Elon Musk’s first public speech - talks Paypal and SpaceX 2003

so uh my background uh in brief I'll I'll talk a little bit about zip 2 and uh and PayPal uh and then uh mostly about space and what we're doing in

space um so I originally came out California to do energy physics at Stanford actually um and ended up putting this is in 95 and ended up

putting that on hold um to start zip 2 um and uh ZIP 2 I'll tell you a little bit about the thought process of exactly

what happened there um in 95 the it wasn't at all clear that the internet was going to be a big commercial thing in fact most of the Venture capitalists that I talked to um hadn't even heard of

the internet which sounds bizarre um on San Hill Road um so uh but but I wanted to do something and in there I thought it would be a pretty huge thing and um I

thought it was one of those things that only came along once in in a very long while so I I got a deferment uh at Stanford and uh I thought I'd give it a

couple quarters um and uh if it didn't work out which I thought it probably wouldn't then I'd come back to school um and actually when I talked to my professor

and I told him this he said well I don't think you'll be coming back and that was the last conversation I had with him so um but there weren't a lot of ways to get the only way to get involved with the internet in '95 that I could think

of was to start a company uh because they want a lot of companies to go and work for apart from Netscape uh maybe one or two others so um and then I didn't have any money so I thought well

we got to make something that's going to return uh that's going to return money uh at very very quickly so we thought

well the the the media industry uh would need uh help converting its content from from a print media to uh electronic and they clearly had money so uh if we could

find a way to help them move their media to the internet that would be an obvious way of of generating Revenue now there was no advertising revenue on the internet at the time so uh and that that

was really the basis of of zip 2 and we ended up building quite a bit of software for for the media industry primarily the print media industry uh so

we had as investors and customers um HST Corporation night rder uh Mo most of the the major US uh print Publishers uh we

built that up and then we uh uh we had the opportunity to sell to compact in in early 99 and basically took that offer it was uh for a little over $300 million

in cash and that's that's a currency I highly recommend um we had that and um and uh but but I wanted to do something

something more uh after zip two so uh post the sale in fact immediately post the sale I didn't really take any time off um uh I was trying to think of where

where the were the opportunities in this is early 99 where the opportunities remained in the internet and it seemed to me that there hadn't been a lot of innovation in the financial services sector um so and and when you think

about it money is is low band width you don't need some sort of big infrastructure Improvement to to do to do things with it it's really just an entry in the database the the paper form

of money is is really only a small percentage of all the money uh that that's out there so it should lend itself to innovation on the internet uh and so we thought of a couple of

different things we could do one one of the things was to combine all of somebody's Financial Services needs into one website so you could have banking brokerage insurance and all sorts of

things in one place um and and that was actually quite a difficult problem to solve um but we we we we we solved most of the issues associated with that and then we had a little feature which took

us about a day um that was the ability to email money from One customer to another so uh you could type in an email address or actually any unique

identifier uh and uh transfer funds uh or or conceivably stocks or mutual funds or whatever from from one uh account holder to another and if you try to transfer money to somebody who didn't

have uh an account in the system it would then forward an email to them saying hey why don't you sign up and open an account so and whenever we demonstrate these two sets of features

which say well this this was a feature that took us a lot of effort to do and look how you can see your bank statement and your your mutual funds and and your insurance and all that it's all in one page and look how convenient that is and

people go ho home um and then we'd say and by the way we have this feature uh where you can enter somebody's email address and transpose funds and they go

wow um so so we we like okay um so we focused the the company's business on on email payments um and in the early going the company's called x.com and then

there was a there was another company called confinity uh which had actually also started out from a from a different area uh they started off with the Palm Pilot cryptography and then they had as a demo

application the ability to beam token payments from one Palm Pilot to another by the imped port uh and then they had a a website which was called PayPal where

you would reconcile the beamed payments um and and what they found was that the the website portion was actually interesting to people than the than Palm Pilot cryptography was so they they

