# Speed reveals broken processes before it improves them

Markdown copy of https://realalpha.app/s/speed-reveals-broken-processes-before-it-improves-them/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Jon McNeill](https://realalpha.app/people/jon-mcneill/) · Jon McNeill is CEO and co-founder of DVx Ventures; author. · Founded and scaled six companies, then grew Tesla revenue from $2B to $20B as president.
- Host: [Nicolai Tangen](https://realalpha.app/people/nicolai-tangen/) · CEO, Norges Bank Investment Management
- Show: In Good Company with Nicolai Tangen
- Episode: [Jon McNeill: The Algorithm Behind Tesla and SpaceX | Podcast | In Good Company](https://realalpha.app/v/hovdgJI5NMc/), Sep 16, 2026
- Moment: 10:25 to 15:56 of the episode (6 min), playing on https://realalpha.app/s/speed-reveals-broken-processes-before-it-improves-them/; the episode from there: https://realalpha.app/v/hovdgJI5NMc/?t=625

## Quote

> “if you **speed up a bad process**, you're just getting to the bad answer faster.”
> — [Jon McNeill](https://realalpha.app/people/jon-mcneill/) at [10:41](https://realalpha.app/v/hovdgJI5NMc/?t=641) · In Good Company with Nicolai Tangen

## Takeaways

1. Speeding up a bad process gets you to a bad answer faster.
2. Downtime between steps is a major source of lost speed.
3. Velocity of cash measures how quickly spending turns into profit.

## About this segment

Jon McNeill explains why Tesla simplified processes before speeding them up, then shares how Toyota’s cash-velocity mindset shaped his approach. Faster flow can reduce downtime and working capital.

From “Jon McNeill: The Algorithm Behind Tesla and SpaceX | Podcast | In Good Company”, Sep 16, 2026. [Watch the full episode](https://realalpha.app/v/hovdgJI5NMc/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[10:31](https://realalpha.app/v/hovdgJI5NMc/?t=631) investors could understand. Now, speed. Step four. Accelerate cycle time. So, first of all, why does speed come in so late in your strategy? Basically, because if you speed up a bad process, you're just getting to the bad answer faster. This is ubiquitous with AI right now. People throw AI into an existing process. And you're not only getting to the bad answer faster, you're getting to the bad answer more expensively because you're spending tokens.

[11:05](https://realalpha.app/v/hovdgJI5NMc/?t=665) And so we introduced speed after we've insisted on simplification, deleting, simplify. And now we're going to add speed to really polish this process and have it first reveal its faults because it's hard to get speed with faults. And so naturally in any new thing, you start to show faults first uh you remove those uh and and speed starts to accelerate so in the example of like the model three or model y when we started production we wanted to get 50 cars a week through the production line then we spent it up to 100 so we doubled it then we doubled it again to 200 then more than doubled it to 500 then double it again to a thousand and each of those what's the key what's the key what's the key to get people to get the finger out get the finger out in what sense in just get the speed up yeah the the key is is really

[12:00](https://realalpha.app/v/hovdgJI5NMc/?t=720) Two things. One is, is perfecting the, uh, eliminating downtime in the process. So, uh, most process speed gets, gets lost in downtime. Uh, just things sitting in between steps and, and speed helps you, a speed goal helps you eliminate those very quickly. And so you get your biggest gains from eliminating actually where the thing's not moving. Uh, and then secondly, you get a lot of uh muscle memory from practice uh and people get better with repetition and machines actually get better with repetition too i can't remember which uh formula one driver said that uh for the perfect machine speed is a unifying force yes i think it was either schumacher or schumacher i think yeah at least it gets attributed to schumacher but exactly uh speed is the unifying force in almost any process. And whether that is a piece of software or a piece of hardware or

[12:56](https://realalpha.app/v/hovdgJI5NMc/?t=776) manufacturing or a customer delivery process. Why is it so difficult to get people to hurry up? I think it's a mindset. Like we actually learned this from the Japanese. You know, the people at Toyota talk about a very different financial metric than the rest of the people in the industry. They talk about velocity of cash. And everybody in that organization is wound around, when we take a dollar in, how fast can we turn that into a dollar profit?

[13:23](https://realalpha.app/v/hovdgJI5NMc/?t=803) And an example of that is when we started to produce the Model 3s and Model Ys, it took us about five days from a pile of aluminum to a finished car, or I'm sorry, 15 days from a pile of aluminum to a finished car. It took Toyota four. So what that means is Toyota means two and a half times less working capital than we needed. And that measure of speed is a mindset at Toyota. And we try to make it a mindset at Tesla.

[13:50](https://realalpha.app/v/hovdgJI5NMc/?t=830) And I try to make it a mindset now of the businesses that I'm involved in. The speed metrics, especially velocity of cash, is really kind of the highest level of competition in business. How have they managed to make it a mindset in the whole of China? China, I think, absolutely understands. They're excellent at going to school on the best of the best. And they went to school in their next door neighbor, Japan, and said, how can we replicate this?

[14:17](https://realalpha.app/v/hovdgJI5NMc/?t=857) And they start with brute force with the 996. Explain the 996. 9 a.m. to 9 p.m. six days a week. That's brute force. But then they... That doesn't really pass label laws in many other countries we know. Exactly. Exactly. So then they move to automation, but they move to perfection process before they move to automation. So they start with brute force, then they move to perfect process, and then they automate.

[14:48](https://realalpha.app/v/hovdgJI5NMc/?t=888) And they've got speed goals at every step of the way. And so they were able to build factories for us, unless the half the time we could do it in Europe or North America. You went to a weekly heartbeat. What does that mean? So the weekly heartbeat means we wanted to know that we were going to make our quarter on a weekly basis. I had an old mentor that said, if you want to make a quarter, make your month.

[15:12](https://realalpha.app/v/hovdgJI5NMc/?t=912) If you want to make your month, make your week. If you want to make your week, make your day. And if you want to make your day, make your hour. And so rather than going completely off the deep end and saying to people, we're going to have an hourly heartbeat, we had a weekly heartbeat. But that meant that Elon could walk up to me on any given point in time and say, are we going to make our quarter?

[15:31](https://realalpha.app/v/hovdgJI5NMc/?t=931) And I would with certainty give him an answer because I knew what the pulse of the business was. and so every week that weekly heartbeat was pulling together the demand side of the business and the supply side and making sure that we were absolutely in sync even though we were being thrown curveballs with tariffs and with supply issues etc we were going to make our quarter