The minimum order is a box of five

Thursday, April 4th, 2024

Just as small, agile drones are starting to look like the future of war, David Hambling notes, small agile suppliers may be the future of defense procurement:

Steel Hornets, “a private manufacturer of weapons systems for unmanned aircraft systems”, is essentially a mail-order drone bomb company sending munitions directly to users.

[…]

Steel Hornets, “a private manufacturer of weapons systems for unmanned aircraft systems”, is essentially a mail-order drone bomb company sending munitions directly to users.

[…]

Steel Hornets provide their munitions without explosive filling or detonator. This makes them safe to handle and easy to distribute via the postal service, allowing Steel Hornets to supply drone operators quickly and efficiently wherever they are.

To arm the munition, the operator fits it with a standard military MD5M or KD8A detonator, devices the size of a thumb drive available by the million. Then also pack the bomb body with plastic explosive.

A spokesman for Steel Hornets said that explosive was typically drawn from supplies for demolition work, or scavenged it from other munitions. For example, the UR-77 Meteorite demining system uses line charges filled with over 1,450 kilos / 3,200 pounds of plastic explosive to blast a path through minefields. One line charge contains enough explosives for several hundred drone bombs.

Steel Hornets are also exploring other ways for users to source explosive filler. With commercial plastic explosive costing just a few dollars a pound (the U.S Army pays $22 a pound for small demolition charges but they do not do things cheaply), it should not add much to the cost of the finished munition.

[…]

Steel Hornets produce three types of drone bomb: armor-piercing shaped charges for use against tanks and other vehicles, fragmentation weapons effective against personnel, and dual-purpose munitions which combine both functions. All three require considerable design, so munitions from Steel Hornets give a real advantage over garage-made or field-improvised alternatives.

The aerodynamics plastic bomb casings are 3D printed with fins to ensure they fall in straight. They are also well balanced so they can be carried without affecting the stable flight of the drone.

“It’s not the cheapest, but it’s a very flexible manufacturing method,” says the Steel Hornets spokesman.

It allows them to make in very small batches, and also to change the design instantly with no need for re-tooling. But the more significant element is inside.

[…]

For example Steel Hornet’s BP 75mm replacement for the standard PG-7 warhead weighs 850 grams/ 30 ounces, somewhat lighter than the original. In tests Steel Hornets’ shaped charge with a copper liner penetrated 180mm / 7 inches of steel plate. This is less than the original which can go through 260mm/ 10 inches of armor, but this is not seen as a problem.

“We are seeking a compromise between weight, size, and cost,” the Steel Hornets spokesman told Forbes. “Additionally, we are making the shaped charge jet thicker, which often results in more confident penetration, albeit slightly reducing the penetration thickness.”

[…]

The miniature tank busters are a bargain at $14 a time. As with other Steel Hornets products the minimum order is a box of five. This gives an idea of how different they are to traditional arms companies dealing in orders of thousands.

We either do this or we die

Monday, April 1st, 2024

Elon Musk by Walter Isaacson Musk’s tolerance for stress is high, Walter Isaacson explains (in his biography of Elon), but 2008 almost pushed him past his limits:

Some Tesla executives and board members felt that the deposits should have been kept in escrow rather than tapped for operating expense, but Musk insisted, “We either do this or we die.”

[…]

Musk’s friend Bill Lee invested $2 million, Sergey Brin of Google invested $500,000, and even regular Tesla employees wrote checks. Musk borrowed personally to cover his expenses, which included paying $170,000 per month for his own divorce lawyers and (as California law requires of the wealthier spouse) those of Justine. “God bless Jeff Skoll, who gave Elon money to see him through,” Talulah says of Musk’s friend, who was the first president of eBay. Antonio Gracias also stepped up, loaning him $1 million. Even Talulah’s parents offered to help. “I was very upset and called Mommy and Daddy, and they said they would remortgage their house and try to help,” she recalls. That offer Musk declined.

[…]

Talulah watched in horror as, night after night, Musk had mumbling conversations with himself, sometimes flailing his arms and screaming. “I kept thinking he was going to have a heart attack,” she says. “He was having night terrors and just screaming in his sleep and clawing at me. It was horrendous. I was really scared, and he was just desperate.” Sometimes he would go to the bathroom and start vomiting. “It would go to his gut, and he would be screaming and retching,” she says. “I would stand by the toilet and hold his head.”

