Ex-Tesla President Reveals Elon's Intense Hiring Process

0:00 You go into a job interview with Elon Musk.

0:02 It might not have even felt like it was a formal job interview,

0:04 but your first conversation with him.

0:06 Uh what's that like?

0:07 All right.

0:08 So, uh the setup to the scene is we're

0:09 introduced by a mutual friend and he is intense.

0:13 Uh and the nicities were about two sentences and then he said,

0:18 "Hey, I got this problem in manufacturing.

0:20 Have you ever seen it before?" And then we were right into it

0:23 and 2 hours flew by cuz I had had that experience in manufacturing.

0:27 I'd seen that problem.

0:28 We started to break it down together

0:30 and then we started to move deeper and deeper

0:32 and deeper into the problem and uh we looked up in two hours he was like,

0:35 "Oh man, like I I got allowed out of this.

0:38 I got to go.

0:40 Uh I'm going to go down to the factory floor and do what we just talked about.

0:45 So that's the first that's the first combo.

0:48 He's uh so you're problem solving together.

0:50 He skips the small talk.

0:51 And then is he testing you or he's

0:53 just genuinely trying to solve the problem right now?

0:55 Did you get any sense of he was poking around to see

0:58 kind of where your capacity was or he was literally just

1:01 Oh yeah, that's a no that's exactly what he was up to.

1:03 So his hiring method is he wants to determine whether or not you can do world

1:08 class work and his method is to interrogate

1:12 a particular problem and go super deep on it.

1:15 And uh it's better if he tries to skew it to a problem that he knows, right?

1:21 So that he bullshitting.

1:23 Exactly.

1:23 and he can take you super deep because he's in it

1:26 and he he just likes to know like almost like

1:28 a video game like how many layers can this player get

1:31 through before they're stumped and so that's exactly what was going on.

1:36 we were getting to know each other, but 90% of it was he was evaluating.

1:41 Later when you worked there and you're the president,

1:43 did he try to teach you kind of the the method or say like,

1:46 "Hey, here's what I'm doing when I'm interviewing cuz I'm

1:49 assuming for the first X hires at Tesla, the key hires,

1:52 I think I've I've read something before that he interviewed the first thousand

1:55 people at SpaceX." I don't know if that's kind of like folklore or real,

1:58 but you know, the idea that he's he's

2:00 basically figured out how he likes to hire.

2:03 Did he try to implement that with you and others so that it's a the whole

2:07 team is or is hiring that way or he just does it in his own idiosyncratic way?

2:10 You do whatever you want to do.

2:12 I'm glad you raised this because this is a hack I don't get to in the book,

2:14 but it's the thing that a lot of entrepreneurs

2:16 think about which is as your company scales, how do you protect the culture,

2:21 right?

2:21 And he and Jamie Strael, the co-founder of of Tesla,

2:24 came up with this method to imprint the culture

2:27 on every hire and to test for culture.

2:30 and that was they would be the last interviews.

2:33 That's a hack that I've taken forward now uh from from that Elon experience.

2:39 Uh and now I do that too.

2:41 But the way that translated was that he would say like he said to me,

2:45 "Hey, look, we now as fast as this thing is growing,

2:48 we're going to split this up and you and I are going

2:50 to interview everybody that's hired at a manager level and above." So,

2:54 we didn't interview everybody, but growing from four to 40,000 employees,

2:59 there were a lot of interviews we were doing.

3:00 In fact, 60% of my calendar was interviews.

3:03 Wow.

3:03 60%.

3:04 That's unbelievable.

3:05 Yeah.

3:06 But it was super important because you totally win and lose on talent.

3:08 So, like that's another hack for entrepreneurs to think about is how much

3:12 of your calendar is devoted to the number

3:14 one driver of your success, which is talent, right?

3:17 Um but he to the point of your question he said hey we have

3:21 to determine whether or not these people can

3:24 demonstrate evidence that they can be world class

3:27 and to do that we've got to dive deep into these problems.

3:30 So he basically articulated what he had done with me as we

3:34 were getting to know each other and going through that uh interview process.

3:37 And then we sort of divide and conquered

3:38 like we literally were the last interview.

3:41 And often times I would include in my senior senior hires uh I

3:46 would include JB and Elon because they were both such great talent selectors.

3:51 JB especially has this unbelievable knack for talent selection.

3:56 And what did you pick up?

3:57 So what's the what's the uh okay so I hear the the overall method

4:01 which is you want to be looking for this sort of um worldclass work

4:05 evidence of exceptional ability you are going to how do you do that you

4:09 go super deep on a problem that they've worked on or that you understand

4:14 I've heard Elon say a couple of things that I liked

4:16 which was uh he's like I'm trying to say wow wow

4:18 wow in the first 20 minutes and if I'm not saying

4:19 wow wow wow in the first 20 minutes probably not there exactly

4:22 and trust trust the conversation not the resume because

4:24 you could have a great resume but if the conversation

4:26 is not giving you wow wow wow it's not

4:28 there and if it is forget the resume it's you

4:31 know this is legit so I picked up a couple of extra things in the over the years

4:34 and some of his interviews but I would love you

4:37 know for to go from white belt to blue belt

4:39 here so what what are the nuances what is

4:41 a little what's a question what's a uh a little

4:45 red flag or a trap that you've learned

4:46 to to avoid so one trap to like try to identify

4:50 is did this person actually do the work or are

4:53 they claiming the work of their team in other

4:55 words a lot of us have been teams of eight

4:57 or 10 or 20 that have done unbelievable work.

