[[General John F. Thompson]] interviews [[Elon Musk]] with a focus on [[innovation]], and how organizations such as the [[US Air Force]] can become more innovative. The interview contains practical information for senior management in large organizations that want to improve innovation.
6:15Interview Begins. How do you ensure products don’t remain static and incrementally improve over time? #[[radical innovation]]
It’s important to push for radical [[breakthroughs]]. If you don’t push for these, you won’t get radical outcomes. To get a big [[reward]], you must have a big [[risk]]. The [[US]] will fall behind in [[innovation]] if it doesn’t continue to do this. It’s a risk today and wasn’t in the past.
13:00Is this need driven by competition with other countries? Or is this regardless of competition? #competition
Without a doubt, if the [[US]] doesn’t make big moves in [[space]], it will be second place in space. [[Innovation]] is the key attribute of the US and it needs to use it.
14:00What does the US need to do to maintain that innovative competitive edge? #Ankified
[[Outcome-Based Procurement]] is very important. You say "this is the outcome sought" and whoever can achieve this outcome to a greater degree the [[government]] will do business with. #Procurement
17:45The workforce is a key component in radical innovation. What do you do to motivate a workforce to help them become more radically innovative? #Hiring #incentives #[[encouraging innovation in an organization]] #Ankified
The most important thing to do is to make sure that you have an incentive structure where innovation is rewarded and lack of innovation is punished. Carrot and stick. People that are innovating should be promoted sooner, and if someone’s in a role where innovation should be happening and it’s not, then they should not be promoted or exited. "Then let me tell you, you’ll get [[innovation]] real fast. How much do you want?"
You have to have some acceptance of failure – failure has to be an option. If you don’t allow trying and failing you might get something worse than lack of innovation – things may go backwards. "You want reward and punishment to be proportionate to the actions you seek." Reward for trying and succeeding, minor consequences for trying and failing, and major negative consequences for not trying. "With that incentive structure you’ll get innovation like you won’t believe."
21:20What about processes – are there processes you recommend to bring about radical change?
Designing a production system of a new product is at least 1-2 orders of magnitude harder than designing the initial prototype.
Designing a rocket easy. Making one of it is hard. The making of a production line that builds and launches many is extremely hard.
26:00 [[Starlink]] – as you scale to build more and more satellites and launch them, what are challenges you’ve had to overcome? #Ankified
It’s important to have a tight feedback loop between the [[design]] of the object and the [[manufacturing]] system. When you design, you don’t realize the parts that are difficult to manufacture, so bring manufacturing and design up together. Counterintuitively, it can be the right thing to do to manufacture the wrong thing, i.e. build it before design is done, because you discover what’s hard to manufacture.
29:15 To figure out what to build, you could query customers ("customer pull", e.g. improving a [[Tesla]] based on customer feedback), or innovate and push something into the customer base ("company push", e.g. iPad). How do you think about that balance? #Ankified
[[Henry Ford]] once said that if you ask the public what they want, they would have said "a faster horse". When it’s a radically new product, people don’t know they want it because it’s not in their scope. Customer feedback once they have the fundamental product is a good thing, though. #[[market research]] #[[customer research]]
34:00In the next 5 years, what technology do you think will see the most advancement?
[[AI]] will be the most fundamentally transformative. Computer science and physics is what you would want to study to prepare for this future. If you want to understand the nature of the universe, these two fields have great predictive power.
35:23What should the Air Force be investing more in for innovation, other than reusable rockets?
Once you have dramatically reduced cost access to space, many things are enabled. Analogy: the [[Union Pacific Railroad]] made travel across the country much faster and less dangerous.
41:30The failures you’ve had to endure would drive many nuts. What’s the mindset to get through that?
You want the net useful output to be maximized. In baseball, it’s three strikes and you’re out. What you mostly care about is not any individual at-bat but the overall batting average. [[Failure]] is irrelevant unless it’s catastrophic.
44:00Intellectual property – how do you protect it in a world where information is constantly under attack? #[[intellectual property]]
[[Tesla]] open sourced their [[patents]] a few years ago. The goal of Tesla is to encourage the use of sustainable energy, so they want to help others that want to make an electric car.
The real way you achieve protection is by innovating fast enough. If innovation is high, you won’t need to worry about [[intellectual property]] because competitors will be copying something you did years ago. Innovation per unit of time is what matters. What is your rate of innovation, and is that accelerating or decelerating? [[Big Business]] tends to get less innovative per employee and also sometimes in absolute terms, and it’s likely because of incentives. Incentives must be aligned with innovation. #Ankified
47:30What are your thoughts on the competition between the [[US]] and [[China]].
[[China]] economy is going to be 2-3 time the size of the [[US]] economy, due to their huge population advantage. So, innovation has to close this massive gap in economic output. Economics are the foundation of war.
50:40How do you create a culture of enthusiasm at [[Tesla]] and [[SpaceX]]?
There is a pretty big selection effect, because especially in important engineering roles, they look for people that have demonstrated innovation. As mentioned earlier, the incentives in the company help – they reward innovation and punish lack of innovation.