Elon musk sphere

Technology Driven Innovation – The Elon Musk Way

Anyone in the tech startup scene will always give Elon Musk his airtime on pretty much any subject. Why? Because he has been instrumental in the disruption of some of the world’s biggest institutions. Paypal (Financial Institutions), Tesla (Automotive Industry) and SpaceX (Space Exploration) are all part of his doing. So, when I receive an interview where Musk talks about his approach to innovation, I listen.

What immediately struck me was that he seems to have organically found his way to understanding methods for breakthrough innovation based on his physics education. Namely, to go back to first principles.

As anyone who has been in the innovation/invention space for a while, his argument is familiar: we, as humans, normally think and reason by analogy. We choose to take a direction with analogy because it is like something we have seen before – perhaps in an adjacent context. 

And, you’d argue that this is a reasonable approach. This is how we are programmed to think, to survive. And if we were to make every decision from first principles, we would be paralysed for much of our (working) life. ‘Analogy’ is what enables us to function as humans and to interact with the world. “Say, that thing looks like a bear, so it probably is a bear, so it would make sense not to prod it with a stick.”
 
However, while this is an efficient model for day-to-day operation, it is the bane of true innovation. Analogy, at best, leads to the occasional innovation, but more often than not, it results in incremental improvements on a theme: efficiency and productivity, continuous improvement – not innovation.
 
Instead, Musk’s method of identifying breakthrough innovation is similar to the tools I use with clients to identify the contradictions – the blind spots – in their thinking that would otherwise typically result in compromise.
 
Musk first started from the biggest issues: “I thought, what are the things that would most significantly affect the future of humanity?” This resulted in him identifying the Internet, sustainable energy and space exploration. And while he humbly admits that he didn’t expect to be involved in all three, he has been fortunate enough to excel in all these fields. Looking at a couple of the more recent moonshots, you can see how his approach from first principles is disrupting very established markets:
 
  • SpaceX resulted from his desire to land a greenhouse on Mars – a philanthropic endeavour that would result in an expected 100% loss. He considered that starting a rocket company might have a greater chance of success, but he accepted that by far the most likely outcome would be failure. However, it is now cash-flow positive and includes the likes of NASA as clients – how’s that for disruption?
  • Tesla, the market-leading electric car company, was not needed until he saw General Motors forcibly remove every singly EV1 from the public’s hands and crush them to ensure that they couldn’t be used again. A decision that Musk hopes GM now sees as VERY unwise and shortsighted. Looking at his work, the contradictions he sought to solve with Tesla were: how can you make a car electric AND high performance AND long-range (AND good looking), all at a price point that people would buy it? And a recent trip to Silicon Valley confirms he has nailed it: one old school VC said to me, “Would you find me in one? Nah, they’re now as common as Chevy.” Sure enough, in Silicon Valley, they are.
And, looking to the future of Musk’s ideas? The Hyperloop has a couple of contradictions holding it back, and they are excellent ones: How do you make a mass transit service personal? How do you make something as fast as Concord in flight but on the ground?
 
Contradictions are there in every business opportunity. There are very few things (if any?) that have been perfected, and it is the assumption that we must compromise on a perceived contradiction that holds us back from identifying the real breakthrough.
 
And what does Elon Musk see as the one drawback to thinking from first principles? That it takes more mental energy. Yet, if there is any chance it could result in a Paypal, SpaceX or Tesla for your business, perhaps it’s worth it.
 
What are the contradictions that you overlook in your business? Where are the blind spots for you and your organisation?
Therein lies your opportunity.
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