Founders - #13 Elon Musk and Why SpaceX Will Colonize Mars

Episode Date: August 27, 2017

What I learned from reading The Elon Musk Blog Series: Wait But Why by Tim Urban.In the most recent 1% of our species short existence, we have become the first life on earth to know about the situation (4:38)The total market for satellite manufacturing, the launches that carry them to space, and related equipment and services has ballooned from $60 billion in 2004 to over $200 billion in 2015 (8:41)Here is what SpaceX does: it takes things to space for people for money. Here is what SpaceX really does: it is an innovation machine trying to solve one big problem. The astronomical cost of space travel (9:13)For 1% we can buy life insurance (20:35)Up until 25 years ago there had never been such a thing as a global brain of god like information access and connectivity on this planet (23:26)Musk has said he doesn't care that much about your degree. Just raw talent, personality, and passion for the SpaceX mission (31:21)For domestic launches the ULA charges the government and the US taxpayer $380 million per launch. For a similar launch, the US government pays SpaceX $133 million (40:14)Life has to be about more than just solving problems. There have to be things that inspire you. (45:55) ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

We made it to part three of the Elon Musk blog series by Wait But Why. So today I want to talk to you about the post that's called How and Why SpaceX Will Colonize Mars. So this is the first Founders podcast that you've listened to. Make sure you subscribe. Every week I usually read a biography of a new founder or entrepreneur and then just share some of the stuff I thought was interesting and some of the stuff I learned about their life and their career. This one, we're in the middle of a series. It's a little different.

It's not a book this time, but a book-length blog post. It's actually a Kindle book, too, if you read it all together. The blog posts take about seven and a half hours to read. This one's a little longer than the one we did last week on Tesla. This one takes about two and a half to three hours to read. So obviously, I'm not going to read the whole thing. I never do. I'm just going to pull out some parts that are interesting that I found interesting that I wanted to share with you today. And then I'm going to do the best job I can. Keep in mind, as I referenced in the last two podcasts, the way Tim Urban, who's the founder of Way But Why, the way he writes is so

he starts at like a foundational level and builds from there. He does a really good job of like introducing you slowly and then taking you on this journey and helping you understand little bit by bit. So since I'm just pulling out different excerpts, hopefully I pulled it out and put an them in a way that makes sense. But to get the full story, of course, just go to weightbutwhy.com, search for Elon Musk blog series. You can read it for free online. If you really like what Tim's doing, you can buy the Kindle version.

I left a link at founderspodcast.com. That's the version I'm going to be, I'm working off of. All right. So in this section, the note I put next to it is called setting up the scene. And I'm just going to get right into the post. Emerging from a 3.6 billion year dream, life on earth had its first questions. What is this big room we're in? And who put us here? What is that bright yellow circle on the ceiling?

And where does it go every night? Where does the ocean end? And what happens when you get there? Where are all the dead people now that they're not here anymore? We had discovered our species great mystery novel, Where Are We? And we wanted to learn how to read it. Around 10,000 years ago, isolated tribes of humans began to merge together and form their first cities. In larger communities, people were able to talk to each other about this mystery novel we had found, comparing notes across tribes and through the generations.

As the techniques for learning became more sophisticated and the clues piled up, new discoveries surfaced. The world was apparently a ball, not a disk, which means that the ceiling was actually a larger sphere surrounding us. The sizes of the other objects floating out there in that sphere with us and the distances between them were vaster than we had ever imagined. And then, something upsetting. The sun wasn't revolving around us. We were revolving around

the sun. This was a super unwarm, unfuzzy discovery. Why the hell weren't we in the center of things? What did that mean? Where are we? The sphere was already, the sphere was already unpleasantly big. If we weren't in the center of it, were we just on a random ball inside of it? Kind of for no apparent reason? Could this really be what was happening? Scary. Then things got worse. It seemed that the pinpricks of light on the edge of the sphere weren't what we thought they were. They were other suns like ours, and they were out there floating just like our sun, which means we weren't inside of a sphere at all. Not only was our planet not the center of things, even our sun was just a random dude

out there in the middle of nowhere, surrounded by nothingness. Scary. Our sun turned out to be a little piece of something much bigger, a beautiful vast cloud of billions of suns, the everything of everything. At our own peril, we had deciphered our way right into the knowledge that we're unbelievably alone, living on a lonely island inside of a lonely island inside of a lonely island, buried in layers of isolation with no one to talk to. That's our situation. In the most recent 1% of our species' short existence, we have become the first life on earth to know about the situation, and we have been we have had we have been having a collective existential crisis

since then you really can't blame us imagine not realizing that the universe is a thing and then realizing the universe is a thing it's a lot to take in most of us handle it by living in a pleasant delusion pretending that the only place we live is an endless land of colors and warmth. Okay, so for that section, he has some great visuals in the blog and in the Kindle format of the blog where he talks about it's really easy to think that you're in the center of everything when you have the big blue sky. And then he's like, but then it gets dark and you see this and it's like a big beautiful picture of the Milky Way. And then you're suddenly like, shit where am I so the post does a good job of like giving you a fundamental knowledge of the solar system universe goes into orbits satellites all this other background information for the scope of this podcast though just like I did with the Tesla post I'm going to

focus mainly on the mission of the actual company and then the strategies that Elon is utilizing to try to reach the goal that he has, which is, of course, the title of the post, How and Why SpaceX Will Colonize Mars. So let's jump to the section about the space race. The final Apollo moonwalk took place in late 1972. In only one decade, we had conquered nearby space and progress was accelerating. If at that time you had asked any American or any other human what the coming decades of space travel would bring, they would have made a big bold prediction. Many more people on the moon, a permanent moon base, people on Mars, and beyond. So you can only imagine how surprised they'd be if you told them in 1972, after just watching