[…]

He gained a lot of weight, and then suddenly lost it all and more. His posture became hunched, and his toes stayed stiff when he walked.

That seems to be a package

Monday, March 25th, 2024

Elon Musk by Walter IsaacsonAfter pushing Martin Eberhard out of Tesla, Musk should have realized he’s not good at sharing power, Walter Isaacson explains (in his biography of Elon), but he installed a Tesla investor, Michael Marks, in the CEO position:

Marks had been the CEO of Flextronics, an electronics manufacturing services company, which he turned into a highly profitable industry leader by pushing a strategy that Musk liked: vertical integration.

[…]

Musk and Marks got along well at first.

[…]

But then, Marks made the mistake of believing he could steer the company rather than just carry out Musk’s wishes.

The first clash came when Marks concluded that Musk’s devotion to reality-defying schedules meant that supplies were ordered and paid for, even though there was no chance they would be used to build a car anytime soon. “Why are we bringing all these materials in?” Marks asked at one of his first meetings. A manager replied, “Because Elon keeps insisting that we will be shipping cars in January.” The cash flow for these parts was bleeding Tesla’s coffers, so Marks canceled most of the orders.

[…]

“Elon is just not a very nice person and didn’t treat people well,” says Marks, who was appalled that Musk had not even read most of his wife Justine’s novels.

[…]

“I told him that people won’t tell him the truth, because he intimidates people,” Marks says. “He could be a bully and brutal.”

[…]

During their debates over Marks’s proposal to outsource assembly of the Tesla, Musk became increasingly angry, and he had no natural filter to restrain his responses. “That’s just the stupidest thing I’ve ever heard,” he said at a couple of meetings. That was a line that Steve Jobs used often. So did Bill Gates and Jeff Bezos. Their brutal honesty could be unnerving, even offensive. It could constrict rather than encourage honest dialogue. But it was also effective, at times, in creating what Jobs called a team of A players who didn’t want to be around fuzzy thinkers.

Marks was too accomplished and proud to put up with Musk’s behavior. “He treated me like a child, and I’m not a child,” he says. “I’m older than he is. I had also run a twenty-five-billion-dollar company.” He soon left.

[…]

“I’ve come to put him in the same category as Steve Jobs, which is that some people are just assholes, but they accomplish so much that I just have to sit back and say, ‘That seems to be a package.’” Does that, I ask, excuse Musk’s behavior? “Maybe if the price the world pays for this kind of accomplishment is a real asshole doing it, well, it’s probably a price worth paying. That’s how I’ve come to think about it, anyway.” Then, after a pause, he adds, “But I wouldn’t want to be that way.”

Outsourcing may save money, but it can hurt cash flow

Monday, March 18th, 2024

Elon Musk by Walter IsaacsonA problem with the Tesla Roadster’s body panels led Musk, Walter Isaacson explains (in his biography of Elon), to ask Tim Watkins to sort out the entire system:

What he found was a nightmare. The process began in Japan, where the cells for the lithium-ion batteries were made. Seventy of these cells were glued together to form bricks, which were then shipped to a makeshift factory in the jungles of Thailand that once made barbecue grills. There they were assembled into a battery pack with a web of tubes as a cooling mechanism. These could not be flown by airplane, so they were shipped by boat to England and driven to the Lotus factory, where they were assembled into the Roadster chassis. The body panels came from the new supplier in France. The bodies with batteries would then be shipped across the Atlantic and through the Panama Canal to the Tesla assembly facility near Palo Alto. There a team was in charge of the final assembly, including the AC Propulsion motor and drivetrain. By the time the battery cells made their way into a customer’s car, they had traveled around the world.

This presented not just a logistics nightmare but also a cash-flow problem. Each cell at the beginning of the journey cost $1.50. With labor, a full battery pack of nine thousand cells cost $15,000. Tesla had to pay for them up front, but it would be nine months before those packs made it around the world and could be sold in a car to consumers. Other parts going into the long supply process likewise burned cash. Outsourcing may save money, but it can hurt cash flow.

Compounding the problem was that the design of the car, partly because of Musk’s fiddling, had gotten too complex. “It was just a flat-out burning dumpster fire of stupidity,” Musk later admitted. The chassis had become 40 percent heavier and it had to be redesigned to fit the battery pack, which invalidated the crash testing Lotus had done. “In retrospect it would have been much smarter to start with a clean-sheet design and not try to modify the Lotus Elise,” he says. As for the drivetrain, almost none of the AC Propulsion technology turned out to be viable for a production car. “We screwed the pooch six ways to Sunday,” Musk says.

