#369 Elon Musk and The Early Days of SpaceX
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All the way back in two thousand, and Elvis watching an interview with elon musk, e, and he was asked the question, how did you learn how to start a company? He had started his first company when you tell chinese.

And the follow to that question was, like, did you read like a lot of business books? And his answer, island's answer, actually gave me the idea to do founders points many, many years later, because elan said, no, I didn't read business books. I read biography and autobiography, thought they were helpful.

And then he went on to say that this was a way to develop mentoring and historical context. So you develop mentors through these books. And he mention people like Benjamin, Frank klein and and ford and Nicole, and every person that's ever designed a rocket elon has read a biography on.

And that's something that elon has in common with all of his sues. Case entrepreneurs is A T that they all read biography. And another thing that elan has in common with history case founders and ob, if you read books about them, is anyone who is committed to being great at building their business is obsessed with watching their costs.

In fact, there's a line in enduring onic, his barter py that says control for him became an obsession. Carnegie would go around repeating this mantra of time and time again. He said profits and Prices were cyclical, subject to any number of transient forces on the marketplace.

Cost, however, could be strictly controlled. And any savings achieved for permanent elan was like this two, he put a hundred million dollars of his own money to pay. And there's multiple examples in books about space x and graphs where employees of spaces would talk about island's complete control over company spent like carnegy and countless of other histories create founders.

For elon, cost control was an obsession. This is something I was talking about with my friend eric, cofounder in CEO of rap. Rap is now a partner of this podcast.

I've got to know all the confounders of rap, and I spent a tome of time with them over the last year. Two, we were actually at dinner a few nights ago. We're talking about this most one in the morning.

They all listen to the podcast, and they picked up on the fact that, just like for alan and the early days of space sex, the main theme from the podcast is the importance of watching your cost in controlling your spend and how doing so gives you a massive competitive advantage. And that is the reason that rap exists. Ramp exists to give you everything you need to control your spend.

Rap exists to give you everything you need to make cost control an obsession. Ramp gives you easy use, corporate court for your entire team, automated expense reporting and cost control. Rap helps you run an efficient organization.

I read a ramp customer review the other day that sums this up perfectly. One of their customers said that ramp is like having a teammate who you never need to check in on because they have IT handled. RAM gives you and your business everything you need to control, span and optimize all of your financial Operations on a single platform ramps website is incredible.

Make history s greatest readers proud by going to ramp dot com to learn how they can help your business control cost. That is rap doc m to understand spaces where the spires to go and why just might succeed. One was voyage back to the fucking in one rocket and dig up the roots.

The seeds for everything space ex is grown into today were planted during the early days of the fucking one program by elon mask. Back then, he thought to build the world's first low cost orbital rocket, all of the aspirational talk about mars would mean nothing if SpaceX could not put a relatively simple rocket like the fcon one into orbit. And so with a burning intensity, he pressed toward that goal.

Spaces began with nothing but an empty factory and a handful of employees. This small group launched its first rocket less than four years later and reached orbit in six. The story of how spaces survived those lean early years is a remarkable one.

Many of the same people who made the fucking in one remain at species today. Some have moved on, but all have stories about those early formative years. They remain mostly on told. That was an expert from the book that when I talked about today, which is lift off elon mosque in the, despite early days that launched space sex and has written by a burger.

This book came to my mind because recently was watching space sexes successful completion of the starship flight test number five, where they send the super heavy booster twelve ve rocket up into orbit, and then IT comes back to earth and IT is caught in the air by these two massive with piech calls chopstick arms. IT was the first time in history a rocket was sent to orbit and then caught out of mid air. And it's like catching, like a small skyscraper.

The booster twelve is two hundred and thirty two feet tall. And so when I saw that, I thought back to reading this book for the first time, like four years ago, and I was like, I remember reading when space accs on the precipice of bankrupcy and destruction, the first three attempts at launching a rocket into orbit were failures. The fourth one succeeds.

And then you fast forward almost twenty years later. And now they are catching rockets the size of skyscrapers out of the air. And so given everything that space has achieved over the last two and half decades, I would be interesting to go back and revisit the first six years of its existence.

And so what I did is I reread the book in this time. I focused on how elon mosque thinks and the decisions that he made in the early days of the founding of spaces. And because elan was extensively interview by the author, there's a bunch of direct quotes from elon himself.

This is a little about the prehistory of space sex at this time give. He's not quite thirty years old. He's been kicked out of paypal and he's trying to figure out what to do next.

And so elan tells a story that he's driving down the road with his friend of deo h. It's raining, they're on a highway. And he says, I told a deo russy, i'd always been interested in space, but I didn't think that was something a private individual could do anything about.

Three decades had passed since Apollo's hay day, and surely he thought the NASA must be well on its way to go to mars. Later that day, still thinking about the conversation, elon checked out masses website into surprise. He could not find any plans for sending humans to mars.

And so elon arts, doing about a research, he started attending space, come back in california. There's one of private groups are trying to do interesting things in space experiments. And he starts to read everything he get his hands on, says numerous other entrepreneurs tried playing a rocket science before musk well knew he wanted to learn from their mistakes so as to not repeat them.

He had been reading everything he could get his hands on about rockets. From old soviet technical manuals to john Clark's iconic book on propellants called ignition, I began to understand why things were so expensive. On set.

I look at the horses that NASA head in the stable. And with horses like bowing and rocky, your screwed. Those horses are lame.

And he thinks they're lane because the products they are building are getting more expensive. So elon's goal, the reason he started, basically because he wants to make the human species a multiplying tary species. And the first step towards solving the multiple anti problem was bringing down the cost of the launch.

So if NASA private company spent less money getting satellite and people into space, they could do more things in space, and more commerce would open still more opportunities. This awaiting governing zed mosque interaction. There is a ton of people in this book that look at elan like he's a crazy person, but there is a very ordered sense of logic to the way that he goes about solving problems.

If you want humans to live on other planets, the first thing you need to do is lower the Price IT takes to get there. And the example that they use, the metaphor that they can use multiple times, like if a plane ticket was a million dollars or ten million dollars a ticket, then a lot less people would fly. And so elon starts building this network of allies, one of his allies, as is ginning my, he.

A few years later, roxy become nasse administrator, and he helps elon organized these meetings of these spaces enthusiasts, these engineers, these rock scientists, and this, the description of one of these meetings. He walks in, elon walks in, and basically announced that he wants to started on rocket company. And I remember a lot of chocolate and laughter, people saying things like, save your money, kid, and go sit on the beach.

