At a networth of USD$20.7 billion, Elon Musk has always been a confusing man to work out. His mind is filled to the brim with ingenious ideas of the future, being the owner and CEO behind the Tesla car brand and taking the next greatest step in mankind by making a civilization of humans on Mars. He’s also released a flamethrower with another of his Californian creations, The Boring Company. But he’s always been a bit ‘different’…with quite alternative leadership styles.
Last year, journalist and former lead-writer of Tesla, Silicon Valley-based, New Zealand born, Hamish McKenzie released his inside take on how Elon Musk’s Tesla “sparked an electric revolution to end thje age of oil.” The book, titled Insane Mode contains an analysis of the context of the automotive industry and the wider renewable energy market, but also a rare and personal take on Elon Musk and the future he is helping to define. We sit down to talk to Hamish about all this and his own revolutionary startup, Substack, which is creating a new model for journalism around the world.
Is there anything in particular that’s really exciting you about the future and where we’re going?
Most of the time I’m just depressed about the future, because I’m trying to raise a kid and climate change is going to kill us all and make his life horrible.
I’m excited for the transition from mine and burn world to something that’s more based on renewable energies and batteries and electric cars. I think that would be a good place. Energy can be cheaper and more abundant and the rulers of the universe might look a little bit different.
With your time at Tesla, you’re a part of some sort of shift, you’re part of history in a sense. Do you Sense that there is a public excitement about this shift?
I think we’re just at the beginning of it and people are starting to twig to it. It did feel like that within Tesla and there are a lot of mission-driven people in that company who really religiously believe that the future is going to be better if we can shift everyone to electric cars, sooner rather than later.
For a long time, it seemed like Tesla was out in an island by itself and people didn’t believe that it was going to ever come to anything. There’s always going to be rich man’s toys for just novelty purposes and that, of course, they would never take over the petrol cars that we’ve known for 150 years.
I think this is the start of a big transition and a big shift and we’ll look back at Tesla and say, ‘That was a company that catalysed it’. I think we’re starting to see the existing auto industries wake up to it and they not moving aggressively enough to get themselves out on the other side in one piece.
Volkswagen is actually making the right moves and putting $50 billion in the next five years into transforming themselves into an electric car company. The thing that had to happen for that to take place was not that it had an epiphany or an enlightment moment, it was that they had this diesel gate emission scandal that forced them to start from scratch, which in the end I think will be looked back on as a fortuitous thing for them.
As you were saying, Tesla will be looked upon as one of those companies that did help drive the shift. was there a catalyst within that?
There were two things that were really important and one is that lithium ion batteries became good and cheap enough. So you had to say that the spread and popularity of laptop computers and mobile phones and their demand for better and better batteries, laid the groundwork for electric cards. A proper transition to electric cars, where there weren’t just going to be these extremely niche high end sports cars.
Aside from that on the personal side, there was this guy Elon Musk without whom this either wouldn’t have happened or would have happened much slower or much later. He is a special personality and with all the good and bad implications of that, who had the determination, the self-confidence and the self-efficacy to just think that despite all the barriers, despite all the things that would have stopped any normal company, he and Tesla could go out and popularise electric cars. Make people not just tolerate them, but want them.
Tesla made electric cars sexy. The Model S was a huge moment in the history of automotive. In 2012, when it came out here, was a sedan that can outperform any other sedans in its price class and was actually desirable. It was exciting and could run for free basically on sunlight, if you charge it from a solar source.
In the book, you talk about some of those hurdles and starting up a car company during a time when the world is imploding on itself with a credit crisis, whilst also going in and revolutionising commercial space flight and then also solar panels for houses with solar city. What the hell is up with Elon Musk?
He’s a special guy. Even though it sounds overblown, but he is a Thomas Edison-like figure. There’s no doubt in my mind that we’ll look back at this time 100 years in the future and say the contributions that that guy made, even though he’s flawed, and even though there are missed steps and controversies, were equivalent what Thomas Edison did at the dawn of the electric era. Edison’s personality was very similar as well; a lot of bloody mindedness and living out beyond the edge a little bit, working crazily long hours and just being completely determined to get this thing that people said couldn’t be done, done.
A normal person’s not going start a rocket company and fund it and then run an electric car company and be the chairman and finance a solar energy company, and then later on do an AI company and an neuralnet company and a tunnelling company. But he has enough charisma, money, intelligence and determination to be able to pull off these crazy things that people ordinarily would just say ‘There’s no chance of ever succeeding.’