When Watkins got to Tesla’s California headquarters to sort through this mess with Eberhard, he was shocked to discover that there was no bill of materials for the production of the Roadster. In other words, there was no comprehensive record of every part that went into the car and how much Tesla was paying for each. Eberhard explained that he was trying to move to an SAP system to manage such information, but he didn’t have a chief financial officer to organize the transition. “You can’t manufacture a product without a bill of materials,” Watkins told him. “There are tens of thousands of components on a vehicle, and you are getting pecked to death by ducks.”

When Watkins pieced together the true costs, he realized that things were worse than even the most pessimistic projections. The initial Roadsters off the assembly line would cost, including overhead, at least $140,000, and it would not fall much below $120,000 even after production increased. Even if they sold the car for $100,000, they would be hemorrhaging money.

It’s about building the machine that builds the machine

Monday, March 11th, 2024

Elon Musk by Walter IsaacsonBefore joining Tesla’s board, Antonio Gracias had invested in an electroplating plant in California, Walter Isaacson explains (in his biography of Elon), where he learned some important lessons:

Because Gracias spoke Spanish like most of the factory workers, he was able to learn from them where the problems were. “I realized that if you invest in a company, you should spend all your time on the shop floor,” he says. When he asked how they could speed things up, one of the workers explained that having smaller vats for the nickel baths would make the plating go faster. Those and other worker-generated ideas succeeded so well that the factory began turning a profit, and Gracias started buying more troubled companies.

He learned one very big lesson from these ventures: “It’s not the product that leads to success. It’s the ability to make the product efficiently. It’s about building the machine that builds the machine. In other words, how do you design the factory?” It was a guiding principle that Musk would make his own.

Electric regional air mobility will disrupt aviation from below

Tuesday, March 5th, 2024

Electric regional air mobility will disrupt aviation from below, Michael Barnard argues:

Jet engines especially became more and more efficient. At least, as long as they were flying at 38,000 feet at optimal cruising speed. Modern large diameter jet engines are miracles of engineering, turning a full 50% of their fuel’s energy into forward motion under those conditions. However, when taxiing or waiting on a runway or even taking off, it’s like pouring kerosene onto the tarmac. The economics of the engines favor longer flights.

In the USA, where so many smaller aircraft were manufactured, there was another duck through the windshield, product liability. The legal environment of the era allowed virtually unlimited liability for airframes even decades after manufacturing. Insurance costs sky rocketed, many small aircraft manufacturers went out of business and larger firms stopped making smaller aircraft.

This was recognized and Congress passed the 1994 General Aviation Rehabilitation Act or GARA, which limited airframe liability to 18 years. With GARA, smaller aircraft started being produced again, albeit in smaller numbers.

[…]

The combination meant that although there are over 5,000 airports in the United States and thousands more in Europe, under 1% of them service over 70% of passengers. Once a business model is baked in, it takes something disruptive to transform it.

[…]

But why are electric airplanes cheaper to fly? For the same reason that electric cars are cheaper to drive. Electric drive trains are vastly more efficient than ones that burn fuel. While the 50% efficiency of modern jet engines is amazing and modern gas turbine aviation engines see that efficiency at optimal speeds, battery electric aviation drive trains are 95% efficient. Further, they are 95% efficient or more when rolling around on runways or sitting still. Pre-flight checks with battery electric aircraft don’t need to keep the propellor turning, something that is causing confusion on small airfields the first few times electric aircraft fly there.

And the simplicity of battery electric drive trains reduces maintenance costs as well. Instead of fuel tanks, fuel pumps, fuel lines, complex engines, exhausts, radiators and lubrication systems with many, many moving parts, electrons flow along wires from a battery to an electric motor that turns the propellors, with a single moving part in the motor. This significantly reduces the duration of all maintenance and inspection activities, allowing the plane to fly more hours with less human intervention.

And simple, battery electric, fixed wing aircraft will be cheaper to certify in the future. At present they are novel, but civil aircraft certification is an n times n safety cross check, with every combination of conditions having to be validated in manufacturing and flight tests before NASA or EASA will allow passengers to be carried. With electric aircraft, there are a lot fewer n times n combinations because there are so many fewer moving parts and sub-systems.