The kid was not amused. If anything, the doubts expressed at this meeting and by some of his conference energize him more. And so elon talks about the fact that wasn't just the people the meeting to, but his friends and they were well, and friends were trying to get him to not blow all of the money.

Several friends had already tried to dissuade elon for doing this. One friend created an our long video completion of rocket failures and forced elon to sit down and watch IT. Another friend told elon of all the entrepreneurs who had tried and failed, elan said he talked my ear off and I would lose all my money.

Elan had cleared about one hundred and eighty million dollars from paypal and figure red. He could risk half of his money on a rocket company and still have planning left over. And one of the most interesting things about reading the beginning of this book is that you realized that space sex was elan's response to the stagnation of an existing industry.

And that's actually a good way to look for opportunity. He identified an important industry that he thought was going completely backwards, says companies in united states and russia use the same decades old technology to launch rocket in the space. And the Price kept going up.

Things were going in the wrong direction. So mask founded spaces. Now, another thing that I found fascinating about this is the fact that this stagnation actually helped iran recruit the insane town that he needed.

And so the book says, relative to other air, space companies must have a lot to offer. Perspective employees at space sex new highs could rapidly grow their skills and take on new respons. Bi, t, ie.

s. There was almost no management, and everyone worked on the rocket mosque was a siron calling brilliant Young minds to space sex with an irresistible song. He offered an intoxicating brew, a vision cara, a dacians goals and resources.

When they needed something, elan wrote a check in meetings. He helped solve their most chAllenging technical problems. When the hour was late, he could be found right there beside them, walking away. And when they needed to kick in the ass, he deployed his stair and. Few sharp words.

Another great thing about this book is the fact that the author interviewed so many early spaces employees, and they were talking about the difference between space sex and other legacy aro space companies. And so an early space sex employee had a friend that worked at lucky Martin on the f. Thirty clive stef aircraft, and this part was absolutely incredible, says this may sound like glamorous work, but IT was not.

His friend had just a single job finding a supplier for a boat on the aircraft landing gear and ensuring that I met all quality specifications. That single bolt was the totality of his employment. Imagine spending years of your life, and that is the totality.

The single boat is the totality of your employment. SpaceX offers the opposite experience. Work was thrilling and all encompassing. And one of the engineers made the really important point, that because your work was so wide and the problems you had to solve were so diverse and actually made you a much Better engineer, a big thing was really having to learn to think, since nobody gave you a cookie cutter job and told you to do this really made us all much Better engineers.

And part of that was because of elan strategy on how to design a rocket, says there are basically two purchase to building complex systems like rockets, linear and iterative design. The link method begins with the initial al goal and moves through developing requirements to meet that goal, followed by numerous qualification tests of subsystems before assembling them into a major pieces of the rocket, such as the structure of proportion in avionics, with lennar design years to spend engineering a project before development begins. This is because IT is difficult, time consuming and expensive to modify design and requirements.

After beginning to build hardware, the iaf approach begins with a goal and almost immediately leaps into concept designs, bench test and prototypes. This is the path of spacial shows. The metro with this approach is build and test early fine failures.

And this is what space's engineers and technicians did in James dick's autobots phy, which I covered, I think, for the fourth time on episode three hundred. This is called the editor ia. Principal of design and indication.

fantastic. Graphed talks about his, who's also an invention engineer, is getting germy fry. And this description of germy fry sounds a lot like elon musk is a space.

So here's the came less and said, here is a man who is not interested in experts. He meets me. He thinks himself, here's a bright kid.

Let's employ him. And he does. He risk little with the possibility of gaining much.

This is exactly what I now do. IT. Dyson, this attitude to employment extended to germany. Fes, thinking in everything, including engineering. He did not, when an idea came to him, sit down and processed through pages of calculations he didn't argue through with anyone.

He just went out and built when I came to him and say, I have an idea, he would offer no more advice in to say, you know where the workshop is going and do IT, but we will need to, well, the thing I would protest, well, then get a well and will IT. When I asked if we shall talk to someone about, say, hydro dynamics, he would say, the lake is down there. The landrover s over there.

Take a plank of wool down to the lake to IT behind a boat, and look at what happens. now. This was not a motors up oni that I had encounter before.

College had taught me to reveal experts and expertise. Fry ridiculed all that. As far as he was concerned with enthusiasm and intelligence, anything was possible.

IT was mind blowing. If he didn't work one way, he would just try another way until IT did. And as we proceeded, I could see that we were getting on extremely quickly. The root principle was to do things your way. As long as IT works and it's exciting, people will follow you.

And so back to this book, I have read the book almost four years ago when I remember one of the things that jumped out, and instead of my mind from the first time I read IT, was the fact that elon personally interviewed the first three thousand employees at spaces s. And there's a ton of interesting stories and great ideas and here about this. So he says he understood he would go nowhere without the right people.

So interview by interview must sort out the brain and creative engineers who would commit themselves holy to the goal and make the impossible possible. One of music's most valuable skills is his ability to determine whether someone would fit this mode. These people had to be brilliant.

They had to be hardworking, and there could be no nonsense. Now we ever direct quote from you on about this. There are ton of phonies out there and not many who are the real deal.

I can usually tell within fifteen minutes, and I can sure tell within a few days of working with them must made hiring a priority. He personally met with every single person, the company higher to the first three thousand employees. He felt he was to get the right people for his company.

And so here's an example. What in any ruth elon was like, muscle ked in to break the ice. Bryan made the usual small talk, it's nice to meet you.

I have a lot about you excited to be here. The hyper observant ask, never won much for pleasantries. Move straight into question.

This maybe up. Move straight into questions. Do you die? Hair mosque, somewhat fluster. Brian reply that he did not one of musk's common tactics during an interview involves throwing a person off culter to see how potential employ reacts. And so he must have asking him with the dies as hair, because his hair IT doesn't matches a high browse. So they want a blausser about this.

And then he just talks about, like why he is found in spaces, like what does the mission behind? IT said the success of nasas Apollo moon program in one thousand nine hundred and sixty had spurred a wave of student interest in math and science and IT LED to a generation of engineers, scientists and teachers. But this tide had ebed, and by the time bryans generation had grown up, the cool kids were not doing space anymore.

