**Summary of "How to Create a Company | Elon Musk's 5 Rules"**
- **Work Extremely Hard (00:09):** Startups require intense dedication. Elon Musk and his brother worked tirelessly, living in their office and coding non-stop to build their first company. Being willing to put in more hours than competitors can lead to significantly better results.
- **Create a Great Product or Service (01:26):** Ensure your offering is superior to existing alternatives, especially in competitive markets. A product or service needs to be significantly better than what's already available to attract consumers away from established brands.
- **Attract Talented People (02:41):** Success depends on gathering a talented and dedicated team. Whether you're joining an existing company or starting your own, having great people is crucial for creating and delivering a successful product or service.
- **Focus on Signal Over Noise (03:02):** Prioritize efforts that directly improve your product or service. Avoid spending resources on non-essential activities. For example, Tesla invests in R&D and design rather than advertising to enhance the product.- **Take Risks Early (04:05):** Take bold risks when you're younger and have fewer personal obligations. As responsibilities like family grow, taking risks becomes more complex and less feasible, so seize the opportunity to be adventurous while you can.
How to Create a Company | Elon Musk's 5 Rules
(00:09) I think the first is, depending on how well you wanna do and particularly if you're starting a company, you need to work super-hard. So what does super-hard mean? Well, when my brother and I was starting our first company, instead of getting an apartment we just rented a small office and we slept on the couch.
(00:27) And we showered at the YMCA, and we had just one computer. So the website was up during the day, and I was coding at night, seven days a week, all the time. Work hard, like every waking hour. That's the thing I would say, particularly if you're starting a company. And I mean, if you do the simple math, say like, okay if somebody else is working 50 hours and you're working a hundred, you'll get twice as much done in the course of a year as the other company.
(01:26) I think two, is you gotta make sure that whatever you're doing is a great product or service. It has to be really great. I go back to what I was saying earlier where if you're a new company, I mean unless it's like some new industry or new market, if it's an untapped market then you have more ability to...
(01:48) The standard is lower for your product or service. But if you're entering anything where there's an existing marketplace against large entrenched competitors, then your product or service needs to be much better than theirs. It can't be a little bit better, because then you put yourself in the shoes of the consumer and they say why would you buy it as a consumer? You're always gonna buy the trusted brand unless there's a big difference.
(02:10) So a lot of times entrepreneur will come up with something which is only slightly better. And it can't just be slightly better. It's gotta be a lot better. The other thing I'd say is that if you're creating company or if you're joining a company, the most important thing is to attract great people.
(02:41) So either join a group that's amazing that you really respect, or if you're building a company you've got to gather great people. I mean, all a company is is a group of people that have gathered together to create a product or service. And so depending upon how talented and hardworking that group is, and degree to which they are focused cohesively in a good direction, that will determine the success of the company.
(03:02) So, do everything you can to gather great people if you're creating a company. Then, I'd say focus on signal over noise. A lot of companies get confused. They spend money on things that don't actually make the product better. So for example, at Tesla we've never spent any money on advertising.
(03:33) We put all of the money into R&D and manufacturing and design, to try to make the car as good as possible. And I think that's the way to go. So for any given company, just keep thinking about are these efforts that people are expending, are they resulting in a better product or service? And if they're not, stop those efforts.
(04:05) And then I think the final thing I would encourage you to do is... Now is the time to take risk. You don't have, yeah, you don't have kids, but as you get older your obligations increase. And once you have a family you start taking risks not just for yourself but for your family as well. It gets much harder to do things that might not work out.
(04:27) So now is the time to do that before you have those obligations. So I would encourage you to take risks now. Do something bold. You won't regret it.