started leading their business in that direction uh and then in basically early 2000 uh x.com acquired confinity uh and

then about a year later we uh uh we ended up changing the company's name to PayPal and but PayPal is really a case of of of where uh the the whole viral

marketing U it's really a perfect case example of viral marketing like hot mail was uh where um one one one customer would essentially

act as uh a salesperson for you for all the for for bringing in other customers so they would uh send money to a friend and essentially recruit that friend into the network and so you had this

exponential growth the more customers you had the faster it grew uh so it was like bacteria and a petri dish you know it just goes like does this S curve um

and in fact uh I I ran PayPal for about the first two years of its existence and uh we launched after year one and by the end of year two we

had a million customers so gives you an EXA you know to gives you a sense of how fast things things grow in that scenario we and we didn't have a sales force right we actually didn't have a VP of sales we

didn't have a VP of marketing uh and we didn't spend any money on Advertising about February of last year for those some some of you probably following it in February of last year uh PayPal went

public um and we were I think we were the only uh internet company to go public in the first part of last year um it went off reasonably well uh although

I think we had more um SEC rewrites than than any company I can imagine like we set a record in SEC rewrites this was right around the Enron time and when there was all sorts of corporate Scandal

so they put us through the ringer um and then shortly thereafter in about June July uh we um struck a deal with eBay to

sell a company to eBay um and uh uh for about and a half billion dollars uh that was when eBay's stock price was about

$55 and they hadn't split uh so I guess in today's dollars we were about $3 billion um so that worked out pretty

well uh in in the first part of last year I've been doing just some background res research on uh on space and let me talk a bit about that

so uh essentially I was trying to figure out why we had not made more progress since since Apollo uh in in 19 in the60s we went from basically nothing not being

able to put anyone into space to putting people on the moon and uh developing all the technology uh from scratch to to do that and yet in the uh the 70s and 80s

and the 90s we we' kind of gone sideways and and we're currently in a situation where we can't even put a person into into low earth orbit and that that doesn't really gel with all of the other

technology sectors out there uh the computer that you could have bought in the early 70s you know would have filled this room and had less computing power than your cell phone um and so just

about every sector of technology is improved why is this not improved uh so I started looking into that um initially I thought well perhaps it's a question of funding and that funding

can be uh garnered by by really marshalling public support uh so I thought well one way to to to get the public excited about space would be to

do maybe a privately funded robotic Spa Mission to Mars um and so we we figured out a mission that would cost about5 to20 million which isn't a lot of money

but um it's about a tenth of what a lowcost NASA Mission would be and uh and the idea was was called Mar Oasis where we' put a small robotic Lander on the

surface of Mars with seeds and dehydrated nutrient gel that would hydrate upon landing and you'd have plants growing in Martian radiation and gravity conditions and You' also uh be

maintaining essentially a life support system on surface of Mars and this would be interesting to the public because they tend to respond to precedents and superlatives uh and this will be the furthest that life has ever traveled in

the first life on Mars so pretty significant um and then we're I start looking at at launch vehicles uh the lowest cost vehicle in the US is Boeing Delta 2 which costs about $50

million and uh and that's a bit that's a bit steep uh what we were trying to do uh so I made three visits to to Moscow to Russia uh to look at at buying a a

Russian uh launch uh and uh it's it's actually pretty interesting uh going to to Moscow to negotiate for uh a refurbished

ICBM uh if you know on the range of interesting experiences that's pretty pretty far out there um but but we actually did get to

to a deal but there were so many complications associated with the deal that that I it didn't I wasn't comfortable with the risks associated with it um so when I got back from the

third trip I thought well you know why is it the Russians can build these lowcost uh launch Vehicles because it's not like uh we we Drive

