In This Episode: Humans mostly pay attention to the short term. If we can lift our eyes and look much farther out, not only does that benefit us personally, but business leaders that truly have Uncommon Sense sometimes take it to the extreme, and their results, actual and still in the works, can be absolutely mind-blowing.
071: Taking It To the Extreme
- Help support Uncommon Sense: — yes, $5 helps!
- The “Easter Egg” (extra bit cut out) is included separately below the transcript [Jump There].
- Meier’s article about his boss.
- Consumer Reports on the most-satisfying car.
- Results from investing in AMZN at IPO is from here, and the rankings are from Forbes’ Real Time Billionaires list.
- Bezos explains civilization of stasis.
- There are also some illustrations within the transcript. Click any of them to see larger.
Humans mostly pay attention to the short term. If we can lift our eyes and look much farther out, not only does that benefit us personally, but business leaders that truly have Uncommon Sense sometimes take it to the extreme, and their results, actual and still in the works, can be absolutely mind-blowing.
Welcome to Uncommon Sense. I’m Randy Cassingham.
In last week’s episode I talked about leadership and how making long-term investments in employees can pay off. I promised that this week, I’ll look at how that might be taken to the extreme.
My examples are names you’ve heard. You may have positive or negative feelings about these people, but this isn’t about them per se. It’s about their vision, and how far out they’re looking. I suspect you’ll hear something you didn’t know about these men. They are: Jeff Bezos (the founder of Amazon.com), Elon Musk (the CEO of Tesla and SpaceX), and Bill Gates (the founder of Microsoft).
Let’s start with Gates. He’s famously known for his early Microsoft mantra, “A computer on every desktop, and Microsoft software in every computer.” That’s not something any company can do in a quarter. Or a year. Or a decade. It’s a plan borne of long-term thinking, a mindset that made Gates the richest man alive. How nice for him, but if he stopped there, then he’d just be another rich guy who made money by helping others be more productive. If he truly has a long-term thinking mindset, he’s not going to stop there. He’s going to have much bigger goals than mere money. The money just enables long-term thinkers to achieve their loftier goals.
Most CEOs in America don’t really look beyond the money part: growing stock prices and their personal bank accounts is their end goal! For those with true Uncommon Sense, it’s just the beginning.
In 1997, J.D. Meier joined Microsoft. He’s still there today: he’s now the company’s Director of Innovation. “When I think back to why I joined Microsoft,” he said in an essay last year, “a very big reason was Bill Gates. Here was a guy with all the money in the world, yet he showed up every day to change the world. Rather than just retire and play with his money, he focuses his time, energy, and resources on making a better world for everyone. I figured he must be on to something.”
“It’s one thing to be smart. It’s another thing to be resourceful,” Meier said. “And, it’s yet another thing to get meaningful results. Bill Gates is a visionary that makes things happen by creating systems bigger than himself, and inspiring people to join him on epic adventures to change the world.”
I’ll link to the article Meier wrote on the Show Page.
In 1998, just a year after Meier joined Microsoft, Gates left the day-to-day operations at the company. In 2000, he stepped down as CEO. In 2006, he transitioned to working full time with his foundation to give his money away to make the world a better place. If that’s not an “epic adventure to change the world,” I don’t know what is. There’s no way even that foundation could spend his entire fortune by the time he dies, and he knows that: as of late last year, even after giving around $40 billion of his own money to the foundation, he still had over $100 billion, which will go to the foundation after he and his wife die.
That’s a lot of money, but there’s more: other billionaires, seeing how Gates is changing the world with his foundation, have signed on to give their billions to the foundation when they die, most famously Warren Buffett, who gave the foundation millions of shares of his company, Berkshire Hathaway, to expand its impact. When he dies, the rest of his money goes to the Gates Foundation too.
The point? Gates’ view of the future, and his involvement in improving that future, looks way beyond his death. That’s the kind of long-term thinking I’m talking about.
Next is Elon Musk.
“I look at the future from a standpoint of probabilities,” he said. “It’s like a branching stream of probabilities. And there are actions that we can take that effect those probabilities or that accelerate one thing or slow down another thing, [to] introduce something new to the probability stream.”