12 humans walk on the moon, that 43 years later, in the impossibly futuristic-sounding year 2015, the number of people to set foot on the moon would still be 12. The Space Shuttle program retired in 2011. Today, only two countries can launch a human into orbit, Russia and China. With no capability themselves, the U.S., the country that once triumphantly put a man on the moon while the world watched, now has to launch their astronauts on Russian rockets at Russia's whim. And Tim did this great drawing to illustrate the difference of the space program today as opposed to the 70s. And it's a magician who first pulls a blue whale, like a giant blue whale out of a hat,

and that symbolizes landing on the moon. And then it's following up that trick with pulling out a bunny with a tie on, symbolizing what the U.S. space program can do now. And he actually goes into detail in the book where the relationship he's describing is really tenuous, because he's saying, well, if we want to get American astronauts to the ISS, the International Space Station, Russia has to shoot them up. Well, Russia and the United States had a disagreement in 2014 over Crimea. And once the US tried to put sanctions on them, they said, well, if you want to get your astronauts in space, I suggest you build a trampoline. Okay, so in 2011, the space shuttle program is retired. Now let's talk about the space industry, which I didn't know much about.

And there's just a few paragraphs on that here. We don't think about them that often, but above us are hundreds of flying robots that play a large part in our lives on Earth. In 1957, Lonely Sputnik circled the earth by itself. But today, the worlds of communication, weather forecasting, television, navigation, and aerial photography all rely heavily on satellites, as do many national militaries and government intelligence agencies. Now, this is one of the crazy parts I didn't know. the launches that carry them to space, and related equipment and services has ballooned from $60 billion in 2004 to over $200 billion in 2015. Now, SpaceX has been around for, I think now, 15 years. 13 years is the time that this post was written. It was published in 2015. So 15 years.

And in that time period, this is where we've seen this massive growth in the total market of satellites and the related industries. And it says, here's what SpaceX does. It takes things to space for people for money. And as we established, here's what SpaceX really does. It's an innovation machine trying to solve one big problem the astronomical cost of space travel because that's the key to making humanity a space faring civilization that can that can become multi-planetary and back itself up on other hard drives it supports itself by taking things to space for people for money so we'll get into that with what what you'll see here in that echoes

The Tesla post is how they had like a multi multi plan a Multi part plan, excuse me for bringing an affordable Cool electric car to the mass market how they started off with the roadster That was part one then use that money to used that money to build a slightly less expensive car, that was part two, then reinvest that money into building what's now the Model 3. So I'm going to get into how SpaceX, again, because what he's saying here, right now, they're basically a space, you know, it takes, this is what SpaceX does. It takes things to space for people for money. But what it's really trying to do is trying to be an innovation machine

trying to solve one big problem. And what they say here is the astronomical cost of space travel. So there's no way that humans can be a multi-planetary species if the astronomical cost of space travel can't be solved. So we're going to get into how Musk's mission and then a little bit of strategy and laying out his plan to do this, just like we did. Again, a lot of the stuff you're going to see with SpaceX and Tesla is you could tell they're run by the same person because they echo a lot of the same strategies. So I'm on part two.

This part is called Musk's mission. Like the rest of us, Elon Musk has a handful of life goals. Unlike the rest of us, one of those life goals is to put 1 million people on Mars. Why a million people? Because that's Musk's rough estimate for the minimum number of people it would take to create a completely self-sustaining population. In this case, self-sustaining has a simple definition. It means that if the Earth vanished from existence, the Mars population would still be able to survive and thrive and grow. They wouldn't be dependent upon Earth for anything. It's not only Musk who's been thinking about Mars. And here's a direct quote from Stephen Hawking.

I don't think the human race will survive the next thousand years unless we spread into space. We face a number of threats to our survival, from nuclear war, catastrophic global warming, and genetically engineered viruses. The number is likely to increase in the future, with the development of new technologies and new way things can go wrong. That's a really interesting point. We need to expand our horizons beyond planet Earth if we are to have a long-term future, spreading out into space and to other stars. So a disaster on Earth would not mean the end of the human race. Once we spread out into space and establish independent colonies, our future should be safe. This is Princeton professor J. Richard Gott. In 1970, everyone figured we'd have humans on Mars by now, but we haven't taken the

opportunity. We should do it soon because colonizing other worlds is our best chance to hedge our bets and improve the survival prospects of our species. Sooner or later, something will get us if we stay on one planet. By the time we're in trouble and wish that we had that colony on Mars, it may be too late. So what they're hitting out right here,'m going to continue to give some quotes in a minute is the elon to me has two reasons he needs he thinks we should colonize mars the first is just uh what tim was referring to is like backing up a hard drive so putting the human species on another hard drive in case the main hard drive which is earth is uh destroyed or are there some kind of extinction event that we couldn't predict so it talks about that we should do it soon because colonizing other

worlds is our best chance to hedge our bets and improve the survival prospects of our species right there that one sentence i think is a good synopsis of reason one i'm going to get in at the very end i'm going to get into reason two um Elon has for colonizing Mars. And I think is obviously not just as important, but is as important to us now in present day. Because obviously colonizing Mars and getting millions of people is going to take several lifetimes to do that. But his second reason also I think could be applied to just adapting it for a good philosophy on how to live a good life. So I don't know if that makes sense yet, but we'll get there at the end. Okay, so now this is NASA, Michael Griffin. He's an administrator from NASA.