4:59 We've been on those teams, but it wasn't our work.

5:03 We weren't leading the team.

5:04 We weren't leading the curiosity or the discovery or whatever.

5:07 And so that's the trap that you're trying to like dive into so deeply

5:12 in the problem that you start to determine

5:14 did this person actually do the work or not.

5:16 And it's tricky because there are companies that are fully matrixed.

5:20 So take like uh Nike.

5:22 Nike is a fully matrixed organization.

5:24 You pull a marketer out of Nike,

5:26 that marketer has never had uh full P&L responsibility,

5:30 full creative responsibility, full distribution responsibility.

5:33 They have a very nichy job and it's really hard

5:36 to determine did this person do the work or not.

5:39 Uh and so you go way deep on trying to figure that out,

5:42 knowing that it's a risky hire to hire from a matrix like that because

5:46 you really can't put your finger on who

5:48 really does the uh the breakthrough work.

5:50 That's kind of that's one.

5:52 The second is I would present a much like Elon did with me.

5:57 I'd flip the tables and present a current problem of mine

6:01 and then I want to see their level of curiosity, their level of analytics,

6:05 their level of problem solving,

6:08 uh their their ability to ask really great questions

6:10 to get some data from me and get me engaged, right?

6:13 And so it's basically it's it's that basic like go into a problem of theirs,

6:16 then flip the table and go into a problem of yours.

6:19 And that's that's the knack of Tesla.

6:21 It was like, let's turn complex into simple.

6:23 I've had the the two traps you just mentioned.

6:25 I've had the exact experience they had in the last week.

6:28 I interviewed somebody, they're like, oh yeah,

6:30 I was there from 1 million of revenue to 93 million of revenue.

6:33 Oh, fantastic.

6:34 They weren't the one driving that revenue.

6:36 So, it's not even they're claiming the work of their team.

6:38 It's they're claiming the progress of the overall company.

6:40 And they lived in this corner over here

6:42 that had nothing to do with driving the growth.

6:44 And they really didn't understand, oh, the core engine of this business is is A.

6:49 you worked on B over here and it's like I need

6:51 to find people who the guy who built A because A was

6:54 the reason that business won and that's what we're actually trying

6:56 to understand and and try to try to do our own version of.

6:59 So I've definitely felt that and then the other side

7:01 is there's people who have come from these great companies.

7:04 Nike I'm a marketer at Nike.

7:05 Well, Nike has great marketing.

7:06 And so your brain associates this like level of talent,

7:09 but they're not maybe the people who were there at the beginning,

7:11 the ones who made the key decisions.

7:12 Or one thing that I found is um with sales people,

7:15 there's a great piece of advice, I think, from Ben Horowitz or someone.

7:18 He's like, hire salespeople from the ones who had the the shitty product.

7:22 He's like, if you hire a salesperson from the the people who's

7:25 the product was just being pulled by the market, they, you know,

7:28 the fish were jumping in the boat and you don't know if that person's a great

7:31 fisherman just because they were just being handed

7:33 inbound organic warm leads and they were closing them.

7:36 That's that doesn't mean anything.

7:38 You want to go to the guy who was selling on the the tier

7:40 three company still beating quota um even

7:43 though their company was not the winner,

7:45 their product was not the hot one because that person actually knows

7:47 how to sell and that's really helped me with some of my companies.

7:50 So there's these like small heruristics that can

7:52 actually like improve talent selection and sourcing.

7:55 I I 100% agree with that.

7:56 Like our head of retail came to me uh and he said, "Hey,

8:00 I'm hiring a lot of Apple people from Apple stores." And I said, "Time out.

8:05 You can work in an Apple store and you are an order taker, right?

8:09 Go down the hall to the people at the Microsoft store who

8:11 have to sell a slate two doors down from a MacBook Air.

8:16 Those people know how to sell." like

8:17 the fact that they're they're not starving is unbelievable.

8:20 So, go hire them.

8:22 Well, one of the stories I loved in the book, so I have I have the book here.

8:25 So, I'm like highlighting all my favorite stories as we go.

8:28 But you have a sale a Tesla sales story.

8:30 Can you expl tell that story?

8:31 I thought it was a great one.

8:32 So, the context is uh Elon and I are having these discussions.

8:36 We're getting to know each other and uh eventually he pops the question.

8:39 He said, "Why don't you join?" My first reaction is, "I'm not sure I'm your guy.

8:43 Like, your company's twice as big as my biggest company already.

8:45 Don't you need a big company guy?

8:47 And he says, "No, no, I I that's the opposite of what I need.

8:50 I need a fellow entrepreneur who knows what it's like." You need him.