He looks at the future and thinks about “actions that we can take” to accelerate the good things we want to happen, and slow down the bad things we don’t want to happen. Musk believes climate change is an existential threat to humanity, so the goal of Tesla is, “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.” The challenge was, the last American vehicle manufacturing start-up that actually succeeded was …Ford, founded in 1903, almost exactly 100 years before Tesla was founded. But Musk took a long-term planning approach to leave Ford behind.
“Our first product was going to be expensive no matter what it looked like,” he said, “so we decided to build a sports car, as that seemed like it had the best chance of being competitive with its gasoline alternatives. I suspected that this could be misinterpreted as Tesla believing that there was a shortage of sports cars for rich people, so I described the three step ‘master plan’ for getting to compelling and affordable electric vehicles in my first blog piece about our company.”
And that master plan was to build a fancy super-expensive but hugely compelling sports car, so rich people would want to buy them. The master plan was, with the cash from that, next was to design and build a luxury sedan that was so compelling, merely wealthy people would want to buy it. With the cash from that, and the similar class SUV, they designed and built a much more affordable car for the masses, the Model 3. That car has, according to Consumer Reports, the highest satisfaction rating of any production car sold today: higher than Porsche, higher than the Corvette, higher than BMW.
To learn that, the non-profit surveyed a half-million car buyers to find “the models that bring their owners joy.” 92 percent of Model 3 owners said, if they had to “do it all over again,” they would “definitely” buy a Model 3 again.
In 2015, that luxury sedan, the Model S, scored 103 out of a maximum of 100 points on the Consumer Reports ranking scale, going over 100 due to weighting factors. No other car had even reached 100. Then there’s the National Highway Traffic Safety Administration’s safety testing. They rank vehicle safety on a scale of 1 to 5 stars. The Model S not only earned 5.4 stars, it broke their machine that measures the force to crush in the roof.
So it’s is not just the safest car ever tested by the agency, it’s also the fastest car in production today, as measured by the zero to 60 mile per hour time. That helps make it fun to drive, which attracts buyers.
But it has to be practical, too, for instance it had to be capable of long-distance travel — coast to coast. There’s only one way to do that for anyone to put up with the car: Musk knew Tesla would have to design chargers that would charge it up very quickly — typically 20 to 30 minutes to get another couple hours of driving, at which point most want to take a break anyway. Then they repeat the process until they get to their destination. But then, of course, the company had to build a network of those chargers along highways and in cities to make it happen. They did, at huge expense, but now Tesla is years ahead of any other auto manufacturer that wants to build electric cars.
Coming up with that all-inclusive plan doesn’t just take intelligence, it takes long-term thinking. Tesla’s stock price has been skyrocketing even though the factory had to shut down for the pandemic. The company is now worth over $150 billion. How does that compare to, say, Ford or General Motors? It’s almost double — of those two companies combined. That means the people investing in automotive stocks looking toward the future — long term investors — think the future of cars means cars like Tesla, and every other auto company in the world is way, way behind them.
And I’m one of those long-term investors: I put $45,000 of one of my IRAs — a retirement account for those not in the U.S. — into Tesla stock. I was late in the game: that only got me 200 shares, but today that’s worth more than $160,000, and I think it’s going to go much higher in the long run.
When my current small SUV is ready to retire, I’ll be buying a Model Y, Tesla’s new small SUV that’s built on the Model 3 platform. I think it’s going to outsell the Model 3 by a long shot, and the Model 3 has been in the top 10 — and sometimes number 1 — on the best-selling car lists in multiple countries, including the U.S., Britain, and parts of Europe.
If that’s “all” Musk did, that would be plenty. But for him, Tesla is just one part of the equation I talked about just a few minutes ago: it’s his way of “taking actions” to effect the future, in this case to slow down a bad thing he didn’t want to happen, climate change. Even if you don’t think climate change is really a human-caused thing, you still have to admire his amazing success enabled by long-term thinking to create the first successful American automotive manufacturing start-up to succeed in a hundred years.
