Matt: 0:14

Hello everyone And welcome to the switch statement podcast It's a podcast for investigations into miscellaneous tech topics

Jon: 0:21

This is our second episode on Elon Musk by Walter Isaacson.

Matt: 0:31

Hey, John. What's going on?

Jon: 0:33

Hey Matt. I am doing well. How are you doing?

Matt: 0:37

I'm,

Jon: 0:38

You're Matt.

Matt: 0:39

felt better.

Jon: 0:40

Oh man,

Matt: 0:40

better.

Jon: 0:41

dude

Matt: 0:41

I just woke up this morning. Just bad headache. Boom. Outta nowhere.

Jon: 0:45

Oh, you had a headache? Have you been drinking enough water?

Matt: 0:49

dude, why you gotta get me like that? But no, probably not. my hydration is always, always shameful. There's people out there who, like, if your pee is not crystal clear, you're you're an animal,

Jon: 1:01

No. You know that pee being clear thing? I feel like that's.

Matt: 1:07

you think that's just big water.

Jon: 1:08

I think it's big water because I, so I recently switched to the like water. bottle method, which I always used to sort of look down on the water bottle method. Um,

Matt: 1:20

What is, could you, could you kind of enumerate the steps of the the water bottle method?

Jon: 1:25

yeah, I think I just made that phrase up. But basically the water bottle method is where you just have a big ass water bottle. And you fill it up repeatedly and just drink from it all the time.

Matt: 1:37

Yeah. Nice. Okay. I like that. That's a pretty solid method.

Jon: 1:40

yeah. So it's clearly a very sophisticated thing, but I've been doing that lately and I feel like my hydration levels are way better than they used to be. Um, so I'm not like advocating for this strategy, but I'm just saying, you know, in my own personal experience, the water bottle method has worked. Yeah.

Matt: 1:59

Yeah, no, I do, I try to do that. My problem is I always like the fizzy water. I'm all outta bubbles. I'm all outta CO2,

Jon: 2:07

Oh, that's tough.'cause I also love fizzy water. Like we are the minority that loves fizzy water.

Matt: 2:13

yeah, no, I'm addicted now. It's hard for me to drink just garden variety water. But anyway, we're not here. For the Water podcast. We're here talking about Elon Musk,

Jon: 2:26

Yeah. And zip two, You can zip to any place.

Matt: 2:29

zip two. That spot that you want to go? Yeah. What do you think of the name? Zip two?

Jon: 2:35

You know, I. kind of like it, it's kind of cute. this whole naming thing cracks me up with Musk'cause he just wants to call everything X uh, which guess he finally got his way. But it, it sounds like some of the biggest arguments he's had in his career are like. That he wants to call something X and other people are like, that sounds sleazy.

Matt: 2:57

Yeah, it's funny because I feel like zip two fit perfectly in at the time. I, I think it's a good name, frankly. And, and it's funny because like everybody's like, oh yeah, like Elon hated it and he was right. But I was like, I don't know. I think it was clever.

Jon: 3:13

I, think it's great. Yeah. it's also got that kind of verb aspect to it. Kinda like what Google has, you know, you, oh, let's zip to it. Like, oh, I wanna get french fries. Oh, zip to it, you

Matt: 3:25

Yeah, the, the one Achilles heel, I would say is like, wears zip one. Like is this, this feels like the sequel to

Jon: 3:33

Yeah. Using the actual numeral. Is strange. It also makes me think it's like a successor to zipping files. You know, like, oh, this is seven zip. there, this is, you know, like th zip three through six somehow got lost and like, this was zip two and we now we got seven zip.

Matt: 3:55

But as you alluded, it was kind of a combination directory, mapping tool. So like you would use it to look up businesses in your local area and zip to those businesses.

Jon: 4:07

Yeah, and they, they would appear on a map, which you could like sort of scroll and zoom around, which I mean to any modern listener, this is gonna sound utterly ridiculous. But this was brand new tech. Like this was probably completely mind blowing at the time.