Russian cars fly Russian planes or have Russian kitchen appliances and you know whenn the last time he bought something Russian that wasn't vodka so uh I think the US is a pretty competitive Place uh

and and we should be able to to build a a cost-efficient launch vehicle so I I put together a feasibility study which consisted of of Engineers that have been involved with all the major launch vehicle

developments over the last three decades and uh we iterated over a number of Saturdays in the beginning of last year uh to figure out well what would be what would be the smartest way to approach

this problem of not just launch cost but also launch reliability and and we came up with a default design and and that actually uh sort of fortunate timing uh

that feasibility study uh finished up right around the time that we agreed to sell uh PayPal to eBay um so coincident with that sale I moved down to to La where there's actually the biggest

concentration of Aerospace industry in the world um it's actually the biggest industry in in in Southern California much bigger than entertainment or anything else uh I I was living in in

palala for about 9 years before that so uh just talk little bro broadly about space and where things are today um obviously US Government man's

exploration is not in a great place uh we've got the the three remaining shuttles are grounded it looks like first flight might only be a year from now uh if that um and and we've got a

vehicle that is incredibly expensive and and and really quite dangerous um it's uh you know for reasons mentioned there it's got a side mounted crew compartment

so if there's an explosion that's basically instant death uh um the you've got solid rocket boosters uh which once you ignite them you can turn them off and there something fundamentally

dangerous about premixing your fuel and oxidizer I think uh and then it's you've got wing wings and control surfaces when you when you reenter you go to maintain a precise angle of attack uh even a

momentary uh variance in that can break the whole vehicle apart so and and and then of course it's got no Escape system so if anything does go wrong you're toast and and that

you've got a cost that is is really pretty hard to Fathom the the the shuttle program when you add up all the pieces is about 4 billion a year and so you can divide uh 4 billion by the

number of flights and that'll tell you what the cost is um and and if if there's say four flights a year which they haven't been for a while then you're talking about a billion dollars a flight

uh the plans for the immediate future obviously we've got to continue uh building the space station uh so we're going to keep flying the shuttle but but uh I think it's probably going to be the minimum number of shuttle flights that

we need to launch the the long-term plans I would build uh something called orbital space plane and i' say plane in quotes because uh one of the options is a capsule um so it should be called you know maybe

orbital space thing um but but the basic idea is to have something that's uh um hopefully a little cheaper and a lot safer uh than

the space shuttle so in particular uh it's going to have an escape system so if something does go wrong you can abort to safety um the the downside is that it's still

it while it might be a little cheaper it's still going to be pretty Dawn expensive the the estimated cost per flight of overal space plane is somewhere in the region of 300 to $400 million a flight um and of that that

amount uh 200 just $200 million alone is uh goes to uh Boeing for the Delta 4 heavy uh expandable booster uh and and the it's a $15

billion development effort and expected to be completed in N9 or 10 years now typically uh typically things have have

not been uh under budget and under time uh so it's unlikely I think given historical precedent that that it will

stay within $15 billion and the 20122 timeline um and a bit about what's going on elsewhere in the world in Russia uh the this is really the soy is our only

access to space station uh it's considerably cheaper considerably safer uh the so has a very good track record um it's uh if the crew is top mounted it has an escape system there are no wings

or control services to go wrong um overall it's a it's a pretty good system um and the estimated costs are about $60 million a flight which is an order of Mag more than order of magnitude less

than than the space shuttle uh the thing that constrains them obviously is the weakness of the Russian economy it's very hard for them to embark on ambitious programs with an economy of the size of

Belgium so um China is is probably the most interesting thing that's that's going on in space uh the this month uh China is expected to be only the third

it's expected to launch their first person into space that'll make them only the Third Country ever to put someone in orbit um and uh they' put a lot of of

money and effort into this program if if anything serves as a spur for human space exploration it is likely to be uh the uh China's Ambitions in space um and

and and hopefully a sense in America that we want to at least uh keep up with with China um and they have grand Ambitions Beyond just low with orbit they're planning on

uh setting up a space station putting a base on Mars and eventually uh sending humans to Mars so what's happening in in in the US

that I think uh might ultimately surpass all of that stuff is uh entrepreneurial space activities uh where um things are led by the spirit of free enterprise and