They were into medicine, investment banking or tech. And so bryant is talking about why he chose to leave a comfortable job and a more baLanced life. He knew, he said, space sex would strip all of that way.

His friend was already working at space sex and told him about space x environment. And so I said, brian knew coming to work for elon, who turned his life upside down and must could offer no guarantees of success. How can a small team rocket capable reaching orbit? anyway? No privately funded company had ever succeeded at something like this before, and many had failed trying.

And so a few days after the interview, IT says, a few days later, he received an email from e landa's. Assistant at one in the morning, did he want the job? Brian realized that this company Operated its own speed.

This office appealed to bryant sense of adventure, and he decided to seize this chance. So he becomes employee number fifteen and space. And when you hear him describe, he was like, like, uh, i'm going to a, have no outside life.

I'm going to work every hour of the day. Uh, high chance that we're gonna fail. Yes, i'm going to do this. IT reminded me. I've seen like a couple times in these books.

I was reading a biography of mark train one time, and he talks about this one, this one pony express ad, which is you such you running mail by horse back across the country. And the job ads that the pony expressed ran became legends, it's said, wanted Young, skinny, wiry fellows, not over eighteen, must be expert writers willing to risk death. Daily orphans preferred that added hundreds of adventure seeking Young men who quickly responded in one of the job.

We saw this also the story without a shako ton. He ran. And I said, men wanted for hazards, journey, low wages, bitter cold, long hours of complete darkness, safe return, delta honor and recognition in event of success.

And so you can have the space of equivalent of that. And so then there's a great description of how relentless sts that evan could be once he identify somebody who wants to hire. This is a very talented Young engineer from turkey living in time for sisco.

His wife works at google the time so is like, you know, I can, uh, work for space x because i'd have to move to los Angeles. But he agrees to be interviewed anyways. And in the interview, elon tells them that really solve this problem form.

So so I heard you don't want to move L A. And one of the reasons is that your wife force for google. Well, I just talk to Larry and you're gonna transfer your wife down away to solve the problem, must get called Larry page, the coal founder of google, the engineer SAT in stunned silence for a moment.

But then he replied, given all that, I suppose i'll come work for space sex. And there are so many great lines about what an interview with elon was like. And so here's a description from somebody that elon interviewed.

I never met a mansa laser focus on his vision for what he wanted. He's very intense and he's intimidating as hell. It's tough when you're interviewing with him.

And in addition to this auditions goal that nobody else was even trying to accomplish, the fact that you had a lot of ley, the fact that you would be constant, push the limit and tested your entire job won, be relegated to a single bolt. All these things helped elon top tier talent. But another thing that helped him recruit there is a guy in han who's gonna come eventually become the vice president of avionics SpaceX.

And one of the things that helped him take the risk of joining space ex was the fact that elan had so much skin in the game, hames knew that elan had put a hundred million dollars of his own money into the project. I think it's impossible to understate how effective elon was a drawing in top talent. In fact, there's a great story that illustrates this.

So there is a scientist. He is running a graduate program in space engineering at the university of machines. IT is one of, if not the best graduate program in space during in the entire country. And so this professor makes a list.

He's like, who are my ten to best students of all time? And then once at the list, he wanted to do research, like, where do they wind up? Where are they working? And he was shot.

Half of the students, five at the ten, were working at space. And this is what he said, the results of bloom away. This was before SpaceX was successful.

So I interviewed these former students and asked, why did you go there? They went there because they believed many of them took py cuts, but they believed in the mission. And and this was hilarious, because this guy's writing this article.

So then elon goes and visit him. Elon request a meeting, and they says he asked a single question. Who with the other five students and this actually said, I realized the meeting was not about me.

He wanted to recruit them. Elan wanted the other five. And IT wasn't just a the university emission either.

So this professor goes and speaks with his engineering peers at places like M I T. In university, southern california. He says he heard similar things.

Space ex had juice with their students too. The freedom to innovate and resources to go fast summer, the best engineers in the country. And the professor is a great line over why the top students were choosing to work at SpaceX over the salleh firms.

He said, talent winds over experience and an entrepreneur culture over heritage. And so another thing that the book is great at IT gives you a lot of insight how elan was managing just a bunch of great lines and stories. And here's one description.

Musk, in your face management file came with benefits. He empowered his people to do things that would have require committees and paperwork and reviews at other companies at space if they could convince the company's chief engineer that dean of something. They also earn the approval from the chief financial officer as they were one in the same.

And this is something that comes up over, over again in the early days of space sets. The faster you can make your decisions, the more iterations you can do, the more elations you can do, the more you are learning, the more you're learning, the more success and capability spaces has. And so there's just quote after quote after quote in the book of early space ex employees describing you on this way, he always made the most difficult decisions.

He did not put off problems. He tackled the hardest problems first. He had a vision of how ero space could be done faster and for less of money.

IT was elon's a bully to identify engineering talent and then motivate his employees to do extradited things. Elan had a nack for inspiring engineers to do things they believe just beyond their ability, and when they achieve the impossible to reach tour, the next goal. This company has a lot of talent.

Elan's primary capability is to valley people quickly and pick the right people. He is really good at that. And then he combines that scale with being super involved.

Mosque was there every step of the way. Having elon there made things a lot simper. Because he is per involved.

He makes those difficult decisions. When the time comes, he would step in and make those decisions. He always kept to focus on the vision.

This is one of the things that elan brought to space ex risk tolerance. This is when my favourite lines in the entire book talking about island's risk. He didn't want to fail, but he wasn't afraid of IT. That is another contrast between space sex and the legacy air space companies.

They become specified or so terrified of taking any risks that could lead to potential is another grade management technique that alan would use in meetings to related to this failure was an option at spaces, partly because the boss often asked of the the impossible from his team. In meetings, elan would ask his engineers to do something that, on the face of IT, seemed absurd. When they protesting that IT was impossible, elan would respond with a question designed to open their minds to the problem and potential solutions.

He would ask, what would you take? This is something elan has economy with ten, twenty four. He would talk about the the factors.

We already know the limitations. So we're trying to do something has never been done before, which will ten reformed and on we're doing in their careers. I don't need you to tell me the limitations.

I need you to open your mind with potential solutions for this previously unsolved problem. There's a line in Henry ford autobots. phy.

Talks about this. He says, that is the way with wise people. They're so wise and practical that they always know down to adult just why something cannot be done.

They always know the limitations. Henry ford and elon mosque wanted solutions, not limitations. And then if we go back to what else motivated these top to talent to join? He is a very talented german engineer that even was recruiting.