What do you think is one of the biggest factors in that success?
Money definitely helps. There’s the internal drive to make it happen, and just to will something into being. Elon has that internal drive and speed and you have to wonder where it comes from.
I think part of it comes from having a chip on his shoulder from being ostracised and bullied when he was a kid. There’s definitely some weird ego stuff at play. Even though it would be to his advantage to stop letting his ego drive his decisions, especially now when he’s doing tweets that get himself in trouble with the SEC [US Securities & Exchange Commission], he still seems to have this insatiable need to satisfy an ego that doesn’t seem to be able to be satisfied.
But then there’s pure grit that comes with it as well. And he wouldn’t have been able to have done any of these things if he didn’t have an extraordinary capacity for pain, because any really high achieving CEO, inventor or entrepreneur or whatever you want to call him, would have given up in nine different points in Tesla’s history, before Tesla like got to a point where it looked like they may not die in five weeks. The same could be said for SpaceX.
Elon’s got this favourite quote which has been attributed to Winston Churchill, which is ‘If you’re going through hell, keep going’, and so that mindset has been what has really got him through all the challenges and got Tesla into the position it’s in today.
Image: Tesla, Inc
You also talk about his early childhood and that big leap, going from a kid picked on at school in South Africa and turning that into a driving force for a whole lot of change. Do you think about that now in terms of say, your own son and how you best set him up for the future?
I don’t have anything useful or profound on this, except that the stuff that happens to you in your childhood, really matters to what happens in your adulthood. It’s very clear Elon is an extremely sensitive guy and you’ll see him in interviews, on camera talking about his companies as if they are his children, and crying. It’s not typical behaviour for someone who’s meant to be a hard-arse CEO, fighting the battle against the forces of evil.
I definitely think there’s something tied up with his childhood and the way his dad treated him. All the kids in the Musk family have said that there were some awful things that went on that they’re uncomfortable speaking about with the father. So back to your question, I guess it makes me more determined to be a good father.
Do you think that leaders of companies should take more of a personal attachment to the companies that they create?
I think for a certain style of founder and entrepreneur, it’s impossible to separate the personal and the professional elements. I’ve got a start-up now and we went through Y Combinator. Y Combinator’s very founder-friendly and they are determined to keep the founders as the CEOs of the company, or the leaders of the company for as long as they can. Even though the conventional wisdom might have been that the founders get it started, and then you replace them with an adult; as what happened with Google when Larry Page and Sergey Brin were quickly replaced with Eric Schmidt.
I think going by the success of the companies that have gone through Y Combinator, going by the success of Elon and his companies and various other companies, Larry Page is now the CEO of Alphabet or Google again. Then you could probably put together enough evidence to say that the personal attachment can have really positive results.
I think it’s really useful in the stages of the company where you are actually fighting a battle, because, for instance, not everyone wants electric cars to take over, or a rocket company to build rockets that can land themselves and change the economics of the whole industry forever. In those days, when in wartime mode, the personal connection is something that will probably motivate you to do things beyond the means of a normal disconnected or more detached chief executive.
I think my answer is, in some cases, it can be helpful, especially in the founding stages of the company and then overseeing great challenges. But then when you get to the sort of peacetime situations, which Tesla are still a long way away from, then it may be suited to the more detached position, the more Tim Cook-type of leadership is called for.
In terms of your start-up within the publishing realm, that’s got to be wartime for you now, right?
People haven’t come to get us yet, because we’re too early and too small and too unthreatening at the moment. Stuff and NZME feel like they’re rebuilding something after the conflict has happened.
War has ravaged the landscape, there’s just smouldering embers of buildings and someone has to come in with a good vision to show how the city can be rebuilt. Substack, the company I’ve helped start, is one of the rebuilders and so at the moment it doesn’t feel like war, it just feels like it’s pretty grim here and something has to be started to give people hope.
I saw a re-tweet from you in response to a writer who had thanked you for your platform and you came back saying it wasn’t your Platform, it belonged to the writers that contribute to it – does it help in the startup world to feel like you are working towards something beyond you?
It definitely helps me because I want to help people. I want to feel like I’m being useful for people and I especially want to feel like writers get valued correctly. Writers have been screwed over for quite a long time now, especially by the technology industry and Silicon Valley.
