Ex-Tesla President: Elon Asked Me To 20X Sales. Here's What I Did

Part of the secret to Elon's secret sauce is he sets these order of magnitude improvement goals. So 10x

100x. He came to me and said, "Hey, look, we got to figure out how to sell cars online." Cuz nobody was buying

cars online." Cuz nobody was buying $120,000 things sight unseen online. And

so he turns to me. He says, "This is your goal. Improve digital sales by

your goal. Improve digital sales by 20x." So now it's like, "Oh crap, I got

20x." So now it's like, "Oh crap, I got to think way differently about this."

All right. So, I guess to start, I mean, I almost want to rename the podcast How Lucky Are We. It's like, oh, we get to sit here with with a guy who was the president of one of the most important companies of our time, Tesla, for years.

You got to work with one of the greatest entrepreneurs ever, Elon. You yourself

have this crazy entrepreneurial track record. You've built and sold,

record. You've built and sold, you know, five, six different startups.

You're like the Force Gump of the tech industry, just going into different spaces. and you go into, you know, uh,

spaces. and you go into, you know, uh, auto repair and cyber insurance and all these different spaces. And so I'm pretty fascinated that we get to talk today and I got a bunch of questions for

you, but I want to start with less of a tactical question and more of a a movie scene. So, um, you go into a job

scene. So, um, you go into a job interview with Elon Musk. It might not have even felt like it was a formal job interview, but your first conversation with him. Uh, what's that like?

with him. Uh, what's that like?

All right. So, uh, the setup to the scene is we're introduced by a mutual friend and he is intense, uh, and the nicities were about two sentences and then he said, "Hey, I got this problem

in manufacturing. Have you ever seen it

in manufacturing. Have you ever seen it before?" And then we were right into it

before?" And then we were right into it and 2 hours flew by cuz I had had that experience in manufacturing. I'd seen

that problem. We started to break it down together and then we started to move deeper and deeper and deeper into the problem and uh, we looked up in two hours he was like, "Oh man, like I I got

let out of this. I got to go. Uh I'm

going to go down to the factory floor and do what we just talked about.

So that's the first that's the first combo.

He's uh So you're problem solving together. He skips a small talk and then

together. He skips a small talk and then is he testing you or he's just genuinely trying to solve the problem right now?

Like did you get any sense of he was poking around to see kind of where your capacity was or he was literally just Oh yeah, that's No, that's exactly what he was up to. So his hiring method is he

wants to determine whether or not you can do world class work and his method is to interrogate a particular problem and go super deep on it. And uh it's

better if he tries to skew it to a problem that he knows, right?

So that he can bullshitting.

Exactly. and he can take you do super deep because he's in it and he he just likes to know like almost like a video game like how many layers can this player get through before they're

stumped and so that's exactly what was going on. We were getting to know each

going on. We were getting to know each other but 90% of it was he was evaluating later when you worked there and you're the president. Did he try to teach you

the president. Did he try to teach you kind of the the method or say like hey here's what I'm doing when I'm interviewing? is I'm assuming for the

interviewing? is I'm assuming for the first X hires at Tesla, the key hires, I think I've I've read something before that he interviewed the first thousand people at SpaceX. I don't know if that's kind of like folklore or real, but you

know, the idea that he's he's basically figured out how he likes to hire. Did he

try to implement that with you and others so that it's uh the whole team is is hiring that way or he just does it in his own idiosyncratic way? You do

whatever you want to do. I'm glad you raised this because this is a hack I don't get to in the book, but it's the thing that a lot of entrepreneurs think about, which is as your company scales, how do you protect the culture, right?

And he and Jamie Strable, the co-founder of of Tesla, came up with this method to imprint the culture on every hire and to test for culture. And that was they

would be the last interviews. That's a

hack that I've taken forward now uh from from that Elon experience uh and now I do that too. But the way that translated was that he would say like he said to

me, "Hey, look, we now as fast as this thing is growing, we're going to split this up and you and I are going to interview everybody that's hired at a manager level and above." So, we didn't interview everybody, but growing from 4

to 40,000 employees, there were a lot of interviews we were doing. In fact, 60% of my calendar was interviews.

Wow. 60%. That's unbelievable.

Yeah. But it was super important because you totally win and lose on talent. So

like that's another hack for entrepreneurs to think about is how much of your calendar is devoted to the number one driver of your success which is talent, right?

Um but he told to your the point of your question he said hey we have to determine whether or not these people can demonstrate evidence that they can be world class

and to do that we've got to dive deep into these problems. So he basically articulated what he had done with me as we were getting to know each other and going through that uh interview process.

And then we sort of divide and conquered like we literally were the last interview. And oftentimes I would

interview. And oftentimes I would include in my senior senior hires uh I would include JB and Elon because they were both such great talent

selectors. JB especially has this

selectors. JB especially has this unbelievable knack for talent selection.

And what did you pick up? So what's the what's the uh Okay, so I hear the the overall method which is you want to be looking for this sort of um world-class work evidence of exceptional ability.

You are going to how do you do that? You

go super deep on a problem that they've worked on or that you understand. I've

heard Elon say a couple of things that I liked which was he's like I'm trying to say wow wow wow in the first 20 minutes and if I'm not saying wow wow in the first 20 minutes it's probably not thereact and trust trust the conversation not the resume cuz you could have a great resume but if the

conversation is not giving you wow wow wow it's not there and if it is forget the resume it's you know this is legit.

So I picked up a couple of extra things in the over the years and some of his interviews but I would love you know for to go from white belt to blue belt here.

So what what are the nuances? What is a little what's a question? What's a uh a little red flag or a trap that you've learned to to avoid?

So, one trap to like try to identify is did this person actually do the work or are they claiming the work of their team? In other words, a lot of us have

team? In other words, a lot of us have been on teams of eight or 10 or 20 that have done unbelievable work. We've been

on those teams, but it wasn't our work. We weren't

leading the team. We weren't leading the curiosity or the discovery or whatever.

And so that's the trap that you're trying to like dive into so deeply in the problem that you start to determine did this person actually do the work or not. And it's tricky because there are

not. And it's tricky because there are companies that are fully matrixed. So

take like uh Nike. Nike is a fully matrixed organization. You pull a

matrixed organization. You pull a marketer out of Nike. That marketer has never had uh full P&L responsibility, full creative responsibility, full distribution responsibility. They have a

distribution responsibility. They have a very nichy job. And it's really hard to determine did this person do the work or not. And so you go way deep on trying to

not. And so you go way deep on trying to figure that out knowing that it's a risky hire to hire from a matrix like that because you really can't put your finger on who really does the uh the

breakthrough work. That's kind of that's

breakthrough work. That's kind of that's one. The second is I would present a

one. The second is I would present a much like Elon did with me. I'd flip the tables and present a current problem of mine and then I want to see their level

of curiosity, their level of analytics, their level of problem solving, uh their their ability to ask really great questions to get some data from me and get me engaged, right?

And so it's basically it's it's that basic like go into a problem of theirs, then flip the table and go into a problem of yours. And that's that's the knack of Tesla. It was like let's turn

complex into simple. And so, uh, and so if you've been a leader there, you can identify these leaders because they have the ability within a minute or two to take a really complex question

and boil it down into principle.

