More from Elon Musk

Focus on signal over noise. A lot of companies get confused — they spend money on things that don't actually make the product better.

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Elon Musk

USC Commencement 2014, 2014

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The Story Behind This Quote

Musk used Tesla as his case study for this principle. At the time of the speech, Tesla had never spent any money on advertising — zero. Instead, every dollar went into R&D, manufacturing, and design 'to try to make the car as good as possible.' His test was simple: 'For any given company, just keep thinking — are the efforts that people are expending resulting in a better product or service? If they're not, stop those efforts.' The engineering-mindset approach to business — borrowed from physics, where signal-to-noise ratio is a fundamental concept — reflected Musk's broader philosophy. Most business activity is noise: meetings that don't produce decisions, marketing that doesn't improve the product, processes that exist for their own sake. The signal is anything that makes what you're building genuinely better for the customer. Everything else should be eliminated.

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