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Yeah, this is way off. By the forth attempt of Falcon-1 flight Musk was rather low on money and pretty high on risk. And no taxpayer funding yet. Downvote; go l

by avmich 4y ago

Yeah, this is way off. By the forth attempt of Falcon-1 flight Musk was rather low on money and pretty high on risk. And no taxpayer funding yet. Downvote; go learn.

bumby 4y ago
Except Musk himself has said they were hours away from bankruptcy before NASA's contract had come through after that fourth launch. Regardless, their early business model hinged largely on securing federal contracts i.e. taxpayer funds is literally what they used to mitigate their risk. Also, when they lose govt payloads, the govt (i.e. taxpayers) shoulder most of the risk because they are self-insured. That means SpaceX gets to take bigger risks because they don't have to pay for them through the typical privatized mechanisms of risk mitigation like insurance. >Downvote; go learn. You might benefit from learning a bit from the HN Guidelines regarding discourse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- avmich 4y ago
  > You might benefit from learning a bit from the HN Guidelines regarding discourse. Yes, I might :) . Just went with existing practice, not with guidelines. Will try to do better next time :) . > Except Musk himself has said they were hours away from bankruptcy before NASA's contract had come through after that fourth launch. That's exactly what I'm talking about. I think you're proving my point - your "Unless you're Musk, who gets the taxpayers to fund his risk. What's the saying? It's socialism for the rich and capitalism for the poor?" says that Musk didn't risk his own money developing Falcon-1, and almost lost. Remember Falcon-5? That was SpaceX approach to relatively slowly conquering the market in case NASA won't give them contracts. But NASA did, and Falcon-5 went to history, and Falcon-9 got full steam ahead. > Also, when they lose govt payloads, the govt (i.e. taxpayers) shoulder most of the risk because they are self-insured. That means SpaceX gets to take bigger risks because they don't have to pay for them through the typical privatized mechanisms of risk mitigation like insurance. SpaceX happily serves commercial customers. And commercial customers are happily served by SpaceX. And US government wants its own share of cheap and reliable - comparatively - launches, so SpaceX gets their orders too. Will you say anybody dealing with US government rides on the backs of taxpayers? Do you understand that you're wrong with your socialism and capitalism?
  - bumby 4y ago
    I think we agree on the points but disagree on what they mean in the larger scope. I have no qualms with the hybrid govt/contractor approach. I've said elsewhere on this thread that I think both sides can benefit from it. But, to a certain extent, I'm saying that limits Musk's claims to great business acumen, at least outside of relying on large govt contracts. To a certain extent, many on this thread have said that constitutes a type of grift. A grift that requires taxpayer money. I'm playing a little loose with the socialism definition, for sure, but that's what I mean in the larger point. To that point, there would be no SpaceX without govt funding. One of the reasons they now have commercial customers is because the NASA contracts allowed them to get better to a point where private customers saw them as a viable option. If they didn't have that opportunity with NASA, I don't think they'd have private customers. For one, they likely wouldn't have enough early private customers to be economically viable. And two, those early flights would be much more expensive because they were unproven and that uncertainty makes insuring those flights much more expensive if not impossible. To that extent, a viable SpaceX business model is completely predicated on government contracts and not on private sector capitalism. The govt split the CCP contract to try and spread risk across multiple vendors and essentially fund an upstart in the hope that it pays off. It's paying off so far, so I'm not saying that's all bad. But it does make their model divorced from a purely capitalistic endeavor. I'm not saying Musk had no skin in the game, but I am saying he had almost nil chance of winning that game without taxpayer support. Other people on this thread have pointed out how that distinction matters when comparing to better examples of business leaders. >Will you say anybody dealing with US government rides on the backs of taxpayers? I would say if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. If your business only works by being propped up by the govt, it's a bastardized form of socialism. I'm glad SpaceX is able to move away from that, but let's not revise history to ignore those early facts because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX.
    - 4y ago

by avmich 4y ago

Yeah, this is way off. By the forth attempt of Falcon-1 flight Musk was rather low on money and pretty high on risk. And no taxpayer funding yet. Downvote; go learn.