Matt: 4:25

this is also crazy because this was in 1995, wasn't it? Or was this, uh.

Jon: 4:31

yeah, exactly. This was almost like a precursor to MapQuest even, which I'm sure people don't remember MapQuest,

Matt: 4:37

Right. So it does sound revolutionary for the time.

Jon: 4:41

Yeah, no, I mean when I was reading this I was like, what? Like this actually sounds incredible. and I don't know, I mean, I'm sure there was probably a lot of people working on this problem, but it sounds like they were very early in sort of figuring this out. Although their business plan was strange to me, I didn't fully understand their business model. They were licensing this utility out to newspapers.

Matt: 5:05

Yes. Yeah, because newspapers would have. Now was this, this was a replacement for the Yellow Pages, right?

Jon: 5:11

Right. Yeah. Which, there's a semi-famous quote where I guess they had tried to like, you know, convince some newspaper guy to like join in on their business and the guy was like, well, you think you're gonna replace this? And he like, chucked a white pages, you know, down on the table and it's Like yeah, that's exactly what we think.

Matt: 5:31

it's so funny'cause it's like he holds up like technology that has existed for. 700 years and it's like this old ass thing and it's like, do you think you're ever gonna be able to find a, a technological replacement for this super fucking old technology? Essentially unmodified since Gutenberg created it,

Jon: 5:52

Yeah, it's ridiculous. It's crazy how that people just have this inability to see the writing on the wall, although the same thing is happening with ai. So,

Matt: 6:01

Yeah, yeah. but apparently Elon, he starts to become super hardcore at this period where he is. they hired engineers to work on zip two. They would write code, and then after they would go home with their whole quote unquote work life balance, Yuon would go in and then just like rewrite their code without talking to them and like, uh, quote on quote unquote fixing their fucking stupid code. Uh,

Jon: 6:31

Which man? That would annoy me. That would annoy me so much.

Matt: 6:35

It is funny because people think of engineers as just being like completely like asocial. There's no it, it feels like people think of us as like robots where there's no social morays at all. But no, there's like a, there is an engineering culture going in without talking to an engineer and just completely changing their code. That's part of the like. No, that's like not culturally okay to do to another engineer.

Jon: 7:05

Yeah, it, it also just seemed,'cause you know, to be clear, like I write crappy code all the time and like you have fixed it and you know, like it happens all the time where you fix another engineer's code or like, you know, a lot of times engineers aren't very territorial. I would even go so far as to say if you're territorial about your code, like you are in the wrong,

Matt: 7:26

oh. Yeah.

Jon: 7:26

but it also just sounds like confusing and. Unproductive to like come in to work and like all the code you wrote yesterday has been like fundamentally changed. You know, like maybe some API that you wrote yesterday that you plan on using today. And it's like that API is gone like it. So it's more so that aspect of it that, you know, really annoys me, I guess.

Matt: 7:50

There's just so many things that are latent about code where sometimes there's code that it's just worse and there's, the way they're doing it has no benefits. But then beyond like very simple situations, there's a bunch of trade-offs. And you could go in and someone could be doing something that looks weird and wrong and unusual and stupid, but then. You realize, oh, there's this very particular circumstance that they're trying to accommodate for. And if you don't know that, like you could quote unquote fix their code in a way that, Yeah.

Jon: 8:28

Yeah. So this, this part of Elon sounds infuriating I highly doubt. It was the right thing to be doing. as we mentioned earlier, he fights over this zip two versus X name. And I guess there was a, I guess Elon and Kimball. Kimball is Elon's brother. I don't know if we mentioned that, but, but Kimball was actually a part of this zip two, business. And I guess they used to just get in fist fights, like in the middle, in the middle of the day,

Matt: 8:59

Yeah.

Jon: 8:59

which is another thing that. Man, that's absurd. Like, can you imagine you're, you're sitting there at Google, like, you know, working on your ad server and you just see Larry and Sergey, like in an office, just brawling.

Matt: 9:12

Yeah. I mean, engineers will frequently disagree, but I have never seen anything. It is just unbelievable. It's also important to remember that at this time they're like,'cause Kimball is younger, right?

