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…ink about manufacturing today, SpaceX's Starlink terminal manufacturing plant, which is very impressive and a much larger scale than people realize. How many Starlink terminals are they producing now? It must be like a million a year or something. Yeah, it's a lot. But yeah, who else should we be looking at and saying we should be doing more of that kind of thing here? Well, in terms of us, I think Chris Powell is doing really well at Hadrian, but I think— What does Hadrian do? They make parts for military aircraft, mostly. But the idea is you increase the machine-to-machinist ratio with software, which is not exactly astounding. How many cores are in your phone? I mean, it's actually quite hard to do in practice. And I think the edges or whatever, the corner cases that the current entrepreneurs are grabbing onto for mass production is like, “Well, I don't have $10 billion to go and set up Foxconn 2.0 here in the United States if I even wanted to. But I could build this really high-value product for a discerning customer, US branded type stuff.” And so Sam D’Amico, for example, down at Impulse has done that with his stoves, right? It's a premium product when people need to replace their stoves, they do it in a hurry. His is available, has all these other ancillary benefits because it's so nice, he can sell it. But I think— They're actually being produced in China, though. But isn't it hard to rely on producing premium products? That's where you start, right? That's the beachhead and then you diversify outwards. But if you're able to build a mostly automated factory that can produce a few thousand units a year, then it's relatively straightforward to go from there to 10,000, 100,000, a million. And then as you get those economies at scale, continue to push the price down. I saw some stat the other day that Apple had spent a hundred billion dollars on manufacturing investment in China. Imagine if they'd spent it here. Do you think they could not have succeeded in building a really nice iPhone even here in Silicon Valley if they'd spent a hundred billion dollars in factories? People in tech follow Elon a lot and have read the Walter Isaacson book, and they're familiar with the oeuvre and know much about how he works. Ashlee's book is good too. Ashlee's book is very good as well. What do you think, nevermind people at a distance or people are very bothered by Elon or something like that, people in tech who kind of follow this stuff. What do you think they still misunderstand about the Elon production function? Oh, that is a good question. Well, I think actually I'd be more surprised if there was someone who had succeeded as well as Elon had in his various fields who was better liked. If that makes sense. You should expect to make enemies if you're going to be that effective in that sort of area for whatever reason. I mean, he has his own— So you think the hard edgeness is not an incidental trait. You think it's part of the success. Yeah. Yeah. I didn't always think that. I used to think that it probably was possible to build an organization as successful as SpaceX without being quite so uncompromisingly demanding of your employees. h. Yeah. I didn't always think that. I used to think that it probably was possible to build an organization as successful as SpaceX without being quite so uncompromisingly demanding of your employees. And then you started a company. Then I ran my own hardware company, and I'm like… And so how did you update? Many hard lessons learned over and over again until I finally worked out that actually, people are in general capable of achieving far more than they would think. But almost always they require extrinsic motivation to do that. And usually it's like, “I expect you to do better,” kind of thing. But there are lots of people who are very successful and generally are regarded as pretty nice people. Successful, yes. But successful in building competitive hardware manufacturing companies in the United States— Okay, so you think it's intrinsic to hardware? Hardware is, I think… Well, statistically speaking, it would seem that a software company is a surer ticket to ungodly riches than a hardware company. That would be my guess. Okay. So that's one thing. You have to be somewhat hard-edged. What else? I think he works really hard. I think that he compounds his own knowledge. I think he's super smart. I think he understands that physics is the law, everything else is a recommendation. But yeah, I don’t know him at all really. So I can only speculate from the outside. I think that one of the things that frustrates me somewhat about Isaacson's book is Isaacson is quite clearly a very sharp guy, and he spent a year and a half with Elon, and yet if you read his book, particularly the last third or a quarter of it, which is talking about all the recent stuff, the Twitter stuff and so on, it's just very clear that he doesn't get it. He doesn't understand why Elon is doing these things that seem completely crazy, but yet he keeps rolling sixes. Why is that the case? And my point of view on this— and I wrote a blog post about this at one point—was, if I see someone who is pretty successful do a series of crazy things over and over again, and yet they work out every single time. Either they have root access to the simulation or their model of reality is better than mine in some key way that I don't understand. But I might be able to understand if I assume that they made a sensible decision, given knowledge that they must have, but I don't have. What can you infer about this? You've talked about how many SpaceX alumni have gone on to start rocket companies that are essentially just trying to build Falcon 1. And despite the fact that SpaceX was kind of doing that for the first time and had to learn lots of hard lessons, they got to work at SpaceX and they knew all the lessons and they'd seen everything and still a lot of them have struggled. I haven't heard you espouse a theory as to why they've struggled. d lessons, they got to work at SpaceX and they knew all the lessons and they'd seen everything and still a lot of them have struggled. I haven't heard you espouse a theory as to why they've struggled. It's got to be really hard. Yeah. Well, I know that a lot of people leave SpaceX and a few of them are like, “I'm going to start my own company and I'm going to try what it's like to be Elon.” And then they get a horrible experience. And some of them are like, “I'm glad I got a horrible experience.” But I think a lot of them are like, well, “I always disagreed with this particular technical choice.” And then they make it differently and then the rocket explodes. And maybe it's because that choice was actually correct and they didn't understand it. And maybe it's because it's unlucky and maybe the organization didn't work well enough. In the space sector at least, it's quite astounding the extent to which SpaceX is dominant. This is not the case that Apple has, 20, 30, 40% market share on smartphones and Pixel has 10% and Huawei and so on has… This is like SpaceX has 95% market share for the entire world. And then the second place getter is China or something. And then the next closest was 15 years ago the United States' main launch company. And then it's very much what I'd call an “anomaly in the matrix”. (00:45:41): Solar getting cheaper every year is also another anomaly. It's like a big wave that can be surfed and people don't really recognize it or how to use it or how to lever it. What advice do you have for highly technical youngsters? Say someone who's in college listening to this. Damn. Well, don't validate my life choices by repeating them. But realize that your life is on a spectrum—a continuum. And certain things are easy now and they'll be hard later, and vice versa. And if you see yourself as someone who's the technological elite, you should challenge yourself as much as you can. You should go out and find a worthy challenge and just level up. Don't go to someplace that puts you in a holding pattern for 10 years. You've only got 40 something years of really good work ahead to level up as much as you can. Go work somewhere that's very demanding.…

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