In the long run, a single planet species will not survive. If we humans want to survive for hundreds of thousands or millions of years, we must ultimately populate other planets. One day, there will be more human beings who live off the Earth than on it. And then science fiction writer Larry Niven may have said it best. The dinosaurs became extinct because they didn't have a space program. And if we become extinct because we don't have a space program, it'll serve us right. Skipping ahead a little bit. Now, what worries Musk the most is the Fermi paradox.

The curious fact that we've never seen any evidence of alien life makes him suspect that there are lots of one-planet dead civilizations out there. He warns, and this is Elon, if we are very rare, we'd better get to the multi-planet situation fast. Because if civilization is tenuous, then we must do whatever we can to ensure that our already weak probability of surviving is improved dramatically. And before I continue, I think if people, if you're not like, let's say you just took that last sentence or two out of context and you just, you randomly, um, you just went like to, let's say on the streets of New York city and you start interviewing random people and see what they think of that.

And I think even though like, if you, to me, the, the, the conclusion is extremely logical. Um, for whatever reason, there's, we, we haven't found any intelligent life, even though mathematically there should be, because there's as many Earth-like planets in the universe as there are grains of sand on Earth, right? So I think when you start saying, hey, you know, it's very logical that if for whatever reason we live on a planet where 99.99% of all living, uh, species has already gone extinct. We're living in a universe where it's,

it's, there's probably lots of, uh, one planet dead civilizations out there. So therefore we want to avoid the most, um, most common outcome. We need to do something like we have to get to another planet and we have to become a multi-planetary species.

So that to me seems incredibly logical. And maybe it's just because I've been reading a lot about this and I've been following it from the beginning and reading three hours of it. I mean, it is persuasive, right? And I think most people, though, I have a feeling that most people would scoff at it. They think it's just ridiculous. Like in the post, they talk about how there's a Congressman or a Senator in the United States that wanted to slash NASA's budget further.

Cause it was Barney Frank. Cause he's saying that, you know, we have problems on earth. Like all this money and space is a big waste. And I think that's how most people feel. And, and I think the reason most people feel that is because like when,

if you live, most of us live in cities, like I, like I live in miami so if i go outside at night yeah i can see some stars but i'd have to drive about 100 miles west in the middle of the everglades where there's no like there's no light pollution to see anything of magnitude and the reason i'm going on this like this this this random thought is because i didn't realize how powerful like my feelings for space were

until this is like six or seven years ago. I was in the southern hemisphere in Argentina and I was in a little town on the coast called Pinamar, which is like about five and a half hours south of Buenos Aires. And me and some friends went to the beach in the middle of the night, and there's no light pollution, a very clear sky. And this is the first time I was able to ever see a clear – like I saw the Milky Way as if I could touch it. And to this day, it gives me – like right now I'm getting goosebumps thinking about it or talking about it. And it just changed everything because you just realize how, like, the reason I'm bringing this up is because, like, think about for the vast majority of human life,

every human got that same experience because there would be no light pollution. You'd be able to go out and see the Milky Way and the vastness of the universe, right? And then as technology increases and now we have electricity, we have cities, we have all this other stuff, it's weird. Now we have the ability to travel in space, but we can't see space all the time. Like you have to actually go out of your way to see space in a way where the vast majority of humans that have ever lived got to see all the time. So I don't know if I'm rambling. I hope that makes sense.

But I just think that like when I'm reading this stuff, I'm like, wow, this is really important. And it may not be important for, again, for our lives, right? But if you are interested in the continuation of human consciousness, like this is something that has to eventually be fixed. So anyways, let me get back to the post. So that was Musk's mindset in 2001 when a friend asked him what he planned to do after PayPal. Musk recounts the conversation. I said, well, I'd always been really interested in space, but I didn't think that there was anything I could do as an individual. But I went on. It seemed clear that we would send people to Mars.

Suddenly, I began to wonder why it hadn't happened already. Later, I went to the NASA website so I could see the schedule of when we were supposed to go. But when he looked around the website, he was shocked to find nothing. Ever since the first round of slashes to NASA's budget in the early 70s, the plans to go to Mars kept being pushed back again and again as battles for funding failed. Now, there were no plans at all. So Musk came up with a way to help. He'd put a plant on Mars.

The plan, called Mars Oasis, was to perform a charitable mission to Mars that would carry a small robotic greenhouse to the planet. The greenhouse would use an arm to scoop up some Martian soil, plant a seed, and then once a plant had grown, the greenhouse would send back what Musk calls the money shot, a photo of a sturdy green plant amidst the alien red background and the first known life on Mars. The idea was that the stunt would get a lot of attention, wake the world up to the excitement of space travel again, inspire a bunch of children to seek out careers in aerospace, and ultimately, Musk hoped, this renewed public interest would lead to an increased NASA budget. Musk believed, and still believes, that around 0.25% of US GDP, or about 1% of the budget should be dedicated to space. He makes it clear he's not suggesting a return to the 4% of the budget days of the 1960s, just an increase from the less than 0.5% level it's at today.

