WEBVTT - Bonus: Barry Ritholtz joins Elon, Inc.

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<v Speaker 1>Hey, everybody. Barry Ritholtz here, I just finished recording an

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<v Speaker 1>episode of Bloomberg's new podcast, Elon Inc. It's a weekly

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<v Speaker 1>show all about Elon Musk. It was a great conversation

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<v Speaker 1>with David Papadopolis, Dana Hull, and Max Chafkin, all about

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<v Speaker 1>SpaceX Tesla, what does the future look like for new

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<v Speaker 1>cars coming out of Tesla, and whether or not Elon

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<v Speaker 1>Musk can continue running three companies at this high level.

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<v Speaker 1>I want to play a little excerpt for you here.

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<v Speaker 1>Head over to the Elon Inc. Feed to listen to

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<v Speaker 1>the whole thing, and if you like it, please subscribe.

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<v Speaker 2>Let me ask you this though, back on Elon the

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<v Speaker 2>entrepreneur and the salesman, perhaps as good as a technologist

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<v Speaker 2>and an engineering mind as he is. What are the

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<v Speaker 2>great salespeople of our time? Right? Maybe?

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<v Speaker 1>No doubt Steve Jobs the second, Like everybody, how often

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<v Speaker 1>you hit people described as the next Steve Jobs And

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<v Speaker 1>it's always a pale imitation.

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<v Speaker 3>My theory in that is Steve Jobs died in what

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<v Speaker 3>two thousand and eleven? That was when Tesla was ramping

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<v Speaker 3>up the models, and so I think the media had

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<v Speaker 3>quite a lot of a role the tech press in

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<v Speaker 3>particular had quite a lot of a big role to

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<v Speaker 3>play in this because Steve Jobs died and everyone was like,

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<v Speaker 3>who's the new Steve Jobs.

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<v Speaker 1>But that ability to create that reality distortion field where

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<v Speaker 1>people suspend disbelief and get pulled into a universe that

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<v Speaker 1>doesn't exist. And it's a to be fair to Elon,

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<v Speaker 1>it's a hopeful vision of the future where pollution is

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<v Speaker 1>a thing of the past, and climate change has been

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<v Speaker 1>managed and even if we have overpopulation, well, everybody just

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<v Speaker 1>head over to my country home on Mars and there's

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<v Speaker 1>plenty of room for all. I mean, he has created

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<v Speaker 1>a narrative that is hopeful, and that's not the worst.

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<v Speaker 4>Thing the Steve Jobs thing. I think that was something

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<v Speaker 4>that eld himself. I mean he has that he has

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<v Speaker 4>explicitly modeled himself on Steve Jobs. Like he I mean

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<v Speaker 4>you look look at look at.

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<v Speaker 3>Yeah, yeah.

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<v Speaker 4>Like the way he presents himself as a CEO, the

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<v Speaker 4>way he conceptualizes the role of a manager, the way

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<v Speaker 4>he goes.

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<v Speaker 1>The way he tweets, the rollout of the new vehicles

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<v Speaker 1>he does.

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<v Speaker 4>The choice of Walter Isa. Look at the covers of

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<v Speaker 4>those books, right, I mean it's like he dial he

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<v Speaker 4>ordered up his own you know, Isaacson treatment, and I

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<v Speaker 4>think that has been an effective approach. People were entranced

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<v Speaker 4>by Steve Jobs, and to some extent, Tesla has managed

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<v Speaker 4>to create an Apple like following and has been able to,

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<v Speaker 4>you know, convince investors that the economics for cars are

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<v Speaker 4>the same as the economics for smartphones.

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<v Speaker 1>So who's the Tim Cook in the Elon Musk story.

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<v Speaker 1>We know Gwen is the Tim Cook of SpaceX. Who

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<v Speaker 1>is the Tim Cook of Tesla?

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<v Speaker 2>Does said person exist?

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<v Speaker 3>So that's always been the interesting dynamic at Tesla. Whenever

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<v Speaker 3>anyone has kind of risen up to be the sort

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<v Speaker 3>of de facto number two, they've always been axed or

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<v Speaker 3>they've disappeared suddenly. We saw that most recently with Zach Kerkorn,

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<v Speaker 3>the very highly regarded CFO. He left in August. No

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<v Speaker 3>one exactly knows why.