A bunch of people come in and build these tools and they’re going to piggyback on the work that’s done by writers, in particular, to build massive audiences for their tools so they can aggregate labels and sell them off as advertising. That has destroyed the business that used to do that work and cost the jobs of a lot of people, a lot of my friends who were doing that work. At the same time, it creates a lot of false hope, because every couple of years a new chain will come along from Silicon Valley saying, ‘We’re here and we’re going to see the media’. It turns out they’re just going to give you a nice contact management system or they’re going to put your work in a different sort of packet and ultimately when it comes time for the company who’s making those promises to make money, because they don’t start with a business model, they start with the idea that they’re going to pull a bunch of content together and gather readers around it.
When it comes time for them to make money then, they make a bunch of decisions and invariably, because the whole market has been based on attention, economy and advertising so far, the decisions that are made help the company that is building the tool, but hurt the writers that are providing the material for making that tool useful in the first place.
Image: Tesla, Inc
I won’t name companies, but a bunch have come along that have really screwed over writers, by changing the business model every 20 minutes and so a lot, in the US at least, a lot of the writers have a justified suspicion of technology companies who are coming along promising that they’re going to make their world better.
To be in a situation where I’m in receipt of one of those technology companies now, but having a very simple and transparent business model from day one, and then seeing writers actually come on and try it and do really well, and see lives get changed and see writing businesses get made, is really exciting and feels good.
It does feel personal because I was that person, I am that person. I’ve written a book, I’ve been a freelancer and I’ve worked for magazines and technology, and New Science and stuff and tried to scrap along in the various iterations of what it is to be a journalist today when the industry is dying around you. To be able to get a little bit of hope for that on that front is gratifying.
Can you talk about some of the stories within Substack, in terms of the people?
The first publisher we worked with is a guy I knew from 10 years ago when I lived in Hong Kong. He was writing a newsletter about China that all the people who make decisions in China who matter, read. The newsletter is called Sinocism and the 5 years he was doing it, he had 35,000 followers. It was like the who’s who of people who did business with China, or had a stake in China, read it and he made no money from it.
He’d done a couple of donation drives that had produced a little bit of income, but it was just two little batches and it dissipated. He was basically thinking ‘Well, should I keep doing this? Or should I try the subscription model?’
So he did it with us as our first publisher and now he is making – I won’t say exact numbers as it’s his business – but he’s making several hundreds of thousands of dollars a year and it’s a really great business. This is after earning for a year and a quarter and it’s going to be giant for the one person operation kind of business it is.
Another guy is writing a newsletter about the New York subway, which is a poorly covered area in New York. New York Times writes about it and some other publications kind of write about it, but no one goes deep. He’s a freelancer and again, I won’t over share his private information, but he went on Substack and was doing it free for a while, then turned on paid subscriptions and very quickly, like within two months, has gone to the place not where it’s a fulltime income, but where it’s definitely on the path where it could be a fulltime income. He has created so much financial stability for him as a freelancer that it felt weird to him to not have to worry about finances, because, like young freelancers who live in Brooklyn, are scraping by and barely getting by. So it’s great to see that life shift in him.
There’s another freelancer, Luke O’Neil, he’s actually tweeted about what a dramatic improvement his life has taken because he’s been doing this newsletter and being able to make money from the people who care most about his work. He is really cool, he’s got a newsletter called Run to Hell World. What I love about that is that he’s completely breaking the form of what’s the accepted mood of journalism and he’ll write these kind of pieces that are like something that Kirk Vonnegut might have written where he’s got a very distinctive voice and a very dry sense of humour and one of his hallmarks is that he just doesn’t use commas. So you have to spend a bit of time wrestling with some of the sentences, but the payoff is great because of it.
He’s mentioned in public, so I don’t think I’m breaching his trust, but he’s the sort of guy who would get by on $65,000 a year as a freelancer, taking some junket gigs where you go and write about cocktails to help pay the bills and if you live in Boston, like he does, that’s not a huge amount of money, rent is really expensive. He’s on this path where his newsletter could become his fulltime income. He can now turn down a bunch of gigs he never wanted to take, but would always just take to pay the bills. I get excited about it and that’s the sort of thing that really excites me.
How about in New Zealand?
Morgan Godfery is doing a newsletter called Maui Street which is about Māori politics, or politics as they relate to Māoritanga and that’s a really good newsletter. I think he’s pretty regular with that and I think that’s in the stages where it could become something super special, but it’s too early for it right now to know.
There’s David Cohen doing something about Middle Eastern cuisine. But there’s not a huge number of Kiwis on it yet. I’d love to see more on New Zealand stuff.