So what about the “actions that we can take” to accelerate the good things he wants to happen? Enter SpaceX. Musk wants to populate a large colony of humans on Mars, in part to make sure humanity has a backup in case climate change or another catastrophe makes Earth inhospitable. Musk knew it would take decades to achieve that goal, but that’s what he’s working on, and I would bet on it happening at some point, maybe not in his lifetime. Seeing it happen isn’t his goal: he just wants it to still happen even if he drops dead tomorrow.
Musk didn’t go and invest in some company that makes rockets, he had enough vision to know that the way companies made rockets was ridiculous: hugely expensive. Nor did he go out and hire the best minds in rocketry to build something new. Instead, he bought every textbook on rocketry he could get his hands on to learn how they worked himself, and then used that knowledge to design and build something radically new that had never been done before: a way to bring back the most expensive part of the rocket, the first stage, and use it again. And again. And again.
Of course there were failures: again and again! But here’s what Musk says about that: “If there’s a test program and nothing happens in that test program, I would say it’s insufficiently rigorous. If there hasn’t been hardware that’s blown up on a test stand, I don’t think you’ve tested it hard enough. You’ve got to push the envelope.”
Sounds like Uncommon Sense-driven long-term thinking to me, and SpaceX was the first private company to launch astronauts into space, just this weekend, giving the United States human launch capability that we haven’t had since the Shuttle was retired in 2011.
And Musk did all of that while also running Tesla, not to mention a few other companies.
Let’s move on to Bezos at Amazon. For years, I used to joke that This is True was more successful than Amazon, which was founded after This is True, because my little newsletter was making pretty good money, but Amazon had yet to make any profits. Amazon was founded on July 5, 1994, just a few weeks after This is True, and it didn’t make a profit until the fourth quarter of 2001, seven years later. Even then their profit was listed as $0.00, because it was a fraction of one cent per share. What I didn’t consider at the time was that lack of profit was absolutely on purpose: Bezos was putting every penny and more back into the business to help it grow, because he had a long-term vision of what it could be.
In other words, Bezos was saying to hell with making great quarterly numbers to keep the stock price up! “If everything you do needs to work on a three-year time horizon,” Bezos said, “then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.”
That’s the key: “very few companies are willing” to take even a seven-year view of their future.
Bezos was willing to. Just imagine buying Amazon stock in May 1997 when the company went public at $18 a share, and holding on to it. If you put $10,000 into the stock at $18 a share that day, today it would be worth more than $12 million. That’s over 12,000 percent.
Bezos, by the way, leapt over Bill Gates as the world’s richest man, today at about $145 billion — even after giving his wife $36 billion of his stock holdings in their divorce settlement last year.
But again, this isn’t about getting rich, it’s about the “then what?” Clearly, Bezos looked ahead by years to make Amazon successful. Whether you like him or the company or not, like Musk, that’s not the only evidence of him looking toward the distant future. He has another company too: Blue Origin, which is also a rocket company. When did idea that get its start? Not in 2000, when the company was founded, but rather in his childhood: Bezos says the idea germinated when he was 5 years old. In 1982, when he was 18 years old, he was interviewed by the Miami Herald because he was named valedictorian of his high school graduating class.
In that interview, he said he wanted to build “space hotels.” Don’t harumph at that as a money-making scheme! Here’s the key: “The whole idea,” he told the reporter, “is to preserve the Earth.” Blue Origins isn’t a billionaire’s plaything, it’s him wanting to be able to move humanity into space so that Earth can become a park. You may dream of going on vacation to Yosemite National Park. He dreams of people taking vacations to a pristine Earth: a Planetary Park.
The thing to realize is, Bezos doesn’t actually have a seven-year time horizon. “I believe in the longest time frame,” he said, “and really here I’m thinking of a timeframe of a couple of hundred years — I get increasing conviction with every passing year that Blue Origin, the space company, is the most important work I’m doing.”
Got that? A timeframe of a couple of hundred years. But that’s not his time horizon either.
“I’m pursuing this work,” he continued, “because I believe if we don’t, we will eventually end up with a civilization of stasis, which I find very demoralizing. I don’t want my great-grandchildren’s great-grandchildren to live in a civilization of stasis. … And [that’s] happening soon, and by soon, I mean just a few hundred years — so we don’t actually have that much time.”
