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It doesn't particularly seem risky to me. What's risky is stagnation and letting other competitors catch up. The only way SpaceX is going to move forward is be

by kiba 3y ago

It doesn't particularly seem risky to me. What's risky is stagnation and letting other competitors catch up. The only way SpaceX is going to move forward is becoming more ambitious with a new project. The risk isn't that if the Starship doesn't work, but that the R&D time takes too long or too much money to complete.

wongarsu 3y ago
One major risk is SpaceX running out of working capital and having to scale back the vision. It's honestly impressive how they manage to build out a huge satellite network of unprecedented scale and run an agile development program for a hugely innovative Saturn-V-sized rocket with new in-house developed engines at the same time. All off the back of their profits from Falcon-9, a bit of private investment, and probably a bit of cross-financing from NASA development contracts (like the lunar lander they are developing based on Starship).
- foobarian 3y ago
  This is exactly what I find fascinating about the company as well. It's not like it's some secret technology nobody else has - why hasn't any other company done this before? How much of a part is played by the exceptional ambition flowing from the top?
  - chasd00 3y ago
    > It's not like it's some secret technology nobody else has Well to be fair, there’s a lot of technology at spacex no one else has. One example, the Raptor engine’s combination of size, efficiency, and thrust is just not available to anyone other than SpaceX. Even if exact schematics were stolen you’d still need to obtain the recipes for the alloys used and how to manufacture them. Companies gave up on full flow staged combustion as just not feasible but SpaceX figured it out and is on v3 of perfecting it.
    - foobarian 3y ago
      Yes but SpaceX is a relative newcomer, so why did they manage to do this when anyone could have? Seems like a combination of ambition, incentives, and just chance I guess as another comment pointed out.
      - tekla 3y ago
        A brilliant and crazy chief engineer that hired the best, wasn't afraid to get dirty, and got shit done.
      - kiba 3y ago
        The relative newcomer is becoming less and less relevant as years passed. The Falcon 9 reusability and cadence was years in the making. Same for their raptor engine and Starship. What's happening is that other companies are slow to wake up and adapt.
      - martindbp 3y ago
        We all know why, but I guess we're not allowed to attribute any success to the tenacity of its founder because of his political views
        kiba 3y ago
        There's a lot of justifable hatred for Musk, which makes it easy to disparage his accomplishment.
  - nickpp 3y ago
    My guess is pure ambition. Tends to attract ambitious people who in turn have a higher chance of making those dreams a reality.
  - dotnet00 3y ago
    I think a large part of this lead comes from the way the engineering responsibility is distributed (at least for the R&D side), where the engineers responsible for certain parts are in the internal tracking system so that engineers responsible for other parts can just look them up and work with them directly about changes they could make to their parts to improve things for the other part. I think most other organizations have a lot more bureaucracy involved in making changes, which makes them slower and more expensive. Plus, SpaceX doesn't try to spread out its operations across the US to act like a jobs program, while the other big space contractors have advertised their presence in every state as a reason they should be picked, which obviously increases costs.
  - nordsieck 3y ago