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out. It's totally free and totally awesome.

I've had the the two traps you just mentioned. I've had the exact

mentioned. I've had the exact experience. said in the last week I

experience. said in the last week I interviewed somebody, they're like, "Oh, yeah. I was there from 1 million of

yeah. I was there from 1 million of revenue to 93 million of revenue." Oh,

fantastic. They weren't the one driving that revenue. So, it's not even they're

that revenue. So, it's not even they're claiming the work of their team. It's

they're claiming the progress of the overall company and they lived in this corner over here that had nothing to do with driving the growth. And they really didn't understand, oh, the core engine of this business is is A, you worked on

B over here. And it's like, I need to find people who the guy who built A because A was the reason that business won. And that's what we're actually

won. And that's what we're actually trying to understand and and trying to trying to do our own version of. So I've

definitely felt that. And then the other side is there's people who have come from these great companies. Nike, I'm a marketer at Nike. Well, Nike has great marketing. And so your brain associates

marketing. And so your brain associates this like level of talent, but they're not maybe the people who were there at the beginning, the ones who made the key decisions. Or one thing that I found is

decisions. Or one thing that I found is um with sales people, there's a great piece of advice I think from Ben Horowitz or someone. He's like, "Hire the salespeople from the ones who had the the shitty product." He's like, "If

you hire a salesperson from the the people whose the product was just being pulled by the market, they, you know, the fish were jumping in the boat and you don't know if that person's a great fisherman just because they were just being handed inbound, organic, warm

leads, and they were closing them."

That's that doesn't mean anything. You

want to go to the guy who was selling on the the tier three company, still beating quota, um, even though their company was not the winner, their product was not the hot one, because that person actually knows how to sell.

And that's really helped me with some of my companies. So there's these like

my companies. So there's these like small heruristics that can actually like improve talent selection and sourcing.

I I 100% agree with that. Like our head of retail came to me uh and he said, "Hey, I'm hiring a lot of Apple people from Apple stores." And I said, "Time out.

You can work in an Apple store and you are an order taker, right?

Go down the hall to the people at the Microsoft store who have to sell a slate two doors down from a m MacBook Air.

Those people know how to sell." Like the fact that they're they're not starving is unbelievable. So go hire them.

is unbelievable. So go hire them.

Well, one of the stories I loved in the book, so I have I have the book here. So

I'm like highlighting all my favorite stories as we go. But you have a sale a Tesla sales story. Can you explain tell that story? I thought it was a great

that story? I thought it was a great one.

So the context is uh Elon and I are having these discussions. We're getting

to know each other. And uh eventually he pops the question. He said, "Why don't you join?" My first reaction is I'm not

you join?" My first reaction is I'm not sure I'm your guy. Like your company's twice as big as my biggest company already. Don't you need a big company

already. Don't you need a big company guy? And he says, "No, no, I I that's

guy? And he says, "No, no, I I that's the opposite of what I need. I need a fellow entrepreneur who knows what it's like."

like." You need them.

Yeah, totally. He's like, "I need a I need a fellow entrepreneur who knows what it's like to chew glass and look into the abyss." His famous quote. Uh

and you know how to allocate capital and no big company person's going to know that. So I said, "Why don't why don't

that. So I said, "Why don't why don't you let me go poke around the business?

What is your biggest challenge right now?" And he said, "Oh, biggest

now?" And he said, "Oh, biggest challenge is top line." like we've promised this this street we're going to sell 12,000 cars this quarter and it's a month and a half in we've sold three.

I'm like, "Oh crap, that's a big problem." I said, "I tell you what, I'm

problem." I said, "I tell you what, I'm traveling a ton the next week. I'll call

you in a week." So, I went out as I was traveling to Tesla stores and I test drove cars. So, your first move was to

drove cars. So, your first move was to mystery shop, which I like, by the way, cuz cuz you get this idea that it's all intellectual. It's all strategy, and

intellectual. It's all strategy, and you're like, "No, no, let me go, let me go see groundf flooror truth of what's going on."

going on." Totally. I'd read the Sam Walton

Totally. I'd read the Sam Walton biography. Uh, and the biggest thing I

biography. Uh, and the biggest thing I pulled out of that book was the management hack of secret shopping because you get to sense like frontline employees knew exactly what's wrong with the company. They will tell you what the

the company. They will tell you what the customers are complaining about. They'll

tell you what the the organization sucks at. And so that was my first instinct

at. And so that was my first instinct like go to the front lines. So I go to eight stores, I test drive, use different email addresses so they don't know who I am. And the test drive is supposed to be the fulcrum of the sales

funnel. Like you hit the accelerator and

funnel. Like you hit the accelerator and you can't stop thinking about buying a Tesla, right?

I didn't get a single call back. And

Elon had introduced me to the head of sales ops. So I called the guy. I said,

sales ops. So I called the guy. I said,

"Can you tell me why I'm not getting called back?" And he said, "I looked at

called back?" And he said, "I looked at the system. you're not fly like I have

the system. you're not fly like I have no idea. I said, "Okay, tell me how many

no idea. I said, "Okay, tell me how many people have gotten a test drive in the last 30 days that haven't been called back." So he cranks through the CRM and

back." So he cranks through the CRM and he comes back and says 9,000. And I'm

like, "9,000? You're going to make your corner if you just call these people."

I said, "Okay, look, this problem has to get solved now." So I'm kind of in CEO mode and um like this problem has to get solved now. can you cut off any new

solved now. can you cut off any new leads to salespeople until they call all their previous test drives back? He's like, "Yeah, I can

drives back? He's like, "Yeah, I can block that in the system." I said, "Okay, do it." He's like, "Great. It'll

be done in two hours globally."

They weren't calling back not out of laziness, but because the incentive structure, right? They were getting they

structure, right? They were getting they the sort of commission was tied to the test drive, right? Not onto not to sales that closed from a follow-up. Is that

what there was some incentive problem?

Correct. There was there was an incentive problem, but there was also a profile problem. We were hiring people

profile problem. We were hiring people that didn't know how to ask for the sale. Uh, and that was the root cause.

sale. Uh, and that was the root cause.

So, when you forced them to uh then uh then stuff started moving. So, I talked to the guy the next day. He's like, I already have the results out of Asia and Europe and like sales are flying. And I

said, I said, no surprise. Like, all you have to do is call people back like if you want to close a sale. Um, and then it dawned on me, "Oh crap, I made this

decision like I was the CEO. I don't

even work for Tesla yet."

And so I said to the guy like, "I got to call Elon and tell him what we did." Uh,

and I said, "I'll take the blame. You're

not going to take the blame. I'll take

the blame." And so I called Elon. I

said, "Man, I got to I got to beg your forgiveness. I haven't I haven't not

forgiveness. I haven't I haven't not been a CEO for 20 years. I've had six companies. I've haven't had a boss." And

companies. I've haven't had a boss." And

when I see a problem, I want it gone like immediately. And so, here's the

like immediately. And so, here's the problem I saw on your topline challenge.

Here's what's happening in your stores.

Here's the change we made yesterday. And

by the way, I think with this change, you're going to make a quarter.

Mhm.

Long silence, like uncomfortable silence. This is before I knew about the

silence. This is before I knew about the signature Elon. Long silence. And uh

signature Elon. Long silence. And uh

what are we talking 30 10 seconds? 30

seconds.