um I think there's perhaps an analogy here where uh uh just as DARPA uh served as the initial um impetus for for the internet

and underwrote a lot of the costs of developing the internet in the beginning uh one it may be the case that NASA has is has essentially done the same thing by spending the money to develop some of

the fundamental Technologies in the beginning and then uh once we can bring sort of the commercial free enterprise uh sector into it then we can see the dramatic acceleration that we did that

we saw in the internet um so there there are several serious launch vehicle efforts underway uh talk about each one uh there's there b retan

of scaled composits uh Bert ran is is one of the world's foremost aircraft designers um and he's developed a subal vehicle that they're actually flying out

of Mojave uh this is an X prise class vehicle uh there's John KAC who wrote quake and doom was probably one of the best software engineers in the world one

of the best Engineers that I know period um and he's developing a vertical takeover and Landing vehicle uh Jeff Bezos who understand was here last week

uh is a huge space ad Advocate um uh and it's my understanding that he intends to spend something on the order of a billion dollars over the next 20 years uh on space exploration and and then space then my

company SpaceX and I I think within the next several years uh these entrepreneurial efforts will actually be what what drives uh space exploration one that's a

picture of of the Roan f it it's called White Knight is the carrier plane and then spaceship one is the thing that's held in the belly

there and uh this project is uh supposedly funded by Paul Allen so there's quite a lot of capital also I should make that point quite a lot of capital that's s of entering this

entrepreneurial space sector as well um the I the only drawback I think of this architecture is that it's not really scalable uh for uh for something that would get to orbit this is pretty

good for suborbital but I think the architecture would need to change for an orbital vehicle and there's John KX you see he's a little irreverent this

is from his website um his his vehicle is a vertical takeoff and Landing vehicle uh he's made he's made really incredible progress for

somebody who has no background in uh um aerospace engineering in and is also kind of doing it all himself with him and like three buddies

um so and I think that will make something that works actually if you you can check out their website alad Aerospace um it's pretty interesting stuff but in order to get or to orbit

this would require a substantial Improvement in the mass efficiency and the engine efficiency and probably uh be a two-stage vehicle uh Jeff Bezos who I'm sure

almost everyone here is aware of uh he is uh a pretty huge fan of space in fact his uh High School B dictorian speech was about the necessity of humanity

expanding to other planets um so it's it's pretty important to him uh from what an understand uh this is our effort

um we're spending quite a bit more than uh the three prior entities that I mentioned um in some cases probably an order of magnitude more uh because what we're doing is really an order of

magnitude more difficult we're building an orbital launch vehicle it's a two-stage very high efficiency engines very high mass efficiency uh launch vehicle um and it's targeted to the

satellite delivery market so our apprach is really to make this a solid Sound business um and so I've predicated the the Strategic plan on a known Market

something that I we know for a fact exists which is the need to put uh small to medium size satellites into orbit and uh so that that's what we're

going after initially and then uh with that as a as kind of a revenue base uh we will uh move into the human Transportation market so long-term aims of the company are definitely in human

Transportation I think this the smart strategy is to First go for uh cargo delivery essentially satellite delivery and our eventual a great path

is to build uh the successor to Saturn 5 bu a super heavy lift vehicle that could uh you know be used for uh setting up a moon base or doing a Ms mission that

would be the Holy Grail objective um on the upper right there you can see uh a test firing of our engine and on the lower right you can

see the uh Al first stage tank this is an engine test of our main engine which is called Merlin and that that generates about uh roughly

75,000 lbs of thrust at se level this is our upper stage engine it's about it's about 7500 lb of thrust in vacuum

and this is a a accelerated version of our launch sequence um our first launch will be uh from the SpaceX launch complex at venberg airport space and

approximately March of next year basically early next year um and uh we will be uh flying a a Navy satellite uh maybe communication satellite so it's

it's notable because uh often uh launch vehicle compan are not able to get somebody get a paying customer uh on their first flight but we've we've been able to do that uh

this is also uh the Falcon development at SpaceX is the fastest La vehicle development in history including wartime so that's actually vburg Airport