For 1%, he says, we can buy life insurance. Musk, who was winding down his time with PayPal as the sale to eBay neared, brought together a team of space people to work with him on the Mars Oasis. To make it happen, they would need a rocket, which Musk would buy with part of his PayPal earnings. The cheapest US rocket at the time cost $65 million. But in Russia, a used rocket would be a fraction of the price so off to russia went to negotiate the purchase of three refurbished intercontinental ballistic missiles musk was

willing to put up 20 million dollars for all three but the russians wanted more he left the country empty-handed and that's when he made the decision he would do it himself let me interject here so if you want more details about what they're talking about here, his trip to Russia, Ashley Vance in his book, Elon Musk, SpaceX, Tesla, and the questions for the fantastic future goes into really good detail. I think I talked about it on the very first Founders podcast, which at the time I didn't know was going to be called Founders.

If you go back, go to Founders Podcast or in your podcast player, it's the first podcast in there. But I listened to that podcast, obviously, and many of you have. I think it's like the most downloaded podcast we've had by like an order of two, like factor of two or three. But the book is really a good source for that. It's a really fascinating story. Okay, so, and that's when he made the decision he'd do it himself, not the plant project, the big project. He had spent months voraciously reading about rocket technology and what it would take to make them himself, and he believed it was possible. He would put one million people on Mars. Okay, so before I'm

going to move on to the section on how to colonize Mars, there's this random part I liked, which kind of goes together with the random tangent I just went off of, of how crazy it is that the vast majority of human history, you could walk outside at night and just see the universe. And now, because of the fact that most of us live in cities, it's partially obscured. So this is just some random bullet points that are in the post. And it talks about, there are other signs pointing to this being an extraordinarily unusual time to be alive. And here's some four ways that it's an unusually extraordinary time to be alive. For 99.8% of human history,

the world population was under 1 billion people. In the last 0.2% of that history, it has crossed the 1, 2, 3, 4, 5, 6, and 7 billion marks. Up until 25 years ago, there had never been such a thing as a global brain of godlike information access and connectivity on this planet. Today, we have the internet. And here's the third bullet point. After barely using any energy for the first 99,800 years of human history, in the last 200, we've suddenly thrust ourselves into the fossil fuels era, blowing through a huge chunk of stored underground carbon energy without fully understanding the implications of doing so. And number four, humans walked around our road horses

for 999 of the last thousand centuries. In this century, we drive cars, fly planes, and land on the moon. All right, so I'm going to skip ahead to how to colonize Mars, which will eventually lead us into the business plan of SpaceX. Okay, so specifically the model Musk has in his mind is that flights to Mars will be funded by the passengers riding on them, the same way public transportation works on Earth. And the key will be to bring ticket prices down far enough that a million people would buy one.

Or as he explained to me in Musk's speak, you'll remember Musk's speak from the previous two episodes. And now here's a direct quote from Musk. There has to be an intersection of sets of people who wish to go to Mars and people who can afford to go to Mars. And if that intersection of sets equals a number of people necessary to make Mars self-sustaining, that's the critical solution. In 2002, Musk explored further. This is another direct quote. I put together a team, and over a series of Saturdays,

I had them do a feasibility study about building rockets more efficiently. It became clear that there wasn't anything to prevent us from doing it. Rocket technology had not materially improved since the 60s. Arguably, it had gone backward. He was pumped. But back to reality for a second. If you decide that revolutionizing the cost of space travel was the key to something very important, you wouldn't be like, great, I'm going to go do it. You'd be like, I don't know how to do that. To get our heads around how one might achieve such a thing, let's imagine that we were trying to do it and work backwards. This is a really interesting part of the post.

So it's going to be a series of questions and answers here. Question. How do I revolutionize the cost of space travel? Answer. With decades of innovation, hundreds of trial and error launches, and thousands of super smart people working on it. Straightforward, but icky. It's icky because, question, where the hell is the money going to come from to pay for that? If the government were interested in funding it, they'd have done it themselves already. And no charitable donor is going to put up tens of billions of dollars towards funding a massive 30-plus year project that has no guarantee to work. Answer, you pay for it by making your research and development operation double as a profitable space delivery service, which is what SpaceX is today. To test your innovative new technology, you'll need to do a lot of launches. Governments and

companies will pay you a ton of money to take satellites, cargo, and people up to space during those launches. Two birds with one stone. Question, but how do I know how to launch something into space? Answer. You don't. You have to spend a few years learning how to do it from scratch and building all of the vehicles yourself and proving that you can launch successfully before anyone will hire you as a delivery service. So that's the phase one of SpaceX that he's already gone through. Question. But if there aren't any customers during the initial learning and development stage, who pays for that stage? Answer, you, the founder. Question, how do I get the money for that? Answer, you co-found PayPal and then sell it.

Okay, so that leads us into the SpaceX business plan. And just as Tesla had the three-part plan, here's SpaceX. And it's called phase one, phase two, and phase three. So phase one, figure out how to put things into space. This is the trial and error phase, which they've so far been able to figure out. Phase two, revolutionize the cost of space travel for the ongoing space delivery business. That's the phase they're in right now. And phase three, colonize Mars.