And one of the reasons he wanted to to one of joining spaces is because is of the chAllenge of doing everything within constraints. And so he said, intrigued me, we trying to build a rocket with two hundred people instead of twenty thousand. Thomas, build IT in a government.

Can I use a computer? I can buy for five hundred dollars. First one I can buy for five million IT seemed to me that's what you want, wanted to do.

And this was precisely what you want, wanted to do because they, we're spending his money. There is a great description about how elan thought about the relationship between time and money and how to deploy resources in the early days of a company. And I found this in the elon musburger.

He ruined by actually events. He says elan would always be at work on sunday, and we had some chats where he laid out his philosophy, said Kevin brogan, an early space sex employee. He would say that everything we did was a function of our burn rate, and that we were burning through a hundred thousand dollars per day.

IT was this very entrepreneur silicon valley way of thinking that none of the aro space engineers in los Angeles were died into. Sometimes he went that you buy a part for two thousand dollars because he expected you to find a cheaper or invent something cheaper. Other times he wouldn't flinch at running a plane for ninety thousand dollars to get something to coach where the shooting the rockets were on because IT saved an entire workday.

So he was worth IT. He would place this urgency that he expected the revenue in ten years to be ten million dollars a day, and that every day we were slower to achieving our goals, was a day of missing out on that money. And so another main theme, in addition to recruiting top talent, is if you're burning one hundred thousand dollars today, you obviously to go very fast.

Speed is another main theme throughout the entire book, and the speed that space ex worked that relative to its peers could be daring after his job. And NASA brian felt the culture shock immediately apparent. Starting work before he could log into a computer, and NASA brian had had to undergo a detailed security screening process in multiple orientations to Operate machines that would steer electron beams.

Brian had to sit two days of training courses at space sector was none of that. On my first day of the job, I showed up the doors not locked. There's no one of the front desk.

I met hans, and he gave me a packet that had some materials about benefits and things like that. And then he told me what I needed to do. Orientation done.

The team was so small that everyone knew everyone, and each employee pitched in as needed with other departments. Everybody was expected to Carry their own way, and then a bunch more. During the early years of SpaceX, the company had no support staff beyond iran's assistance.

The early days of microsoft is the same way. The first thirty employees of microsoft are twenty eight engineers, bill gates and a secretary back to this. This included the lack of custodial staff.

Win shot well, whose can become a very important in space x. She's the president CEO today. But at the time of the story, he was the vice president of sales.

This Green shot well remembers organizing a meeting with government customers. SHE checked in on the company's upstairs comfort room. They were going to be there for hour or in an hour.

And IT was a mess. So I got out the vacuum, the vice president of sales vacuum ing, and then trying to figure out the coffee. No job was beneath us, going back to the fact that elan prioritized making decisions very rapidly, sped up the entire velocity of the company.

And so he says he could be difficult to work for, certainly, but his early highers could immediately see the benefits of working for someone who wanted to get things done and often made decisions on the spot. No committees, no reports just done. This kind of style Carried over into meetings.

If an engineer faced an intractable problem, elon wanted a chance to solve IT, he would suggest ideas and give his teams a dare to. The trouble suit then reported back to him in the interim, if they needed guidance, they were told to email him directly, day or night. He typically responded within minutes.

This is a story about the early days of amazon that I thought of when I was reading this section. There is a guy that comes to work for amazon from warmer. And his his job is to build out the the new film ment center rams on.

And so he wants to build a three hundred million dollar for filming center. He shows these plans to jeff eos. Jeff loves them.

And so the guy asked jeff, okay, so who do I need to talk to to get permission to build this? And jeff says, you just did. And that's something that jeff repeats in shareholder letters.

And in some of the speeches, he says, you can drive away great people by making the speed of decision making really slow. Why would great people stay in organza where they can't get things done? They look around afterwhile.

They said, look, I love the mission, but I can't get my job done because our speed of decision making is too slow. The opposite of that is elon. In the early days of space, ex, over the course of a single meeting, elon could be a turns, hilarious, deadly, serious, penetrating, harsh, reflective and a stickler for the finest details of rocket science.

But most of all, he channel an intense force to move things forward. Iran wants to get shit done. okay. So another main theme that is repeated throughout the book is how important was for iron. He wanted to build as much of the rocket in house as possible.

He wanted to control as much of his business as possible, so says, from the very beginning, elon wanted space to build as much of every rocket as he could to free itself from the cost and schedule visit de of suppliers, and is a great example of this. First, they identify a very talented machine shop that can move as fast as they do. And then when the two owners of the machine shop have a falling out even on, buys the entire shop and brings the in house.

And so we have one of the code wners of the companies gaining bobb regan, talking about the difference between working with space x and other people. There were also customers of his machine shop. And so he says, man, those guys would send me some of the wild crap i'd seen.

SpaceX also paid quickly within a day of receiving a purchase order from space ex. Regan would have a check with other companies. He would finish a part, submit an invoice and receive a check.

Thirty days later, space sex wanted its parts fast. Reagan got the message and began to prioritize their orders. He had never worked with the company that moved as quickly as space sex.

And so this is when else going to actually buy his machine shop and bring IT in house. And again, so this is the speed is just a head kring theme that hopefully i've picked up on by now. This is repeated probably a hundred times in the book.

One day in the fall of two thousand, three, when they called and said they needed a particular part, rushed over region, replied that he could not help. He and his business partner had fAllen out, and the only course was to shut the business down. Space sex would have to get its parts from elsewhere.

And so space sex realizes this would be disaster. So elon meets with them. They negotiate over asking Price, and ten minutes later they present him with a contract.

IT was saturday, november first at five P. M. Ian wanted his new vice president of machining to start work that evening.

So he once up, bringing six of their machines st. In house and all the machines. And this is why, by bringing IT in house, elon cut much of his manufacturing costs in half.

Now he could buy a chunk of aluminum and have people in his building work on IT, as if he were clay producing apart on demand, without the markup and delay of sending IT to an outside machine shop and the lines of communication between space ex engineers and the manufacturing crew were wide open before. If I had a problem with of my customers, I have to call the buyer, then the buyer would have to call the engineer. And a week later, I may, I might get a call back with an answer at SpaceX regan SAT in the q farm.

If the engineers did something that I was down or would not work, he could tell them there was mutual respect. His relationship with elan was simple. This is how he describes elan.

