where where john john posed the question i mean you've spoken often in your career about how important it was for you as a young entrepreneur an innovator to come to america and you've said there's no other country where you could have achieved what you've achieved today definitely when you look at the us today in the landscape would that still apply in 2020 and are we broadly as a society doing everything we should be doing to foster that same environment that brought you yeah well i think u.s is still great with respect to innovation and fostering entrepreneurship so it's still great i think we don't want to be complacent and we want to say okay how can we make it better over time and i think we want to be um cautious about the the gradual creep of regulations and bureaucracy the rules and regulations uh are immortal and if we keep making more of a year and do not uh do something about uh removing them then eventually we will be able to do nothing this is very important and i think not well appreciate this is just sort of like the the the slow boil of the frog you know his part doesn't jump out because gets just slightly hotter each year um we should be aware of this i think particularly at the state level yeah well i want to talk about that because uh you've been running into that some in in california but let me ask in a broader sense i mean you've never been i mean you've been working with government you do business with government now uh you've expressed strong feelings about government pro and con at different times depending on the circumstances but when you think through an innovation lens in the broader sense what's the right role for government like what is the role worship government be a player and where should be hands off what's ideal in your mind sure um a lot of the time the best thing that government can do is just get out of the way um and so that i'd say that that's the default um probably best thing to do then um after that would be ensuring that uh there are not artificial monopolies that that there is a federal ground for startups um and the because what can happen over time is they can get regulatory capture by large companies where they influence the regulators and the legislators to favor uh their their situation and then you have a forest of redwoods and you just can't the the little uh little trees can't grow so we really want to have an environment that that tends to favor uh smaller companies and startups the big companies really don't need the support but they will they will generally try to work the system to establish a monopoly of some kind we should be wary of that um you know in general it's like i i think we we could consider uh changing the way we think of things from say capitalism versus communism i apologize long answer but i think this is kind of um capitalism versus communism and and think more in terms of feedback loops so is is a given organization does it give an organization governor or or a commercial have good feedback loop for the customer um whether it's the people as a whole or you know where whoever the customers are and if you've got like a duopoly or oligopoly they're generally going to be have a weak uh response to their customer um and if they're monopoly they're going to have the weakest response to the customer and the reason that that government i think is often the worst at responding to the customers being the people is that they're a monopoly that can't go bankrupt or usually cannot go bankrupt so there's not there's not really a a a cleansing process for a government short of a catastrophe um so i mean if you want to complain about the dmv what's the what's the alternative yeah so a couple things to unpack there first i do want to when you talk about redwoods dominating the uh the air and smaller companies have a challenge some people would hear that as being the situation in silicon valley today i don't think that's what you replied but is that what you see in silicon valley today well i think this is not a silicon valley problem it's just it's a general uh problem um i mean if you look at say you know how many how many candy companies are there like you know big candy is like consolidated into like three companies or something um and they also own all the dog food and the baby food so it's like when's the last time there was some good candy uh you know what's the forcing function for a new candy bar i haven't seen one in ages um so you know we gotta watch this like consolidation um that uh ends up resulting in lower responsiveness to the end customer and um like i said it's like you can think of like in the limit government is simply the largest corporation yeah so some people i think it's a false dichotomy to look at government and sort of industry as separate government is simply a corporation in the limit it is the ultimate cooperation with the monopoly so but then as you get closer to like set up monopoly as the feedback loop gets weaker and less responsive to the customer that's that's that's where you have something which does not maximize the happiness of people which should be our objective overall we had a couple of people last night at this event uh who are joining the big administration a couple of the president-elect senior advisors and clearly one of the things heavily on their mind is sort of a new national industrial policy for want of a better term they talked about spending a lot more on research and development and fostering innovation big government spending basically um is is that kind of national industrial policy a good idea is that a good use of government right now in your mind and if it is where would you focus that kind of effort well it's governor's responsibility to establish the rules of the game and then to ensure that those rules are properly enforced like sort of like the the referees on the field and