Get a ticket to Mars down to $500,000 per person. Continue ongoing Mars colonization. Eventually reach 1,000, 1 million people. And that's the threshold. And again, that's mainly a guess. They're guessing that it'll take a million people for Mars to be completely self-sustaining, which means that even if spaceships stop going from Earth to Mars, that the people on Mars would be able to procreate and keep going as an independent human colony, basically. All right, so let's go back into the post.

Phase one really started before SpaceX even existed, back in mid-2001 while Musk was still at PayPal. Strongly considering entering the space arena as his next move, Musk did what everyone does when they want to become a world-class rocket scientist in about a year with no schooling. He read some stuff. He read books like Rocket Propulsion Elements and Aerothermodynamics of gas turbine and rocket propulsion. And he basically memorized all of them. There's some more list of books in the post that he read as well. Rocket expert Jim Cantrell, who met Musk around this time and was on a failed trip to Russia with him, says,

quote, he would quote passages verbatim from these books. He became very conversant in the material. To supplement his reading, Musk asked a lot of questions of a lot of people. Cantrell, who calls Musk, by far the single smartest person that I've ever worked with, says that Musk hired as many of my colleagues in the rocket and spacecraft business

that were willing to consult with him, and that it was if he would suck the experience right out of them. As Musk started to talk more and more seriously about making space his next big pursuit, Musk's friends were worried about him. Wouldn't you be? Imagine if your friend made a huge amount of money selling an internet business and

then told you he was going to spend almost all of it trying to become the first entrepreneur to succeed at building a space launch company because it was important that human life became multi-planetary. You wouldn't feel too good about this. One of Musk's friends did his best to talk him out of this insane project by putting together a montage of rockets blowing up and forcing Musk to watch it. But Musk is an odd duck, and he continued along unfazed. After building himself a tree trunk foundation of knowledge,

it was time to get other people on board. When I asked Musk about his knowledge of business, this is a really important quote. When I asked Musk about his knowledge of business, he scolded me explaining, I don't know what a business is. All a company is, is a bunch of people working together to create a product or service. There's no such thing as a business, just a pursuit of a goal, a group of people pursuing a goal. I don't know how many people think about their jobs or their companies like that. And I think that's really, really crystallizes. Like, are you wasting your life doing something you don't care about just because you're trying to make money? Or are you actually in a pursuit of some kind of goal?

To me, once you hear it worded that way, it becomes obvious. But I don't know how many people explicitly think in those terms. So back to the post. So he started assembling a group of the smartest people he could find, and SpaceX was born. Now we're going to get into some actual interesting things about the organization of SpaceX. Here are some early SpaceX hiring policies. Number one, no assholes. Musk says that if you hate your colleagues or boss, you won't want to come to work and stay for long hours. Number two, hire and promote based on raw talent,

not experience. Musk has said he doesn't care that much about a grad degree, college degree, or even a high school degree. Just raw talent, personality, and passion for the SpaceX mission. I sat down with SpaceX VP of Vehicle Engineering, Mark Giancosa, who I was surprised to learn is a casual California bro. He seemed like some silly dude I'd be friends with, not a leading rocket scientist. He told me he was a terrible student and on his way to being a burnout of a human when he found an affinity for working on race cars at the car club where he went to college.

Turns out he was a total genius at it and after school someone introduced him to Musk, who hired him. Jun Kosa quickly rose up at the company and now, in his early 30s, he's in charge of one of the major departments of the company with hundreds of far more experienced people working for him. Here's another interesting thing. Musk interviews everyone, including janitors, and does so like a weirdo. All right, check this out. This role held with almost no exceptions of the first eight years of the company's life, up to the company having 1,000 employees. According to Musk's biography, each employee receives a warning before going to meet with Musk.

The interview, he or she is told, could last anywhere from 30 seconds to 15 minutes. Elon will likely keep on writing emails and working during the initial part of the interview and not speak much. Don't panic. That's normal. Eventually, he will turn around in his chair to face you. Even then, though he may not make actual eye contact with you or fully acknowledge your presence, don't panic. That's normal. In due course, he will speak to you. So I think when he says Musk interviews everyone and does so like a weirdo, that's a really good way to summarize that. The company itself, this is really interesting from a strategy perspective, and we'll go into more detail in a minute. The company itself, like Tesla, is heavily vertically integrated. This means that rather than outsource most of the parts of the

rocket making process to third-party suppliers, SpaceX does nearly all of the major pieces itself, maintaining ownership and control over most of the supply chain. This is highly unusual in the aerospace industry, just like it was in the car industry. As Ashley Vance explains, and again, Ashley Vance is the author of that book I recommended that you read earlier, Elon Musk. You know what it is, I keep saying it. As Ashley Vance explains, the factory is a temple devoted to what SpaceX sees as its major weapon in the rocket building game, in-house

manufacturing. SpaceX manufactures between 80% and 90% of its rockets, engines, electronics, and designs its own motherboards and circuits. It designs its sensors to detect vibrations, flight computers, and solar panels. Old-fashioned industrialists like Andrew Carnegie, who we're going to cover on the podcast in the future. I actually just ordered a massive book on him. It's like 14 hours. It's going to take me some time to get through. And Henry Ford, who we've covered twice on this podcast. If you haven't listened to those episodes, go back and listen to them,