Elan cannot stand a liar, and he hates a feet. And if you say you can do something, you Better fuck and do IT. And here's the punching line of the entire story space.

Ex likes to Operate on its own terms, in its own timeline. And this next part does a great job of describing why this was so important to elan. Elan taught his team to assess every part of the rocket with the deciding eye for a given task. A typical airspace company would just use whatever part has always been used. This saved engineers from the time consuming, difficult work of qualifying a new part for spaces fly, but space axis attitude was different.

True, a product, mary, exist, but is IT optimize for your solution? Is IT from a good supplier? And what about their two or two or tear three suppliers? And if you need more of them faster, will they meet your needs? If you want to change something, are they willing and able to change IT? And if you improve that product, will they eventually ate your competitors? And the go back to his record, me, that elon is keep out of making decisions very fast.

They're looking for a testing sight unfettered by government controlled, are having a hard time doing this. In california, they were ware of a previous rocket company called bill air space that was founded by the scanning andy bill. And the company had gone out a business of few years earlier.

And so one of elan's employees was telling him, hey, this site, immigration texas looks promising. We should go check IT out. And he says, ian decided that day day to fly down the texas and check out the site.

The sites suited space sexes needs because andy bill had developed specifically to test rocket engine. The fact andy bills, one of the richest people in the country, he started real airspace with two hundred million of his own money, and what the site has everything that needs. And IT also has a much more CoOperative local government, he said.

The town of grater owned everything hearing was willing to lease IT because local officials wanted the companies is attended. There will be minimal interference in no restrictions on the size of their engine. Texas had a much less restrictive regulatory enviro in california with more business friendly laws.

Elon hired Allen, who is the guy who is showing on the, the, the, the spot and immediately least the site, elan company, which is here and half old. And now he found room to rome in texas. There his engine designers would construct a new test, I one with wide open spaces and few rules.

And then I just love this writing. Over the next two years, they would hammer together the merlin engine and put IT to its paces. They would burn up thrust chAmbers below apart fuel tanks and raise enough rockets to bring the secret service to their gates.

But by two thousand and five, they would build something powerful almost from scratch, with enough thrust and half a ton screaming towards our space. So one of the benefits of reading this book is that you're constant exposed to these smart, dedicated people having to deal with failure after failure, of problem after problem. Ninety percent of the book is space x fAiling.

The second flash chapter is flight for the first successful rocket launch. And then the chapter after that is how basics almost still goes out of business because of a lack of funding. And the great financial crisis is happening in two thousand and eight.

And so at this point, the book, as soon as they solve the problem of, okay, now we have a spot where we can test successfully test or rocky engine. Once we do that. Now we need to be able to launch IT.

They thought they already had that problem solved because they thought they could launch their rocket from vender berg air for space about an our and a half north of the space x head course. And so much. He's giving a talk to his employees after their first successful test of the rocket.

And like we completed a large milestone in a few months, we will receive air force current to fly only they wouldn't IT. And so i'll give you a little background here before space sex is forced to build a launch site on a remote island in the pacific ocean. And so he says, the air force of space x had an uneasy relationship from the beginning.

The military service has a rigid culture, strict hiarandi, and loss of requirements. Space sex had a loose culture, almost no higher chy and build requirements, mostly as a waste of time. Space ex wanted to get things done.

An air force had people whose job a was to review every last environmental city or technical detail before signing the day after spacelike X, A successful static fire test, officials said. Space sex officials from the the air force said SpaceX was welcome to launch its rocket, but only after the n oro. The n.

Oro is the national constant office. They launched spy satellite, but only after the nero's expensive spice satellite was safely in orbit. They promise the air force couldn't or wouldn't tell SpaceX when that was going to happen.

This place SpaceX on a horrible while. The fact one waited its term, no one would competitive space ex for its expenses. The company got paid when IT launched.

By contrast, when the military rewarded a national security loans contract to lock key e or boeing, they signed a cost plus agreement where any delays were built to the government plus a fee. Technically, we weren't t kicked out of vanni g. Elon said.

We were just put on ice. The air force never said no, but they never said yes. This went on for six months.

The resources were draining out of the company effectively. IT was just like being starved almost from the beginning of its existence. Space sex has paid its hopes on this launch site, located only one hundred and fifty miles from its factory.

Spacewalks had invested seven million dollars in launch facilities at vanni g there would be no reinforcement. Elan had to eat the loss. The company, born with DNA that impelled to go as fast as I could, had run into a movable force.

And so the air force will help them. But the army woods of space excess backup plan was to launch from this remote island in the martial islands called the quadi, a toll or quad for short. This is one of the crazy parts in above.

They had just worked themselves to exhaustion building one launch site. Now we'd have to turn around and build a second one. And this one is honey mote highland in the pacific. Listen to how much work. And had really tons of supplies, that is a ship to the middle, nowhere.

They had so much to move unless the employee Carried a key rocket part on a two day, two airplane journey from los Angeles to quash most cargo, had to be shipped by sea on a month long journey at their heads, and also to employees began to pack dozens of sea vans that would be stacked on large cargo ship for the voyage. Fresh from experience building a vanburgh, the space x team knew they would need a lot of everything to assemble, test and launched the falling one. So they stuffed tools and lifts and pipes and tubing and computers into forty foot cargo containers and send them to the port of los Angeles.

Over the course of three months, the company shipped thirty times across the pacific. They managed to build in tester first rocket. That one fails.

What was interesting is on the flight back united states to somebody on the plane with elan, and he describing what elan was doing, he's eon, spent much of the flight pouring over books written about early rocket scientist and their efforts. Elon seemed intent to understand the mistake they had made and learn from them and what he does, nexus, a really smart move. He was placing the difficulty of what humans team are trying to do in a historical perspective.

Keep mind, by this time they've been toiling away nearly seven days week, almost our hours a day for years, trying to build a rocket again into orbit. This is what in on desk. Everyone seem to recognize the emotional tool that the failure might inflict on some of his engineers.

Not long after the accident, he tied up an uplifting memo to the space x team as part of his no. Elon offered some comforting perspective. Other iconic rockets, he noted, had failed often during early test launches, so he search listing ones in europe and the russians and the american program.

And he said, having experienced first hand how hard IT is to reach orbit, I have a lot of respect for those that persevere to produce the vehicles that are mainstay of space launches today. Space sex is in this for the long haul and come held or high water, we're gonna make you work. And so it's fascinating about this part of the book is he's got two problems he's got to solve, multi eely.