This doesn’t apply to the urban air mobility Jetson dreams of electric vertical take off and landing aircraft by the way. They are complex, have multiple novelties and many more failure conditions, so certification is likely to be US$1.5 billion per machine, money that companies like Archer and Joby don’t have and realistic assessments of their business cases don’t support. More on that in a future article.

Battery energy density is not as significant a constraint as many have been assuming. Yes, batteries carrying the same energy as aviation fuels are much heavier than the fuels, but the efficiency cuts into that. With current energy density and smaller aircraft, ranges of over 200 miles are easily achievable. With CATL’s new condensed matter batteries, shipping this year, double that range with the same weight is viable.

[…]

Automating aircraft flight is actually easier than automating driving to work. Airport aprons and runways are carefully controlled environments with many fewer moving vehicles, much lower speeds and no children on tricycles. Once in the air, it’s actually quite hard to hit anything except the ground. There isn’t a lot up there and there’s a lot of room in all directions to go around anything which shares airspace. Autopilots have been able to land and takeoff for a long time and big jets frequently use it, especially in low wind, low visibility circumstances. although there is still plenty of pilot involvement and oversight.

[…]

The lingua franca of air traffic control will change from English to computerese, with humans overseeing the process.

When that occurs, the pilots can leave the cockpits and oversight can be from the ground. This is starting with smaller cargo aircraft flying carefully designed low-risk routes. No school yards will be overflown for years.

How scrappy and non-Boeing-like were the SpaceX crew on Kwajalein?

Monday, March 4th, 2024

Elon Musk by Walter IsaacsonHow scrappy and non-Boeing-like were the SpaceX crew on Kwajalein?, Walter Isaacson asks (in his biography of Elon):

In early 2006, they planned to conduct a static fire test, one that ignites the engines briefly while the rocket stays attached to the launchpad. But when they began the test, they discovered that not enough electrical power was reaching the second stage. It turned out that the power boxes designed by Altan, the goulash-cooking engineer, had capacitors that could not handle the juiced-up voltage the launch team had decided to use. Altan was horrified because the window the Army had given them for the static test ended four days later. He scrambled to put together a save.

The capacitors were available in an electronics supply house in Minnesota. An intern in Texas was dispatched there. Meanwhile, Altan removed the power boxes from the rocket on Omelek, jumped on a boat to Kwaj, slept on a concrete slab outside of the airport waiting for the early-morning flight to Honolulu, and made the connection to Los Angeles, where he was picked up by his wife, who drove him to SpaceX headquarters. There he met the intern, who had arrived from Minnesota with the new capacitors. He swapped them into the faulty power boxes and rushed home to change clothes during the two hours it took for the boxes to be tested. Then he and Musk jumped into Musk’s jet for the dash back to Kwaj, taking the intern with them as his reward. Altan hoped to sleep on the plane—he had been awake for most of forty hours—but Musk bombarded him with questions on every detail of the circuitry. A helicopter whisked them from the Kwaj airstrip to Omelek, where Altan put the repaired boxes onto the rocket. They worked. The three-second static fire test was a success, and the first full launch attempt of Falcon 1 was scheduled for a few weeks later.

It was both correct and costly

Sunday, February 25th, 2024

Elon Musk by Walter Isaacson “We only get to release our first car once,” Musk told Eberhard, Tesla’s CEO at the time, “so we want it to be as good as it can be.” Walter Isaacson explains (in his biography of Elon), how this played out:

One major design revision that Musk made was to insist that the door of the Roadster be enlarged. “In order to get in the car, you had to be a dwarf mountain climber or a master contortionist,” he says. “It was insane, farcical.” The six-foot-two-inch Musk found he had to swing his rather large butt into the seat, fold himself into nearly a fetal position, then try to swing his legs in. “If you’re going on a date, how is a woman even going to get in the car?” he asked. So he ordered that the bottom of the door’s frame be lowered three inches. The resulting redesign of the chassis meant that Tesla could not use the crash-test certification that Lotus had, which added $2 million to the production costs. Like many of Musk’s revisions, it was both correct and costly.

Musk also ordered that the seats be made wider. “My original idea was to use the same seat structures that Lotus used,” Eberhard says. “Otherwise, we would have to redo all the testing. But Elon felt that the seats were too narrow for his wife’s butt or something. I got a skinny butt, and I kind of miss the narrow seats.”