Jon: 9:25

yeah, yeah. They're like 22 or something.

Matt: 9:28

yeah, they're in their mid twenties, so it's like,

Jon: 9:30

but I, I wanted to mention that Kimball bit, Elon. I just thought that was funny.

Matt: 9:37

Yeah. No, it's just outrageous. And then he had to go to the hospital, didn't he?

Jon: 9:41

I didn't write that in my notes, but I feel like that happened. But it cracks me up, like I've fought with my brother many times, but I don't think we've ever bit each other.

Matt: 9:55

They work on this for four years, so this is a major, you know, they really put their, their time in. so in 1999, they sell their product to, Alta Vista. Well, actually the company that owns Alta Vista Compact, which I had no idea, I did not realize that.

Jon: 10:15

Compact.'cause Compact was a computer

Matt: 10:18

it's a hardware Yeah. Company. And they, I guess want, were thinking about breaking into the, the search engine space. And they offered$300 million in cash for zip two.

Jon: 10:30

so crazy that that whole era was just insane with the like valuations and.com

Matt: 10:36

Well, you gotta think about the time. they sold it at the perfect time. this was just, just as everything was starting to become a frenzy with, with the.com bubble.

Jon: 10:48

absolutely. Yeah. So Elon got 22 million I wrote.

Matt: 10:52

22 million. Yeah. And Kim got 15.

Jon: 10:55

Yeah. And he just immediately bought a McLaren F1. Which I guess is what you do. I mean, that's kind of what Carmack did, right? He bought a, what was his car? It was a Ferrari or a,

Matt: 11:06

Yeah. Ferrari sounds right.

Jon: 11:08

but yeah, so that was his experience with zip two. Now was zip two. I stupidly didn't write this in my notes, but I seem to recall like something that kept happening to Elon is he would be starting this company. There would be a lot of buzz around it and. He would get these rich investors and they would sort of insist that they put like an adult in charge. and did this happen at zip two? I wanna say it did, but I didn't write in my notes.

Matt: 11:34

Yeah. So they put, someone invested like$3 million or whatever into zip two, and then they put, I think they said Rich Sorkin.

Jon: 11:44

Okay. Rich Sorkin. And I think this is something that Elon started to get very annoyed about he would sort of lose a little bit of control. And there was also this ostensible like, oh, but I'm in charge of the technical, you know, I'm the CTO, so I can do whatever I want in the technical space. But Elon found that that was not the case. Like unless he was CEO, he didn't truly have control over the technology and that bothered him.

Matt: 12:10

Yeah. Um, well, so, so the, the Deta details are, um, so Rich Sorkin, this guy who, who's the adult, adult in the room, he wanted to merge with this other provider called City Search. Musk and Kimball managed to scuttle the merger. And then Musk wants to try to become CEO and apparently they just were, were like, Nope, we're, we're taking you off the board. And you're, you know, basically they just put him in the corner wearing the dun cap and, uh, and so that's the point at which they decide to find, an acquirer.

Jon: 12:50

So, yeah. zip two gets acquired. He gets$22 million. He's already a rich guy. There's a brief interlude about his first wife, whose name was Justine. This chapter had a lot more interesting and juicy bits about the Musk family. I guess they were very anti Justine, like very vocally. Anti Justine Kimball, his brother, tried to do an intervention, I guess, to get him to not marry Justine. Which man can you imagine you're like about to marry someone in your family's, like doing an intervention, trying to prevent you. so very sad. And then one hilarious moment, I you know, they get, they get married, they're having like a, a dance and Musk sort of leans in to Justine's ear and whispers. I am the alpha.

Matt: 13:40

I, I'm gonna be honest, I just completely skipped past this chapter. I did not read this chapter.

Jon: 13:46

That's fair. I, I almost skipped it'cause I was like, oh, personal life, I don't care. But at the same time, his dealings in his personal life. Have so much of the same foibles that he exhibits in his public life. And also I'm very happy I got to read that I am the alpha bit.'cause that was just so, like, such toxic masculinity, but also like hilarious and very incel. I don't know. He

Matt: 14:11

and, and he wasn't joking about it.

