Elon Musk's Mission to Mars
On the eve of SpaceX's historic scheduled launch of its first human spaceflight mission — both the first ever by a private company, and the first to take place on American soil in nearly a decade — we tell the incredible story of its rise from ragtag rocket jocks to the most disruptive and advanced force in aerospace today. While much of the Musk spotlight has shone on Tesla in recent years, is SpaceX actually the company that will have the greatest impact on our world's future, and perhaps even other worlds beyond? All of a sudden that idea seems a little less crazy...
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Playbooks
Thanks to listener Preet Anand, president of Snug and founder of Risk & Safety tech at Lyft, for contributing these Playbook notes!
1. A truly world-changing, if not solar system-changing, mission attracts great people.
Before even founding SpaceX, Elon already had relationships with one of the world’s preeminent rocket engineers and the future head of NASA. This was because the mission, inspiring the public to get back to Space with the Mars Society’s rocket project, was that exciting.
2. Show, don’t just tell.
This is especially true as a company building a technologically deep, out of sight, and literally out-of-this-world service. Figure out how you can weave a compelling story into everything you do (i.e. not just some blog posts).
- SpaceX livestreams everything. Starlink launches, their first crewed mission, their attempts to successfully re-land rockets, and much more. While this takes a tremendous amount of transparency and vulnerability, there is no question it has captivated the public. This certainly fuels the cult of personality around Elon.
3. Great government policy catalyzes opportunity.
- NASA’s new procurement policies enabled lower costs for taxpayers but also gave SpaceX the opportunity to get these contracts. They changed from merely sub-contracting rocket components, to contracting out entire launch programs, including complete vehicles. If not for this change in policy, SpaceX would not be where it is.
- This theme has also held true for Tesla’s 2008 Department of Energy loan (repaid in full and then some) as well as KeepTruckin’s positioning in the safe transportation market.
4. The best companies are open-minded about their best customers and follow the market’s pull.
SpaceX thought its customers were going to be new microsat and cubesat companies. But it turns out, as observed by SpaceX President Gwynne Shotwell, that even NASA and the Air Force were interested (and came with huge-dollar contracts!) Being open-minded about this led to SpaceX’s contracts with NASA that would serve as the profitable engine to fund new innovations like the Starship, and new business lines like Starlink.
5. Build a bottoms-up cost model to cut the fat and unlock opportunity.
- Elon’s cost model spreadsheet after his Russia trip unlocked one of SpaceX’s foundational insights: the cost of space travel should be much lower based on the cost of materials. It showed the incredible amount of fat from the cost + pricing structure and the many, many layers of subcontracting. This is one of SpaceX’s sources of competitive strength, and has also inspired cost-reducing innovations like rocket reusability. his ultimately results in lower costs for taxpayers and a low-cost launch vehicle via the “rideshare” program.
- Additionally, being transparent about its pricing certainly furthers Tesla’s counter positioning.
6. A big, hard mission takes time and needs patient capital.
SpaceX has been around for 18 years now - longer than Facebook. And the mission is still far from accomplished. It has been a difficult journey, even with Elon’s huge personal $100M initial investment to do three launches, Founder’s Fund’s contrarian bet, and the U.S. government’s uncharacteristically quick decision to award SpaceX their first contract. Additionally, the company’s decision to avoid the day-to-day volatility of the public markets and instead to periodic secondary sales keeps its stakeholders focused on the long term.
7. Be your best customer and push the flywheel.
Similar to Epic Games, SpaceX is leveraging its strengths to unlock new opportunities. The rocket launch business is now powering Starlink to enable a new, huge recurring revenue stream with global telecommunications. This in turn will enable SpaceX to keep investing in its core technology capabilities and build out the Starship.
Links
- The Tesla episode: https://www.acquired.fm/episodes/season-3-episode-1tesla
- The Ascend Conference: https://www.ascend.events
Carveouts:
- David: The Last Dance: http://www.espn.com/nba/story/_/id/28973557/the-last-dance-updates-untold-story-michael-jordan-chicago-bulls
- Ben: Michael Mauboussin on the Success Equation: https://youtu.be/1JLfqBsX5Lc