It had to be at least 60. And to the point where I was just about ready to ask him, "Are you still there?

And what I have now come to learn is like that's his processing mode. He

shuts down all other sens sensory inputs and he just lets the compute run.

It's literally like AI, right? You can

say go to go to think mode and it just it'll take time.

That is the think harder button. So uh

he comes back on. He says you know what I think you're going to fit in here just fine. You've proven to yourself and to

fine. You've proven to yourself and to me you can be useful. So why don't you just join?

That's an awesome story. Yeah.

Um, and you, you know, you've done this kind of over and over again where you sort of go into problemsolving mode and I want to talk a little bit about that a little off book here because Yeah.

I was at a dinner somewhere and I got bumped into a dude who had taken over as CEO of uh Lime Scooters, you know, one of the scooter companies. I like hot for a while. Bird or Lime and then it kind

a while. Bird or Lime and then it kind of crashed. But they were a public

of crashed. But they were a public company and they were struggling now.

And um, so this guy comes in and I was like, "So what'd you do?" cuz they he actually turned the company around like they got to profitability. They you know like it it's not like it's the best company in the world but it was about to

die and it not died. So, you know, as a ER doctor, he did well. And he goes, "The first thing I did is I went and I sat in the warehouse and I just sat took a chair and I just sat there for 8

hours." And they, you know, people were

hours." And they, you know, people were like, "Hey, do you want to do meetings?"

And he's like, "No, I just want to watch." And he just watched and he's

watch." And he just watched and he's like, "Okay, he's basically like watching where all the waste is cuz if he wants to make this thing profitable, he has to find out where all the all the waste and expense is that's not driving revenue to the company. We're getting,

you know, we're spending money but we're not getting paid to do these activities." He's like, "Oh, so that

activities." He's like, "Oh, so that guy, he's doing this, but there's a bottleneck over here, and that's because they only have one person, and they're all waiting for this." And he's just he's like, "I sat there for 8 hours, and

it kind of like told me what I needed to do for the first, you know, 2 weeks."

And I remember thinking this idea of mystery shopping or going and sitting in the factory, going and sitting in the warehouse and just watching what's going on. There's an immense amount of power

on. There's an immense amount of power to that. And I think for most CEOs, we

to that. And I think for most CEOs, we sort of think that a big impact has to come from a big highlevel thing and not this kind of roll your sleeves up, just

go watch, you don't need a 2,000 IQ. You

just need a simple thing. Yeah. Like I

think the biggest your biggest job as an entrepreneur or as a leader is to like stack rank the problems that are constraining your business. Stack rank

them and then pull the biggest problem off the top of the pile every day and work it. M and the first principle that

work it. M and the first principle that I learned from a guy that who was a mentor of mine. He taught me he used to haul me down to the like I had a software business. He would haul me down

software business. He would haul me down to the customer support teams and he'd say just sit here on a chair and listen to these calls.

And his first principle that he kept saying to me was I'm going to introduce you to the most powerful analytics you have as a leader. Your two eyes and your two ears.

Nice. use them because you will get insights so much faster than the data can get to you to give you insights. And

it was true. Uh and so when I started at Tesla, we were having a super big problem producing Model X's and getting the Falcon wing doors to fit. And uh and

Elon and I had shared this this favorite book, The Goal, which is all about manufacturing process. And he grabbed me

manufacturing process. And he grabbed me one day. He said, "Okay, The Goal Guy.

one day. He said, "Okay, The Goal Guy.

Uh come on. We're going down the line."

And I said, he said, "Help me solve this problem. I've been sleeping in the

problem. I've been sleeping in the factory trying to work on this." And I said, "Okay, like we're going to walk up the factory line to where all the inventory is stacked up on these doors

because that's the clue where the problem exists. If if throughput can't

problem exists. If if throughput can't get through there, it's all stacking up.

That's where the problem exists. So,

we're just going to stand here." So, we walked to that point. Sure enough, bunch of doors stacked up. And I said, I said the same thing my mentor said. I said,

"You're going to now use and I'm going to now use the greatest analytical instrument in the world, our eyes. And

we're just going to sit here for an hour, and this is going to drive you crazy, but we're just going to watch these people work." And so we stood there and watched them work. And you

could all of a sudden see, oh, these people can't see where the bolt goes because it's blind. And so they're threading a bolt blind, and they're missing that they're missing the angle.

And therefore, the door is going on crooked. What do they need? They need a

crooked. What do they need? They need a jig. After 10 minutes, you could see

jig. After 10 minutes, you could see this. And so he got antsy, I got antsy,

this. And so he got antsy, I got antsy, and we're like, "Okay, just have the maintenance guys build a jig, bring it out here, and let's start to experiment about whether they can get the bolt done correctly." But that was an example of

correctly." But that was an example of just go out there, don't don't depend on data, don't depend on anybody's else's uh opinion. Just go see it with your own

uh opinion. Just go see it with your own eyes.

And that will lead most likely to an insight that you you can then teach people like, "Here's what I was looking at. here's

what I saw. So, if you're the leader of this little team, next time you look for this and you can solve this problem, you don't have to wait for me to come down here and sleep on the factory floor as

the president or CEO.

What's it's it's funny is like uh is there a double slit experiment problem here where as soon as you start observing it, it it behaves differently when you're sitting there watching with Elon, all of a sudden the doors are going through real fast. Is that is it

that or no? like it's usually a process constraint no matter how hard they're trying to work.

No matter how hard they're trying to work, it's usually a process constraint.

But that does happen. And so the problem can like can can fool you. Uh because

people do start to have the white coat problem where you're the boss is standing there and they're like now they're hustling.

Now they're trying to impress the boss, but most of the time you can see it.

Like if you stand there long enough, they're going to forget you're there, right? And and there's also um you know,

right? And and there's also um you know, you talked about being there for an hour and after 10 minutes you see it and you get antsy. You want to go fix it right

get antsy. You want to go fix it right away. And there's almost actually a

away. And there's almost actually a benefit in just feeling the pain a little longer than you're supposed to to just really like actually drive home the importance of it. We did this, you know, I'm not in the manufacturing business,

but I have an e-commerce business and in our e-commerce business, we're at this, you know, leadership offsite and we're all talking about these strategies and it's like, has anyone tried shopping the site or watching someone shop the site?

Hey, let's get somebody here to shop right now and they're trying to find something that we know we have and you can't find it on the site and it's painful and we think this is so yeah, just click that thing and they won't

click it cuz it doesn't look obvious and feeling the pain of watching somebody use your product. It's surprising how many CEOs don't actually use the product

or watch average people struggle to use the product. So, I was with a group of

the product. So, I was with a group of bank executives a few weeks ago, and I asked them to raise their hand if they used their bank's app in the last week,

their consumer app, and no hands go up.

And I said to them, I could have guessed that because I'm a consumer of two of your banks, and your apps are terrible, right?

