An Important Lesson
People don’t ‘make’ mistakes, they make decisions which turn out to be errors. Scott Alexander seems unaware of ‘trial and error’, which is the way Humans progress.
He's human, and so he's not infallible, and he'd rather spend his time doing things than try to be perfect. You don't gain so much going from 95%-100% perfection.
But, let's note that Musk CAN be perfectionist, when he needs to be. He has excellent intuition about what he needs to be perfectionist about.
The funny thing for me is how people get exposed to Musk’s decision making through Twitter (which is really an unique opportunity to see how one of the most-successful businessperson in the world thinks), and they come away thinking “wow, he’s an idiot.” Instead of thinking, “wow, what am I missing about what makes for a successful person?” (I.e., for Alexander, maybe Musk isn’t a “paradox” at all...)
The exceptionally successful people I know, particularly in the business setting, really don’t behave like you think they should behave, usually in very surprising ways.
It is likely Alexander, in that essay, is simply misidentifying mistakes. Musk has done a lot of things I thought were mistakes in the past. I have learned to give him the benefit of the doubt.
Alexander’s excellent book review provides a balanced and interesting psychological analysis of Musk. Musk is one of those characters one can’t resist thinking of in terms of The Republic of Plato and Cicero’s De Officiis: Musk, more than any other business elite, seems to stick to his role as businessman and to keep his political involvement to voicing matters of opinion. Unlike Jeff Zuckerberg, Larry Fink, and Bill Gates, for example, he seems like the one least convinced that he has seen beyond the shadows in the cave and does not mistake his calling for that of the philosopher king. One gets the sense, that Lincoln’s admonition that "No man is good enough to govern another man, without that other's consent" would be most readily embraced by Musk than his peers. Musk is a visionary businessman, nothing more, nothing less. He may play the despot in the workplace, but that is the narrow function of the competent executive. Musk doesn’t seem to play at being globalist ESG philosopher king, and that may be why he is richer than the other guys, mistakes and all.
“The greater our prosperity, moreover, the more should we seek the counsel of friends, and the greater the heed that should be given to their advice. Under such circumstances also we must beware of lending an ear to sycophants…” And from Alexander’s essay, one gets the sense that this too adds to Musk’s success as well as fostering a resilience that can absorb mistakes.
As an aside, Musk can also be used to illustrate the differences between two alternative definitions of “elite” and the definition of “establishment.” “Elite” can mean “The best or most skilled members of a group” and it can also mean “A group or class of persons considered to be superior to others because of their intelligence, social standing, or wealth.” These alternative definitions are frequently conflated such that say business elites such as Musk and the other, that is, those who are among the best and most skilled in the art of business, are also taken to also be superior in every regard to other people and “good enough to govern another man” with or without that other’s consent. Musk does not fall into that latter group. Which is why he is also not a member of the “establishment” when using that word as defined as “the important and powerful people who control a country or an organization, especially those who protect existing patterns of patronage and clientelism.” Musk is a powerful illustration then of why the word “elite” should be used sparingly and precisely without conflating its alternative meanings, and the word “establishment” as defined above should be used in most contexts.
It is amusing to see Scott Alexander, a smart guy, expatiate on Elon Musk's supposed bad business decisions. This reminiscent of the many pundits who had strong opinions about presidential candidate Trump's mistakes during his 2015 - 2016 campaign which, they assured us, meant that he couldn't win.
Are all Musk's decisions really "business decisions"? Musk is rich enough that he may have other motives than profit maximization for the moves he makes.
Great post and important framing of business reality. (In a similar vein, my slightly snarky take on Elon is that he is doing a great service for potential entrepreneurs of the overly perfectionist type. Those who would otherwise be intimidated by Elon's success, assuming he has sheer superhuman capabilities, can suddenly see him making some really dumb decisions in real time. So there must be something else at work, i.e. you don't have to be perfect. Or as per the famous quip of the camper in the woods who is putting on his running shoes after he and his mate have been confronted by a bear: I don't need to outrun the bear, I just have to be faster than you.)
"Netscape had the worst products." => This is one of the reasons I always distrusted Marc Andreessen as a technology commentator. Netscape was his product and it was pretty horrible.