He's gotto figure out how to develop a rocket that can reach orbit, and he's got to secure contracts. So space x doesn't run out of money. And so at this point is having a conversation with Green shot. well. And this is before he joins the company, and he has a lot of industry experience.

So SHE mentioned to elon in a meeting that you need to hire someone to sell the rocket full time, that at that point, elon just had a part time sales consulting SHE like that's not going to work. So says later that afternoon, elan decided that he should indeed hire someone full time. He created a vice president of sales position and encourage shot well to apply.

And so he talks about the fact that he had to think about this for while, because he said he was almost forty years old, SHE was in the middle of divorce and he had two Young children to care for. SHE says that was a huge risk, and I almost decided not to go. But her final decision came down to a simple calculation, look, i'm in this business, and do I want this business to continue the way IT is? Or do I want to go in the direction that elon wants to take in? This is so important, she's going to secure the two contracts that save space.

X is a very important part. In the early days space, x bus leader partner who possessed his brothers, but also understood the political terrain and had the sophistication to navigated. This is where shot well would come in the idea of selling elon mosques unproven rocket and working for someone regarded as a demanding boss did not face her.

I knew the business. By then I would be selling to my old competition. Of course, I could sell rockets, no question at all.

That is such an important point in such a great idea. Who knows your customers? Who are you trying to sell to?

Who knows your customers find the person who knows customers, then hear that person to sell your product to them. It's exactly what elon did you are reading through the lies here is exactly what elon did when he hired. Shot well from the beginning, shot well understood the complex and evolving relationship between the air force, NASA and private industry.

Elan was still learning about his new federal customers. And then this is one of my favour lines, our favourite stories in the book, because he just realized that elan's very easy in face with no work about work, just work. That's the way he wants to do things.

Shot well, wrote a plan of action for sales. One took one look at that and told her he did not care about plans, just get on with the job. And then showers responses.

Perfect SHE is like, oh, this is refreshing. I don't have to write up a damn plan. Here was her first real taste of england's manager style. Do not talk about doing things, just do things.

And I think this goes back to something elon mentioned early, the book, the fact that IT was a benefit, a huge man of petipa, as the fact that the lead engineer and the head, all the finance and engineering, is in the same, he's in charge of boat, is in the same brain he touched. Putting those two functions together makes you move a lot quicker. He says.

I make the spending decisions and the engineering decisions in one head. Normally, those are at least two people. There are some engineering guy, you trying to convince a finest guy that this money should be spent, but the finance guy doesn't understand engineering, so he can tell if if to go way to spend money or not whereas i'm making the engineering decisions and spending decisions.

And so shot well is introducing iron to potential customers are all inside the government. This one guy is another exam memor earlier like, hey, you know rich internet guy just like, go sit on the beach this is like to be too hard. Don't do this.

Well, we're now several years later and they are still telling him the same thing. And so as a result of this meeting about described to you, we're going to see that elon realizes he's got to find a way to gain attention and put on a show. And so IT, as Peter teeth, represented an important potential customer as the agency designs, builds and launches a multitude of spy satellite of the U.

S. government. This is the N. R. O that I mention earlier, teeth was generally supportive of the startups intensions, but he had seen this kind of presentation before in the book, which I admitted and I have to recommend you read the book, those multiple examples of all these people that try to start uh, private space companies for elon, all of them failed.

And so agencies just would see the same person trying over over, like all this in lunch, just can be like them. And I realizing that one is anybody else. I remember him putting his hand on islands back and saying, sun, this is much harder than you think IT is, it's never going to work at this remark you on, straighten up.

And he had this look in his eye that shot well, could easily read tips. Preternatural gesture had hard in his result shot, wells said. He's gonna make sure you regret the moment you said that.

And so elan, throughout his entire career, and you still see the city very much, has a flair for show manship and for gaining attention. So this in an began to believe customers like teats needed to see real hardware, to believe the company in its booster legitimate. So says they work eighteen hours a day to build a full scale model.

The rocket itself was hollow, but from the outside looked genuine enough. The rocket then rolled out of space access factory for a cross country journey. U.

N. Wanted to make a splash in the nation's capital where his customers are. So his rocket was head to washington, D. C.

The sixty eight foot long booster rocket was part on independence avenue, across the street from the national air and space museum. If people needed to see a rocket, iran was going to show them a rocket shot. Well admired elan's talent for confronting his critics head on.

Everyone thinks a private company like space sex building an orbital rocket is crazy. They think it's never going to happen. His attitude was, let's drive the damn thing there and show all the tractors that is here.

It's funny, when I read this section, I remember that elon did something like this on a much, much small scale. After his first start ups, IP two, and he was in his only twenty. I've remember reading this story in Ashley dances by graph of elan I want to read from, and now says, ever marketing savy.

The mask brothers tried to make their web service seem even more important by giving an an imposing physical body. Elan built a huge case around a standard P, C, and log the unit onto a base with wheels. When prospective investors will combine, elan will put on a show and roll this massive machine out so that IT appeared like ipad to rain inside of a mini supercomputer.

The investors thought that was impressive. So now there's a third simultaneous problem that they have. They need to build a rocket to reach a bit successfully.

They need to sell the rocket successfully. And then the third thing is they have to fight corruption. So elan knows that if space ex is going to survive, NASA has to played important role.

They need the contract from NASA. And so something crazy happens. There is a company, a rocket company called caller. That company goes bankrupt. The chief executive of that company was a game, George Miller, who is one of the heroes from nasas Apollo program.

He is eighty five years old at the time, a year after the company goes bankrupt, NASA announced a new two hundred and twenty seven million hour contract with kiser. And so elan is outrage, and he does what everybody tells him not to do. He protest to the government account office that this is not fair, and a nesses should be forced to open this up to bidding.

And so elan describes his thinking and why he did this. I was told by many people that we should not protest. You got a nine percent chance that you're you're going to make a potential customer angry.

I'm like IT seems like right is on our side here. IT seems like this bit should go off for competition. And if we don't fight this and I think we're doomed, our chances of success are dramatically lowered.

Next of being one of the biggest customers of space launch would be cut off from us. I had to protest and resort was they won the new. The company won space one. After NASA learned that the U. S.