Do you Think that you’ve created something that will change journalism?
I think it’s early to say, we might be dead tomorrow [laughs]. But I’m lucky because I’ve got to work with guys who are really, really smart and I’ve been able to take care of the writer side of the equation, and they’ve taken care of the technology and how you make this a good business of the equation.
I’ve had the easy role in the company. I feel like if Substack didn’t go any further than it has gone today, which is really early stages of some sort of green shoots of success, then I would still feel extremely lucky to have been part of that and that is an awesome ride. I think that there is an opportunity for Substack to go way, way, way bigger than that and be transformative, but that’s just me in my most frothy, when I really like to let my dreams get ahead of me. It’s awesome to be in a position where it might happen.
Do you get a sense that when you go back to the US things are so much freer in terms of what you can dream about?
I think the dominant New Zealand culture’s at one end of the spectrum, and then Silicon Valley is at the other extreme. It’s probably nice to mix it a little bit. There’s a lot of start-up founders in the US that could be more humble and would benefit from it. A lot of Kiwis could believe in themselves more and not be afraid to take wild risks and not be so apologetic about their successful when they come on it.
Do you Foresee some more humility Forming in silicon valley?
I think it’s right that Silicon Valley’s getting beaten up a bit. I do sense some more humility or more awareness of like, ‘Oh, we’re now the bad guys,’ creeping in. Maybe it’s just more a totally irrelevant anecdote, but Justin Kan who was the founder of Justin.tv, which became Twitch and is now founder of Atrium and has been through Y Combinator three times, he’s really central founder figure in Silicon Valley. He tweeted something the other day about, ‘I used to think as an entrepreneur everything I’d got I’d earned. More recently I’ve realized there was a huge amount of infrastructure set up for me to make it (educated workforce, execs, the internet) and I really controlled a much smaller % of the outcome than I’d thought’.
Perhaps that’s indicative of more acceptance of the narrative. It’s not just one start-up founder who should capture all the glory, there are other things going on in society that you need to acknowledge more and be more humble about.
Why did you move? Were you dreaming of something bigger?
I moved for the usual Kiwi OE reasons. I edited the Otago University student magazine, Critic, and after that I ecided I’m going to do a journalism degree. I just want to go do it somewhere else, to have an excuse to travel a bit. I went to Canada because it just felt too obvious to go to London or Melbourne or New York. I ended up go to a little, unlikely city in Ontario, but I should have gone to Melbourne or London or New York probably.
I did my journalism degree and then I wanted to go where the big story is and go and be a serious foreign correspondent in China. China was coming up, it was just before the Beijing Olympics. My drive was always to be a great journalist, a serious journalist. I kept on making sidesteps around that and ended up helping to launch an entertainment magazine, which was awesome. I got to do some serious stuff with that in Hong Kong.
Eventually, I met an American girl, who is now my wife, and she came to Hong Kong for a bit, but we decided to move to the US. Everything that’s happened from there has been almost accidental. It’s not like I’ve had the grand ambitions, although I like living and working in the Silicon Valley climate. I like being among, in the middle, writing about companies like Tesla and then going to work for Tesla. It’s impossible not to be infected with some of that and so to actually see what’s possible if you really want to do it and the right amount of luck strikes, then I thought ‘Well, these things happen to some people. There’s no real strong reason they shouldn’t happen to me. So, might as well give it a shot’.
Did your time at Tesla change you as a leader, as a founder?
Definitely changed me as someone who’s working to try to do things. Definitely makes me think that you should aim high and you should not be ashamed about trying to aim high and you should not be scared about failing if you somehow miss, because usually, if you’re trying to do something meaningful, and then you miss, then the miss is not going to be too drastic, because you gain so much.
In your own life, in your own sense of worth and in the eyes of others for having attempted to do that big thing and gotten some part of the way there. There’s an infectious ambitiousness and great scheme-ness that comes from working for a company like Tesla.
Image: Tesla, Inc
How’s the book gone?
Very well, I feel. I don’t think it’s going to make me rich, that was not ever the intention. The reviews have been pretty good, and the Washington Post wrote about it, London wrote about it and they were surprisingly gentle on me. Friends have told me good things and strangers have told me great things and, there’s the people who care about electric cars and Tesla are already quite a fervent crowd, the people who really, really care, like they’re almost evangelical.