bumby 4y ago

Except Musk himself has said they were hours away from bankruptcy before NASA's contract had come through after that fourth launch. Regardless, their early business model hinged largely on securing federal contracts i.e. taxpayer funds is literally what they used to mitigate their risk. Also, when they lose govt payloads, the govt (i.e. taxpayers) shoulder most of the risk because they are self-insured. That means SpaceX gets to take bigger risks because they don't have to pay for them through the typical privatized mechanisms of risk mitigation like insurance. >Downvote; go learn. You might benefit from learning a bit from the HN Guidelines regarding discourse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

avmich 4y ago
> You might benefit from learning a bit from the HN Guidelines regarding discourse. Yes, I might :) . Just went with existing practice, not with guidelines. Will try to do better next time :) . > Except Musk himself has said they were hours away from bankruptcy before NASA's contract had come through after that fourth launch. That's exactly what I'm talking about. I think you're proving my point - your "Unless you're Musk, who gets the taxpayers to fund his risk. What's the saying? It's socialism for the rich and capitalism for the poor?" says that Musk didn't risk his own money developing Falcon-1, and almost lost. Remember Falcon-5? That was SpaceX approach to relatively slowly conquering the market in case NASA won't give them contracts. But NASA did, and Falcon-5 went to history, and Falcon-9 got full steam ahead. > Also, when they lose govt payloads, the govt (i.e. taxpayers) shoulder most of the risk because they are self-insured. That means SpaceX gets to take bigger risks because they don't have to pay for them through the typical privatized mechanisms of risk mitigation like insurance. SpaceX happily serves commercial customers. And commercial customers are happily served by SpaceX. And US government wants its own share of cheap and reliable - comparatively - launches, so SpaceX gets their orders too. Will you say anybody dealing with US government rides on the backs of taxpayers? Do you understand that you're wrong with your socialism and capitalism?
- bumby 4y ago
  I think we agree on the points but disagree on what they mean in the larger scope. I have no qualms with the hybrid govt/contractor approach. I've said elsewhere on this thread that I think both sides can benefit from it. But, to a certain extent, I'm saying that limits Musk's claims to great business acumen, at least outside of relying on large govt contracts. To a certain extent, many on this thread have said that constitutes a type of grift. A grift that requires taxpayer money. I'm playing a little loose with the socialism definition, for sure, but that's what I mean in the larger point. To that point, there would be no SpaceX without govt funding. One of the reasons they now have commercial customers is because the NASA contracts allowed them to get better to a point where private customers saw them as a viable option. If they didn't have that opportunity with NASA, I don't think they'd have private customers. For one, they likely wouldn't have enough early private customers to be economically viable. And two, those early flights would be much more expensive because they were unproven and that uncertainty makes insuring those flights much more expensive if not impossible. To that extent, a viable SpaceX business model is completely predicated on government contracts and not on private sector capitalism. The govt split the CCP contract to try and spread risk across multiple vendors and essentially fund an upstart in the hope that it pays off. It's paying off so far, so I'm not saying that's all bad. But it does make their model divorced from a purely capitalistic endeavor. I'm not saying Musk had no skin in the game, but I am saying he had almost nil chance of winning that game without taxpayer support. Other people on this thread have pointed out how that distinction matters when comparing to better examples of business leaders. >Will you say anybody dealing with US government rides on the backs of taxpayers? I would say if the business model is only viable with government contracts and is particularly viable because it forces taxpayers to shoulder the early risk, yes. If your business only works by being propped up by the govt, it's a bastardized form of socialism. I'm glad SpaceX is able to move away from that, but let's not revise history to ignore those early facts because they don't fit our preferred narrative of Musk being a clever paragon of capitalism. The simplest way of framing it is saying, "If they required taxpayer money in order to become/remain viable, it's a form of socialist intervention." I would put a lot of other companies in that list, from automotive to finance, so I'm not just picking on SpaceX.
  - 4y ago