And if you use them, you couldn't live for another day with how terrible this was. So, you'd be calling whoever could

was. So, you'd be calling whoever could fix it to fix it ASAP. And a little bit to your point like I learned this technique from Scott Cook the founder of in it and he has got this process he

calls follow me home and what it means is you look over the shoulder of real customers who are using your product. So

sometimes you can't use it and there's a lot of cases of that but you want to see how an actual user thinks about using your product and when you look over their shoulder you see all of the friction you're putting into that

product. like how difficult it is really

product. like how difficult it is really to find what you're looking for, to make the right clicks, do whatever. And he

has his senior executives do this on a really frequent basis so that they're getting the feedback loop through the eyes of the customer. And often times those customers will turn around and say, "Would you just fix this or would you could you just do this for me?" And

they get new product ideas too where they they would get to like an accountant doing the end of the month payroll close and they one of them in this exercise turned to a senior manager

and said be a whole lot easier if the payroll was just done by QuickBooks and boom that idea was like right back into the senior management team discussion instantly like hey I just heard this

from a customer should we get in the payroll business now that's a huge business for into it but it came out of these like just follow the customer home and watch them click and uh and then

have them tell you not only what's wrong with the product, but what what's missing in the product?

Does doesn't Proctor and Gamble do something like this where you uh I think they have like research teams that will literally go home, they'll go to the home of a of an average mom and they'll watch, you know, how they clean their

kitchen, how they're oh, they use the soap this way. Totally. I'm on a board with a guy named Chip Berg. Uh Chip

started his career at PNG. He ended up being the CEO of Levis's, but he was famous at C at PNG for washing moms in kitchens like you said. And he invented

he and his team invented the Swiffer because they were like the the mop sucks. Like you got you get water all

sucks. Like you got you get water all over the place. You got to dump it in the sink. It's totally janky. And so

the sink. It's totally janky. And so

they invented the Swiffer based on how they watch moms suffer with regular mops.

Right. I love that. You have a couple of other like business principles. And one

of the things I liked was uh I'm an idea guy like my my entrepreneurial style is a high variety style. I've done

businesses and you know whether it's restaurants and biotech and cyber and you know a bunch of different industries and you know not all have worked but like that's I guess just the way I'm wired whereas some people they stay in

one domain and they keep solving problems in that domain for 40 years of their career. Um, and it seems like

their career. Um, and it seems like you're also in the high variety category. And one of the reasons why is

category. And one of the reasons why is you've learned how to sniff out opportunity because it smells like a problem. It smells like something that

problem. It smells like something that doesn't make sense. And it sounds like one of the tells that you have in the book is anytime you see something that's one sizefits-all. Yeah. So, a little bit

one sizefits-all. Yeah. So, a little bit like you, I I've been a variety uh driven entrepreneur. I think it's a

driven entrepreneur. I think it's a little bit because I've got business add like I I could spend an entire career in a single industry uh without driving myself crazy. So I do look at these

myself crazy. So I do look at these one-sizefits-all and uh and as a clue of ooh there could be an opportunity here.

So an example of that is we took a look at the cyber security industry and we started with this question of like hey 30% of computers moved to the cloud 70% hasn't when does the next 30% move what

opportunities is that going to create etc. This is in my venture firm and we found something surprising that 30% of compute wasn't moving to the cloud. It

was small medium-sized businesses like law firms, accountancies, etc. have no compelling reason to go to the cloud and they have a headwind of data risk. They

they have very sensitive data. They

don't want to move that to the cloud.

And so then we started to ask ourselves like is there a one-sizefits-all here scenario? And it turned out there was.

scenario? And it turned out there was.

We asked, we just happened to ask the question, how many cyber security platforms have been created for the cloud in the last 5 years? And the

answer is like,300.

And then we said, how many have been created for the SMB in the last 5 years?

And the answer was zero.

All right, this is a oneizefits-all market. Cyber is sized to the cloud,

market. Cyber is sized to the cloud, which I totally get. As a computer scientist, I I get that it's easier to write to Amazon, Azure, and Google, and it's super difficult to write to an

infinity number of tech stacks in SB.

So, that one sizefits-all is creating an opportunity. And then we asked one more

opportunity. And then we asked one more question because then we felt like we knew the answer to this question. Where

are the ransomware attacks happening?

And no doubt, it's in the S&P side because they haven't had tech in 5 years. Uh and so we set out to build a

years. Uh and so we set out to build a company that is essentially a super modern cyber platform for widely variable tech stacks. Uh and introduce

that and it's got a ton of market traction and it's like one of the fastest growing companies in cyber right now. But it came from that first insight

now. But it came from that first insight of like oo we just cry tripped across a one-sizefits-all. The market has been

one-sizefits-all. The market has been 100% cloud and there's this small medium thing hanging out here that isn't large or extra large. How about we like split the market uh and go after where the

competition isn't?

I like that. In the book, you phrase it.

You you use a slightly different intro to the story, which I liked, where you basically talked about like you're looking at the expense. I think you were on the board of two companies or something like that.

You're looking at the line items on the expense sheet and it was like uh it was two different, you know, it was like um it was Lyft and Lulu.

Lululemon, which is a retailer. they

don't really have any personal sensitive data about any customers. You know,

customer comes in, swipes your credit card, they don't save it, and they were spending something like $7 million on cyber insurance. And then somebody else

cyber insurance. And then somebody else was spending um you know, somebody else who had a lot of sensitive data. It was also spending $7 million. And you sort of had this

$7 million. And you sort of had this like, huh, how could these two vastly different companies with vastly different risk profiles in vastly different industries have the same thing? And you were like, that that

thing? And you were like, that that smells a little fishy to me. and whether

that became a successful company or not.

I just like the the general idea of um noticing is actually a superpower. We talked about noticing for bottlenecks, but then you can sort of notice for things that don't

make sense in the world and an entrepreneur entrepreneur can come in and make it make sense by actually changing the way the world works, right?

And and actually change the system rather than try to just say, I guess it just has to be that way.

Right. Right. And and that's a perfect example of that. Like I think noticing is a trait a lot of entrepreneurs have because we do see like friction and say to ourselves like why does this friction

exist in life and how do we get rid of it right?

Um and I have people ask me like do you fly private and I've got a weird answer.

I said no I don't but it for a weird reason I don't fly private I fly commercial because I want to experience friction of everyday life that's going to give me my next business

idea or two or three. Um, and I think entrepreneurs are kind of wired to look for friction as a clue that there could be an opportunity. Um, but they definitely, we all have, I think, a

heightened spidey sense for that where that friction is.

Yeah. As an entrepreneur, if your life gets too comfortable, you lose your ability to spot problems. Comedians when comedians get too rich, they fall off a cliff because they don't have relatable jokes anymore because their life is completely unrelatable at

this point and they don't see the the everyday things.

Okay. So I want to go through a couple of the like the steps of the algorithm.

So your book is called the algorithm and the idea is that let me let me phrase what I took away from the idea.

Okay.

So the idea is there's a certain way that you can run a company that will lead to faster growth and um more success obviously. And I what I liked

success obviously. And I what I liked about it is there's this feeling that Elon's just this super genius alien and maybe he is but let's say like that the success of the companies are because you

have this super genius. It's a very nice story, fits well in the sort of Hollywood um way of looking at the world. But you said, or is it that he is

world. But you said, or is it that he is really smart and ambitious and talented, but he surrounds himself with really smart and ambitious and talented, a legion of smart people who are empowered

by a way of working, a culture of working, a method that leads to this level of success because he's got all these different companies. One man can only be doing so much and can be only be in so many places at once. Is that is

that accurate how I describe the like the premise of what we're talking about?