So some of the feedback you get from those people, you have to dismiss a lot of it because of course they’re going to like something that reaffirms their beliefs, even though I tried to be balanced and not just make it a puff piece for Tesla. Without having good empirical data and without it having made me rich at least yet, I feel the book has gone very well.
Long form journalism is quite enduring. People still read books and magazines and long form articles and other formats. I think story-telling is just something that is fundamental to the human condition and I can’t see it never not being important to our lives.
I was listening to your interview with Kim Hill From RNZ and you spoke about drinking the “Kool-Aid” and then spitting some of it back out, can you talk about the bit you spat back out?
If you’ve read anything about Tesla, you know that corporate culture is very difficult and if you’re read anything about Elon Musk, you know that working with Elon Musk is very difficult. I had a healthy amount of scepticism going to work for Elon and going to work for Tesla, because I knew what happened in the years before he became like God, as he’s portrayed by some today. He’s a really strange difficult guy, but still I went into Tesla.
I joined in 2014 and I was getting excited about the company represented in 2012, 2013 when I was writing for this tech blog. I was and I am still zealous about the mission of transitioning the world to electric cars, you have to be crazy not to want a sustainable energy future. Going in there, I was willing to turn a blind eye to a lot of things that would be negative about working for that man and that company. Then going in there and experiencing it, it wasn’t like a harrowing experience.
I’ve have a few interactions with Elon since leaving the company. You should expect those sorts of interactions and experiences, given that’s Elon Musk, and given that he is this unique person in time. But given that I had those experiences, it gives me a much more realistic picture of the flaws and the difficulties and the challenges, and helps me better contextualise the sort of inspirational on the rah, rah stuff that would have been easy to succumb to completely if I had not had those experiences.
Towards the end of last year, Bill Gates was talking about how only about 25% of greenhouse gases were caused by non-renewable energy and saying that we’ve also got to look at agriculture and farming. Are you worried that that kind of statement can become a copout for a move to renewable energy?
Yeah, this is a criticism around it. I’m not sure if you’ve been following the grand schemes for transitioning, decarbonising the economy. You can do all these things, like get rid of all the cars and just have electric cars and there’s still going to be problems with agricultural and industrial stuff. I do think it’s a copout, because you’ve got to transition that part of the energy economy and make it clean. But it also fails to appreciate the symbolic value of taking something that was status quo and beloved and totally default habit, and then switching it in for this visibly better thing.
Especially when it comes to the car, the most personal kind of object, especially in American’s life; the car is central to how America became like the hyper-modern capital success story, post World War One.
So even its only value was in it being a marketing coop for sustainable technology, sustainable energy technologies, that would still be justification for doing it. But it’s importance, of course, goes beyond that, because cars and petrol-based transport is a huge chunk of greenhouse gas emissions.
What are you reading at the moment?
I read a hell of a lot of newsletters. The Luke O’Neil one, Welcome to Hell World. There’s one by Daniel Ortberg, who use to be Mallory Ortberg, who was one of the founders of a feminist humour publication called The Toast. It was much loved and then it died and Mallory came on to Substack and transitioned into Daniel and writes amazing stuff called The Shatner Chatner, so also I’ve read that as well.
But one I’m really excited about is by Daniel’s fiancé, Grace, who also relatively recently transitioned to be a woman and she writes this incredible newsletter called The Stage Mirror that talks about trans issues, among other things, like philosophy and academic stuff. But one of the first posts she did was about what transitioned people’s sex was like. Something I had actually not given much thought to and was mind blowing to like delve in to. Which is another good thing about Substack, it helps these outsiders find a way to make money from their writing, in a way that is difficult to support through the mainstream options.
Matt Taibbi is writing a great serial book through Substack, at the moment. He’s a Rolling Stone writer and the book is called Hate Inc and it’s about how media makes us hate each other. A focus on cable television in the US. He hasn’t been talked much about on Twitter and Facebook, but they fit the narrative too.
Noah Harari, read a bit of him 21 Lessons of 21st Century, but otherwise I’m a bit ashamed of my lack of book reading at the moment. I hope I make up for it with my veracious consumption of newsletters.
What’s the best piece of advice you’ve been given?
One thing I keep coming back to you, I think it was passed on to me by my brother. It is a Buddhist philosophy, which I’m definitely going to mangle. A Buddhist monk will have the attitude that if someone gives you a precious goblet, you should treat that goblet as if it’s broken, because then you’re going to appreciate your time with that goblet so much more and being overprotective of it to make sure it never breaks.