Another important consideration on Experience Curves/Wright's Law - certain engineering philosophies and corporate cultures can allow you to achieve significantly higher learning rates than the competition - and Elon has fully embraced these advantages.
The three mechanisms driving Wright's Law (R&D scaling, Learning from experience and Economies of scale) are all somewhat interrelated and the lines can be blurred at times.
The main thing they all have in common is that delivering on each works by eliminating the bottlenecks to cost reduction or production increases.
I’ll call this the Bottleneck Theory of Progress and I think it is the key engineering philosophy behind all of Elon’s companies. Elon solves these Bottlenecks by breaking every large goal/problem down into Physics First Principles and then re-writing every challenge in terms of smaller steps. This gives his teams smaller, clear and achievable goals and allows Elon to focus his resources (human and financial) on the key bottlenecks where the most progress can be made for a given number of resources. This engineering philosophy allows Elon to accelerate the mechanisms which drive Wright’s Law and achieve far higher learning rates than previously shown in the industries/product.
This First Principles and Bottleneck approach is completely different to how R&D and innovation normally works in the economy. Generally R&D teams are tasked with iterating the current technology with a 1-5% improvement one step at a time. This leaves most products dependent on sometimes arbitrary design decisions taken years or decades ago, using outdated science and engineering tools and a huge reluctance to pivot from sunk costs. Elon instead looks at every problem from the bottom up, ignoring previous design decisions and pulling in all current knowledge from all branches of technology and engineering. He will rapidly pivot strategies if a newly considered approach solves more cost/volume bottlenecks than the current one, regardless of sunk costs.
One analogy to explain the differences between these approaches is to consider a person tasked with travelling from point A to point B without knowledge of the paths or terrain in between. On his journey he faces many decisions on which fork in the path to take. Some of these decisions are educated guesses while some are random. This person eventually finds themselves scaling a mountain with the route ahead getting gradually more and more difficult with progress getting slower and slower, but he keeps pushing on, one step at a time, refusing to ever turn back. This person is sadly the most common process of innovation in corporations today.
A second person on the other hand realises he can always turn backwards and attempt to find an easier route. He also realises many different people are trying to cross the same terrain (in the real world people pushing forward in different branches of technology/the economy) and that he can communicate with them to try to piece together a fuller picture of the terrain to better plan the route forward. Eventually he finds an alternative and far easier route around the side of the mountain. This person is Elon and this is the culture he has tried to instil in Tesla, SpaceX, Paypal, OpenAI, The Boring Company and Neuralink.
(Telsa's committment is to release within the 1st 3 days of the month)