you know it's like it's just like um you know football or something then you've got the rules you've got the referees you're gonna make sure the rules are the right rules and the referees are enforcing the rules that's a that's an important role for government uh to ensure that the rules are correct and that the incentives uh are what we actually want them to be for like i said the long-term maximum happiness of the people into the future um where i think government does not do a great job is when they want to not just be a referee on the field they want to be a player on the field uh this is not does not end up in a good stage picking winners and losers that kind of thing i mean effectively government incentives do fake or do favor like you're gonna say like what are the rules of the game um i don't know this is obviously an imperfect analogy but i i do think it is a pretty good one um that you you want the government to be carefully focused on ensuring the rules of the game are what we actually want them to be that we're getting rid of all rules this is very important which is not occurring um and that the the rules are enforced such that we have uh ethical behavior of companies um yeah um now there are times when you have an unpriced externality such as the co2 capacity of the oceans and atmosphere so then if that is not priced in effectively then you can get behavior in industry behavior that does not that that we think is probably not good for the environment or not good for the future of the planet most of the time i mean provide pricing is correct you will see correct behavior from a private industry um so you know that's like one example where if we effectively price carbon we'll see the right behavior and then the government does not need to try to pick technology winners losers they can simply incent the outcome i think it's incredibly important that government focus on incenting the outcome not the path um you mentioned california i have to ask um are you you're in texas right now and there's been speculation and you've been vocal this year on some of your frustrations in california are you really are you relocating is it happening and can you talk a little bit about uh what's been troubling you in california uh so much this year since you since you mentioned it sure well first of all uh tesla and spacex obviously have massive operations in california in fact it's worth noting that tesla is the last car company still manufacturing cars in california uh spacex is the large the last aerospace company still doing significant manufacturing california so there used to be over a dozen car plants in california and california used to be the center of aerospace manufacturing my companies are the last two left i want to emphasis so that's a very important point to make um for myself yes i i have moved to texas um we've got the starship development uh here in south texas where i am right now we're hopefully going to do a launch later later today and then we've got a big factory development just outside of austin for texas but you made the move really but what why why did you why did you go there is that is it all a personal decision or was it it was partly a corporate environment decision really for the headquarters is that well i mean in my case the two biggest things that i've got going on right now um are the starship development in south texas which was done this was set in motion like five years ago um and then the the the big new uh u.s factory for for tesla which is called gigatexas uh just by austin so those are the two big projects so these necessarily um drive the use of my time here um yeah and then the other big thing for uh tesla right now is the gig of berlin so i was in berlin i spent a fair amount of time in berlin working on that um and um yeah i think there's you know there's um california is great so there's a lot of things that are really great about california it's the biggest economy in the country most number of people um i do think that uh that there's there is something that happens when um you know if it's going into the sort of sports team analogy like if a team has been winning for too long they they do tend to get a little complacent a little entitled and then they don't win the championship anymore so california's been winning for a long time um and i think they're taking them for granted a little bit yeah let's talk a little more on innovation in corporate america in general i mean innovation has always been core to who you are it's how you think about your companies and your role um in the corporate suite in america are our companies in general uh fostering and developing and innovation and are the leaders in corporate america you've got a lot of them on this call or are we do we prioritize innovation as much as we might uh or need to do you think right now well i i think there's this this innovation but then there's also just um our um ceos in corporate america focused enough on on product improvement i think the answer is no um and i think generally my advice uh to or my recommendation would really be spend less time on on finance spend less time in conference rooms less time on powerpoint and more time just trying to make your product as amazing as possible um and particularly from that why why why why is that is that because uh boards or shareholders are too financed and returned focused and don't don't think enough about product as being at the heart of of value is because a certain kind of the skill is cultivated um why is that why why why is that a problem in the c-suite i think there might be too many mbas running companies um there's the mba isation of america which i think is maybe not that great um there should be more focus on on the product the service itself less time on board meetings less time on on financials the financials come as a result like you say