Elon Musk’s Lessons From Hell: Five Commandments for Business
New book by biographer Walter Isaacson explores the billionaire’s leadership style and ‘demon mode’
New book by biographer Walter Isaacson explores the billionaire’s leadership style and ‘demon mode’
Simply put: Elon Musk can be a real jerk.
And that has probably helped and hurt him in business, according to a new biography by Walter Isaacson.
In “Elon Musk,” out Tuesday, Isaacson puts forth the idea of “demon mode” to explain the temperamental impulses behind some of the tycoon’s successes—and setbacks. But it isn’t just demon mode that has fuelled his rise. Isaacson details other teachable ways the billionaire’s methods have helped make him the world’s richest man.
Both sides of Musk are sure to become part of B-school lore for a new generation of would-be entrepreneurs and business managers picking and choosing which traits and tactics to emulate.
Isaacson had previously made the concept of the “reality distortion field” popular with his bestselling 2011 book about Apple co-founder Steve Jobs and his ability to bend perception to motivate others.
Demon mode was on display in 2018 as Musk struggled to ramp up production of Tesla’s Model 3 sedan, which nearly destroyed the electric-car company and which the CEO dubbed production hell.
That experience through hell, the book says, also helped Musk shape five commandments for how he wants problems solved by his workers across his companies, from rocket maker SpaceX to social-media platform X, formerly Twitter.
Musk, in the book, calls the framework for problem solving “the algorithm.” In short, Musk urges his employees to:
“His executives sometimes move their lips and mouth the words, like they would chant the liturgy along with their priest,” Isaacson wrote of Musk’s mantra.
In the book, Musk acknowledges he talks about the approach often. “I became a broken record on the algorithm,” Musk is quoted as saying. “But I think it’s helpful to say it to an annoying degree.”
The approach builds off a long-held method for problem solving touted by Musk called first principles, a reasoning that breaks tasks into their very basics without simply reverting to what has been done before.
“The algorithm is a five-step process for not only making good products and designing good products, but manufacturing them,” Isaacson said in an interview Monday.
“It begins with first principles. He says, question every requirement, and, by first principles he means, look down at the physics. If somebody says, no, we can’t build it at this price, he says, tell me how much the materials cost. Tell me exactly what’s involved here and then tell me you can or can’t do it.”
There are other lessons in the book that Musk has long practiced, such as never asking an employee to do something you aren’t willing to do (hence his sleeping on factory floors), hiring employees based on their attitude, and saying “it’s OK to be wrong. Just don’t be confident and wrong.”
Telling Musk bad news, however, has been seen by some employees as dangerous to one’s career.
“One of his problems is people sometimes are afraid to tell him the bad news,” Isaacson said. “Those who succeed around Musk are those who figure out you got to give him the bad news even if it’s going to result in some unpleasant scenes.”
Their fear is often rooted in demon mode.
Claire Boucher, known as the musician Grimes and the mother of three of Musk’s children, coined the term in an interview with Isaacson.
“Demon mode is when he goes dark and retreats inside the storm in his brain,” Boucher said in the book. “Demon mode,” she added, “causes a lot of chaos but it also gets s— done.”
And Musk has gotten a lot done, helping usher in the electric-car era as Tesla chief executive and igniting the commercial space race with SpaceX, which he founded. His messy stewardship of X, however, is testing public perception of his business genius.
Isaacson, who shadowed Musk for two years in reporting the book, saw demon mode in person several times along with other personalities that he described as ranging from silly to charming. He suggests the roots of the dark clouds come from the 52-year-old’s childhood in South Africa.
“It’s almost like Dr. Jekyll and Mr. Hyde where a cloud comes over and he gets into a trance and he can just be tough in a cold way,” Isaacson said. “He never gets really angry, never gets that physical, but coldly brutal to people and he almost doesn’t remember afterwards what he’s done. Sometimes I’ll say, why did you say that to that person? And he’ll look at me blankly as if he didn’t quite remember what happened while he was in demon mode.”
In one instance, Isaacson described seeing demon mode emerge when Musk saw SpaceX’s launchpad in South Texas empty late one evening.
“He orders a hundred people to come in from different parts of SpaceX from Florida, California so they can all work for 24 hours a day getting this thing done even though there was no need to,” Isaacson said.