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<v Speaker 1>So that reminds me a little bit of Jack Welsh,

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<v Speaker 1>who was running General Electric for twenty years, and there

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<v Speaker 1>was a series of CEOs coming up under him, or

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<v Speaker 1>potential CEOs, and they knew Jack had a death grip

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<v Speaker 1>on ge and all these guys, the S and P

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<v Speaker 1>five hundred is littered with CEOs who were potential Jack

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<v Speaker 1>Welsh replacements. There's a whole longer story about what a

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<v Speaker 1>terrible job Welch did, but there are some parallels there

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<v Speaker 1>in that it becomes hard to retain talent at the

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<v Speaker 1>highest level if they don't see a path to work

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<v Speaker 1>their way up ladder, if not succeed the CEO. You know,

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<v Speaker 1>we saw that a little bit with Jamie Diamond at

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<v Speaker 1>JP Morgan Chase, and we definitely saw it with Jack

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<v Speaker 1>Welsh at GE. The question is, at a certain point

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<v Speaker 1>Elon is going to have to focus on whatever the

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<v Speaker 1>next thing is, and he needs someone to run Tesla

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<v Speaker 1>when he's too busy. I have no idea who that

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<v Speaker 1>person might be.

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<v Speaker 3>Well, and it's really hard for someone from the outside

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<v Speaker 3>to succeed at Tesla because the culture is so unique

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<v Speaker 3>that the various people that they've hired from other industries

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<v Speaker 3>or from other companies have never lasted long. I mean,

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<v Speaker 3>the top the four named executives now at the top

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<v Speaker 3>of the roster, there are all longtime Tesla executives who've

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<v Speaker 3>been there forever.

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<v Speaker 4>No one else can be as hardcore as I musk,

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<v Speaker 4>and that that's true.

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<v Speaker 2>I mean this is this is definitely true. So Barry,

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<v Speaker 2>last question for you, your final thought on Elon and the

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<v Speaker 2>difference between physics and humans.

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<v Speaker 1>Sure, so, his greatest success have come, I don't want

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<v Speaker 1>to say, conquering the rules of physics, but working within

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<v Speaker 1>the laws of physics to bend our expectations as to

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<v Speaker 1>what's possible very quick, long range software driven cars, the

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<v Speaker 1>ability to launch cheap, renewable, reusable rockets into space and

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<v Speaker 1>land them where he's kind of you know, seems to

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<v Speaker 1>have lost the thread. No pun intended was at Twitter.

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<v Speaker 1>By the way, we don't know the impact on Tesla

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<v Speaker 1>sales from him being such a kind of wackado on

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<v Speaker 1>Twitter because we don't have the control group. You know,

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<v Speaker 1>we don't run an experiment. But I know personally and

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<v Speaker 1>all right, I live in the New York area, which

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<v Speaker 1>tends to vote Democratic, but that tends to be his

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<v Speaker 1>Tesla potential base. You have California, you have Austin, Texas.

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<v Speaker 1>You have you know, the liberal the big city.

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<v Speaker 2>You have the cash to.

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<v Speaker 1>Write, they have the income, they they're concerned about the environment,

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<v Speaker 1>and they're willing to put up with some of the

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<v Speaker 1>inconveniences of an electric car. If they think they're they're

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<v Speaker 1>doing good for the world. Look I'm that is eventually

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<v Speaker 1>a series of Harvard Business School case studies how to

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<v Speaker 1>alienate your core customer and how long can you get

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<v Speaker 1>away with that? My last thought is he needs a

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<v Speaker 1>couple of no men. He needs some people around him

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<v Speaker 1>to say, Elon, that's a really dumb idea. Elon forty

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<v Speaker 1>four billion dollars, that doesn't make any sense. Elon, focus

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<v Speaker 1>on rockets and cars. Leave this social media crap to

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<v Speaker 1>other people. And he doesn't have anybody, not only does

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<v Speaker 1>any of people willing to stand up to him and

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<v Speaker 1>tell him that's a terrible idea. That inner circle really

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<v Speaker 1>seems to be a bunch of cheerleaders urging him on.

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<v Speaker 1>You know, you know, Chuck, Chuck, Chuck, a frat house,

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<v Speaker 1>every worst instinct he has, and they're encouraging and chugging.

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<v Speaker 4>Does