SpaceX
A private aerospace company building reusable rockets, the Dragon capsule, Starship and the Starlink satellite network.
SpaceX attacked the 98% of rocket cost that wasn't materials, building about 80% in-house and standardizing on one Falcon 9, which flies every two to three days with boosters reused up to 20 times. Development cost roughly $440 million, three to ten times less than traditional contractors. Lesson: find where cost really sits, pair volume with vertical integration, and be willing to retire your best product for its successor.
- 1Publish long-range plans10-year roadmap shared openly
- 2Telegraph Falcon 9 sunsetCustomers told rides end in a few years
- 3Build StarshipThe heavier vehicle the vision needs
- 4Move customers overStarship replaces its own winner
From Peter Sellis on SpaceX
What was said about SpaceX
SpaceX is willing to retire Falcon 9 to move customers to Starship. Peter Sellis points to SpaceX sunsetting Falcon 9, the world's best launch system, because its vision needs the heavier Starship. SpaceX has telegraphed that customers will no longer be able to buy Falcon 9 rides in a few years.
Sellis calls this a 'burn the ships' dodge of the innovator's dilemma: build the thing that competes with and obsoletes your winner. In his words: "just because we have the thing that is the best, we're completely willing to build the thing that will compete against ourselves". A clear mission and a published roadmap make the choice logical.
SpaceX publishes its 10-year plans openly, which signals ambition. Sellis cites the open publication of long-range plans as a mark of ambition, and as what makes retiring Falcon 9 legible to customers.
How SpaceX Works
Materials were about 2% of a typical rocket's price, so it builds about 80% of its hardware in-house and flies one standard Falcon 9 in volume. A Falcon 9 flies every two to three days, boosters are reused up to 20 times, and Falcon 9 cost roughly $440 million to develop, three to ten times less than with traditional contractors.
SpaceX is willing to retire Falcon 9 to move customers to Starship. Peter Sellis points to SpaceX sunsetting Falcon 9, the world's best launch system, because its vision needs the heavier Starship. SpaceX has telegraphed that customers will no longer be able to buy Falcon 9 rides in a few years.
Sellis calls this a 'burn the ships' dodge of the innovator's dilemma: build the thing that competes with and obsoletes your winner. In his words: "just because we have the thing that is the best, we're completely willing to build the thing that will compete against ourselves". A clear mission and a published roadmap make the choice logical.
SpaceX publishes its 10-year plans openly, which signals ambition. Sellis cites the open publication of long-range plans as a mark of ambition, and as what makes retiring Falcon 9 legible to customers.
How Elon Works
Founded to take humans to Mars, it runs on deleting parts, in-house manufacturing and urgency, and still beat every competitor despite missing most schedules. Rockets cost at least 50 times their materials, a $120,000 supplier part was made in house for $5,000, and a $2 million crane cost $300,000 after rules were revised. Starship tanks went to 4 mm walls after asking welders where the limit was.
90 minutes of unfiltered product advice from Snap and Discord’s product chief | Peter Sellis
It is retiring Falcon 9 service to move customers to Starship, which Sellis calls a 'burn the ships' dodge of the innovator's dilemma. A clear mission and a published roadmap make that choice logical.
Good Strategy, Bad Strategy | Richard Rumelt
Musk asked why reusing a rocket is so hard. Reentry burns it up at 18,000 mph, so he turned it around to land on its engines, an example of focusing on the crux.
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