especially the one that's the autobiography of Henry Ford, because it's just little bits of knowledge written towards the end of his career. Old fashioned industrialists like Andrew Carnegie and Henry Ford were all about vertical integration, as is Apple today in many ways. Most of today's companies avoid taking on the massive scope vertical integration requires. But for a quality control freak like Musk or Jobs, it's the only way they'd have it. And we're going to eventually get to the advantage that vertical integration gives SpaceX. On top of so many parts of the process being merged together under the SpaceX roof, integration gives SpaceX. On top of so many parts of the process being merged together under the SpaceX roof, they're

physically meshed together in the building, just like at Tesla. Engineers on their computers are stationed either out on the floor amidst the design and manufacturing, or in all-glass offices with the assembly process visible all around them. As the team grew and departments formed, Musk remained intimately involved in almost every process in a truly unusual way. So this is just going to be a tangent before we get back to the benefits of vertical integration. Some bosses are called micromanagers. At Musk's companies, his level of involvement earned him the term nanomanager. Almost every

person I talked to at both Tesla and SpaceX emphasized how much of an expert Musk is in their particular field, whether that field be car batteries, car design, electric motors, rocket structures, rocket engines, rocket electronics, avionics, or aerospace engineering. He can do this because of a combination of his immensely thick tree trunk of fundamental understanding of physics and engineering and his genius level ability to retain information as he learns it. It's that insane breadth of experience that allows Musk to maintain such an abnormally high level of control over everything that happens in his company, companies rather. About SpaceX rocketsx rockets must said there's a direct quote

from him i know my rocket inside and out and backward i can tell you the heat the heat treating temper of the skin material where where it changes and why we chose that material the wielding the welding technique down to the gnat's ass so i've never heard that expression before the gnat's ass i actually don't know what that means I guess it just means he's extremely detailed. I asked SpaceX VP of Software Engineering, Janan Hossein, about Musk's nanomanagement technique. He said, the biggest surprise for anyone first joining the company, SpaceX throws around the term nanomanager, and you're like,, oh okay, he likes to go down in the weeds, that's

cool, but you have no idea. For the CEO of the company, he has an incredibly deep stack. He has all the info available to him and he can drill down on any one thing and often does. He's making very low-level decisions and very low-level course directions for the company with high fidelity and I can't imagine it working with anyone else at any other company. The thought of one person being a key decision point for so many things is remarkable to me. He can hold it all in his head and recall it on demand in real time, as necessary, in order to make good decisions. So that was the quote from the VP of software engineering.

A little rambly on my part. I don't know if I did the best job there. Okay, so now we're back to the vertical integration, and this section is called why are costs so high? And it's going to relate to what we learned about vertical integration in the last section. Okay, so Musk is trying to answer the question why are costs in the in the space industry still high so number one this is his his opinion the only companies

in aerospace are huge and huge companies are risk adverse he says direct quote from musk here there's a tremendous bias against taking risks everyone is trying to optimize their ass covering. Even if better technology is available, they are still using legacy components, often ones that were developed in the 1960s. Many use Russian rocket engines that were made in the 1960s as well. I don't mean their design is from the 60s. I mean that they start with engines that were literally made in the 60s and like packed away in Siberia somewhere. Number two, the second reason why he believes costs are so high, not enough vertical integration. We mentioned SpaceX's vertical integration and the full control it affords Musk over what happened to SpaceX.

But Musk also believes the vertical structure is critical to keeping costs down, and he criticizes the rest of the industry for not doing so. This is a direct quote from him now. There's this tendency of big aerospace companies to outsource everything. They outsource to subcontractors, and then the subcontractors outsource to sub-subcontractors and so on. You have to go four or five layers down to find somebody actually doing something useful, actually cutting metal, shaping atoms.

Every level above that tacks on profit. It's overhead to the fifth power. Okay, and we're going to see actual numbers is what this means if you're using subcontractors and they're using subcontractors and then those subcontractors are also using subcontractors. Every single subcontractor has to tack on extra percentage points just to for profit just to maintain business so an industry in an industry full of middlemen price hikes and decades old equipment spacex's tightly controlled in-house supply chain and cutting-edge technology has made it the world's cheapest option for space delivery now check this out this blew my mind for years the u.s government has relied on two major aerospace companies, Boeing and Lockheed

Martin, along with their joint venture called United Launch Alliance, the ULA. For domestic launches, the ULA charges the government and the US taxpayers $380 million per launch. For a similar launch, the US government only pays SpaceX $133 million. For launches with other customers without all of NASA's special requirements, SpaceX charges $60 million per launch. So in direct competition with the ULA, it's what almost a third of the price. $380 million is what the US taxpayers are charged by ULA. For SpaceX, that same exact launch is $133 million. And then if it's not NASA, they can do it even cheaper for almost,

what is that, $80 million, something like that? $73 million less for $60 million per launch. So compare $60 million per launch to $380 million per launch. And reason Musk is able to get that down. One of the reasons is his belief in vertical integration. Then I'm going to end this section here. And this is, again, something that just keeps popping up. It pops up in The Cook and the Chef, which we talked about two weeks ago,

and then in Tesla last week, which I think is, again, if you're only taking away two things from any of these podcasts it's uh it's reasoning from first principles so actually drilling down to actually what is true and building it from there and then not being trapped in your own history so approaching whatever you're doing it doesn't matter how it used to be done in the industry approach it from a blank sheet of paper perspective and so this what this paragraph is going to talk about. Without the baggage of a huge company with a long history, SpaceX was able to design and develop the Falcon 1 from the ground up from a blank sheet of paper. See, this is a direct quote from