Yeah, it's kind of three layers. First

off, he's he's brilliant and he is uh unique as an entrepreneur in our time.

Like I can't name I can't name any entrepreneur who's created four or five companies all worth uh all worth tens of billions of dollars if not hundreds of billions of dollars. Uh you know Zuck

has had one, Gates had one, Jobs had two, B's had one, Ellison's had one. You

go down the list of entrepreneurs of our time, there's nobody like him. Uh and so he is pretty special dude. He does

surround himself with world-class talent and but the idea of the algorithm was to give that world-class talent a framework so that we could push decisions to the

edge and people could drive innovation without us showing up and and having to drive it ourselves. And and a framework is super helpful in that. So you combine

world's class talent with a framework and a method and you start to get innovation breakouts that are really unique and um a lot of people said hey do you have to be Elon to do this and my

answer was no like that's why the book is told through the eyes of people who are actually on the edge doing this work and telling their story so you can see hey there was no senior management team hanging around here this was like

frontline people taking on these big problems saying we like we just want to solve this and you give them a framework to solve And they they do crazy things like in inventing mobile car service

from an OEM from a manufacturer, inventing one-click loans, inventing um insurance embedded in car payments, like just stuff that was flowing and moving

so fast because people at the edge were empowered, but they were also equipped with this framework. And one thing that's not in the framework, but it seemed common was that the starting

point for a lot of the stories was we had this problem, you have this one in there about online sales. It's like uh you know Tesla is this you know high-tech kind of the most techforward

company but actually the e-commerce the online sales were were were pretty weak at the time, right?

And so you have this problem and and it's a weakness in the company right now. And instead of just saying, "Hey,

now. And instead of just saying, "Hey, let's improve our weakness a little bit.

Let's get back up to par."

Elon's method it seems like, starts with a crazy goal that's like, not only is this today, not only are we going to go from weakness to average, we're going to go to like world class or best-in-class

in that same category, which I think is not how most people think, it's not how I I operate. Like I when I see that, I'm like, hm, that's not what I would have said in that situation. For example,

with the online sales, it's like online sales are weak. Okay, here's what we're going to do. we're going to 20x our online sales or something like that.

Like we are going to lift this and be it's going to be the the number one driver, right, of of sales. And so

there's this crazy ambitious goal to start the thing.

And it's it sounds pretty unreasonable, especially because you're starting not from a position of strength, but from a position of weakness. Can you talk about that side of things? the like let's just start by laying down the gauntlet of a

somewhat impossible goal on something that today is actually a weak area. Goal

setting can determine like what outcome you're going to get. And so if you set a goal for 5 to 7% improvement, you're probably going to get three to five. M

if you set a goal for an order of magnitude improvement, now you got people that have to think way differently about that problem because you can't tweak the status quo to get to

a 100% improvement or a 20x improvement.

And so part of the secret to Elon's part of his secret sauce is he sets these order of magnitude improvement goals. uh

so 10x 100x and it forces you to think way differently about how you would solve that problem or what what you would do with the product or what you would do with a process etc. And so like

you're referencing this example of he came to me and said, "Hey, look, we have continuous demand challenges. We got to figure out how to sell cars online."

Which sounded crazy at this time because nobody was buying $120,000 things sight unseen online.

Click click.

But we both knew because we'd both been in consumer um that every click you have, you ask the consumer to make your conversion goes down. And that's that's I'm saying an obvious every entrepreneur

in in ecom knows that. But we looked at our clicks and there were 64 clicks to buy a car. And so he turns to me. He

says, "Improve, let's improve digital sales. This is your goal. Improve

sales. This is your goal. Improve

digital sales by 20x."

So now it's like, "Oh crap, I got to think way differently about this. I

can't think about like tweaking here and there." And so he said, "How many clicks

there." And so he said, "How many clicks does it take to buy a Domino's pizza on their app?" I have no idea. He's like,

their app?" I have no idea. He's like,

"Let's pull it out." So we pull it out.

Take it. Turns out it takes 10 10 thumb taps to buy a Domino's pizza at that time. He's like, "We are 64, Domino's is

time. He's like, "We are 64, Domino's is 10. Let's go to 10."

10. Let's go to 10."

And the first thing then that that calls into question, it was a core tenant of the business at that time, which was producing custom build order product, right?

And that was religion there. Partly uh

driven by the fact they didn't want to be a typical car company. They wanted to make you the car you wanted versus the car the car company wanted to sell, right? And it's something everyone will

right? And it's something everyone will nod their head to. Fully customizable,

of course.

Totally. But that led to like 360,000 different combinations of a car that you could choose, which is driving a lot of clicks, plus a lot of decision fatigue for people. And so we went and ran the

for people. And so we went and ran the data, my team ran the data, and we came back and figured out that people weren't buying 360,000 versions, they were buying two. And it was either what is

buying two. And it was either what is known today as a standard uh or a performance. And so I went to the head

performance. And so I went to the head of manufacturing, Greg Reicho, and the head of uh engineering, Doug Field. I

said, "Hey, look, I'm the new guy here.

I've never been in the car business. Uh

so I could be completely stupid about this, but let me show you what the data says. The data says that out of all

says. The data says that out of all these 360,000 combinations of build to order, people are only buying two.

And what would it mean to you guys' side of the business if there were only two?"

And sorry, just to clarify, what you're really saying is it's not that they were buying two configurations. It's like the job to be done. The thing that the customer cared about was they wanted either high performance, you know, like

tap the pedal and it flies. Yeah.

Or they want the safety plus EV plus whatever, you know, like longest range battery they could afford.

Longest range battery. Good. I'm going

to have that. And actually like we can pre-customize we can preconfigure cars to like solve those needs without letting them choose what color the the strip is on the the side of the you know

the side of the door.

Exactly. And that's exactly it. And so

Greg who's running manufacturing says, "Oh my god, I I've been waiting for this day for somebody to like somebody to really drive this because you know what that would do to our factory? Totally

simplifies the factory. It simplifies

the supply chain. Um, we could increase throughput dramatically. Turn to Doug.

throughput dramatically. Turn to Doug.

What does it mean for engineering? He's

like, are you kidding me? Like, I don't have to design all these parts. I don't

have to test them. I can put engineering's time on the stuff that really matters to the job to be done for the customer. I'm totally in. So, then I

the customer. I'm totally in. So, then I walk into the senior management team meeting and um and one of the team members was like, "Hey, you are the new guy. You don't understand. Like, it's

guy. You don't understand. Like, it's

religion here. We do build order." I'm

like, "It might be religion. Uh, but

that religion might take you to the grave. Here's why. Here's what happens

grave. Here's why. Here's what happens to the business if we do this. We're

going to get rid of a lot of clicks, a lot of decision fatigue. If we just get down to two configurations, and you can make it three if you want. I don't care, but you can't make it 360,000, right?

And Elon, he's super rational. He looked

at the case and listen to Greg and listen to Doug and he was like, "Yeah, we have to do this." So, if you go to buy a Tesla today, you'll see you've got two or three configurations on there.

