Elon’s Operating System
Second Level Thinking · Issue 45
What two new books reveal about the five-step algorithm behind the most extraordinary builder alive, and how to apply it to your own business and life.
Even with all the Elon Musk content available today, I must admit, I was still curious about two new books that were published recently: The first is The Book of Elon by Eric Jorgenson. Jorgenson is the writer behind The Almanack of Naval Ravikant which we talked about at great length in issue 28, The Naval Framework: Navigating the Path to Success.
That book distilled one of the sharpest philosophical minds in Silicon Valley into a concentrated guide on wealth, happiness, and building a meaningful life. The Book of Elon applies the same curatorial method and over five years of work, millions of Musk’s own words — interviews, tweets, podcasts, essays — distilled into frameworks, it is more an operating manual than a biography.
The second is The Algorithm by Jon McNeill. Where Jorgenson is the outside observer, McNeill is the insider. He served as President of Tesla from 2016 to 2018 and was one of Musk’s closest direct reports during that period. Under his tenure, Tesla’s revenue grew from $2 billion to $20 billion in thirty months. The Algorithm is the first book written by any of Musk’s direct reports, and it is the most credible, battle-tested account of how Musk’s operating framework actually works in practice.
Read together, they reveal something important: Elon Musk’s success is not a product of genius that cannot be studied or replicated. It is a product of a replicable system that almost nobody uses correctly.
Mission as Gravity
Jorgenson’s central thesis — and it’s a big one — is that Musk’s defining competitive advantage is not intelligence, capital, or even work ethic. It’s purpose.
Not purpose in the corporate mission-statement sense. Not a values slide from a strategy offsite. Purpose at civilisational scale: making humanity multi-planetary, accelerating the transition to sustainable energy and building artificial general intelligence. These are not business strategies. They are goals of a magnitude that most people don’t allow themselves to take seriously.
And that, Jorgenson argues, is precisely the point. Missions of that size create their own gravitational field. They attract the best engineers in the world and people who want to work on something that matters, not just something that pays. Those engineers build better products, better products generate more capital, more capital funds the next impossible project; the loop is self-reinforcing and it compounds over time.
Compare this with the conventional approach: choose a defensible market, optimise for margin, manage risk, harvest returns. That is a sensible strategy that produces sensible outcomes. It does not produce SpaceX.
The question worth sitting with is not whether you are building SpaceX. It’s whether the mission behind your work is large enough to attract the calibre of people and level of commitment required to build something genuinely remarkable. Most people, and most organisations, underestimate how much of their talent problem is actually a mission problem. If the best people aren’t drawn to you, it is worth asking whether what you are building is magnetic enough to deserve them.
The Algorithm
This is the centrepiece of both books, and the concept that deserves the most space.
Musk calls it The Algorithm. McNeill, who lived it weekly on the Tesla factory floor, describes it as the most powerful operational framework he has ever encountered. Since leaving Tesla, he has applied it to every business he has worked with.
The five steps are deceptively simple:
Question every requirement.
Delete unnecessary steps, processes, and parts.
Simplify and optimise what remains.
Accelerate cycle time.
Automate.
That’s it. Five steps. The genius is not in the steps themselves. It’s in the ordering.
Musk is emphatic that most organisations do this in reverse. They automate first, accelerate second and optimise third. They never — or almost never — question the requirements or delete the unnecessary parts. The result: organisations become extraordinarily efficient at producing things that should not be produced at all. Highly optimised, beautifully automated, completely wrong.
McNeill illustrates this with one of the most striking examples in the book. Tesla needed to manufacture in China, the largest auto market in the world. The rule, accepted by every major car company without question, was that a foreign-owned plant required a Chinese joint venture partner. General Motors had one. Volkswagen had one. Everyone had one.
Musk sent McNeill to Beijing with a different brief: negotiate for a 100% Tesla-owned factory. Not because the rule was obviously wrong, but because nobody had seriously questioned whether it needed to exist. After fourteen months of negotiation, Tesla secured approval for the first wholly foreign-owned automotive plant in China. The rule was not immovable, it had simply never been challenged.
That is Step 1 in practice. Question the requirement and don’t assume the constraint is real until you’ve tested it.
The most powerful application of Step 2 — Delete — came in the body shop. Under pressure to cut costs, McNeill and Tesla’s head of engineering, Doug Field, looked at the factory’s most expensive bottleneck: hundreds of parts being welded together in a complex, labour-intensive process. The question they asked was radical: could the entire body shop be eliminated? Not optimised. Eliminated. The answer, eventually, was yes and by redesigning the vehicle’s structural components so that far fewer parts were required in the first place. This is deletion at scale. Most companies never attempt it because it requires questioning work that has already been done, which is politically uncomfortable. Musk does not find this uncomfortable. He finds failure to question it uncomfortable.