Jon: 14:14

no, no, he, it basically, I think the, the bargain he made in his own mind, I. Was like, okay, I am gonna completely define my family here, but I will also be the one in control of the marriage. You know, he, he made her sign a prenup and he like insisted on, on this prenup in the way that, you know, like an old rich guy would if there were marrying like a young model or something. And so yeah, he, he was doing it very transactionally. and I think Justine was just kind of this like. you know, she was just kind of being carried along. Like, she sounds like a fairly normal person.

Matt: 14:51

why didn't they like Justine?

Jon: 14:53

I think they didn't think that she matched with his godliness. I think they also thought she was like a little cold, like it seems as though Justine was very pretty, but she was also. kind of an introvert. Like she she liked writing, she liked reading. she wasn't like a party animal, so I think they just thought that there wasn't a vibe match,

Matt: 15:17

Mm-hmm.

Jon: 15:17

which I, in a lot of ways I think they were right. in any case, it's, I think the chapter, at least for me, just exemplified all of these flaws that the Musk family has. so in that regard, it was very interesting. then we move on to this X slash PayPal era, or I guess the first X era where Elon realizes that the banking industry is ripe for disruption. And so he starts this venture called X, which is basically what PayPal is. It allows people to very easily transact money.

Matt: 15:58

I don't know if we talked about this, but while he was in university, he had an internship at a bank this is one thing I will say. Walter Isaacson is really good at lighting these breadcrumbs

Jon: 16:08

Mm-hmm.

Matt: 16:09

because he talks about the fact that when he came to the United States or Canada rather, he had these travelers checks, which he lost and. It took them weeks and weeks to replace these travelers checks. And he's like, this is unbelievable that this is how the system works. and he's already laid the foundations for Tesla. He's laid, laid the foundations for a lot of these other little things that he's gonna go on to do.

Jon: 16:36

I don't think we mentioned, but in, when he was in college, he was reading white papers about battery technology. So, so these are life, these truly are lifelong obsessions, you know, space, electric cars. And also to a certain extent, like you're saying, banking.

Matt: 16:55

So they have X and then they're like you're saying there's PayPal and they're basically starting essentially at the same time and they're immediately starting to viciously compete with each other basically.

Jon: 17:07

yeah. Yeah. And they, I think they come to realize that this is a zero sum game, like.

Matt: 17:12

yeah.

Jon: 17:13

They basically realize that whichever company achieves a critical mass of users like that will be the company that basically just eats the other company. So they make a fairly reasonable decision to join the two companies together. and it's a bit tricky. Negotiating with Musk sounds like a massive pain in the ass. He sounds like a, like a Trump style negotiator. Where he basically comes in saying like, oh, I should owe 90% of the company,

Matt: 17:40

Yeah.

Jon: 17:41

which is just this utterly ludicrous thing because they had about equal user numbers. Peter Thiel in some ways had a better brand, like the PayPal brand was, they did focus groups and PayPal sort of had better responses. Like I said earlier, X always seems sleazy to everyone, like it sounds porn site. I think they eventually decided, there was a section where they were talking about like a 55, 45 split where Musk would have 55, but then Musk said something afterwards to the effect of like, oh, I'm getting the better end of this deal. Like he basically torpedoed his own deal. Uh, and then they eventually landed on, I think more or less 50 50. And so there's a, there's a hilarious section in here where I guess Peter Thiel was driving with Elon Musk in their, in Elon Musk's, McLaren. They were driving together to a meeting, and Peter Thiel was like, oh, what can this McLaren do? And so Musk slams on the gas and just immediately crashes. And so they're in this kind of like horrible accident.

Matt: 18:50

he said that he floored it and then the rear axle broke. It's like, what kind of a garbage car is that?

