“Failure is typically an introduction to success”: Jon McNeill on his Tenure at Tesla and the Future of Tech-Driven Innovations

Impossible not to start this interview talking about your time at Tesla. As most of us are aware, disruptive thinking is a hallmark of Tesla. How has leading this company influenced your thoughts on challenging the status quo? 

I’ve learned not to say no. Instead, I’ve learned to say, “Let’s set a big challenge for ourselves and understand that we don’t know how to get there, but let’s commit to figuring it out together really rapidly and with discipline, with frameworks in ways that aren’t random to make sure that we can actually achieve these goals. Or at least 80% of the goal, which will have us well on our way towards being disruptive.”

In this sense, the mantra of many companies, especially the very innovative ones, is “Fail fast, learn fast.” Do you relate with this vision of innovation?

I’m not a big fan of “fail fast.” I try to turn that into “just try.” Try to find the improvement, try to determine what the core of the problem is, try to make headway against that, and keep trying. I think “fail fast” focuses on failure. I’d rather focus on the “try” because we have to do that multiple times, typically, to get a hit. Great leaders keep exercising curiosity and the discipline of trying. So I wanna see more tries that lead to, hopefully, major breakthroughs.

Now that you’ve brought failure into the conversation, can you talk about a time when failure led to an unexpected success or learning opportunity?

I think failure is typically an introduction to success. There was a time at Tesla where we were growing our sales so fast that we weren’t keeping up with service. So, if you had asked our customers, they would have said that we were failing at servicing their cars. For instance, if your windshield wiper wasn’t working, it could take a month or two to get a service appointment. We knew we were failing at that and we had fallen behind in building service centers. 

We needed about $300 million to build more service centers, but at that point, we didn’t have $300 million for anything, much less service. So Elon Musk said, “You need to figure out a way. We’re failing our customers, so you have to fix this fast, and you can’t do it with service centers.” So we devised a way to figure out how many cars we could fix in 20 minutes. And when we learned how to do that, we realized we didn’t need service centers. It was this breakthrough insight that we could actually provide mobile service, and our customers could ask in an app for service, and we could show up at their house to fix their car. They didn’t have to go anywhere or do anything. It was magical. That breakthrough in what’s now mobile service, which is about 80% of how Tesla services cars, came out of this failure of not being able to keep up

Speaking about the electric vehicle, did you expect to see this influence on consumer behavior? 

I think consumers are now experiencing something that the Head of Engineering at Audi said in 2017, “Electric cars are so fun to drive that if our customers try them, they would not go back.” I think we’re seeing that, because sales of EVs are doubling, and it is because they really are fun to drive, they’re faster, they’re safer, and they’re much less expensive to own and operate, so they’re much more convenient. EVs are a futuristic product that are available to us today. And I think we’re gonna see more and more of those types of products hit the market due to three things: Sustainability, better Customer Experience, and lower cost. 

This point takes us back to innovation and disruptive thinking. Do you think innovations happen abruptly or do you believe that changes evolve gradually over time? 

I think many changes evolve gradually over time. I had the privilege of having a front row seat to the early OpenAI teams who were working on GPTs. Although it appears like ChatGPT exploded on the scene, which it did abruptly, that was the result of five or six years of incremental daily work that the team did to get the product to a point where they could release it and have an enormous impact on the world. I think most disruptions are built over time, and then they spring onto the scene when both the market’s ready for them and they’re ready for the market. But the work isn’t typically quick. It typically happens over a long course of time with a lot of dedication and discipline.

Many things that are now considered normal would have appeared impossible or even absurd in the past. However, not every promising concept can be realized. How can teams differentiate between a viable, innovative idea and an unworkable one?

I think the biggest signal for a viable innovative idea comes from the customers who once they see it they want it. We measure that at DVx: We put a new product out and we watch the percentage of people who do a survey and say “I can’t live without this.” And when that gets to 40% of customers, we know we’re onto something. It’s a real signal that we’ve built something that people really want. 

Teams are crucial for innovation within organizations. When assembling an innovative team capable of developing tech-driven solutions, like the mobile services or GPTs you mentioned, what specific traits do you look for in individuals?

