SpaceX Evolution (Chapter 4)
A serialized version of this book for SubStack
CHAPTER 4: PURPOSE OF MUSK ENTERPRISES
In 1992 Elon Musk began his bachelor’s degrees in physics and economics at the University of Pennsylvania. This provided him with fundamental knowledge of how things work and how to handle business. Physics taught him to work from first principles, which provides new insights into existing processes, or even how to create entirely new technologies, which were overlooked by legacy industries (who tend to stick with the tried and trusted). Similarly economics, i.e. understanding how people assign value to goods and services – in particular their production and distribution, would prove essential to implementing large-scale production and uptake of these divergent technologies.
While a sophomore at college, Elon Musk identified five technologies which would most affect our future: -
1. The internet
2. Human space exploration
3. Electric transport
4. Sustainable energy generation
5. Rewriting human genomics
While he doubted he might be involved in all these areas, the seeds were sown, like a self-fulfilling prophecy.
In 1995, before even completing graduation, Elon founded his first company (along with his brother Kimbal Musk and Greg Kouri), called Global Link. Initially this had rather modest ambitions to provide Palo Alto businesses a presence online and supply directions. However, the company quickly burgeoning into Zip2, now supplying an online business directory, calendar, email and other software services to national newspapers. The company’s conspicuous success in a relatively new market led to its acquisition by Compaq, which furnished Elon with $22m as the CTO and one of its founders. Ever restless, Elon conceived the future of banking was online and went on to found X.com with Greg Kouri, in late 1999. After merging with a Silicon Valley competitor called Confinity in early 2000, they renamed the company PayPal… Due to its success in arranging secure online payments, PayPal went public in 2002 and was quickly snapped up by eBay for $1.5bn. While this showered him with riches (estimated at a further $165m), the situation was far from satisfactory for Elon, who had earlier been ousted from his CEO position, while taking a long-delayed honeymoon with his first wife Justine Wilson.
Elon Musk has a plan always, starting with his bachelor’s degrees in physics and economics. For example, entering business with Zip2 to supply software services then transitioning to online banking with PayPal shows a clear trajectory. This period was known as the dot-com boom, when incredible amounts of money were flooding Silicon Valley from the financial world and venture capitalists. Given Elon’s shrewd intelligence and careful planning it seems inconceivable he happened to be at the epicenter of what turned into a money-making magnet at precisely the right moment. His move into the banking realm with PayPal also indicates an increased interest in finance, something he would certainly need to pursue his more ambitious goals. Elon could be likened to a good chess player, who uses each move to create two advantages, one tactical (i.e. some immediate gain) and one strategic (i.e. prepare long-term opportunities). Yes money earned at that time was significant, but far less important than the knowledge he gained of software development at the cutting face, in the center of the software world. From here-on every company he helped create and/or manage used the iterative approach (favored by software engineers) to product development, supported throughout by state-of-the-art software. This approach provides significant benefits compared to legacy companies, who often prefer to intensely design products, based on technologies they already know that work, before entering production – often leaving software as an afterthought.
Another senior leader [at Blue Origin] expressed admiration for what SpaceX has accomplished through iterative design.
"They were able to actually implement the concept of iterative design and development in aerospace, which is something many companies talk about but few achieve."1 ~ Eric Berger/Ars Technica
Interestingly in later years Elon added Neuralink and OpenAI to his portfolio. Neuralink is finding new ways to directly interface computers to the brain, to help overcome brain and nerve injury; while OpenAI is developing open-source software to create a benign artificial general intelligence. Some startlingly diverse choices for new startups – except when you take into account Elon’s larger vision. One by one he is working his way down the list of new technologies which will change the world. This is aptly demonstrated by more mature concerns like Tesla, who are crushing it with their innovative, stylish and efficient electric vehicles, solar generation systems and energy storage solutions.
Similarly SpaceX have a lock on the space launch market and, if anything, accelerating innovation with their new Starship launch vehicles. Shockingly they intend to emplace these Starship spacecraft on distant worlds, like steel skyscrapers – ready made habitats for new space communities. In addition, they plan to use Starship for passenger travel here on Earth, reducing the duration of long-haul flights to short minutes instead of long hours.
