the idiot index
first principle thinking in action
I was listening to a Founders podcast episode on Elon Musk. One thing jumped out to me: his obsession with simplification.
Let’s be clear, simplification is not dumbification. You can’t make rockets, spaceships and plan to colonize Mars with dumbification.
So what does simplification actually look like in action?
When Elon wanted to build rockets. It was fucking expensive. So he created something called the idiot index. It calculates how much more costly a finished product is than the cost of its basic materials. If a product has a high idiot index, you’re being an idiot.
The cost can be reduced significantly by coming up with an efficient manufacturing technique.
For every part of the rocket, he went to the bare bones of separating every raw material. He calculated the cost of carbon fiber, metal, fuel, and other materials that went into making a rocket.
The finished product cost at least 50 times more than the raw materials.
So, he started hunting.
A supplier quoted a price of $120,000 for a part. Elon said that the part was no more complicated than a garage door opener and told one of his engineers to make the part. His engineer made it and it only cost $5,000.
When an engineer told Elon the air cooling system for the Falcon 9 would cost $3 million, he shouted over to Gwynne Shotwell to ask her what an air conditioning system for a house cost. About $6,000, she said.
So, the SpaceX team bought some commercial air conditioning units and modified their pumps so they could work atop the rocket.
Elon saved money by questioning every requirement.
When he asked his team why it would cost $2 million to build a pair of cranes, these are cranes for rockets. He was shown all the safety regulations imposed by the Air Force. Most were obsolete.
So SpaceX then goes to the Air Force and they start questioning them and he says SpaceX was able to convince the military to revise them. The cranes ended up costing $300,000 instead.
Elon constantly presses team to source components from non-aerospace companies because aerospace companies charge 10 times more.
The latches used by NASA cost $1,500 each. A SpaceX engineer was able to modify a latch used in a bathroom stall and create a locking mechanism that only cost $30.
All of this is nothing. Elon has an algorithm - the 5 Commandments that he repeats like a mantra:
Question every requirement. Each should come with the name of the person who made it. Requirements from smart people are the most dangerous because people are less likely to question them. Always question, even if the requirement came from Elon himself.
Delete any part of the process you can. You may have to add them back later. If you don’t end up adding back at least 10% of them, you didn’t delete enough.
Simplify and optimize. This comes after step two. A common mistake is to simplify a part or process that should never exist.
Accelerate cycle time. Every process can be sped up, but only after you’ve followed the first three steps.
Automate. This comes last. Never first.
My core takeaways from this podcast:
Stop thinking you have limits. Stop giving into imaginary delays. Start with whatever is in front of you right now and resist the urge to overcomplicate.
See you tomorrow,
Akanksha
PS: I have been experimenting with creating AI videos. Might write about it tomorrow.
A few examples:
These kind of videos are easily doing 300K+ views on Instagram reels. You won’t believe how simple they are to create.
Created these for hugsy.app the fun couples app I am building:
You will see all of these illustrations and more directly in our app.
If you are in relationship, you should definitely sign up to the early access.