Jorgenson makes the same point from Musk’s own words across a different context. Tesla didn’t accept that batteries cost $600 per kilowatt-hour. Musk decomposed the cost to raw materials — approximately $80 per kilowatt-hour — and set about engineering the gap closed. The Boring Company didn’t accept that tunnelling costs $1 billion per mile. Musk asked why, discovered the machine was idle 85% of the time, and redesigned the process around the idle time rather than the active time.
In each case, the question is the same: what are we assuming that we haven’t tested?
Urgency as a Weapon
One element of the Musk operating system that both books identify is the strategic use of urgency.
Most organisations treat urgency as a reaction to crisis. Something goes wrong, the pace accelerates, the crisis passes, the pace returns to normal. For Musk, urgency is not reactive. It is a permanent operating condition, engineered deliberately into the culture.
McNeill describes attending weekly engineering reviews where Musk personally tracked progress on one or two existential issues — the problems that, if not solved, would kill the company. Not quarterly reviews but weekly with personal involvement. He contrasts this with the competitors he observed: CEOs who delegated the hard technical problems to committees, who reviewed progress monthly if at all, whose organisations moved at the pace of their organisational structure rather than the pace of the problem.
“I was absolutely certain that the CEOs of our competitors would never personally participate in weekly engineering reviews or drive the company forward at such a pace,” McNeill writes. “Compared to these competitors, our accumulated advantages were continuously compounding.”
Speed, Jorgenson adds, is both an offensive and a defensive tool. Offensively, it allows you to out-innovate before competitors can respond. Defensively, it makes you nearly impossible to copy, because by the time a competitor has replicated what you built, you have moved on to the next version. The best protection for intellectual property is not a patent. It is a pace of innovation that leaves competitors perpetually copying obsolete versions of your technology.
Meetings are the mechanism through which speed is either protected or destroyed. Musk’s rule, documented in both books, is unambiguous: eliminate all large meetings unless the value to every person in the room is unequivocal. Frequent meetings are only justified for genuinely urgent issues and must stop the moment the urgency passes. And — the counterintuitive one — leaving a meeting the moment you realise you are not adding value is not rudeness. It is respect for everyone’s time, including your own.
First Principles as the Foundation
Beneath all of this is a more fundamental habit of mind that both Jorgenson and McNeill identify as the common thread: first-principles thinking.
Most people reason by analogy. This is how the car has always been built. This is what a battery costs. This is how a factory in China works. Analogy-based reasoning is fast, socially safe, and usually correct enough to be functional. It is also how you get incrementally better versions of things that were designed a generation ago.
First-principles reasoning asks a different question: what is actually true here, and what have we merely assumed? It is slower. It is uncomfortable. It requires being willing to conclude that a lot of effort has been invested in doing things the wrong way. And it produces, occasionally, a $65 million rocket that everyone else said could not be built for less than $450 million.
Jorgenson documents Musk’s own articulation of this: “I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first-principles basis.”
You don’t need to be building rockets to apply this. The question — what am I assuming here that I haven’t tested? — is available to all of us, in every domain, every day.
Three Takeaways
So what does this mean for each of us and how can we apply first-principles thinking to our own lives:
Run The Algorithm on one process in your business or life this week. Pick something that feels inefficient or expensive. Don’t start by optimising it. Start by questioning whether it needs to exist at all. Then delete everything that doesn’t. Only then simplify, accelerate, and automate what remains. The order is not cosmetic — it determines whether you end up with a better version of the wrong thing.
Identify one to two existential constraints. Musk’s weekly reviews focused on the issues that, if unresolved, would kill the company. Most of us manage our days around what is loud rather than what is load-bearing. What is the single constraint that, if you removed it, would change everything? That is where your personal attention belongs.
Size your mission. If the best people aren’t drawn to your work, the problem may not be compensation or culture. It may be that the mission is not large enough to feel meaningful to someone who has options. Ask honestly: is what I am building worthy of the best version of the people I want to attract? If not, the answer is not better marketing, it is a bigger problem to solve.
Finally, where in your business or life are you currently automating something that should first be questioned, simplified, or deleted?
Parting Shot
Elon on self-limiting:
“Most people self-limit their ability to learn. Just read books and talk to people. I didn’t study rocket engineering, I picked it up along the way.”