Musk also decided that the original Lotus headlights were ugly because they had no cover or shield. “It made the car look bug-eyed,” he says. “The lights are like the eyes of a car, and you have to have beautiful eyes.” That change would add another $ 500,000 to the production costs, he was told. But he was adamant. “If you’re buying a sports car, you’re buying it because it’s beautiful,” he told the team. “So this is not a small deal.”

Instead of the fiberglass composite material that Lotus used, Musk decided that the Roadster body should be made from stronger carbon fiber. That made it costlier to paint, but it also made it lighter while feeling more solid.

[…]

No detail was too small to escape Musk’s meddling. The Roadster originally had ordinary door handles, the kind that click open a latch. Musk insisted on electric handles that would operate with a simple touch. “Somebody who’s buying a Tesla Roadster will buy it whether it has ordinary door latches or electric ones,” Eberhard argued. “It’s not going to add a single unit to our sales.”

[…]

Eberhard finally got pushed to despair when, near the end of the design process, Musk decided that the dashboard was ugly. “This is a major issue and I’m deeply concerned that you do not recognize it as such,” Musk wrote. Eberhard tried to put him off, begging that they deal with the issue later. “I just don’t see a path — any path at all — to fixing it prior to start of production without a significant cost and schedule hit,” he wrote. “I stay up at night worrying about simply getting the car into production sometime in 2007…. For my own sanity’s sake and for the sanity of my team, I am not spending a lot of cycles thinking about the dashboard.”

[…]

By modifying so many elements, Tesla lost the cost advantages that came from simply using a crash-tested Lotus Elise body. It also added to the supply-chain complexity. Instead of being able to rely on Lotus’s existing suppliers, Tesla became responsible for finding new sources for hundreds of components, from the carbon fiber panels to the headlights. “I was driving the Lotus people crazy,” Musk says. “They kept asking me why I was being so hardcore about every little curve of this car. And what I told them was, ‘Because we have to make it beautiful.’”

All requirements should be treated as recommendations

Sunday, February 18th, 2024

Elon Musk by Walter IsaacsonWhenever one of Musk’s engineers cited “a requirement” as a reason for doing something, Walter Isaacson explains (in his biography of Elon), Musk would grill them:

Who made that requirement? And answering “The military” or “The legal department” was not good enough. Musk would insist that they know the name of the actual person who made the requirement. “We would talk about how we were going to qualify an engine or certify a fuel tank, and he would ask, ‘Why do we have to do that?’ ” says Tim Buzza, a refugee from Boeing who would become SpaceX’s vice president of launch and testing. “And we would say, ‘There is a military specification that says it’s a requirement.’ And he’d reply, ‘Who wrote that? Why does it make sense?’ ” All requirements should be treated as recommendations, he repeatedly instructed. The only immutable ones were those decreed by the laws of physics.

When Mueller was working on the Merlin engines, he presented an aggressive schedule for completing one of the versions. It wasn’t aggressive enough for Musk. “How the fuck can it take so long?” he asked. “This is stupid. Cut it in half.”

Mueller balked. “You can’t just take a schedule that we already cut in half and then cut it in half again,” he said. Musk looked at him coldly and told him to stay behind after the meeting. When they were alone, he asked Mueller whether he wanted to remain in charge of engines. When Mueller said he did, Musk replied, “Then when I ask for something, you fucking give it to me.”

Mueller agreed and arbitrarily cut the schedule in half. “And guess what?” he says. “We ended up developing it in about the time that we had put in that original schedule.” Sometimes Musk’s insane schedules produced the impossible, sometimes they didn’t. “I learned never to tell him no,” Mueller says. “Just say you’re going to try, then later explain why if it doesn’t work out.”

[…]

The sense of urgency was good for its own sake. It made his engineers engage in first-principles thinking. But as Mueller points out, it was also corrosive. “If you set an aggressive schedule that people think they might be able to make, they will try to put out extra effort,” he says. “But if you give them a schedule that’s physically impossible, engineers aren’t stupid. You’ve demoralized them. It’s Elon’s biggest weakness.”

Steve Jobs did something similar. His colleagues called it his reality-distortion field. He set unrealistic deadlines, and when people balked, he would stare at them without blinking and say, “Don’t be afraid, you can do it.” Although the practice demoralized people, they ended up accomplishing things that other companies couldn’t. “Even though we failed to meet most schedules or cost targets that Elon laid out, we still beat all of our peers,” Mueller admits. “We developed the lowest-cost, most awesome rockets in history, and we would end up feeling pretty good about it, even if Dad wasn’t always happy with us.”