That's it. And the fear was we would look like Honda, but the but it turns out we didn't because we had a completely different product. We had

software on wheels. We were making um we're taking away all that decision fatigue from the customer and all that friction in the sales process

just by questioning like at the end of the day we question the business model at the time which happens to me as an entrepreneur happens to a lot of entrepreneurs. You fall in love with

entrepreneurs. You fall in love with your business model and you don't really accept any challenge when somebody says, "Should we chuck this business model because it's actually what's in the way,

right?" And I I wonder what you learned

right?" And I I wonder what you learned when you went to work for someone because you said like you said I've been CEO for 20 years and I had the same experience where we got acquired and I went from a 20 person company and

I'd always been my own I was always the CEO of startups for 10 years and then suddenly I now had to go and report to and what forget the report to I just had

to bring my plans of what I'm trying to do to the table with somebody. I had to learn how to talk to a CEO who was thinking about the business, you know, separately. And I had never really been

separately. And I had never really been on that side of the table. And I had to learn how to like communicate upwards.

What does that mean? How do I simplify?

How do I speak the language that they're trying to understand in order to do this? Well, do you have any tips for

this? Well, do you have any tips for somebody who's learning how to communicate to a CEO? And you know, you were doing it with Elon, right? Maybe

there's something specific to Elon, but what what what was your method for when you go into those meetings of how you present information in a way that is productive versus wasting time?

We actually had this bit of a game for a while. I think it was just his idea.

while. I think it was just his idea.

He's like, let's try to let's try to get down to three sentence emails. What is

the problem?

What's what's your analysis of the root cause? And what's your proposed

cause? And what's your proposed solution?

And uh and he's like, I think we could run the company on three sentence emails.

Um and so we did that. And what that taught me about exact communication was that level of efficiency is so helpful.

Like if you can give me three sentences.

So I turned to my people and said the same thing like tell me what the problem is. Tell me what the root cause is. Tell

is. Tell me what the root cause is. Tell

me what your proposed solution is. And

in that proposed solution, you got to have like how much it's going to cost and what's going to do the economics and all that sort of stuff. But the thing executives, if you're talking to a CEO,

the most precious commodity that CEO has is time.

And it's information inbound uh absorption time, information processing time, decision time. And so if you can get super

time. And so if you can get super efficient in communicating to a CEO and say, "I'm going to minimize your information absorption time. I'm going

to minimize your information decision time." um you become a very valuable

time." um you become a very valuable member of that team, very valuable.

And it sharpens your own thinking. You

think you're doing it for them and then you realize actually I didn't fully have clarity on this until I was forced myself to be clear to them. Now I'm

clear to myself. Actually, it's so funny you said that that those exact three when I went into my first meeting with EMTT, the founder of Twitch, and I said, "How do I talk to you? How do I use these? I don't want to come here and

these? I don't want to come here and just, you know, chitchat, you know, like uh we could do that, but I'm guessing that's not what you want me to do." Um

and he goes, "Yeah, three ways." He

three sentences. He goes, "What? Why? So

what? What is happening?" Or, "What happened? Why is it happening? Or why

happened? Why is it happening? Or why

did it happen? And so what are we going to do about it?" And he's like, "That's the way I like to communicate. What?

Why? So what?"

And then I I've now taught that to my team of the same. It's so funny. The

same basically almost the exact same thing. We just had different labels for

thing. We just had different labels for the for the same exact communication structure.

I love that. In fact, I'm going to steal that because I think the world of EMIT.

But um but that's a great that's a great way to think about communication. And I

think the other way I the other thing you made me think about is as an entrepreneur, if you're successful, the most likely outcome of your business is somebody's going to buy it. And that

means you're going to have an owner that you're going to now be subordinate to.

And that's a different form of mindset.

And I got it wrong. Like the first few times that we sold companies to like every time we sold a company of mine, we sold it to a public company. And so then I would come in and I'd owe that company a year or two, right?

And I'd have to work in their structure.

And at the time I was young and uh and so I was trying to keep this bullheaded entrepreneurial um uh mindset and that

doesn't work in large corporations. And

what I've now learned if like I had a redo and I apologize if anybody's listening who bought one of my companies and had to put up with this pugnacious like entrepreneur who didn't get it. Now

what I get is I should have sat down with them and said what what drives success for you? Like what do you care about? like you bought this company,

about? like you bought this company, what has to happen in your mind to make it a success? That's often different than the bullheaded entrepreneurs way of thinking about it, right?

And um and I think that's a different set of challenges when you sell yourself to another company. You the first thing you got to realize is you don't own it anymore. They do. They have the keys.

anymore. They do. They have the keys.

And if you go, "Oh, a year or two, you might as well make not make that miserable. You might as well make it

miserable. You might as well make it like fun." And the way to make it fun is

like fun." And the way to make it fun is to figure out, okay, like how do I make this thing work for you and for me? Um,

right.

And if you do that, often times you got an earnout and it's going to work for you too.

Yeah, that's that's great advice. I wish

I had that advice earlier.

Me, too. Me, too. Man, I stumbled so bad.

You know, you sort of discover it the hard way. I wanted to ask you about the

hard way. I wanted to ask you about the collision repair business cuz this was fantastic. Um, can you just tell the

fantastic. Um, can you just tell the story of because I only know part of the story. I

want to know the whole story. So, what's

the story of how you got into that business? like how you discovered the

business? like how you discovered the problem and what actually happened with that company and uh cuz I think it's pretty fascinating because it's not a venture tech it doesn't sound to me at

least like a venture tech business no software but you built that and I it sounded like a pretty pretty interesting success story can you can you tell that one yeah it ended up having a lot of

software in it but it starts with uh a little context I grew up in the back of my grandfather's auto repair uh business and so like I I was a tech I had the dirtiest jobs cuz I was a kid, didn't

have any skills, so I was changing oil and changing tires and that sort of stuff, but learned learned how to hang out and talk to auto technicians. Uh, and um, so decades

technicians. Uh, and um, so decades later, my wife's car gets hit by one of our neighbors and now I got to go get that fixed. And so I go to a large body

that fixed. And so I go to a large body shop and um, drop it off, get the estimate, uh, agree to have this place fix it. And they and the guy says it'll

fix it. And they and the guy says it'll be done by Friday. So, this is Monday. I

come back on Friday. Car's not done.

He's like, "Ah, part didn't come in.

This is kind of typical. Uh, next

Friday." So, I show up next Friday.

Car's not done. Tech didn't show up. Da

da da da da. I said, "You know what?

I've just sold one of my businesses.

I got a curiosity about how your business works. Can I just come hang out

business works. Can I just come hang out here?"

here?" He was like, "You're the first customer ever to ask that, but I don't want you back there because you're going to get hurt." And then I explained to him, "No, I know my way around a body shop. I know my way around auto repair. I won't I'll stay out of

auto repair. I won't I'll stay out of the way. I won't get hurt. In fact, I

the way. I won't get hurt. In fact, I I'll just run parts for you if you want."

want." So, I went home that weekend and I started to do research and found out the auto collision industry is a $50 billion industry. And then figured and then

industry. And then figured and then found out that there were 38,000 of these. And so, uh, the average

of these. And so, uh, the average business is around 1.2 million. So,

pretty small. And uh I had been exposed to advanced manufacturing and I could got a sense of that was not what was happening in the back of these shops. So

I went and just observed I was running parts uh just observing and what I saw was essentially a hair salon. Every

technician had two bays and they were on commission and they made money off of those two bays. So they had no interest in how fast that car went through because it was that car was sitting in

front of them as a cash register to make money. And uh and so I thought to

money. And uh and so I thought to myself, what if what if this was $50 billion industry was modernized? What if

you put these cars into a uh into a production line like Henry Ford did? And

what if you paid the entire team a bonus based on cycle time and throughput?