Base which is about two hours away from s uh well I guess both of them uh involved had had software at the as the heart of the

technology um even though zip 2 was in was servicing the media sector and obviously PayPal was servicing the financial sector uh the the um the heart

of it was really software um and and internet related stuff so certainly that's a a huge commonality um they were

both in paloalto where I lived uh um I think we you know took a similar approach to building both companies uh

which was to have a small group of uh very talented people um and uh and keep it small uh you know I think PayPal had

at at its height probably 30 Engineers uh for for a system that's I would say is more sophisticated than the Federal Reserve clearing clearing system um I'm pretty sure it is actually

cuz the federal Reser clearing system sucks um so uh what else is there uh it it generally you know I think the way both zip2 and PayPal operate was was

really your it was your canonical Silicon Valley uh startup uh you know uh pretty flat hierarchy um you know

everybody had a roughly similar Cube um and uh anyone could talk to any anyone we had a philosophy of best idea wins uh as opposed to you know the person

proposing the idea winning because they are who they are um even though there were times when I thought that should have been the way go um and

um obviously you know everyone was was an equity uh stakeholder uh give us

anything if if there were uh two paths that we you know let's say we had to choose to do one thing or the other um and there one wasn't obviously better than the other uh then rather than spend

a lot of time trying to figure out which one was slightly better we would just pick one and do it and sometimes we'd be wrong and and and we pick this optimal path but often it's better to pick a

path and do it than to just vacillate endlessly on on a choice um uh we we didn't worry too much about

uh intellectual property uh paperwork legal stuff we we really were very focused on building the best product that we possibly could um both Z2 and

PayPal were very product focused companies um you know that's we're just incredibly obsessive about how do we build something that is really going to

be the you know the best possible uh customer experience and and that that that was a far more effective selling tool than than having a giant sales force or

thinking of you know marketing gimmicks or you 12ep processes or whatever Brer um certainly I mean the essence of viral marketing is do you

have something that um One customer is going where One customer is going to sell another customer without you having to do anything um and uh there there are lots of instances of that um frienda

might be one uh obviously hot mail was one uh PayPal was one eBay was one um uh and and in a situation like that going going back to what I said about product

product matters incredibly because if you're going to recommend something to somebody uh you've got to really love the product experience otherwise you're not going to recommend it because you don't want to burn your friend industry

entering the space industry uh well you know it it is a very uh uh complicated regulatory structure um as you might imagine when somebody tries to

build an opit a launch vehicle which is not really all that distinguishable from an ICBM there's a lot of Regulation um they probably should be uh because you

know you don't want to launch something and end up hitting La uh where I live um so uh uh probably the regulatory stuff

was very difficult uh the environmental approvals certainly proven very difficult um much more so than we expected I mean here in Silicon Valley you look uh you know what I came to

appreciate is in Silicon value you live in a Libertarian Paradise um you know there's almost no uh regulation um and what can be very frustrating is

that regulation is often irrational it doesn't make any sense um but you've got somebody there who's simply executing a set of rules independent of where those rules make sense and you can try to convince them that the rules don't make

sense and they won't listen to you so um probably regulation is the most annoying thing uh I would say overall though I'm very pleased because I think we've had a

very smooth development process and um on the whole I can't complain at all so something into space um well let me tell you what makes a rocket hard

uh the the energy and the velocity required to get into orbit is is so substantial uh that compared to say a car or even a plane uh the you have

almost no margin to play with typically uh a launch vehicle will get about 2% of its liftoff Mass to orbit so and that's

the case for for Falcon and so if you can only get 2% of what your rocket weighs to begin with to to orbit uh you you can if you're wrong by 2% you're not

going to get anything to orbit you know come crashing down on the Pacific somewhere um so um that means all of your calculations have to be

right if if you miss if you miscalculate something you get an answer wrong it blows up um and and it's very expensive trying to get all your answers right and then double-checking that they're right and testing them all and doing as much

as you can on the ground I think that's a lot of what makes Rockets expensive um the low launch rate typically is also what makes rocket Rockets expensive if you had you know thousands of flights a

year then it would be a lot cheaper although it's a bit of a chicken and egg because it needs to be cheaper in order to have thousands of flights a year um um but at the end of the day when you in the final analysis I would say that