Jon: 18:58

That's true actually. That's very true. Like maybe it was the, you know, a technological fault. but I guess Peter Thiel is kind of a fierce libertarian, so he wasn't wearing a seatbelt, so dude could have easily been killed, but you know, he survived. And, uh, then they just went to this meeting and didn't talk about it.

Matt: 19:19

I'm just, it's just so crazy to me that like, do you not wear a seatbelt because you're a li Libertarian?

Jon: 19:26

It's idiotic. It's, that's the thing, like I kind of hate all of these people. Like, I think they're all just narcissists. I think they all, love the smell of their own farts. And they think that they're these geniuses, but the truth is like, you know, they're above average intelligent people, but they're just like, they just have this like, I guess it's like a risk taking. appetite that has allowed them to achieve certain things and also luck. It plays a massive part.'cause I think for every Elon Musk there's like thousands of people who thought they would've been Elon Musk, but just flamed out.

Matt: 20:05

Oh yeah. I mean, Musk doesn't have a monopoly on being this self-aggrandizing asshole. You know? I feel like there are a ton of people who. They think they're amazing and they're just actually not. Um, I do think Elon has met some threshold of competence that, so that he, and like you're saying, it's, there's so much luck here where he's right there at the time. He manages to sell this company, make$22 million.

Jon: 20:36

Yeah, 15 of which he reinvests into X. Um, which, which, that's impressive. I mean, you're basically, you briefly become a super wealthy person, but then you immediately reinvest all of that wealth, or not all of it, you know, he kept 7 million for himself, but you know, most of that wealth back into a new venture, like that's impressive. You know, that's a testament to his character. Yeah,

Matt: 21:03

It's interesting'cause I, I guess if I'm thinking about math chops, you know, we could have been much more risky with how we approach math chops and just being like, all right, well we want to grow at any cost, and I don't know, maybe like we, I guess we could still could. What would that look like for us? Would we be like pumping a bunch of cash in and like hiring a big team?

Jon: 21:26

Yeah, trying to find VC funding. I just think like, I certainly don't have the disposition for that, and feel like I'm just like so happy with what we do have, but I also think that's, I. You know, this is why a person like me would not become a person like Elon because I'm kind of a humble engineer. I just want to build cool stuff and kind of put it out into the world. Uh, but I think Elon is kind of an empire builder and he wants truly dominate industries and, utterly change the face of the earth, which I have like a fear of changing the face of the earth because you could change it for the worse. it's like creating ai. If I were creating ai, I would worry about the consequences almost to the point where I like wouldn't want to be involved.

Matt: 22:15

Yeah. Yeah, that is, that is interesting. Yeah. I mean, what are the negative ramifications of everyone being really, really good at math? have we ever thought about that?

Jon: 22:25

Well, and that's another thing is I feel like I've always gravitated towards these things where I just can't see a downside. like at Google I worked on education technology, and I just thought what possibly could go wrong with like helping teachers work with their students? Or, you know, I worked on educational VR tech and I was like, what could possibly go wrong with like, having students have this cool educational experience? So I feel like I've always gravitated towards those things in my own career. and I think that's part of what Math chops is. It just feels like, maybe there's a downside, but I just can't see it.

Matt: 23:05

Yeah, no, it's really hard for me to imagine like what the, I mean, maybe like in the AI world, no one's gonna need to know any math. It's just a waste of time. but I even, even in that world, I think in knowledge of math itself, it just allows you to appreciate more about how the world

Jon: 23:24

works. I think logic will always be an important ability and think learning math helps you develop that skill

Matt: 23:32

I was thinking about this in the, the context of learning engineering, engineering is really all about just problem solving generally. I think people think of, oh, you learn to be a coder and like you learn how you know how to code, and it's like, well, there's a lot of engineering that is really more about, okay, you're trying to understand a problem. understand a set of tools and come up with a way to apply the tools to the problem. and. it's but that can work in any domain, you know, that doesn't have to be specific to coding.

Jon: 24:04

oh yeah, a hundred percent. And this is why, you know, engineers will always be useful, even if programming is completely handled by some sort of AI utilities. Like that mode of thinking that you're talking about, like being analytical about a problem and sort of understanding which tools can adequately handle the problem, like that will always be valuable.

