I don’t disrupt something for the sake of disrupting it. My focus is mI don’t disrupt something for the sake of disrupting it. My focus is making a product that improves quality of life for people.699
If the output is more valuable than the inputs, that creates a profit. Profit shows you have a useful company. But in a high-growth scenario, you need a lot more inputs for future output, so for a while you have negative cash flow and lack of profitability, which we had early on at Tesla. In the long term, of course, that has to be fixed. There can’t be a negative cash flow in the long term.700
If you create a company that produces products and services better than what existed before, wealth is created. If you have some ownership in that company, wealth accrues to you. Doing good work gives you the right to allocate more capital.701
Sometimes people equate wealth with consumption, but they’re obviously not the same thing. Consumption is fun, but capital allocation is a job.
If people want to get upset about something, excess consumption is more reasonable than being upset about someone having a high net worth.702
Warren Buffett has a high net worth because he’s doing a useful job allocating capital for the economy. He’s very skilled at it, and he should probably keep doing it. But he is not engaged in insane, conspicuous consumption.703
Warren Buffett sits there and reads all these super boring annual reports. Does anybody want that job? He is constantly reading tedious annual reports of companies, including the minutiae of accounting and deciding whether to allocate capital into Coke or Pepsi. I don’t want that job.704
I’m not claiming I have no money. But when people hear a big number for my net worth, they think I have that much cash, and I’m sitting on the cash doing nothing, hoarding resources. No, that value is the stock of these companies. Net worth just calculates my ownership of these companies, if you add them up. It’s not as though I’ve got billions of dollars sitting in a bank account.705
Just as my money was the first into Tesla, it will be the last out.706
The alternative to keeping the stock would be to say, “Okay, let’s give the stock to the government or someone else.” Then the government would control the companies and be running things.707
A lot of the push for higher government involvement or expropriation of assets to the government is from politicians. What they are saying is those resources shouldn’t be in control of individuals who built them, but instead should be under government control. They're basically saying they want control of the assets.708
I think the profit motive is good if the rules of an industry are properly set up. There’s nothing wrong with profit. Profit just means people are paying you more for whatever you’re creating than you’re spending to create it. That’s a good thing. If that’s not the case, you’ll soon be out of business, and rightfully so, because you’re not adding enough value.709
A few people do bad things to achieve profit, but that’s quite unusual, because the rules are mostly set up correctly. Not perfect, but mostly correct.710
It is insanely hard to build and ship useful products to a large number of people. There’s a hell of a difference between a company that has shipped a product and one that hasn’t. It’s night and day. Once you ship products, is the value of the output worth more than the cost of the inputs? Again insanely difficult, especially with hardware.711
If you create great products and services that create wealth, that should be applauded.
You increased the standard of living of the country and perhaps of the world.aking a product that improves quality of life for people.