    I think a big part of the problem is that a lot of companies are cost-plus government contractors first and sell rockets to the civilian market as an afterthought. Which means that their internal structure and processes are optimized for that use case - not really caring so much about costs, but putting a lot of effort into documenting. So when someone comes along that optimizes on cost and velocity and eschews cost plus contracts, that can be very difficult to deal with. Also, as other people have mentioned, they pretty clearly do have exceptional tech - they routinely land orbital class boosters which has only been done with prototype rockets (it's very different landing when you can hover vs when you can't). And Raptor and Merlin are among the best rocket engines that have ever been made. And even more impressive than specific components is their production and operational expertise. Being able to launch so many rockets flawlessly is a truly astounding feat. In a couple of years, Falcon 9 might even beat out the RD-108/107's total accumulated flight time record, which I thought wouldn't happen for a very long time. Edit: for context, the RD-108/107 are the engines used on the Soyuz, which (as a family) has a truly astounding number of flights. To be fair to SpaceX, though, Soyuz accumulated those over many decades.
- kiba 3y ago
  Starlink is already becoming profitable. So they already cleared that hurdle WRT funding.
  - ceejayoz 3y ago
    Do we know this? It's privately held, and Musk's made almost certainly false claims about such things (especially Twitter revenues post-purchase) in the past. Hell, he got in trouble for false statements about Tesla, which is publicly held.
    - dotnet00 3y ago
      Well, the statement about profitability was made by Gwynne Shotwell rather than Elon, and she's much more of "speak only when necessary" type, with no public social media presence. So make of that what you will. Elon's stated position on an IPO is that they'll wait until they can predict cashflow reasonably well. Edit: Also, to be precise, she said they had made a profit in Q4 2022. So, it could just be referring to the costs vs income of that quarter specifically rather than a general statement that Starlink is in the green now. After all, since then they've upped their flight rate significantly.
      - ta1243 3y ago
        I certainly interpreted it as operationally profitable, and not including the existing costs of developing, building, launching the satellites - or even just the cost of replacing them in future.
  - ianburrell 3y ago
    Starlink announced that they arev cash flow profitable. But that doesn't include capital expenditures and they require those to keep operating. The satellites fall out of the sky after five years. They also need to launch more satellites to increase capacity and add most customers. The big question is how many potential customers are out there, and if they will be enough to maintain the network.
- bell-cot 3y ago
  > ...a bit of private investment... I'd bet that SpaceX has some huge loans and/or bonds issues outstanding, based on future StarLink revenues. There isn't that much revenue from their other sources, and "build out the network, collect the monthly fees" is the sort of business model that banks and bond investors love.
  - s1artibartfast 3y ago
    It is vc funded, do that is primarily their working capital
- cma 3y ago
  > All off the back of their profits from Falcon-9, a bit of private investment, and probably a bit of cross-financing from NASA development contracts (like the lunar lander they are developing based on Starship They also had Tesla to bail out SolarCity after SpaceX basically used NASA to buy their bonds and prop them up, which wasn't enough and they were about to fail.
  - s1artibartfast 3y ago
    What does Tesla and Solar City have to do with this at all?
    - cma 3y ago
      If Tesla didn't bail out SolarCity, it would have impacted Space X since Space X had bailed out SolarCity in a way that left them vulnerable to further failure of it (buying their bonds in a show of self-dealing).
      - s1artibartfast 3y ago
        I see now, Thanks!
inglor_cz 3y ago
"What's risky is stagnation and letting other competitors catch up." It is a different category of risk, though, with a different perception bias. For an analogy: becoming obese is probably more risky than BASE jumping, as the diseases that come with being too fat are horrible. But people don't perceive those two risks in the same way.

