In Part 12, Dwarkesh Patel and John Collison dive into Elon Musk’s management and hiring philosophy. They discuss how he evaluates talent, why companies outgrow people as they scale, and what makes someone effective at Tesla and SpaceX.

Transcript:

Evaluating Technical Talent

John Collison asked about Elon’s system for evaluating and hiring people, noting that he personally interviewed the first few thousand employees at SpaceX.

Elon Musk: “Me. Literally there’s not enough hours in the day, it’s impossible.”

John Collison asked what Elon looks for in candidates.

Elon Musk: “Well, at this point I think I’ve got, I might have more training data on evaluating technical talent especially, but talent of all kinds, I suppose, but technical talent especially given that I’ve done so many technical interviews and then seen the results. Technical interviews, seen the results. So my training set is enormous and has a very wide range.

Generally the thing I ask for are bullet points for evidence of exceptional ability. These things can be pretty off the wall. It doesn’t need to be in the domain, the specific domain, but evidence of exceptional ability. So if somebody can cite even one thing, but let’s say three things where you go wow, wow, wow, then that’s a good sign.”

Dwarkesh Patel asked why Elon himself had to be the one making those judgments.

Elon Musk: “No, I don’t. I can’t be. It’s impossible. Right? I mean, total headcount across all companies, 200,000 people. Right.”

John Collison asked what made early hiring so hard to delegate.

Elon Musk: “Well, I guess I need to build my training set. It’s not like I’ve bat a thousand here. I would make mistakes, but then I’d be able to see where I thought somebody would work out well, but they didn’t. And then why did they not work out well? And what can I do to, I guess reload myself to in the future have a better batting average when interviewing people? So my batting average is still not perfect, but it’s very high.”

Dwarkesh Patel asked what some surprising reasons were for people not working out.

Elon Musk: “Surprising reasons like they don’t understand technical.”

Dwarkesh pushed for more detail on the long tail of hiring mistakes.

Elon Musk: “Yeah, so the, I mean generally what I tell people, I tell myself, I guess aspirationally is don’t look at the Resume just believe, believe your interaction. So the resume may seem very impressive and it’s like, wow, resume looks good. But if the conversation after 20 minutes, that conversation is not. Well, you should believe the conversation, not the paper.”

Executive Retention and Company Growth

John Collison noted that Tesla and SpaceX have had relatively stable and internally promoted executive teams despite rapid growth, and asked what the long-tenured technical leaders have in common.

Elon Musk: “Well, so the, I mean it tells us sort of senior team at this point probably has an average tenure of 10 or 12 years. It’s quite, quite long. Yeah. So, but there are times when Tesla went through extremely rapid and extremely rapid growth phase and so things were just somewhat sped up.

And when a company, as you know, company goes through different orders of magnitude of size, people who could help manage say a 50 person company versus a 500 person company versus a 5,000 person company versus a 50,000 person. It’s just not the same team. It’s not always the same team. So if a company is growing very rapidly, the rate at which executive positions will change will also be proportionate to the rapidity of the growth generally.”

John Collison asked about the challenge of retaining talent when companies become successful and get heavily recruited.

Elon Musk: “Then Tesla had a further challenge where when Tesla had very successful periods, we would be relentlessly recruited from relentlessly. When Apple had their electric car program, they were carpet bombing Tesla with recruiting calls. Engineers just unplugged their phones.

If I get one more call from Apple recruiter, but they’re opening offer without any interview with me, like double the compensation at Tesla. So we had a bit of the Tesla pixie dust thing where it’s like, oh, if you hired a Tesla executive suddenly you’re going to.. everything’s going to be successful. And I’ve fallen prey to the pixie dust thing as well where it’s like, oh, we’ll hire someone from Google or Apple and they’ll be immediately successful. But that’s not how it works. People are people. There’s not like magical pixie dust.

So when we have the pixie dust problem we would get relentlessly recruited and, and then also Tesla being engineering especially being primarily in Silicon Valley, it’s easier for people to just like they don’t have to change their life very much. They can just their commute is going to be the same.”

John Collison asked how to prevent the “pixie dust” effect of other companies poaching talent.

Elon Musk: “I don’t think there’s much we can do to stop it. But that’s like, that’s one of the reasons why Tesla, but really being in Silicon Valley and having the pixie dust thing at the same time meant that there was just a very, very aggressive recruitment.”

John Collison noted that moving to Austin likely helped.

Elon Musk: “Austin. Yeah, it still helps. I mean Tesla still has a majority of it’s engineering in California, so getting engineers to move, I call it the significant other problem. Yes. And others have jobs.

Yeah, yeah, exactly. So for Starbase that was particularly difficult since the odds of finding a non SpaceX job Brownsville, Texas are pretty low. Yeah, it’s quite difficult. I mean it’s like a technology monastery thing, you know, remote and mostly dudes. An improvement over SF.”

Management Philosophy and Hiring

John Collison asked what the long-tenured technical executives at Tesla and SpaceX have in common and what makes a good “sparring partner” for Elon.

Elon Musk: “I don’t think it was a sparring partner. I mean, if somebody gets things done, I love them. And if they don’t, I… So it’s pretty straightforward. It’s not like some idiosyncratic thing. If somebody executes well, I’m a huge fan. And if they don’t, I’m not. But it’s not about mapping to my idiosyncratic preferences, or certainly try not to have it be mapping to my idiosyncratic preferences.

Yeah, but generally I think it’s a good idea to hire for talent and drive and trustworthiness. And I think goodness of heart is important. I weighted that at one point. So are they a good person, trustworthy, smart and talented and hardworking? If so, you can add domain knowledge. But those fundamental traits, those fundamental properties you cannot change. So most of the people who are at Tesla and SpaceX did not come from the aerospace industry or the auto industry.”

Elon Musk shares his philosophy on hiring, evaluating talent, and why companies must evolve their leadership as they grow. In Part 13, the conversation continues with the famous decision to switch Starship from carbon fiber to stainless steel and how he drives urgency at scale.