8:55 Yeah, totally.

8:56 He's like, "I need I need a fellow entrepreneur who knows what

8:58 it's like to chew glass and look into the abyss." His famous quote.

9:01 And you know how to allocate capital

9:03 and no big company person's going to know that.

9:06 So I said, "Why don't why don't you let me go poke around the business?

9:08 What is your biggest challenge right now?" And he said, "Ah,

9:12 biggest challenge is top line." like we've

9:14 promised the this street we're gonna sell

9:15 12,000 cars this quarter and it's a month and a half in we've sold three.

9:20 I'm like, "Oh crap, that's a big problem."

9:23 I said, "I tell you what, I'm traveling a ton the next week.

9:25 I'll call you in a week." So,

9:27 I went out as I was traveling to Tesla stores and I test drove cars.

9:32 So, your first move was to mystery shop, which I like,

9:35 by the way, cuz you get this idea that it's all intellectual.

9:39 it's all strategy and you're like, "No, no, let me go.

9:41 Let me go see groundf flooror truth of what's going on." Totally.

9:44 I'd read the Sam Walton biography.

9:46 Uh, and the biggest thing I pulled out

9:48 of that book was the management hack of secret

9:50 shopping because you get this sense like frontline

9:53 employees knew exactly what's wrong with the company.

9:55 They will tell you what the customers are complaining about.

9:57 They'll tell you what the the organization sucks at.

10:00 And so that was my first instinct like go to the front line.

10:03 So I go to eight stores.

10:04 I test drive.

10:05 Use different email addresses so they don't know who I am.

10:08 And the test drive is supposed to be the fulcrum of the salesunnel.

10:11 Like you hit the accelerator and you can't stop thinking about buying a Tesla,

10:17 right?

10:16 I didn't get a single call back.

10:18 And Elon had introduced me to the head of sales ops.

10:22 So I called the guy.

10:23 I said, "Can you tell me why I'm not getting called back?" And he said,

10:28 "I looked at the system.

10:29 You're not flying like I have no idea." I said, "Okay,

10:32 tell me how many people have gotten a test drive

10:34 in the last 30 days that haven't been called back.

10:38 say cranks through the CRM and he comes back and says 9,000.

10:42 And I'm like, 9,000?

10:43 You're going to make your corner if you just call these people.

10:46 I said, "Okay, look, this problem has to get solved now." So,

10:49 I'm kind of in CEO mode.

10:51 And um like this problem has to get solved now.

10:53 Can you cut off any new leads to salespeople

10:57 until they call all their previous test drives back?

11:00 He's like, "Yeah, I can block that in the system." I said,

11:02 "Okay, do it." He's like, "Great.

11:05 It'll be done in two hours globally." They weren't calling back

11:08 not out of laziness but because the incentive structure right they were

11:12 getting they the sort of commission was tied to the test drive

11:15 right not on to not to sales that closed from a follow-up.

11:19 Is that what there was some incentive problem?

11:21 Correct.

11:21 There was there was an incentive problem but there was also a profile problem.

11:24 We were hiring people that didn't know how to ask for the sale.

11:27 Uh and that was the root cause.

11:28 So when you forced them to uh then uh then stuff started moving.

11:33 So I talked to the guy the next day.

11:35 He's like, "I already have the results out of Asia

11:37 and Europe and like sales are flying." And I said, "Yeah."

11:41 I said, "No surprise." Like, "All you have to do is call people back,

11:44 like if you want to close a sale." Um,

11:46 and then it dawned on me, "Oh crap, I made this decision like I was the CEO.

11:53 I don't even work for Tesla yet." And so I said to the guy like,

11:58 "I got to call Elon and tell him what we did." Uh,

12:00 and I said, "I'll take the blame.

12:02 You're not going to take the blame.

12:03 I'll take the blame." And so I called Elon.

12:05 I said,' Man, I got to I got to beg your forgiveness.

12:07 I haven't I haven't not been a CEO for 20 years.

12:11 I've had six companies.

12:12 I've uh I haven't had a boss.

12:15 And when I see a problem, I want it gone like immediately.

12:18 And so here's the problem I saw on your topline challenge.

12:22 Here's what's happening in your stores.

12:23 Here's the change we made yesterday.

12:25 And by the way, I think with this change, you're going to make a quarter.

12:30 Mhm.

12:30 Long silence.

12:31 Like uncomfortable silence.

12:32 This is before I knew about the signature Elon long silence and uh

12:37 what are we talking 30 10 seconds 30 seconds?

12:39 It had to be at least 60 and to the point where

12:41 I was just about ready to ask him are you still there

12:45 and what I have now come to learn is like that's his processing mode.

12:49 He shuts down all other sens sensory inputs and he just lets the compute run.

12:54 It's literally like AI, right?

12:55 You can say go to go to think mode and it just it'll take time.

12:58 That is the think harder button.

13:00 So, uh, he comes back on.

13:02 He says, "You know what?

13:05 I think you're going to fit in here just fine.

13:07 You've proven to yourself and to me you can be useful.

13:10 So, why don't you just join