by kiba 3y ago

wongarsu 3y ago

One major risk is SpaceX running out of working capital and having to scale back the vision. It's honestly impressive how they manage to build out a huge satellite network of unprecedented scale and run an agile development program for a hugely innovative Saturn-V-sized rocket with new in-house developed engines at the same time. All off the back of their profits from Falcon-9, a bit of private investment, and probably a bit of cross-financing from NASA development contracts (like the lunar lander they are developing based on Starship).

foobarian 3y ago
This is exactly what I find fascinating about the company as well. It's not like it's some secret technology nobody else has - why hasn't any other company done this before? How much of a part is played by the exceptional ambition flowing from the top?
- chasd00 3y ago
  > It's not like it's some secret technology nobody else has Well to be fair, there’s a lot of technology at spacex no one else has. One example, the Raptor engine’s combination of size, efficiency, and thrust is just not available to anyone other than SpaceX. Even if exact schematics were stolen you’d still need to obtain the recipes for the alloys used and how to manufacture them. Companies gave up on full flow staged combustion as just not feasible but SpaceX figured it out and is on v3 of perfecting it.
  - foobarian 3y ago
    Yes but SpaceX is a relative newcomer, so why did they manage to do this when anyone could have? Seems like a combination of ambition, incentives, and just chance I guess as another comment pointed out.
    - tekla 3y ago
      A brilliant and crazy chief engineer that hired the best, wasn't afraid to get dirty, and got shit done.
    - kiba 3y ago
      The relative newcomer is becoming less and less relevant as years passed. The Falcon 9 reusability and cadence was years in the making. Same for their raptor engine and Starship. What's happening is that other companies are slow to wake up and adapt.
    - martindbp 3y ago
      We all know why, but I guess we're not allowed to attribute any success to the tenacity of its founder because of his political views
      - kiba 3y ago
        There's a lot of justifable hatred for Musk, which makes it easy to disparage his accomplishment.
- nickpp 3y ago
  My guess is pure ambition. Tends to attract ambitious people who in turn have a higher chance of making those dreams a reality.
- dotnet00 3y ago
  I think a large part of this lead comes from the way the engineering responsibility is distributed (at least for the R&D side), where the engineers responsible for certain parts are in the internal tracking system so that engineers responsible for other parts can just look them up and work with them directly about changes they could make to their parts to improve things for the other part. I think most other organizations have a lot more bureaucracy involved in making changes, which makes them slower and more expensive. Plus, SpaceX doesn't try to spread out its operations across the US to act like a jobs program, while the other big space contractors have advertised their presence in every state as a reason they should be picked, which obviously increases costs.
- nordsieck 3y ago
  I think a big part of the problem is that a lot of companies are cost-plus government contractors first and sell rockets to the civilian market as an afterthought. Which means that their internal structure and processes are optimized for that use case - not really caring so much about costs, but putting a lot of effort into documenting. So when someone comes along that optimizes on cost and velocity and eschews cost plus contracts, that can be very difficult to deal with. Also, as other people have mentioned, they pretty clearly do have exceptional tech - they routinely land orbital class boosters which has only been done with prototype rockets (it's very different landing when you can hover vs when you can't). And Raptor and Merlin are among the best rocket engines that have ever been made. And even more impressive than specific components is their production and operational expertise. Being able to launch so many rockets flawlessly is a truly astounding feat. In a couple of years, Falcon 9 might even beat out the RD-108/107's total accumulated flight time record, which I thought wouldn't happen for a very long time. Edit: for context, the RD-108/107 are the engines used on the Soyuz, which (as a family) has a truly astounding number of flights. To be fair to SpaceX, though, Soyuz accumulated those over many decades.
kiba 3y ago
Starlink is already becoming profitable. So they already cleared that hurdle WRT funding.
- ceejayoz 3y ago
  Do we know this? It's privately held, and Musk's made almost certainly false claims about such things (especially Twitter revenues post-purchase) in the past. Hell, he got in trouble for false statements about Tesla, which is publicly held.
  - dotnet00 3y ago
    Well, the statement about profitability was made by Gwynne Shotwell rather than Elon, and she's much more of "speak only when necessary" type, with no public social media presence. So make of that what you will. Elon's stated position on an IPO is that they'll wait until they can predict cashflow reasonably well. Edit: Also, to be precise, she said they had made a profit in Q4 2022. So, it could just be referring to the costs vs income of that quarter specifically rather than a general statement that Starlink is in the green now. After all, since then they've upped their flight rate significantly.
    - ta1243 3y ago
      I certainly interpreted it as operationally profitable, and not including the existing costs of developing, building, launching the satellites - or even just the cost of replacing them in future.
- ianburrell 3y ago
  Starlink announced that they arev cash flow profitable. But that doesn't include capital expenditures and they require those to keep operating. The satellites fall out of the sky after five years. They also need to launch more satellites to increase capacity and add most customers. The big question is how many potential customers are out there, and if they will be enough to maintain the network.
bell-cot 3y ago
> ...a bit of private investment... I'd bet that SpaceX has some huge loans and/or bonds issues outstanding, based on future StarLink revenues. There isn't that much revenue from their other sources, and "build out the network, collect the monthly fees" is the sort of business model that banks and bond investors love.
- s1artibartfast 3y ago
  It is vc funded, do that is primarily their working capital
cma 3y ago
> All off the back of their profits from Falcon-9, a bit of private investment, and probably a bit of cross-financing from NASA development contracts (like the lunar lander they are developing based on Starship They also had Tesla to bail out SolarCity after SpaceX basically used NASA to buy their bonds and prop them up, which wasn't enough and they were about to fail.
- s1artibartfast 3y ago
  What does Tesla and Solar City have to do with this at all?
  - cma 3y ago
    If Tesla didn't bail out SolarCity, it would have impacted Space X since Space X had bailed out SolarCity in a way that left them vulnerable to further failure of it (buying their bonds in a show of self-dealing).
    - s1artibartfast 3y ago
      I see now, Thanks!

inglor_cz 3y ago

"What's risky is stagnation and letting other competitors catch up." It is a different category of risk, though, with a different perception bias. For an analogy: becoming obese is probably more risky than BASE jumping, as the diseases that come with being too fat are horrible. But people don't perceive those two risks in the same way.