Such surges seem to play in tandem to Musk’s need for drama.
“He is a drama magnet,” Musk’s younger brother, Kimbal, said in the book. “That’s his compulsion, the theme of his life.”
Isaacson cautions that readers shouldn’t come away thinking they can be just like Musk and automatically succeed. Rather, he said, readers should see both how leaders such as Musk and the late Jobs were effective and also take away cautionary tales.
“You don’t have to be this mean,” he said.
Still, throughout his book, Isaacson chases the question of whether Musk could be successful any other way.
“I try to show how that’s one of the strands in a fabric and as Shakespeare said, we’re moulded out of our faults,” Isaacson said. “If we pull that strand out, you might not get the whole cloth of Elon Musk.”
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Super isn’t your only option. These smart strategies can help you self-fund a comfortable retirement.
Super isn’t your only option. These smart strategies can help you self-fund a comfortable retirement.
Superannuation is the first thought when it comes to self-funding retirement. Yet it is hardly the only option for doing so.
Just as we have a choice in how and where we work to earn a living, many people also have a choice in how to fund their retirement.
It is possible and sometimes preferable to leave your superannuation untouched, allowing it to continue growing. Some or all of your income can come from alternative sources instead.
Here are some alternatives you can consider.
For many who own their own homes, the equity accrued over decades can eclipse the funds in superannuation. However, it’s theoretical money only until it is unlocked.
Selling up the family home and downsizing – or rightsizing – for retirement allows you to pocket those gains tax-free and simultaneously relocate to a more suitable home with lower upkeep costs.
Up to $300,000 from the proceeds can be contributed by a downsizer to boost your super, and the remainder can be used to fund living expenses or actively invested.
Remember that while the sale proceeds of your home are tax-free, any future profits or interest earned from that money will be taxable.
Semi-retirement allows you to gradually step into retirement. You continue earning income and super while working part-time, keeping a foot in the workforce while testing the waters of your new found free time.
Doing so also offers scope to move into different roles, such as passing on your skills to future generations by teaching/training others in your field of expertise, or taking employment in a new area that interests you and is closer to home.
Retirement from a full-time position presents a good opportunity to pursue self-employment. With more time and fewer commitments on your hands, you have greater scope to turn your hobby into a business or leverage your professional skills and reputation as an external consultant.
Also, for the self-employed and those with a family business, director’s loan repayments from the company are typically tax-free, offering a potentially lucrative source of
income and a means of extracting previous investments into the business without selling your ownership stake.
Rental property income (from residential or commercial properties) can supplement or even provide a generous source of income. The same applies to dividends from shares.
These are likely to be more profitable if you own them well before retirement.
Income that is surplus to your everyday needs can be reinvested using tax-effective strategies to grow your future returns.
A family trust could be used to house investments for yourself and other relatives, building intergenerational wealth.
Trusts allow funds to be allocated to beneficiaries to manage marginal tax rates and stretch the money further, you have control over how income is split between different family members and have flexibility for changing circumstances.
You may not realise the value of items you have collected over the years, such as wine, artwork, jewellery, vintage cars, and antiques.
Rather than have them collect dust or pay to store them, they could be sold to fund your living costs or new investments.
Where possible, avoid selling growth assets in a depressed market – wait until you can extract maximum value.
Part-pensions are not only possible but valuable in making your superannuation stretch further. They still entitle you to a concession card with benefits in healthcare, transport, and more.
Take these savings even further by requesting pensioner discounts with other companies, on everything from utilities to travel and insurance to eating out.
Also, don’t overestimate the value of your assets as part of the means test. It’s a common mistake that can wrongly deny you a full or part-pension.
However, you ultimately fund your retirement, planning is crucial. Advice would hopefully pay for itself.
Understand your spending and how those habits will change before and during retirement, then look to investments that offer the best fit.
Consider a mixture of strategies to diversify your risk, manage your tax liabilities and ensure ongoing income.
Above all, timing is key. The further ahead you plan, the more time you have to embrace additional opportunities and do things at the right time to maximise their value. You’ve worked hard and now is your chance to enjoy the fruits of your labour!
Helen Baker is a licensed Australian financial adviser and author of the new book, Money For Life: How to build financial security from firm foundations (Major Street Publishing $32.99). Find out more at www.onyourowntwofeet.com.au
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