Rockets really should be a lot cheaper than they are today and and I think I think um the way they're built the way they're operated is just very

inefficiently uh and I think with with SpaceX and Falcon we're going to we're going to show that that's that's the case um our vehicle will sell for about

$6 million a flight uh that our nearest competitor is the Pegasus from orbital Sciences which is about $25 million a flight and that has less capability than

our rocket uh so Falcon would represent a pretty substantial breakthrough on the cost of access to space you talk a little bit about differ customer

have experien uh yeah the customer base with SpaceX is just it's dramatically different obviously from PayPal PayPal is a consumer product uh whereas uh

SpaceX we're selling Rockets and the number of people who want to buy Rockets is quite small um if anyone here has $6 billion and wants a rocket I mean I'd be glad to sell it to them

um but uh so it's much more of an individual selling process um it there's a great deal more thought that goes into any purchase of a launch um much more so

than signing up a PayPal account which doesn't really cost you much um so uh yeah and there's not a lot of viral marketing that's going to happen with the rocket I

suspect I'm hoping but you know I'm not counting on it so there's probably come in all Siz of shapes and flavors um I'm not sure there's any one one particular thing um

uh for me you know some of the things I've described already I think are very important I think uh really um an an obsessive uh nature with respect to the

quality of the product um is very important uh so you know being obsessive compulsive is is a good thing in this context

um uh really really liking what you do what whatever area that you get into um given that you know even if you're if you're the best the best there's always a chance of failure so I think it's

important that you really like whatever you're doing um if you don't like it life is too short um you know I I'd say if and and also if you if you like what

you're doing you think about it even when you're not working I mean it'll just it's it's something that your mind is drawn to um and and if you don't like

it you just really can't make it workout I think SpaceX is about 30 people um and and what we do internally at SpaceX is

we do all of the design uh analysis um integration of Hardware testing and then launch operations um but a lot of the heavy Manpower stuff like welding

together our primary structure the heavy Machining and so forth that we Outsource so we'd be a much larger company put did all of that internally um and sorry you had another

part to your question law oh yeah actually we don't have any lawyers um uh the the regulatory stuff that we we deal with is very technical um it's

it's it's really a lot like trying to get an airplane certified with the FAA um we're just getting a rocket certified um so so our documentation is it's very

I I wish we could offload it to to some lawyers they wouldn't know what the heck to do so the Wharton degree help uh I think it a business degree teaches you a lot of the terminology um it introduces

you to Concepts that you would otherwise you know this terminology there's something to be said for that um you introduces you to Concepts you you would otherwise have to learn empirically I mean I think I think you

can you can learn whatever you need to do to start a successful business either in school or out of school um School in you know in theory should help

accelerate that process um and I think it you know it often times it does it it's it can be an efficient learning process perhaps more efficient than empirically learning lessons um but

really I think you I there are examples of of successful entrepreneurs who never graduated high school and there are those that have phds so um I think the

important principle is to be uh dedicated to learning what you need to know uh whether that is uh in school or in

perkley well uh I should point out that uh Falcon our first vehicle doesn't really have the same capability as as either the Chinese the Russian or or the space shuttle uh vehicles that I

mentioned um Falcon would be in the in the light class of launch Vehicles whereas the space shuttle would be a heavy class launch vehicle uh so it's not it's not quite an Apples to Apples

comparison um however uh the right comparison would be uh Falcon compared to the Pegasus from overal Sciences Falcon is 6 million the Pegasus is 25

million um and uh the way we' we've gotten our prices low our cost low uh is we've really focused on every element of the launch vehicle there's really no one