Right? So I didn't understand. So the

why why doesn't the technician want the cars to go through? More cars equals more commission. No,

more commission. No, they wanted to control their paycheck and so they would surround themselves with three or four cars and they would just cherrypick hours off of those cars and they got paid by the hour but not so the car didn't have to get finished.

They were getting paid by the shop just on the hours they worked on that car. So

that car could sit there for a couple weeks. They didn't care.

weeks. They didn't care.

And you had these two terms, cycle time and touch time. Can you explain what those Yeah. So, I went to the shop owner and I

Yeah. So, I went to the shop owner and I said, "Tell me what the average time it takes between a customer dropping it off and a customer getting their car back."

And he said, "Yeah, I can tell you that it's 18 days." I said, "How do you know that?" He said, "That's the average

that?" He said, "That's the average rental car time." I said, "Okay, that's pretty good proxy." I said, "Um, how many hours of labor do you bill on each job on average?" He said, "Oh, that's

easy. Six to eight."

easy. Six to eight."

And I went 18 days to get 6 to 8 hours of work done. That looks like an opportunity because that's the difference. Cycle time is the 18 days.

difference. Cycle time is the 18 days.

That's from the beginning to the end of the process. And touch time is the

the process. And touch time is the amount of time that those technicians were actually touching the car. 6 to 8 hours.

And I went, "Oh, that looks like an opportunity to maybe turn this industry around for the consumer. what if you could go to market and say you'll get your car back in a day

versus the 18 days of the the rest of the guys down the street. That's when I like started to diligently say, "Let's start a business." So, I I I grabbed

some guys that I had worked with uh and we started to work on just doing that.

We ended up with um the largest at the time collision repair chain around the country.

What was it called?

Uh it was called Sterling then. It's now

called Service King. Uh, it's owned by Carlilele. It's got several billion

Carlilele. It's got several billion dollars in revenue, but the whole premise was we're going to get your car back way faster because we're just deploying assembly lines versus a hair salon.

That's amazing. What do you have a do you have a name for that moment where you're like, "What if you could get it back in the same day?" Uh, like, you know, what's the name of when you do that? When you say, "We're all the way

that? When you say, "We're all the way over here." That's kind of the same

over here." That's kind of the same thing with the Elon 20x online sales, right? It's like the industry, the

right? It's like the industry, the expectation of the customer, the current workflow is all the way here. What if it was all the way on this side?

I do have a name for it. I have a name for it. I call it an epiphany. Like I I

for it. I call it an epiphany. Like I I just And so my teams that I've worked with now, they they they hear this phrase a lot because I'll in that moment like I'll sit down, I'll I'll write out a Slack or an email and say like and the

subject would be I just had an epiphany.

Uh and um it's kind of a realization moment where you're like, "Ooh, there's a big opportunity here to move the market." And that word for me is an

the market." And that word for me is an epiphany. It's just like woo. It's this

epiphany. It's just like woo. It's this

like sudden discovery. Uh where you've been like you've been pilled and now you can see the other side, right?

Yeah.

What What do you think now with AI? So,

uh I feel like you've been doing this for a long time and just when you're probably like, I'm a veteran of this game, the entire board game changes.

somebody flips the table and now there's a whole new game to be played. Where is

your head at with AI? How do you think about this?

Man, I'm excited. I all the way back in college, I worked my way through college writing trading algorithms at uh at the world's largest options and futures

trading uh platform in Chicago. I was I went to college in Chicago area and worked my afternoons coding. And way

back then we were using neural the very beginning neural nets to try to get an edge in the market and try to and try to robo trade uh in a way that people hadn't been able to in terms of the

accuracy and the speed. So all these years later now that this has emerged I'm like completely psyched because we were using what looked like like rudimentary computers uh to do this

stuff. Now you got real compute power.

stuff. Now you got real compute power.

Caveman AI.

Totally. And now that you see this unleashed, I'm like, "Ah, this is what we were trying to trying to do three decades ago." So, um, so I'm super

decades ago." So, um, so I'm super excited by it largely because every technical revolution and breakthrough like this that has happened

in history creates enormous opportunities for entrepreneurs. I

cannot name a technical revolution that's happened that's resulted in less GDP and less jobs. Can't like it just doesn't work that way. Um, and there's a lot of hand ringing though at the

beginning of every technological revolution because humans are really good at seeing the first order effect, which is the job destruction, but they're not good at seeing the second order effect, which is the job creation

that happens by entrepreneurs on the back end. And I think we're like right

back end. And I think we're like right in the middle of this. So I we're we're applying AI at the core of each of our companies, but I think more importantly, I think there's going to be just like

we're keeping our eyes peeled for big big opportunities that are being created by this. So I give you an example, and

by this. So I give you an example, and this isn't this example would date me, but when I was growing up, uh to make a longdistance phone call,

you had to dial zero and talk to a human being. And that was usually a lady in

being. And that was usually a lady in your town uh who would literally plug the local phone network on one end of a cord and then plug that cord into the national phone network and that would create a

connection for you to do a longdistance call. In other words, humans were

call. In other words, humans were switches. Uh and um sometime in the late

switches. Uh and um sometime in the late 60s, early '7s, Bell Labs invented an electronic switch that would do this.

And by the end of the 70s, there was a lot of hand ringing that there were 800,000 people, pillars of our communities that were employed as operators. And 100% of those jobs were

operators. And 100% of those jobs were going away.

And sure enough, by the late 70s, early 80s, 100% of those jobs had gone away.

They were those humans were replaced by electronic switches.

But what people couldn't see while they were doing the hand ringing was what was going to happen on the other side. And

what happened on the other side was now that a long-distance call is free, doesn't require human labor, just requires electrons.

Now you could offer toll-free calls. And

so some entrepreneurs said, "I'm going to I'm going to use these toll-free calls." There was a single area code

calls." There was a single area code 1800 uh and I'm going to create businesses. 1-800 flowers, 1800 junk,

businesses. 1-800 flowers, 1800 junk, 1800 insurance. We want to enter this,

1800 insurance. We want to enter this, that. And what those 1-800 numbers

that. And what those 1-800 numbers required was now centralized answering of phone calls cuz now people were calling like crazy cuz it was free. And

so this industry got created called centers and support centers.

And a few years into the 1980s, there were now millions of people employed in call centers. Hundreds of software firms

call centers. Hundreds of software firms that were created. And my first startup was a software firm in the '9s serving call centers uh because the technology

was still nent when people were just deploying electronic switches and people were like lamenting the end of these jobs as operators. Nobody could see on the other

operators. Nobody could see on the other side that these entrepreneurs were going to create toll-free dialing. They were

going to create businesses on top of toll-free dialing. And on top of that,

toll-free dialing. And on top of that, there were going to be this whole layer in our uh in our economy called call centers that millions of people are going to be employed in. We just have

creativity to see the other side. And so

now I tell our teams like we cannot see through the other side, but we can get a hint of where this stuff is going to go if you think creatively.