After a few years, SpaceX was making in-house 70 percent of the components of its rockets.

Sunday, February 11th, 2024

Elon Musk by Walter IsaacsonMusk was laser-focused on costs, Walter Isaacson explains (in his biography of Elon):

He challenged the prices that aerospace suppliers charged for components, which were usually ten times higher than similar parts in the auto industry.

His focus on cost, as well as his natural controlling instincts, led him to want to manufacture as many components as possible in-house, rather than buy them from suppliers, which was then the standard practice in the rocket and car industries. At one point SpaceX needed a valve, Mueller recalls, and the supplier said it would cost $ 250,000. Musk declared that insane and told Mueller they should make it themselves. They were able to do so in months at a fraction of the cost. Another supplier quoted a price of $ 120,000 for an actuator that would swivel the nozzle of the upper-stage engines. Musk declared it was not more complicated than a garage door opener, and he told one of his engineers to make it for $ 5,000. Jeremy Hollman, one of the young engineers working for Mueller, discovered that a valve that was used to mix liquids in a car wash system could be modified to work with rocket fuel.

After a supplier delivered some aluminum domes that go on top of the fuel tanks, it jacked up the price for the next batch. “It was like a painter who paints half your house for one price, then wants three times that for the rest,” says Mark Juncosa, who became Musk’s closest colleague at SpaceX. “That didn’t make Elon too enthusiastic.” Musk referred to it as “going Russian” on him, as the rocket hucksters in Moscow had done. “Let’s go do this ourselves,” he told Juncosa. So a new part of the assembly facility was added to build domes. After a few years, SpaceX was making in-house 70 percent of the components of its rockets.

It is a perfect target for digital destruction

Wednesday, February 7th, 2024

Burn Book by Kara SwisherKara Swisher was a reporter at the Washington Post in the early 1990s, where, at age 30, she was the “young” person in the newsroom, so she had to cover digital media:

During that period, I made one prediction that started coming true much more quickly than even I expected. This was about the end of old media, starting with the destruction of one of its most important economic pillars: the classified ads in newspapers.

In 1995, a quirky programmer in San Francisco named Craig Newmark started emailing friends a list of local events, job opportunities, and things for sale. The next year, he turned Craigslist into a web-based service and eventually started expanding it all over the country and the world.

It was clear this list was a giant killer, and I told everyone who would listen to me at the Post that we needed to put all the money, all the people, and all the incentives into digital. I insisted that the bosses had to make readers feel like digital was the most important thing. But the bosses never did because the business they knew was the physical paper. I relayed my worries about the turtle pace of digital change many times to the Washington Post Company’s affable CEO, Don Graham, the son of legendary publisher and surprisingly entertaining badass Katharine Graham. Don Graham was inexplicably humble and even sheepish about his power. The very worst thing that Graham — always apologetic for having interrupted me, as I strafed big retail advertisers in my stories about the sector’s decline locally — would say to me was “Ouch.” Then he would saunter away from my desk with a jaunty wave. And while Graham was interested when I talked about what Newmark was doing, he laughed when I told him that Craigslist would wipe out his classifieds business.

“You charge too much, the customer service sucks, it’s static, and most of all, it doesn’t work,” I lectured him about this business, which was crucial to his bottom line. “It will disappear as an analog product, since it is a perfect target for digital destruction. You’re going to die by the cell and not even know it until it’s over and you’re dead on the ground.”

Don smiled at me with a kindness I certainly did not deserve at that moment. “Ouch,” he said.

The Post, of course, is now owned by a tech mogul, Jeff Bezos, and other Silicon Valley machers have taken over or invested heavily in legacy media, but they have not prevented its relentless decline, or the hemorrhaging of thousands of jobs from the industry in just the past few years, as the digital world has both sucked up and diminished print business models.

Rockets had an extremely high idiot index

Sunday, February 4th, 2024

Elon Musk by Walter Isaacson“I was pretty mad,” Elon Musk said about his failed attempt to buy Russian rockets, “and when I get mad I try to reframe the problem.” Walter Isaacson explains (in his biography of Elon) how Musk employed first-principles thinking:

This led him to develop what he called an “idiot index,” which calculated how much more costly a finished product was than the cost of its basic materials. If a product had a high idiot index, its cost could be reduced significantly by devising more efficient manufacturing techniques.