Max Vozov, an early SpaceX employee, which we see over and over again in these posts. Blank sheet of paper, reasoning for first principles, not being trapped in your own history. Back to the post. And you can see the blank sheet of paper mindset in Musk's ground-up reasoning. So he's calling it ground-up reasoning here, also known as reasoning from first principles. And this is a direct quote from Musk. I asked, what is a rocket made of? We're back to this. Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. And then I asked, what is the value of those materials on the commodity market? It turned out that the material cost of a rocket was around 2% of the typical price which is a crazy ratio for a large mechanical product so

I thought we should be able to make a much cheaper rocket given those material costs and again the reason I say that there's so much when you drill down into Tesla and SpaceX that echo one another. If you remember, he talks about batteries. He's like, well, what are batteries made out of? And it wound up being something I forgot the exact percentage. But if you look, if you could just buy the same proponents of the batteries on the on the commodity market, it was like 70 percent of the cost. So he's like, all right, well, I just got to figure out a way to arrange them in an order. And I should be able to do that for a lot cheaper than what they're trying to sell it to me for.

So now I'm going to end on, I think I almost thought about putting this in the beginning. And it's why to go to Mars? Like, why is he even doing all this stuff? So we already talked about he had two reasons. And the first reason was as almost like a think about the metaphor of like backing up your computer well if you only have one computer and one hard drive and all your important stuff's on there and that hard drive gets fried well then that data is lost forever and if you look at human consciousness as just

a subset of a collection of data that we need to back up our own species. So let's end here. Why go to Mars? And there are two major reasons. Now, actually, to back up, before I even jump into this, now remember probably 30 minutes ago or so now, I was saying that I think his second reason is, again, not using the word more important, but I think it's an important philosophy that I think, even taken out of the context of SpaceX and everything else he's doing, that if you just applied it to your own life, that I think it's a good philosophy to just have a good life and enjoy the time that you're here. Okay, so let's close this out.

There are two major reasons Musk wants us to go to Mars, and backing up the hard drive is only one of them. In this post, we've talked mostly about the first. major reasons Musk wants us to go to Mars, and backing up the hard drive is only one of them. In this post, we've talked mostly about the first, mostly about the first very long-term reason to colonize Mars, what Musk calls the defensive reason. And in order to see why that matters, we've had to zoom way out. But when he talks about his other reason for pursuing Mars, because he believes it will be the greatest adventure in history, Musk is zooming way in, and that greatest adventure in history is direct quote from Musk. This second reason isn't about the far future and the fate of the species. It's about everyone who's alive right now and the way we'll all get wrapped up in the adventure even if we have no interest in going to Mars ourselves and how that might change how we feel about the world and our lives.

To hammer in this point, Musk references the Apollo missions. Now here's the quote that I think is extremely important and the best way, in my opinion, that I could come up with to end this podcast. Life has to be more than about solving problems. There have to be things that inspire you, that make you proud to be a member of humanity. The Apollo program is certainly an example of that. Only a handful of people went to the moon, and yet actually, we all went to the moon. We went with them vicariously. We shared in that adventure. i don't think anyone would say that that was a bad idea that that wasn't great we need more of those things at least we need some of those things so when i read that um quote it reminds me he's also said this in some interviews that i've seen too and he elaborates

and he's like life he uses that phrase over and over again. Life has to be more about solving problems. There have to be things that inspire you. And he's used the term like, what excites you getting out of bed? What is like, yes, I want to do this. And the whole reason, if you remember in the first podcast was when I talked about like why I wanted to cover Elon Musk is because it's just so bizarre. He made over $180 million in his early 30s after taxes. And when he's basically solved the problem that most of us have to deal with, and that's like obviously being able to support your family, making enough money to sustain yourself. Once you have more money than realistically that you'd spend in one lifetime,

even though I know people have blown through that much money before making bad decisions and everything, but you still need a reason to get up in the morning. And again, life has to be more about solving problems. There have to be things that inspire you. And I think even if you take that quote outside of the context of what we talked about here today, and you just apply that to your own life, it's like, why am I getting up in the morning? There's another variation this as steve jobs is famous for saying that he'd look at himself in the mirror and he'd ask himself if this is one of his last days would he still want to go do what

he's about to do today and when he'd have a series of days where he'd answer that question no he knew he had to change something and i think apart from all the other things that are on our mind all the stuff that occupies our time i think just asking asking ourselves, like, what is inspiring me? Why am I up today? Do I actually want to do what I want to do? Like today, I knew I was going to record this podcast. Like that made me excited. I was like, yes, I'm going to do another podcast.

And that's just one of the things that inspires me. But I don't know. I just really love that part. That's why I wanted to leave it for the end. Obviously, if you want to get the whole story, read the post. So now let's get to the support section. I want to talk to you in case you're interested how you can support founders if you like what I'm doing here. So the first thing is the easiest thing. It's the easiest and really important part.