Silver Bullet uh that has has um been responsible for a substantial portion of of the car savings it's been really hundreds of small Innovations and improvements and and so we've done

improvements in the propulsion system the structure uh the avionics and the launch operations as well as maintain a very low overhead organization and when you add up all the things we've done those areas that allows us to produce a

launch vehicle at $6 million um the uh as as far as uh PayPal um there were a lot of back office

relationships that we needed to establish and to attach to various heterogeneous data sources um we needed uh to attach to the credit card system for processing credit cards we needed to

attached to the Federal Reserve System uh for um doing electronic funds transfers uh we needed to attach to various fraud databases to run fraud

checks um there there was a lot that we had to uh we to interface with um and and that that that took that took a

while um but uh uh it all came together I think roughly simultaneously I mean developing the software and having it ready for uh for the general public uh

reasonbly coincided with us being able to conclude those deals and interface with the outside vendors and all that took about a year um I think one one thing that's important is to try not to

serialize uh dependencies so if you can put as many elements in parallel as possible um a lot of things have a gestation period um and there's really

nothing you can do to accelerate I mean there's it's very hard to accelerate that g gestation period um so uh if you can sort of have all those things

gestating in parallel uh then then that is one way to substantially uh accelerate your timeline I think people tend to serialize things too much on pay

uh on the PayPal system although nothing that ever actually mattered um so patents are mostly useful in in a defensive situation rather than

offensive uh it can be very difficult to actually uh offensively prosecute a patent um so I'm I think I think in certain industries like Pharmaceuticals

and so forth patents can be incredibly important uh in software particularly when you've got um a very rapid life cycle where you know you made sure you

got a patent but now it's redundant so who cares um it's less relevant in when you've got a rapid uh life cycle you know I've looked at the various there are a couple things that I

think are pretty bogus uh one is space mining another is for space solar power I mean if you if you calculate how much it costs to bring uh either

the the photons from uh space solar power um you know back to Earth or or or the raw material uh back to Earth it it the economics don't make sense they just can't close the economic case not not

even by it's probably all by three orders of magnitude um so uh I I think um the probably the biggest thing that could happen is if if we if we decide to

establish a base on the moon or a base on Mars and particularly if we if we attempt to make a self sustaining uh self-sustaining base self- sustaining civilization on on the moon

or Mars that that that is enormous opportunity on probably the trillion dollar level um because then you got basically interplanetary commos going on

um I think that that's pretty huge um um but uh but it's it's it's you know it's not going to be space all power it's not going to be space mining I

think so uh let's see uh the government I you know who knows maybe we're being spied upon I don't know um but but certainly we are there are some

restrictions which are really annoying um such as the fact we are only allowed to employ people who um have at least a green card or a citizen of of the us we're not allowed to employ anyone who is does not have permanent residency in

the US basically if they can't throw you in jail they would they won't let you work work on Rocket stuff um and

uh uh we have if we talk to any uh foreign Nationals we we need a a technology transfer agreement or something like that from the state department um so our second launch is is

actually um a non- US governmental launch and it's taken us six months to get the state depart approval just to engage in a contract discussion with them um so that that is

problematic had several offers actually from a number of different entities for uh for paval um and uh in fact the closer we got to IPO the more more ofers

we got um but we always felt that those undervalued the the company um and subsequently when we were in public I think the public Mark has kind of indicated uh the value of the company um

so uh I think that that's one of the good things about the public markets is that they're an objective value of companies when you're a private company it's very hard to say how much you're

worth um because you have to basically think of some Metric you know are you going to go for multiple of future earnings are you going to go some something of Revenue uh what are your comparables going to be there are all

sorts of questions it's it's really up for debate what sort of value your company is when you're public it's it's you know it's whatever the market says you're you're worth that's what you're

worth um so uh so yeah so I think um eBay made a number of offers prior to going public um that were substantially below our uh the value once we're impos

public and that kind of cleared up the disagreement and and we we sold them um and uh what else it was actually you had a second part to the question

e um yeah eBay had a uh uh it was initially bpoint and there was eBay payments and um and it was really a pretty tough uh long running Battle of