Rockets had an extremely high idiot index. Musk began calculating the cost of carbon fiber, metal, fuel, and other materials that went into them. The finished product, using the current manufacturing methods, cost at least fifty times more than that.

[…]

So on the flight home, he pulled out his computer and started making spreadsheets that detailed all of the materials and costs for building a midsize rocket.

[…]

“Hey, guys,” he said, showing them the spreadsheet, “I think we can build this rocket ourselves.” When Cantrell looked at the numbers, he said to himself, “I’ll be damned — that’s why he’s been borrowing all my books.”

Vacations will kill you

Sunday, January 28th, 2024

Elon Musk by Walter IsaacsonMusk’s ouster as PayPal CEO allowed him to have his first weeklong holiday from work, Walter Isaacson explains (in his biography of Elon):

After getting back to Palo Alto in January 2001, Musk started feeling dizzy. His ears were ringing, and he had recurring waves of chills. So he went to the Stanford Hospital emergency room, where he started throwing up. A spinal tap showed he had a high white blood cell count, which led the doctors to diagnose him with viral meningitis. It’s generally not a severe disease, so the doctors rehydrated him and sent him home.

Over the next few days he felt progressively worse and at one point was so weak he could barely stand. So he called a taxi and went to a doctor. When she tried to take his pulse, it was barely perceptible. So she called an ambulance, which took him to Sequoia Hospital in Redwood City. A doctor who was an expert in infectious diseases happened to walk past Musk’s bed and realized that he had malaria, not meningitis. It turned out to be falciparum malaria, the most dangerous form, and they had caught it just in time. After symptoms become severe, as they had in Musk’s case, patients often have only a day or so before the parasite becomes untreatable. He was put into intensive care, where doctors stabbed a needle into his chest for intravenous infusions followed by massive doses of doxycycline.

The head of human resources at X.com went to visit Musk in the hospital and sort out his health insurance. “He was actually only hours from death,” the executive wrote in an email to Thiel and Levchin. “His doctor had treated two cases of falciparum malaria prior to treating Elon—both patients died.” Thiel remembers that he had a morbid conversation with the HR director after learning that Musk had taken out, on behalf of the company, a key-man life insurance policy for $ 100 million. “If he had died,” Thiel says, “all of our financial problems were going to be solved.”

[…]

Musk remained in intensive care for ten days, and he did not fully recover for five months. He took two lessons from his near-death experience: “Vacations will kill you. Also, South Africa. That place is still trying to destroy me.”

Entrepreneurs are actually not risk takers

Sunday, January 21st, 2024

Elon Musk by Walter IsaacsonWhat struck Elon Musk’s colleagues at PayPal, Walter Isaacson explains (in his biography of Elon), was his willingness, even desire, to take risks:

“Entrepreneurs are actually not risk takers,” says Roelof Botha. “They’re risk mitigators. They don’t thrive on risk, they never seek to amplify it, instead they try to figure out the controllable variables and minimize their risk.” But not Musk. “He was into amplifying risk and burning the boats so we could never retreat from it.” To Botha, Musk’s McLaren crash was like a metaphor: floor it and see how fast it goes.

That made Musk fundamentally different from Thiel, who always focused on limiting risks. He and Hoffman once planned to write a book on their experience at PayPal. The chapter on Musk was going to be titled “The Man Who Didn’t Understand the Meaning of the Word ‘Risk.’ ” Risk addiction can be useful when it comes to driving people to do what seems impossible. “He’s amazingly successful getting people to march across a desert,” Hoffman says. “He has a level of certainty that causes him to put all of his chips on the table.”

It was like walking into a mob scene

Sunday, January 14th, 2024

Elon Musk by Walter IsaacsonIn the early days of PayPal, Walter Isaacson explains (in his biography of Elon), Musk and Michael Moritz went to New York to see if they could recruit Rudy Giuliani to be a “political fixer” for becoming a bank:

But as soon as they walked into his office, they knew it would not work. “It was like walking into a mob scene,” Moritz says. “He was surrounded by goonish confidantes. He didn’t have any idea whatsoever about Silicon Valley, but he and his henchmen were eager to line their pockets.” They asked for 10 percent of the company, and that was the end of the meeting. “This guy occupies a different planet,” Musk told Moritz.