Uh and and so that's the thing I'm most excited about. Like we're going to have

excited about. Like we're going to have entrepreneurial opportunities like crazy over the next few years based on what this technology is going to unleash. I

love that story. So, keep going. So,

let's say uh you know, if we can think creatively, we could start to get a glimpse of what maybe is possible. What

do you see as the kind of first generation businesses that you're excited about and what the second order effect might be?

Well, now we've got intelligence that is so rapid and non-latent, so you can solve problems way faster that are really complex. So, one of the one of

really complex. So, one of the one of the businesses that we've got that I'm most excited about is we pulled a team out of Tesla that built the supply chain automation platform at Tesla, which is

super sophisticated and way beyond anything anybody had in the industry.

And they built this with ML uh in uh in like 2017ish.

And we said, how would you like to build it today in AI? And what AI allows that team to do is solve a super complex problem really quickly, but also uh use

Aentic AI to understand the workflows of their clients super rapidly. So they

just went into one of the biggest grocery delivery platforms in the country. I don't think I can say which

country. I don't think I can say which one yet publicly, but it's it's one of their newer customers. and their agents could go in and understand the work

rules of that ginormous platform within hours and then design a system and a workflow within hours that um uh that you really have to have two special

things to be able to do. You have to be expert in that particular thing which is supply chain optimization to know which rules are good, which rules are bad, what to tell your agents to do etc. And

then you have to be able to judge, okay, what these agents are bringing back is correct or it needs to be tweaked or redirected or whatever. So you

definitely have these humans who have got AI as exoskeleton like super strength. They're now building a

strength. They're now building a business that's growing like rapid fire because it's got this incredible commute compute to actually fuel uh the business

and deliver value back to the customer way faster than you could otherwise.

like they what they're competing against is standard ERP systems that take 9 to 12 months to implement and they can implement in a period of days and deliver that value back and um that's

the kind of business like I think we're going to see more and more and more of as this capabilities unleashed.

Yeah, that is that is the weird thing about this that the software essentially works like labor, right? So what you're describing is like

right? So what you're describing is like exactly essentially a consultant. It comes in and it learns your workflows. documents

and it figures out how things are currently working and then it starts to improve or automate or uh whatever.

That's right. And so so the weird thing is like there there is a question of is it different this time in terms of the jobs because it's like if the software is fundamentally like human labor like equivalent then even the business it

creates won't the workers in that business also just be AI labor mostly that's doing that right and do we all just become sort of like mechanics for for the robots and for uh

for AI right that's one part I haven't been able to wrap my head around I haven't either and I haven't heard the case for why we do that is compelling enough to Like the the most frequent example I

hear is, hey, in the 1950s there were skyscrapers full of humans who were humanly calculating spreadsheets.

And then this then the real spreadsheet came along and all those jobs are eliminated.

And then that's where the story ends for them. And I'm like, "Hey, time out. I

them. And I'm like, "Hey, time out. I

was just in New York City. Those

skyscrapers aren't empty. What

happened?"

And what happened was a plethora of things. And I would use just one tiny

things. And I would use just one tiny little example of what happened that created trillions and trillions of dollars of market cap. Once an once a a spreadsheet was available that was

digital, uh it could calc.

And so entire markets got created on top of that one technological change that employ hundreds of thousands of people. Um, and

again that was unknowable on the on the other side when the spreadsheet was just being invented that somebody would deploy blackuals and somebody would figure out how to price puts and calls

and derivatives and make entire markets like the options exchange, the merc, etc. possible uh to be able to syndicate loans like none of that stuff was

available and now it's all available and that's the kind of thing where I think okay make me the case that all of a sudden now the computers do all of that

and take all that creativity and all those jobs I just haven't seen that in history and I don't know that I can I can fully buy into that ending point.

What do you think happens with uh the different AI players? You've got like you think Elon has called it the highest ELO game in in the world, right? So,

it's the highest level chess game being played between the smartest people with the most capital behind them going all out for the biggest prize. You've got

Zuckerberg and you've got Google and you've got Elon, you've got Sam Alman, you've got Anthropic, you have all these players. How do you how do you see this

players. How do you how do you see this playing out? You've seen a couple of

playing out? You've seen a couple of tech waves, you know, you know, at least some of the players and maybe even all of them personally. Um, how do you see this playing out?

I sort of wonder if if they're creating a app layer or a tooling layer. And what

I mean by that is I think they're creating the tooling layer that then a lot of us are now using to create real businesses on top of. So I kind of go

back to the internet breakthrough and the internet revolution and think about okay like the browsers everybody was super excited about the browser business

and Mark Andre made uh made a career out of Netscape but I wonder if like those now browsers are a commodity but what got him what

got built on top of a browsable web were things like Facebook and Airbnb and uh Erade and you name the the businesses

like tons of GDP got created on top of that tooling.

And it sort of feels like to me we're getting really excited like we did about Netscape and Internet Explorer. We're

getting really excited about these hyperscalers, but what you really want to be looking at is what businesses are going to get created on top of this tooling. And so I'm psyched for the work

tooling. And so I'm psyched for the work they're doing. I think it's amazing and

they're doing. I think it's amazing and it's breakthrough level, but I but I am also much more excited about what's going to get built on top of it.

Yeah, me too. I can't wait to see it. I

almost want to fast forward. It's like I don't want to miss it, but at the same time, I'm so curious how the how this all plays out, how the what the world looks like in 10 years. This is probably the first time that I feel like I I have

no idea what the world's going to look like in 101 15 years, but I do know it's it's likely to be very like completely different, you know, for sure.

You know, like I I bought a Tesla this year and it has like self-driving that's perfect.

It's amazing. It's it's so good. And I

just don't drive anymore. And I'm like trying to tell my mom and my sister and I'm just like, "Guys, you realize like you don't have to drive anymore? Like

that's that's now." And I I can't believe that that's not more people aren't freaking out about this one change, let alone whether it's robots or it's AI that you know AI assistance in

everybody's pocket orally. There's so

many different ways that I feel like the whole world in 1015 years is going to like my kids won't really understand.

Wow, you used to have to do all that.

You used to do that. Like that's so funny that you used to do that's horseback riding, right? Not cars.

That and it seems like we're on one of those transition points which exciting.

Totally agree.

Well, John, I appreciate you coming on.

Everybody should go get your book, the algorithm. Uh, I don't say that, but

algorithm. Uh, I don't say that, but usually most people come on, but I actually am reading the book and liked it a lot.

Awesome. Um, big fan of it. And, uh, you know, thanks for coming out and doing this because I feel like we get a lot of biographies.

Oh, they grew up this way and daddy issues and blah blah blah. But like, you know, what's which is it's entertainment. It's great. But what I

entertainment. It's great. But what I really love is tactical practical me and how do how do you actually do things? Um

what can I how can this be useful for me versus reading about somebody else's life and so I'm glad you wrote this book. If I think if this book didn't

book. If I think if this book didn't exist and it could only be written by somebody who's kind of there doing it side by side with other people and and has you know the experience doing it. So

so congrats to you and thanks for writing the book.

Thank you. I'm glad you're enjoying it.

All right. Take care.