Musk Companies Will Outlive Elon

Musk succession is a meritocratic process

Companies owned by Elon Musk, credit Madison Trust

Musk companies have become key to many emerging sectors, such as commercial space and tunneling, brain interfacing, sustainable transport/energy and AI robotics, which implies he is a keyman. Unfortunately this suggests Musk companies could lose their way or even founder without him, slowing or halting progress in these crucial sectors.

The possibility of Musk disappearing from the stage shouldn’t be discounted, he likes to court conflict, placing him at high risk, and he isn’t getting any younger... Certainly Musk intends to move to Mars in the next decade to assist the colonization process, so his companies will have to survive without him, in the not too distant future.

“I would like to go [to Mars] at some point, I’ll go when I’m certain that SpaceX will be fine without me and that path will continue.” ~ Elon Musk

Perhaps the best way to determine the likely fate for these enterprises is to examine how they work, especially how they differ from the norm. The common traits found in these companies come under three primary headings: Inspiring Mission, Excellent Staff and AI Management.

Inspiring Mission

“In the early days [of Tesla], the mission was the same, and we didn’t know if we could make an impact. The mission is something that you aim for, right? And we kept aiming for it and kept getting better, and then we subsequently started to see the impact of what we were producing and what we were creating having an impact that was ultimately steering the rest of the world into this direction… Once you realize the impact, you’re like: wow, we can really steer the future for the better.” ~ Franz von Holzhausen, Tesla Senior Design Executive

First and foremost, Musk companies are built on a truly inspiring mission: -

SpaceX – colonize space, starting with Mars

Tesla – transition the world to sustainable energy to combat climate change

Neuralink – enable the disabled via a computer brain interface

The Boring Company – provide low cost tunnels to alleviate surface congestion and pollution

xAI – to understand the true nature of the universe

This mission acts as a natural regulator, keeping the company on-track, and emboldening employees to rise to the challenge of creating new technologies.

Excellent Staff

“Last year 5.8 million people applied for jobs at Tesla and SpaceX, for 30 thousand jobs...they get the best people, who do the best.” ~ Ron Baron, SpaceX/Tesla investor

Musk companies aim to employ the best and most capable people. Smart yes, but also those who can work in a team; or as they put it the “no assholes” policy. Generally these are young people, ideally just out of college, or preparing for the transition in the case of interns. Hence they feel particularly strongly about the mission and work tirelessly to bring it to fruition. Of course some old hands are included, such as Franz von Holzhausen at Tesla, Gwynne Shotwell at SpaceX, Steve Davis for the Boring Company and Igor Babuschkin at xAI, who can guide and mentor the younger employees to success. So effectively these companies benefit from the energy of youth, tempered by the wisdom of experience, the perfect combination.

AI Management

“You’re given self-management tools, you’re not assigned a manager. Instead you’re given apps which let you decide where’s the highest value you could add right now and you’re not assigned to any one area. You then just go into production and start designing, making financial decisions to the best of your capability.” ~ Joe Justice, Tesla Agile consultant

Musk companies use AI to enhance their work efficiency. For example: at Tesla the AI generates areas for attention, engineers choose one and form teams to tackle the problem. Then they work off their own cognizance to discover the most efficient and economic solution. Generally management is low-key because these companies hire professional people, who are capable of managing their own work. Overall this ensures a rewarding work experience, while the company’s products and production are continuously improved.

Holistic Approach

As these corporate virtues suggest, the experience is quite different working at a Musk company. More importantly they are mutually reinforcing, the mission inspires the youthful workforce and self management frees them to plot their own course, adding to their personal motivation and sense of achievement. However, these self-reinforcing virtues are an unusual combination, hence the balance could easily be upset by a new CEO with differing opinions on how best to run the company. Remove any of these building blocks and a Musk company could collapse, or devolve into something far more mundane.

Succession Plan

“People – especially the media – often claim that Elon isn’t deeply involved in his companies and doesn’t deserve credit for their success. This couldn’t be further from the truth. While he obviously can’t personally solve every issue, he relentlessly focuses on the biggest, most critical problems, often staying hands-on 24/7 until they’re resolved (or until an even bigger challenge demands his attention). Anyone who’s worked with him for more than a few years can attest to this firsthand.” ~ Jon Edwards, VP of Falcon Launch Vehicles at SpaceX

Elon searches for the biggest bottleneck at any of his companies then attacks it with gusto, personally contributing to its resolution. This willingness to jump into the trenches demonstrates his technical and leadership ability, something crucial at these tech companies, where the path to success is far from certain. This suggests whoever replaces Musk should possess strong technical and leadership skills, although not necessarily as strong as Musk if they only have manage one at a time. Reportedly there are succession plans in place at these companies, which involves promoting someone invested in their mission and modus operandi. Steve Davis is already CEO of The Boring Company, Gwynne Shotwell is in pole position at SpaceX, Igor Babuschkin at xAI, and there are many capable people at Tesla who could fill the leadership role, like Franz von Holzhausen. De facto or de jure these people already act as CEO because Musk can’t be everywhere at once, particularly as he expands into new areas.

Inherited Succession

Musk’s children will likely inherit ownership of his companies, in whole or in part. However, Musk will likely use a holding company to manage all his stocks as he transitions to a more executive role. Hence whoever succeeds him will likely inherit the holding company rather than individual companies, which suggests they won’t be involved in day-to-day running. Perhaps his scions will use this vast wealth to start their own enterprises on Earth, Mars or wherever they find themselves in the future.

AI Executive

No doubt Elon is moving towards AI control of these companies, as it’s already used as a management tool. However, AI has a long way to go before it can fill the role of CEO. When Elon asked AI to solve a design problem at SpaceX it spectacularly failed, so currently lacks the technical chops for something as demanding as CEO at any of his tech heavy companies. However as AI capabilities grow they could learn to fill the role, although whether this could occur before Musk migrates to Mars seems moot at the moment. Perhaps when a sufficiently cognizant AI can teleoperate an android, like Tesla’s Optimus, this might become a practical possibility.

In Conclusion

Essentially what Musk has created is a self perpetuating culture of personal, product and corporate improvement. Hence management is usually promoted from the ranks because they best understand how Musk companies work and the tempo required to succeed.

Sooner or later Musk will secede from his leadership role but the number of possible replacements are legion, all with first hand experience of what’s needed. SpaceX et al will survive Musk – because that’s all part of the plan.

Chris Prophet