Matt: 24:26

And you know, we, we see this in the book, one of the most effective ways of decision making when you're engineering, which is arm wrestling.

Jon: 24:36

Dude, I could tell where you were going with that and it still got me. this was another interesting aspect of Elon's, persona is. he will make decisions based on hard evidence and good pragmatic engineering thinking, but then he will also force engineers into arm wrestling contests order to,

Matt: 25:03

the like CTO of the other company to an arm wrestle.

Jon: 25:06

yeah. And this was in order to figure out whether to use Unix or Windows? Wasn't that what the dispute was?

Matt: 25:12

Exactly. Which is so funny because I feel like to in at least where we're sitting now, it's like no one in their right mind would, would build a system on on windows,

Jon: 25:22

it's, it's crazy that Musk was so, I mean, I think Musk had this like idolatry of like these tech billionaires, like Musk loved Bill Gates and just wanted to use Windows'cause he thought it was awesome. My guess is Musk, look down on. Unix and Linux because it was sort of this communist bs.

Matt: 25:43

Yeah.

Jon: 25:43

but yeah, that arm wrestling thing was awesome. There was also this incredible section that I wanna make sure we don't skip about Rudy Giuliani. when, uh, Peter Thiel and Musk were navigating the legal ramifications of setting up a pseudo banking entity. They briefly had a meeting with Rudy Giuliani. They were trying to find someone that could sort of help them through like this political, legal quagmire. and this meeting sounded hilarious, like apparently Rudy Giuliani, and this was just after Rudy Giuliani was the mayor of New York City. he was in the prime of his career or whatever. He was apparently surrounded by goons. none of Giuliani's people had any understanding of what they were talking about. Like Peter Thiel and Musk could immediately tell that they were just not technical whatsoever and they had no expertise and they were just asking for 10% of the company. I thought this section was hilarious. It just, it's so funny'cause when I was a kid, I feel like Rudy Giuliani. was a well respected figure,

Matt: 26:48

He was America's mayor. Didn't they

Jon: 26:50

uh, America's mayor. He had done the RICO thing. He had sort of figured out the, the legal process through which the five, you know, mob families could be taken down. so he sort of was this like bright and shining figure in, in my own childhood. But it's like now that I'm old and I've sort of learned more about him. he's just been completely unmasked as this like, just terrible guy. but anyway, I just thought that part was funny.

Matt: 27:20

I think the arm wrestling match, was kind of the straw that broke the camel's back. I think people were pretty upset within PayPal slash X they did. Yeah, they did wind up merging. I think you might have said this, that they did wind up calling it, PayPal because they just thought the name X was superseded. But, this is kind of this building discontent with Elon Musk in general. I think, uh,

Jon: 27:43

yes. Which built up to Elon Musk finally taking a vacation. And going on his honeymoon, which I guess he had delayed, like I wanna say, years. and so he finally goes on his honeymoon and all of these guys basically oust him from PayPal while he's on his honeymoon.

Matt: 28:04

Yeah, so he, he, they have, they really stabbed him in the back. I think, we'll leave it there to get into the details next time, but, It was pretty dramatic. I mean, talk about mobster, mobster movies. It kind of like that level of drama.

Jon: 28:17

I think it's a, a moment where I have a lot of sympathy

Matt: 28:21

Yeah.

Jon: 28:22

because in spite of, the whole arm wrestling thing, like, that's clearly ridiculous and you can sort of see this momentum building against Elon and it feels very warranted. Like, it just seems like Elon was like this crazy bull in a China shop and they just wanted him out so that they could like focus on building the business.

Matt: 28:39

Yeah.

Jon: 28:39

But at the same time, it's like Elon really had put in everything into this effort, and here they are like conspiring against him, behind his back, like while the guy's on his honeymoon. It's pretty rough. but we'll discuss that later.

Matt: 28:53

discuss that next time. All right, well, I will see you next time, John.

Jon: 28:58

see you next time, Matt.