Two things. I look for really smart, practically smart people, not theoretically smart. By that I mean that they’ve demonstrated a capability in advancing whatever they’ve been a part of. I look for a drive, a real competitive drive. Also, I look for curiosity and humility: Curiosity that they’re not going to stop pursuing greatness, and humility that they can be part of a team and understand that they don’t have all the answers because that’s typically where innovation starts, when you don’t have the answer. You might have a conviction, but you have to be smart enough to know that you don’t have the answer yet. And that requires a lot of humility to listen to others and bring others into the problem with you. 

Given the recent trend where many tech companies and other industries are reversing remote work policies and asking employees to return to the office, how do you evaluate the impact of remote work on innovation?

I think the way innovation happens is when you’re with people. In fact, when we’re together at DVx Ventures, my company, we say that three weeks worth of online meetings is equal to one day together. It’s amazing. When you look at all the big technical breakthroughs in the world, they happened in labs, whether it’s electricity, the Internet, the automobile, the steam engine, the gas engine… Those all happen in labs where people happen to be beside each other, sharing insights and ideas physically. So it’s been very hard for us to figure out how to do innovation remotely, and we’ve found that we need to have a core of the week where we work together physically to do that kind of work.

Working in a high-pressure environment like Tesla, what practices did you find most effective for managing your own stress and maintaining mental wellbeing?

I found out I needed to do two things. First, I needed to have dedicated time with my family because they are the most important reason I’m on this planet, so I would block time for them. The second thing I needed to do for myself was stay physically active. That meant that I sacrificed sleep to get up really early in the morning to go take a run or a bike ride so that I could actually have free time and space. That’s where most of my creative thinking happens, actually.

Let’s pivot into how you envision the near future.  When asked about the future, many of us will think of cities with flying cars and people living on other planets. In your opinion, how far are we from this future? 

I don’t think very far. I think humans tend to be pessimistic in the near term and optimistic in the long term. And I think we’re too pessimistic. Flying cars exist today, and you can go to Dubai and take a flying taxi. It’s pretty cool. People are starting to experience these technologies, where you can sit in the back of a car and not have to drive. Or where you can fly across your commute in the city. That is going to be compelling to people.

I’ll give you an example from two of my favorite pictures: One picture is of Times Square, New York, in 1910. The car had been introduced just years earlier. In this picture of Times Square, all you can see is a traffic jam of horses and carts, and in the middle of the traffic jam of horses and carts, there’s one little Ford Model T. The same picture was taken eight years later, in 1918. Now, Times Square was filled with a traffic jam of cars, and in the middle of cars there was one horse in carriage. In eight years, the entire transportation system had flipped. In 1910, I think if you would ask people if it would happen that fast, they would say, “No way.” I think we’re gonna have cities that are gonna be amazing in terms of transportation options in the next 10 years. It’s gonna be pretty amazing.

To wrap up the interview, can you share your predictions on how emerging technologies will reshape business strategies and spur new business models in the near future?

I think the most exciting thing that’s happening right now is Artificial Intelligence, and we’re all trying to guess where that’s going to take us. I think in every economic or technological disruption, there have been new jobs created. At the beginning of the Internet, when I was playing around searching different university libraries, there wasn’t much new that I could do. If you would’ve asked me, “10 or 20 years from now, what would you imagine for the Internet?,” I couldn’t have answered that I would have entertainment over the Internet, and all my banking and financial life, and my social life on the Internet. I couldn’t have imagined all those things. I think we’re just beginning to understand the potential of Artificial Intelligence, and we know it’s going to affect big things like drug discovery and medical delivery, but I don’t think we can even yet imagine the new business models.

I think there’s amazing things that AI is unleashing already. One of which is for example, just how you produce a world-class automotive factory. Very simple example, but you used to have to do a lot of design work, and maybe the only experience you had was your own. Now, you can ask some of the GPTs to take all the best features of the best automotive plants in the world, combine them into a plant in a series of diagrams and build the most advanced automotive factory. A factory that takes years off of the cycle and probably results in a much higher quality factory. That’s just one example of many ways that AI is gonna start to affect our world in really cool ways.