And that what I need you to do is open. You're most likely listening to this. If you're interested in the stats, something like between Overcast and Apple Podcasts and iTunes, it's like 90% of our listeners, right? So that means you most likely have an iPhone. If you have an iPhone, or you can do this on your computer if you just have iTunes. But if you're on your iPhone, or you can do this on your computer,

if you just have iTunes. But if you're on your iPhone, go to Apple podcast app on your phone, search for founders, leave a five star review. So far founders is a perfect five star rating. And it would help spread the word to others. The more high quality higher ratings we get, the more people will discover it in the Apple podcast or the iTunes store, which is like the vast majority. It's like 70, something like 75% of the entire podcast market happens in there. So it's extremely important. If you like what I'm doing here and you want to help spread the word, this costs you nothing but one minute of your time and it makes a really, really big difference. And thank you to all the people that have left ratings and reviews. I really appreciate it. And some of

you have maybe left. Okay, so that's the easiest way to support. Now, the most important way to support founders, the best way to support is by subscribing to Founders Podcast on Patreon. I make premium episodes of founders that are only found on Patreon, nowhere else. Usually that's every other one. I do one to two every month. Usually it's's two a month sometimes it's only one a month but um the only way you hear those episodes is if you subscribe they're premium episodes so you have to subscribe on patreon when you subscribe on patreon you get a like a hidden rss link that only patreon subscribers have access to and uh so that's the best way to to support this podcast you get the premium episodes you also get every single episode I do early. So like this episode will be coming out on like, let's say Wednesday for Patreon subscribers.

And then everybody else has to wait till like Sunday to get it. So that's also another benefit. So growing the number of patrons I have on Patreon is the most important thing for this podcast. Because the higher that number gets, it ensures that this project can continue in perpetuity. And it helps me stay ad free and independent. Now, if you've listened this far, you already realize that we might be like something like maybe an hour in. There's no interruptions and no ads. So I've talked to you about this before. I love reading, but I'm also a huge podcast addict too. And as a podcast fan myself, I think this is the single best listening experience

where you get the entire product with no interruption. And I can only do that with your help. So patreon.com forward slash founders podcast. If not, just Google Patreon founders podcast or go to founderspodcast.com. I have a link for the Patreon right at the top and I also include a link for the Patreon in every single description so you can also find on your podcast player. Okay, so that's number one, numero uno as they say. The next best way

to support the podcast after you've already subscribed on Patreon is buy the book. If you buy the book using the link that's on founderspodcast.com and in the show notes in the description of your podcast player, if you use that link in the show notes on your podcast player or on founderspodcast.com to buy the book, this helps support the podcast at no additional cost to you. So it goes directly to Amazon. You buy the book. Amazon gives me a small percentage of the sale. It winds up being like something like 50 cents or something like that. So it's just a way to like kind of tip the podcast. If you like what I'm doing, you also get a book and that's a really good way to support the podcast.

There's two other ways that you could support the podcast too. If you want to listen to the book instead of reading it, then go to audibletrial.com forward slash founders and Audible is giving listeners of this podcast one free audio book with absolutely no obligation if you'll try a free trial from Audible. So you probably know what Audible is by now. They advertise on a lot of podcasts. They don't pay me for the advertising.

This is the same situation as Amazon. So if you want to support the podcast, when you sign up for a free trial, Audible gives the Founders Podcast a small little percentage for sending you their way. So what do you get? You get 30 days of membership free plus a book to get you started.

If you continue with the trial you get one for one audio book a month it's ad free premium audio you can also listen to offline there's no interruptions which is really important to me you also own the library you build so even if you cancel like let's see you keep it for five months you cancel those five audio books they're yours forever um and the cool thing, they have this thing where like, if you listen to a book and you think it's, you didn't like it, you think it's whack, you can exchange it, you could swap it out. So I think that's really important. So again, that's only if you want to listen to the book and you don't, if you want to listen to it instead of reading or supplement, because I listen to audio books, but I also read as well. So, and you want to listen to it instead of reading, or a supplement, because I listen to audiobooks, but I also read as well.

And you want to support the podcast, audibletrial.com forward slash founders. And again, everything is in your podcast notes, which are clickable on Overcast and Apple Podcasts. And if you want to grab everything, just go to founderspodcast.com. And then the last thing you can do if you want to support the podcast,

and again, this is all centered around learning and reading, is subscribe to the Blinkist app. Blinkist is 2,000 of the best-selling nonfiction books that they transform and they summarize for you into powerful packs. So you take an entire book and synthesize the ideas and the stuff discussed in it so you can read or listen to it in 15 minutes. And so this is like the most unique thing about if you started a company and you just hired a bunch of people to read books and then summarize

that stuff and you're building an entire database. That's what basically they've been doing. So I found out about Blinkist when they had like a thousand books. And I think now they're adding like a couple hundred a month, something like that. Now they're up to 2,200. So that's basically what the company does. They hire people to read books. They summarize them. Then they build this library, this app for you to use that you can read or listen to. So it's really helpful if you want to check out a book before you want to invest the time.

So say you download the Kindle version. You read it. It sounds interesting. Buy it that way. If not, go to Blinkist. If they have it in their library, you read it sounds interesting buy it that way if not go to blinkist if they have it in their library you read about it and then there's and it's also good for some books that you're just never going to get around to reading most people read like you know four to five books a year if that so if you think about it let's say you have 40 50 years left on the earth it's only it's not

that many books that you can actually get to so anyways blinkist Blinkist.com forward slash founders. They'll give you 20% off if you use that link. And same way as Amazon and Audible. If you do that, it helps support the podcast as well. But these are obviously all optional. So anyways, I've talked enough. My voice is going. I need some more coffee. I will talk to you guys next week. And if you want to find out what book we're talking about, check out Founders Podcast on Twitter. Thanks for your time. Thanks for your support. I love you very much.

Bye.