like what's the point of a company at all and why even have companies it's like a company's assembly of people uh gather together create a product or service and deliver that product to service and sometimes people lose sight of that a company has no value in and of itself it only has value to the degree that is effective allocator of resources to create goods and services that are of greater value than the cost the inputs this thing we call profit is uh just just should just mean over time that the value of the output is is worth more than the than the inputs and and it's a reflection of the quality of the product more than uh so so the product is good presumably the profits follow rather than profits being called versus problems and yeah sometimes as people sort of have it backwards and you know if people are getting sort of the incentive structure is coming from the financial side of things i don't i just i just honestly would recommend to anyone listening uh that just spend less time in meeting rooms less time on on on powerpoint presentations less time in a spreadsheet and more time on the factory floor more time with customers and obviously a lot of people out there are already doing that but i just like i just urge people to say like hey step back a second and say is your product as awesome as it could be probably not um what could you do to make it make it great um and you know it's it's a it feel like think about innovation like maybe it has to be like breakthrough innovation i don't think it necessarily has to be breaking innovation it's just like like you know just make your product better it's this is the thing that really matters is that kind of product mindset that the kind you describe is that learnable is it is it teachable or is there is there an innate element that somebody has to have to really to do it well i mean not everybody's innovating or thinking on your scale a lot but but you you hi you look for innovative people when you hire them is it something that that is pretty easy easily learnable or is there some inequality in the people that uh succeed i think it is learnable i mean step number one would be try and any have you tried and if have you tried hard and if you haven't tried hard try hard i think it is learnable um it's not some mysterious thing it's just basically just be like an absolute perfectionist about the product that you make the service that's provided um seek negative feedback from all quarters uh you know from customers from from people who aren't customers like hey okay what can we make this how do we make this better um and you know i think that's it it's absolutely learnable and and and and just if you find yourself spending a lot of time in getting presentations and reviewing spreadsheets you're blocking up the wrong tree that's the that's the effect not the cause um so just get out there on the factory floor get out there in the stores talk to customers think about what what would what would you love to have oh and you know sometimes i think you know and i've had this conversation that tells a few times where it's like we're trying to think okay we don't it's at times like we don't love this product but we think others will love it you know that's not really how it works if you don't love it don't expect others will either [Music] now you're at a moment i want to talk about your companies in a minute but you're at a moment where both we're particularly tesla and spacex are really growing in lots of ways right now um and you've had plenty of ups and downs even at this point but but but it's a high point on your own journey in this way what are the biggest mistakes you've made that you've learned from because you talked a little bit about being willing to put yourself out there fail learn keep growing what were turning points for you that really you you you said wait a minute this is wrong or this is the wrong move either personally or or for the company and that that you learn from that have fed to where you are right now well if i had to list all the mistakes this would be a very long call um so it's too too much to even think of i'm trying to think like how could i could i classify them in some way um well i mean some of the things i mentioned just before it's like where you know i was recommending that people spend less time in a conference room less time getting presentations and and spreadsheets and that like generally that's like when when i have spent too much time in a conference room that's generally when things have gone awry and when i go and spend time on the factory floor um or you know really using the the cars um thinking about the rockets it's like that's where things have gone gone better um but does that does that risk some some people would worry that that risk sending a message to your your teams that you personally have to be involved for something to work that you can't delegate or you can't trust them i think that's one thing that makes some [Music] executives reluctant they're trying to find that line between showing their personal commitment and trusting their subordinates to do the work so yeah i mean you're known for being passionate sleeping on the factory floor but but but is that a concern for you or do you not care does this that's not an issue for you how do you think about it well there's a lot of talented people at spacex and tesla um and i think the morale is is good um uh i for sure respect them greatly and it's an honor to work with them um and i find that if if i am um engrossing the details of the issues this does not result in them feeling better but worse but feeling better like my experience more energized um you know it's like you know you think about like war it's like do you want the general in some like you know ivory tower or or on the front lines like troops gonna the troops are gonna fight a lot harder