In all this Elon has far from forgotten the internet, which he plans to shift into space, using SpaceX’s Starlink system. Currently Starlink uses a host of advanced low altitude satellites to provide high speed broadband around the world. This promises to completely disrupt legacy satellite providers, whose relatively sparse satellites orbit at considerably higher altitude (typically MEO or GEO), hence suffer from high latency, i.e. lag in data transfer, plus data caps due to limited capacity.
Last but not least, Elon is beginning to explore the genomics world and healthcare. Tesla’s German subsidiary, Grohmann Automation GmbH, has started to manufacture RNA printers for a research company called CureVAC. These effectively print strands of genetic code from feedstock material, which can then be used to reprogram the function of our cells. Whether this leads to a new spin-off company is unknown but it’s quite a diversification for Tesla, which is essentially a car and energy company.
“You can basically do anything with synthetic RNA, DNA… You could probably stop aging, reverse it if you want… You could turn someone into a frigging butterfly if you want with the right DNA sequence.”2 ~ Elon Musk/Axel Springer Award 2020
Intriguingly Elon’s companies rarely work in isolation, talent and resources often flow between these sister companies, like osmosis between cells. Effectively they act like a symbiotic community, lending each other support through sharing resources their neighbor lacks. Given each company’s deep penetration into different fields, this can only multiply their effectiveness, compared to their more technologically isolated competition.
Probably the best example of this cooperative approach would be SolarCity, a company founded in 2006 by Lyndon and Peter Rive, following advice from their cousin Elon Musk, who also lent financial support and became the company’s chairman. For years SolarCity aggressively rolled out low cost home solar installations until it effectively ran out of money in 2016. Rather than see it fail, Tesla decided to merge with SolarCity in an all-stock deal worth $2.6bn. Note this merger took place despite objections it might present a conflict of interest for Elon, who served as chairman for both companies at that time. However, solar energy was integral to Elon’s plan to democratize energy generation and make it sustainable, i.e. transition away from fossil fuels to full electrification. At the end of the day the deal went through, despite objections from some parochial investors, who saw it as an unnecessary diversification for what was in essence a car company. It seems likely this aggregation process will be repeated for other Musk companies in the future, possibly through creation of a holding company for Elon’s stock.3 This implies Musk enterprises could eventually become a truly herculean conglomerate with enormous influence on humanity’s technological expression and culture.
Given the interrelated nature of Musk enterprises, it suggests some greater purpose or destination by design. Elon is usually quite open about what he intends, hence the statement he made at the 2016 International Astronautical Conference, in Guadalajara Mexico, was quite revealing.
“…the main reason I’m personally accumulating assets is in order to fund this. So I really don't have any other motivation for personally accumulating assets, except to be able to make the biggest contribution I can to making life multiplanetary.”4
One way to interpret this statement is he simply intends to use his financial assets to move life to new worlds, such as the moon and Mars. These financial assets are almost exclusively the shares he holds in companies he helped to found i.e. SpaceX, Tesla, Neuralink and The Boring Company. However, to create a true spacefaring culture will require targeted development in a variety of diverse technologies, like rocketry, energy generation and storage, artificial intelligence and human augmentation... Hence it seems likely all these companies Elon helped to create will play some part in achieving his overarching goal. Unfortunately if he liquidated these holdings* he would also relinquish control of the companies, which seems unlikely, at least in the short to medium term. More likely each company would be used to engineer the core technologies required, which should also find good commercial applications here on Earth.
Unfortunately the current space technologies employed by NASA are designed to operate without maintenance, in some pretty extreme environments, while incorporating minimum mass, which makes them inordinately expensive. Hence they are unsuited to large-scale space colonization, where such machines can be tended and mass isn’t a defining issue due to Starship’s enormous lift capability. In addition, many types of equipment are simply unavailable at present so need to be developed from scratch, preferably by a well-run commercial company to ensure cost efficiency.
Succinctly: Elon Musk will use all his corporate assets to raise us to the next level of civilization, through transforming humanity into a spacefaring species.
*When Elon sold roughly 10% of his Tesla stock (~15 million shares) In late 2021, these funds were then used to exercise vested stock options, which overall increased his Tesla holding by ~7 million shares and generated up to $4bn in cash to pay off personal debt/fund future development.5
1 https://arstechnica.com/science/2021/10/revealed-the-secret-notes-of-blue-origin-leaders-trying-to-catch-spacex/
https://twitter.com/elonmusk/status/1341801143631028225
Musk's strengths come from his ability to reason from first principles, whether those are physics or economics. It allows him to approach problems differently than competitors.