The Man Who Took Tesla From $2B To $20B Shares The Exact Formula | Jon McNeill

Tommy Mello (0:00)

I'm very, very excited about this podcast. This is gonna be one of the best ones yet, and I've done over 700 podcasts. Jon was the president of Tesla when it grew from 2 billion to 20 billion in revenue in 30 months. He founded and sold six companies and sat on the boards of General Motors, Lululemon and CrossFit. His new national bestselling book, The Algorithm, reveals the five-step framework Elon Musk used to build Tesla and SpaceX, and how any company in any industry can use it to cut complexity and grow faster than they ever thought possible. Today, he runs DVX Ventures, a venture studio that's launched 12 plus companies using the algorithm as its operating system.

After this podcast, we might switch to this system as well. Jon, it's great to have you, my friend.

Jon McNeill (0:46)

It's good to be with you, Tommy.

Tommy Mello (0:48)

You've already founded and sold six companies when Sheryl Sandberg decided to call you and said Elon needs help.

I've really researched the hell out of Elon Musk and his childhood. I read his biography and it's just interesting because he's the richest, most successful man in the world. But it's people around him that make it possible. There's no way he could do everything he's doing without a guy like you.

Jon McNeill (1:10)

Yeah. The team, he's got an incredible ability to attract people of talent to him, and so the team that's around him is fantastic, and the team below that team is fantastic. They get, I forget how many thousands of applications per job at a place like SpaceX or Tesla. Because the best people in the world want to work with somebody that gives big challenges and then gives a lot of agency to go attack those challenges. So yeah, he can't do it alone, and he would be the first to say that.

But he's got a pretty unique ability to attract talent to.

Tommy Mello (1:49)

In your companies, as you created this algorithm framework, how much do you guys promote failure? I mean, it seems like failure is like race towards failure and fix it versus NASA trying to get it perfect.

Jon McNeill (2:03)

Yeah, exactly. Like the whole mantra is start. Like don't try to avoid failure, just start. Knowing that like we're going to screw it up, we're not going to get it right. It'll probably take us 20 or 30 or 40 tries to get it right. But you won't get to the end goal unless you actually start. So to your point, we don't wait until we've figured it out and then we move, we move first and figure it out. And that's key to this because what we're striving for is big, big breakthroughs and you get those breakthroughs little chips at a time. You don't get them in big, big ah-has typically.

And so we're working really towards making these little gains, little gains that pile up into big gains over time.

Tommy Mello (2:46)

You know, I'm sure you came from lean manufacturing. I've read the Toyota Way and the principles of Kaizen, incremental improvement.

You know, you said that Elon Todd was complete opposite of everything you knew. What was that like? What was different about that?

Jon McNeill (3:05)

Yeah, like I came in and we had immediate problems producing the Model X. And so I hopped into that problem with everybody else on the leadership team and started to use the skills that I had, the toolbox I had, which was lean and Kaizen, and the Toyota production system. And what I found was that stuff was great to drive incremental change, but it wasn't sufficient to drive quantum change. And when I met Elon and asked him, like, what does success look like if I come and join Tesla?

He said, what success looks like is you double the company every eight months. I was like, man, you're already $2 billion in sales. That's a big ask. And I learned that the lean and the Toyota production system weren't sufficient to drive that kind of growth, which is why over time we ended up inventing the algorithm because we wanted a formula that would drive quantum growth. And that's what the algorithm does. It really drives big, big innovation breakthroughs.

Tommy Mello (4:08)

Well, I don't know if this is a question I should even ask, but what made you kind of go out on your own and bring a team and decide to dive into a few different board seats and start developing your own businesses versus continuing? You know, SpaceX just had a great IPO.

I know a bunch of guys that were buying it at 12 bucks and they 13X their investment. You know, what you just felt like you're ready to spread your wings and.