Government accountability office were ruled in favor of spaces on the issue of fairness, NASA pulled the award from kisser NASA realized IT would need to open up a new competition for cargo delivery this became the foundation for nasas commercial orbital transportation service, also known as cots. This was important because the cuts contract two years later, space ex wins that contract. The kiss or protests was just one of many battles that elon and shot well would fight before government committees.

And incorrect is not. A year later, SpaceX scrapped with three of the tides of the U. S.

Launch industry. In one battle, space x and north of gunmen traded lawsuits over town. Muller and his rocket engine technology. Tom was the first of employee of space sex and the designer of the murine recognition.

And in another more consequently battle spacesuit boning and lucky Martin over plans to merger launch businesses into a single rocket company called united launch alliance in space access point was that neither company's new rocket to compete on Price with rivals in russian europe for a commercial satellite launches. So but when this is happening is the studio of five, the U. S.

Share of global market for commercial launches is like shooting, like large satellites. Tes, for television and communications into space fell near to zero. So when I got to that part, the book, and in two thousand, five, it's at zero.

What is that now? And so he says in two thousand and twenty three, the U. S.

Had a fifty four percent share of global commercial launch revenues with space access fault in nine responsible for the bulk of these. That's nuts. The role that one company can play from near zero twenty years later to over half. So space ecs lawsuit said this was a violation of manatos is they went up losing that lawsuit.

But this is the punch line within its first three years, space x had suit three of its biggest rivals of the launch industry, gone against the air force with the proposed united launch of lines merger and protected NASA contract. Elan was not walking on ag shells on the way to orbit. He was breaking a lot of eggs, and he was right, because at this time, IT would cost between twenty six and twenty eight million dollars per launch.

Space sex wines are being able to do this for six million dollars. He is something really fat smart too, because his Price was so good. Elan wanted the Price front and center on the companies 的 website。

Needs to say no of the competition, say, hey. You would not find pricing on their websites. And so we like like no know you go to space like to com. You going to say, hey, we can do this for six million is going to be on the front page in all these protests, in these lawsuits. Its they they directly lead to the two contracts that change space sex forever.

The first one in two thousand and six can be for two hundred and seventy million and then the one that saves the company after the fourth launch in two thousand eight for one point six billions. But this is the first contract to change basic forever as a summer of two thousand six. Drag, dawn, space, sex and the other finals waited to find out who received the lucent contracts to design the cargo delivery systems.

Then the call from NASA finally came in August, so shot well in england. Take the call after hanging up to call an improved staff, meaning on the factory floor. Elan speech was short.

We fucking won. Space ex had won big in a couple of critical ways. First there is the money, the contract value of two hundred and seven eight million dollars would allow musk to accelerate his plans to build the big orbital rocket.

And perhaps most significant, the with the contract award, NASA had endorsed the company. That was really important shot. Well said.

We were a little company. We were jack asses at that time. We blew up a rocking in march of that year. From my perspective, NASA was acknowledging that even though we had a failure, they felt we were on the right path. And so now they are still working on trying to get a rocket into orbit.

This is even on and how difficult to problem space is trying to solve just for and is directly from him just for your information. It's not like other rocket scientists were huge idiots who wanted to throw their rockets away all the time. It's fucking hard to make something like this.

One of the hardest engineering problems known to man is making a reusable orbital rocket. Nobody had succeeded for a good reason. Our gravity is a bit heavy on mars.

There should be no problem. Moon pizza cake on earth, fucking hard, just barely possible. IT is stupidly difficult to have a fully reasonable orbital system.

IT would be one of the biggest breakthrough in the history of humanity. That's why it's hard. Why does this hurt my brain? It's because of that.

And so he's pushing his team and himself to the absolute limits he's going to get to the point of almost financial, financially breaking as well. And about a year two. But this, again, IT goes back to what I was watching early, the fact that his employees respect him because he's actually working alongside them.

He's not an absent tea boss. And so when he suggests a solution to a problem or potential solution, the problem doesn't work. Do not upset that he was wrong because he was right there.

Mosque might have been wrong, but the filthy and exhausted engineers and technicians working with him all night did not program mosque for keeping them at a task that proved fruitless. Rather, his willingness to jump into the fray and get his hands dirty by their sides won him admiration as a leader. And so this is what the early SpaceX company culture was.

From the perspective of one of the engineers, the timeline involved fairly regular all nightlife. There was a certain amount of competitive marcha culture that was part of IT too. Like I can fuck in work as hard as anybody else.

I'm not going to be the one that has to go home first. And here's one of the wild parts, the guy talking right now, he's in his match ones. He's four months into working at basics and the early has respons sibly for the rockets entire first stage proportion system.

Elan was willing to give talented Young people a tonet responsibility. So he's talking his names done, done, is talking about this point in space ic history. I did know what.

I didn't know if something like that happened today, I D be super apprehensive. I would be very thoughts about IT. But at that time I was like, let's go get after I just wanted to do the best I could.

The way I approached IT was to work my ass off. And so one of my favourite chapters in the entire book comes towards the end. It's called eight weeks when elan arts space access, I say, we ve got enough money.

We're going to give you three attempts after the third they attempt. He's like we're running on money. We have one more shot this, but we have to do this in eight weeks and keep in mind when this is happening.

So ell's thirty, when he found space x, when this is happening, IT is due or die time for his company. He is only thirty seven years old. And so this is how elon responded to that third failure. After the third failure, must called a staff meeting, mosque chose not to play the blame game. Instead, he rally the team with an inspiring speech.

As bad as flight three had gone, he wanted to give his people one final swing outside that room in the factory they had the parts to for a final thousand one rocket build IT, he said, and then fly IT. He collected everyone in the room and said, we have another rocket, get your shit together and go back to the island and launch IT. The period have followed to be the most memorable and arguably important period of the company's history, hardening its DNA and setting the stage for space x to become the most transformative airspace company in the world.

Now keep in mind what is happening with elan at the time. Okay, elan felt as cris phone, as the reserve employees. Worse, even he had bet a lot on space x in time and money and emotional toil with little return.

Now his personal fortune was running dry. He'd invested everything in space x in tesla. Beyond money, his personal life was falling apart.

He, in his first wife, had split that summer. This is what elon said at the time. I had to allocate a lot of capital to teslin solar city.

So I was out of money. We had three failures under a bet, hard to raise money. The recession was starting to hit.

The tesla financing round that we tried to raise that summer had failed. I got divorced. I didn't even have a house.