I think Musk also succeeds because he keeps focused on a long term vision. While people debate this move or that move, he’s lowering the price of Telsas to expand the market. He knows in the end that data and an installed base will be more important in a world of driverless or near driverless cars. I don’t think anyone else in the industry has even thought of that.
Good piece. The person who is visibly constantly running into expensive rakes is not the "most focused person in the world". Bad analysis by SSC.
Also what does he exactly mean by "I tend believe X will be a success". What does success for X mean according to SSC? Is X just exisitng a success or becoming the $3 trillion company the Musk fans have been saying it will be since he acquired it. If its such a great bet then why did Musk try to lie to the Chancellery court and get out of the deal? Why is it so hard to believe he stepped on yet another implusive $40B rake and see what's plainly obvious rather than see some 4D angle to it? He did not want to buy the company despite his lies. His actions during the acquisition and the various attempts to get out of the bad deal speaks stronger than his words which are self-serving on a Trumpian level.
Also, no, the user experience is not the same on X after firing 80-90% of the staff. It is noticably worse. Does SSC even use Twitter?
Also a social media company is not measured purely on "user experience". There is no moat for social media companies other than network effects. When you bring your company into serious disrupte you risk your company's moat so company is not on firm reputational and network effects ground as it was pre-Elon. And I say this someone who likes his (some) of the anti-censorship stance (on other instances of censorship where he obliges he's just lying and hypocriticial -- see the whole Elon-Yglesias censorship back and forth to see what I mean https://www.firstpost.com/world/elon-musk-calls-journalist-numbskull-for-pointing-out-jump-in-twitter-censorship-12659912.html).
Twitter is by Elon own admission down by 90% in value, so how is it "doing well" and how could SSC possibly not mention this or even factor it into his own prediction that X will be a "success"?
Also there is nothing in the post about the dozens of lawsuits and the downright shameful non-payment of bills to vendors, non-payment of rents at various of its locations. The richest man in the world is stiffing vendors and landlords and this doesn't even get a mention? He nuked part of the company and he nuked the departments that took care of the bills (just like he nuked the ad departments that were bringing in money through good customer relations people though the ad algos were terrible). He is on track to pay a lot of fines for stiffing vendors and ex-X employees. That is not is X "doing well".
Uncharacterisically bad analysis by SSC.
Thanks for notes on errors - still underdiscussed. Type 1 "false positive" errors and Type 2 "false negative" errors are so hugely important to so many areas. All buy / not buy decisions; ask / don't ask; accept offer/ don't accept; do / don't do.
But this note fails to separate binary yes/no decisions, from analog/ continuous gradations. Business decisions, like many decisions, depend also on implementation, which is more a matter of more or less optimal. Doing the right thing, as well as you con do it. Rather than doing the thing in the best way - which is not so great if it's the wrong thing.
It's most important to be doing the right thing.
Scott's notes on Musk note especially that Musk is great at doing the things in the best way, as with doors: "coined as “falcon-wing doors.” They’re hinged versions of the gull-wing doors found on some high-end cars like the DeLorean. The doors go up and then flop over in a constrained enough
way that the Model X won’t rub up against a car parked close to it or hit the ceiling in a garage."
I've long liked gull-wings, as well as rear hinged suicide doors. The flop over hinge seems excellent - and many customers talk about it, and it happened because of Musk.
That's business genius - like Steve Jobs also had (to whom Musk is compared).
Musk's ability to keep track of detailed engineering issues in his head, correctly yet also deeply, allows him to bypass most middle managers, and their financial as well as business consideration delay costs. Faster & cheaper & so far, technically, better.
Tho maybe not X (ex-Twitter) so far.
Sort of too bad we don't have more Musk level CEOs of tech companies.
I don't see what kind of Type II error Musk's obsession with George Soros and the JDL make less likely.
I think I agree with only minor exceptions. I would add that the mistakes Alexander lists and others I'm aware of are mostly or all after Musk got where he is. He isn't necessarily the same guy now that he was getting there. And I can't see that any of those supposed mistakes tell us much about what he did right to get there or what he might be doing right to stay there.