For Bezos, “soon” is the next few hundred years, so what kind of time scale does he actually think about?
While the Earth is finite and pretty much has to reach stasis within that time, he says “The solar system can easily support a trillion humans. And if we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts and unlimited — for all practical purposes — resources and solar power and so on. That’s the world that I want my great-grandchildren’s great-grandchildren to live in.” Or, as the case may be, the solar system they’ll live in. Getting to a trillion humans isn’t a few-hundred-year vision: we’re talking at least a millennium.
Lots of people dream about the future, even the distant future: it’s a staple of science fiction. There are not very many people who have the means to make significant strides to help make it happen. That’s taking it to the extreme.
I’ll link to that article on the Show Page too, so you can get the full context of those quotes and see his reasoning on why civilization will hit “stasis” “soon.” While most CEOs are concentrating on their quarterly numbers, Bezos is looking way, way into the future.
And that is why I think Amazon is so successful, and will continue to be successful.
“Vision” implies a look into the future, and all three of these men are taking it to the extreme: not three years, not seven years, not their lifetimes, but much, much longer. They don’t just look at the bottom line, they look at the distant horizon, which then shows up in the bottom line. That’s the way to run a company, not the short-sighted concentration on quarterly results, or even the annual report.
I don’t know about you: you may dislike Gates, Musk, and/or Bezos. But when you combine vision with truly long-term goals of pushing humanity forward into a sustainable future, I say more power to them. That’s the kind of Uncommon Sense that we need to take the next leap in human evolution. It’s not going to happen tomorrow, but they’re “taking actions that effect those probabilities” to accelerate to that better future. I think each of them is serving humanity more than any politician alive.
You don’t have to have a thousand-year plan to benefit from this idea, but do consider thinking beyond today, the quarter, the year, or even three years. You may be surprised at the bottom line results.
Next week, I’m taking the week off to ponder and write about the next sort of thing I’d like to talk about. If you have any questions, or ideas you want me to discuss, you can connect at thisistrue.com/contact
The Show Page for this episode is thisistrue.com/podcast71, which has the links I mentioned, a 90-second bit of this episode that I cut out because this was long enough already, and a place to comment.
I’m Randy Cassingham … and I’ll talk at you later.
Extra (“Easter Egg”)
- This portion was cut out of the episode since it was getting too long.
- Bezos’s 2018 tweet.
- Wikipedia overview of the Clock of the Long Now, and the blog post by Bezos on the clock’s web site.
Easter Egg Transcript
In 2018, Jeff Bezos tweeted this: “Installation has begun—500 ft tall, all mechanical, powered by day/night thermal cycles, synchronized at solar noon.”
What the heck was he talking about? A clock. A clock installed in a mountain that will keep time for 10,000 years. It’s called the Clock of the Long Now. OK… but why?
“It’s a special Clock,” Bezos said on the clock’s web site, “designed to be a symbol, an icon for long-term thinking.” 10,000 years? Now we’re talking long-term thinking! “As I see it,” he continued, “humans are now technologically advanced enough that we can create not only extraordinary wonders, but also civilization-scale problems. We’re likely to need more long-term thinking.” All these years I’ve been trying to just get people to value thinking, and do it! He’s going to the extreme and pushing long-term thinking!
He doesn’t expect the clock to even be finished until “many years into the future” — but he’s funding it to the tune of $42 million, and providing the land for it. Maybe it’ll be a tourist stop for people visiting Earth for the first time. You know, for a special birthday or something.
If you find this clip somewhere other than the page I posted it on, you can go to thisistrue.com/podcast71 to get the context. I’m Randy Cassingham.
- - -
This page is an example of Randy Cassingham’s style of “Thought-Provoking Entertainment”. His This is True is an email newsletter that uses “weird news” as a vehicle to explore the human condition in an entertaining way. If that sounds good, click here to open a subscribe form.
To really support This is True, you’re invited to sign up for a subscription to the much-expanded “Premium” edition:
Q: Why would I want to pay more than the regular rate?
A: To support the publication to help it thrive and stay online: this kind of support means less future need for price increases (and smaller increases when they do happen), which enables more people to upgrade. This option was requested by existing Premium subscribers.