My x wife had the house IT was a shady summer IT was a hell of time to be running a single cash hungry start up let alone too. Mosque really had put all of his network into rocket and electric car ventures. And in obvious two thousand eight he had almost nothing to show for IT.

His rocket company had produced a linna failures, and tesla was equally cash strapped and only just beginning to sell its first product, the roster. And what a great summary of this. Elan had tried to change the world, and the world resisted.

It's unbelievable how fast they put the rocky together. Okay, the first time was even more unbelievable. They had to do IT again the second time.

So they are flying this giant rocket in a this is the c seventeen, just one of giant military plains. And the information they have in the c. Seventeen, like the pressure inside the c seventeen was outdated.

So as are doing the sent into hawaii, the rocket crumbles and so they get the rocket to quash and they call back to space ex headquarters. And I they like, you know, the the thing crumbled. We have to send this back and rebuild an and so they're on the phone as this remote island.

They're talking to headquarters, headquarters in ally. And this is the response to headquarters. You need to stop talking and shut up and listen to what about to tell you you're not bringing that fucking in rocket back.

You're gonna strip that fucking thing like a chevy in that rocket. Better be fucked and disassembled by the time I get there. Monday morning, there was dead silence on the other end of the phone as the words sunk, they were gonna have to fix the rocket right there.

In the tropics, there is no time for quality control or particular records. They did not have six weeks. They had one, and they did IT.

They said, after the fact, I cannot believe we disassembled an entire stage and resembled an entire stage in the course of a week. I don't think we could have imagined that. And so they launch flight for in record time.

And IT works, the rocket gets to orbit. And yet even after that, spaces s almost failed because they almost ran out of money. So says, after sinking six years and a hundred million dollars into space sex, elon finally had a real rocket.

When flight four launched, the companies is payroll succeeded. Five hundred people in space sexes finances remain dire to luo Riley, which is elan, a girlfriend at the time. I described elan at this time, he said elan looked like death itself and described him waking up from nightless, screaming and in physical pain.

Even as spaces have achieved rocket success, both of island's major company by spiral torch bankrupcy that fall, friends urge you on to save spaces x or tesla. Warning that he could not support both, he organized over the decision. IT was like having two children, elon said.

I could not bring myself to let one of the companies die. And so this is when NASA had an open competition for this program called C. R S, which is commercial resupply services.

And what nas needed was need help keeping astra ts there on the international spacing set in closed. So if basics wins the contract, they would fly food, water supplies to the I. S.

S. And so while this is happening, they're bidding on this contract. And he says, still musk thread about how his company's desperate finances must look to nat NASA as is personal wealth dried up amid ever session.

Finally, on a monday morning, december twenty second, two thousand. Eight, the answer came. They just called my cellphone out of the blue right before Christmas. Elan said they were excited to tell elan that space ex had won one of the two contracts. Must couldn't believe IT he told them, I love NASA you guys rock.

After the call, elon asked, shot well to immediate n whatever deal na offered, he harbor a feared that the space agency might take the contract back. Without the C. R S.

Contract, we would have gone down as the company that made IT to orbit and then died. The contract was worth one point six billion dollars. Two days later, on Christmas eve at six P.

M, tesla closed a financing round that provided the strap automobile company with six months of funding. At a stroke, his two seemingly doomed companies were saved. IT felt like he'd been taken out to the firing squad and blind folded, elan said.

Then they fired the guns, which went click. No bullets came out and then they let you free. Sure, IT feels great, but you're pretty fuck in nervous.

IT was a high drama situation. It's a great story, but IT is way Better in recollection than at the time. And then the book ends with this interview that elon's doing with the author. Two thousand twenty. I says, nearly two decades have now gone by, since must first began taking seriously about mars during an interview in early two thousand and twenty, his mind drifted back to that first impulse to get into the space business.

He remembered a grey, rainy day on the long island expressway with his friend audio russy, and later his frustration upon visiting nasser's website, finding no plans, he could not understand why humans had remained stuck in low earth orbit s since Apollo. And so he made a life changing decision to commit himself to the goal of mars, a commitment that has grown stronger over time. That's nineteen years ago, and we're still not on mars, he said, not even close.

It's a god damn outrage. This is the passion that fires in on mass, and that is where I leave IT for the full story. Highly, highly recommend reading the book.

If you buy the book using a link that in your show, notes are available, founder pakistan a com. You'll in the pakistan same time, that is three hundred and sixty nine books down one thousand ago. And i'll talk to again soon.

I just went back in, listen to one of the episodes I made on j pog gei. At the time, j pog. Getty was considered or thought to be the richest person on the planet, and something that jumps out from reading his autobiography, the fact that he made IT a prior to learn from history.

And he talks about like actually just studying rocket fella. Like what get he learned about how rockfeller built his oil company was literally worth billions when he was building his own company. And you just heard how elan was costly paratimer ing.

Learning from rocky entrepreneurs that came before him, because I think they both understood would get in. And elon understood was there's a lot of truth in what charlie monger said. When charlie said that learning from history is a form of the leverage, that is why so many people that uni study in the parking spend so much time learning from the great people that came before them.

If learning from history is a form of leverage, then founders, notes, gives you the superpower to do this on demand. Founders notes is the internal tool that I built for myself to keep track of all my notes for all the books, all the highlights on the books I read and all the transfers for every episode made, all in one searchable database that gives you the beauty to tap into the collective knowledge of history, question fires and use IT when you need IT existing subscribers. The founders to be using IT to make decisions inside their company.

They were using IT to prepare for client meetings, for board meeting, to find ideas and hiring marketing leadership. Anytime you hear me reference a pass founder or past idea on the podcast that comes from me searching founder notes, if you are already running a successful company and you don't already subscribe the founders notes, I highly recommend that you do so. And once you sign up, you have access to all of my notes, and highest for every book that I read for the podcast, all in one giant searchable database in by popular demand, as he brought back at the lifetime option, which means that you will get all my no highlight and transcript, every book and episode that i've ever done, and also for every book or episode I will ever do.

If you're going to spend hours and hours listening to episode of founders, I would encourage you heavily to sign up for founders, notes IT makes the lessons that you are learning on the pike cast even more powerful, and he gives you that superpower to tap into the collective knowledge pish cage entreprises on demand. And you could do so easily by going to founders notes to com, that is, founders with the, just like the pic ast founders notes dot com. Thank you very much for your support. Thank you very much for listening. And I like you again soon.