if they see the general on the front lines than if they think generals you know in some cushy situation so it's like nobody bleeds the prince in the palace get out there on the goddamn front line and and you know show them that you care and that you're not just in some plush office somewhere um yeah i mean my plush office right now actually yeah yeah well yeah um let's talk quickly about tesla um but both tesla and spacex were scaling up today in fact i mean tesla touched 600 billion i think yesterday in evaluation today you said you're going to raise 5 billion to do stock sales um i assume and i assume what those gains are really in your mind going to do is help you scale up faster be poured back into investment because now is the moment to do that is that the plan here yeah i mean i i guess there's um you know what we're kind of debating like should we raise money or should we not um it wasn't like a 100 sure thing um in the end we thought well we can retire a lot of the debt and increase the security of the company well probably a good thing uh and for less than one percent of solutions probably makes sense um but we're you know neither here here or there on that i think it's a it could have gone either way so what is so the money is for really debt retirement you're saying today uh debt retirement and like i guess to have a bit more of a war chest or you know um you know what what is money money is an entry in a database okay i want to think a couple questions uh from the audience first i want to go to a video question uh that we solicited um uh if we could play that um hello my name is catherine parsons and i'm the ceo of technology education company decoded i want to know are machines able to innovate or is innovation an inherently human capability yeah i think uh machines will well my views on ai uh i've spoken a lot about this hey i will be able to do everything better than human over time everything everything includes yeah okay uh elon here's one um uh if you could have a very quick very quick easy one if you could redo the entire transportation infrastructure of the united states how would it look michael fountain asks the entire transportation infrastructure wow um the main thing that i see missing here is uh that we need to go 3d in cities in order to alleviate traffic congestion and um i think probably the best way to do that is with uh with tunnels um it sounds it may sound a bit silly but boring company that you you started which looks at that now yeah in fact for for many years i was asked what do i see as the biggest opportunity for new companies and i kept saying can someone please build tunnels for half a decade i said this and nobody built tunnels so it's like fine we'll start a company and start building some tunnels and we've got the first tunnel that's uh going to be opening up first commercial tunnel opening up in vegas uh going from the convention center to the strip and i think who will have an opportunity to try it out and be able to see that hey if we just go 3d and cities we don't have to be stuck in gridlock those are great and so i'd recommend tunnels and then for long distance travel the you can do tunnels or tubes but if you evacuate the tunnel and and essentially remove the air or most of the air you can you can get rid of the uh air friction and you can go uh supersonic uh and do so with i mean with no um dependence on weather and with no need to get to high altitude or create any sonic boom issues so that's what i meant by sort of a hyperloop it in it's just basically a pressurized electric car in a vacuum tube um so i think this this will be our evolution in transport that would be amazing um and um hopefully others do it not just the boring company okay here's one uh elon i'm a founder of a founder and ceo of a private company in the battle one of the changes i'm seeing uh is people trying to force uh the company uh on political and social matters uh you know making demands not to sell police or not to sell the government agencies there's walkouts and protests google do you think this kind of thing is having a chilling effect or will have a chilling effect on innovation well a lot of this stuff is is centered in the san francisco bay area and i think there's the the silicon valley of the san francisco bay area has too much influence on the world in my opinion and i say that as someone who has spent most of his life in california mostly in the bay area so you're like you're like your friend peter thiel feels it's gotten more stifling up there you you that you're expressing you agree with me yes i think there's uh the the bay area has outsized influence in the world uh so is that changing is the pandemic changing that i mean is there a real chance here that with departures and people leaving the valley that we're going to see some of that scatter out into the country side for good now uh post pandemic i think we'll see some reduction in the influence of silicon valley um but the social media is still very much centered in silicon valley so i think we need to be concerned about mind viruses just you know memes that travel very quickly through social media that may or may not be correct um and we certainly want to encourage a healthy dialogue uh so you know there's some out there who just want to shut down one side of a debate or another i think we should resist that yeah we're out of time unfortunately because i could go for an hour we didn't even get to half of the questions i had but thank you for the time today it's good to see you uh and hope we can continue the conversation another time and it's always fascinating to hear what's on your mind so thanks and and good luck on your projects right now all right thank you thank you elon

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Id: V1nQFotzQMQ

Length: 26min 48sec (1608 seconds)

Published: Wed Dec 09 2020