PayPal versus uh versus eBay's payment system um and it was certainly a very challenging I mean I think it was you know there were times where it felt like we're trying to

win a land war in Asia um and uh you know they kind of set the ground rules uh or trying to beat Microsoft in their own operating system it's really really pretty hard um that took a lot of our

effort to to actually beat eBay on their own system um and that one of the long-term risks certainly for the company was that eBay would one day

Prevail um and one way to retire higher that risk obviously was to sell to eay during the summer of 95 uh trying to make useful things happen on the internet um and uh I wrote something

that allowed you to get maps and directions on the internet and then something that allowed you to do um online manipulation of content kind of a

really Advanced blogging system um and uh uh and then we we we started talking to to small uh newspapers and media companies and so forth and uh

we started getting some interest I mean half the time be like what's the internet um even in Silicon Valley uh but then occasionally somebody would bite and they would we get a little bit of money from them um and then uh there

was basically only about six of us there were myself uh my brother who I convinced to come down from Canada and a friend of my mom's um so and then and

then three salespeople we hired on contingency uh by putting an ad in the newspaper uh but things were pretty tough in the in the early going um uh I didn't have any money in fact I had

negative money um I had huge student debts so um or in fact I couldn't afford a place to stay and an office so uh I I rented an office instead because that

was I was actually I got a cheaper office then I could get a get a place to stay and then we I just sort of slept on the futon and showered at the YMCA on page and El Camino

um I was in the best shape I I've ever been you going to shower workout and you're good to go um and and there there was an there was an ISP on the floor

below us just a like little tiny ISP and uh we drill the hole through the floor and connected a null modem cable uh that that gave us our internet

connectivity for like 100 bucks a month um so I mean we had just an absurdly tiny burn rate um and uh and and we also had you know a really tiny Revenue

stream but we actually had more Revenue than we had fenses so um so when we went and talked to VCS we could actually say we had positive cash flow there's no Silver Bullet that I can point to as to

why the our vehicle is a lot cheaper um we've really focused on um reducing the cost across the board um I mean one thing our overhead in a 30 person

company is um you know an order of magnitude less than it is in lock or Boeing uh just just for starters so even if we did everything the same and built the same launch vehicle we'd be considerably cheaper

um and then every decision we've made has been with consideration to Simplicity and the reason for Simplicity is because that both improves the reliability as well as U uh reduces your

cost um if you've got fewer components that's fewer components to go wrong and fewer components to buying um I think there's there's I think a fairly significant innovation in our airframe

um which is uh a semi- pressure stabilized monoco with varable skin thickness and a common bulkhead if you know what that means uh I need a diagram

to explain it all uh but the net result is that it's very cheap um and uh it's very Mass efficient and I think easy to

test and quite reliable um our avionic system I give you another example our avionic system we use an Ethernet on the vehicle to communicate they may that may not sound like a great Innovation but it

is in launch vehicles um all the other launch Vehicles communicate in the vehicle by these uh serial cables that run the entire length of the vehicle and uh so you've got these these giant copper bundles as thick as your arm

running up and down the vehicle makes it heavy it makes it expensive and it's just so this there's things like that which uh when you add them all up it it makes a huge

difference good question that's a good question uh no I would not um I think SpaceX is not this is Advanced entrepreneuring

um and it it it may also you know I can't tell you how many people have said that um you know the fastest way to turn uh uh you the fastest way to make a

small fortune in the Aerospace industry is to start with a large one um so uh you know hopefully that doesn't doesn't work out but um I I would definit I I

think space is is a tough one for first-time entrepreneurs um um you're better off starting with something that that requires low capital and space is a high Capital effort

sorry last question