Elon Musk on Why SpaceX Has the Right Stuff to Win the Space Race
A lot of people with a lot of money want to stake a claim in space. One guy is ahead of the pack, perhaps because he has chosen his partners well.
Elon Musk's SpaceX is scheduled to launch a rocket and space capsule filled with supplies bound for the International Space Station on May 7. If the launch is successful, it will be the first time a private company, not a government agency, has accomplished such a feat.
In the past, NASA would pay contractors like Boeing or Lockheed Martin to build equipment which NASA would own and operate. Here, NASA is paying SpaceX for services, not equipment, which saves the government money and risk. However, NASA has to give some money upfront, hundreds of millions of dollars in fact, which SpaceX has used to fund its buildout. By partnering with NASA, not competing with it, Musk has managed to go farther and faster than others in not only creating a commercial space venture, but turning a profit.
"I'm primarily an engineer, but I also have the financial side of things," Musk said during a CNBC interview.
Sitting next to the Dragon space capsule the company successfully launched into orbit and retrieved in December, 2010, Musk explained that his business style saves time and money.
"Normally you have a chief engineer and a CEO, and they're kind of different. In my case, it's the same, so I can simplify the decision making, and I only need to convince myself whether the decision is correct."
Musk put up the first $100 million for SpaceX ten years ago, money he made as a co-founder of Paypal .
He says other investors have put in another $100 million.
The company has signed about $4 billion in contracts for over 40 missions, both with private customers and NASA, and those agencies have come up with down payments. "I think we've received about $400 or $500 million in NASA funds so far," Musk says.
SpaceX builds nearly all of its own components in a renovated hangar in Hawthorne, California, which once housed Boeing.
Like Apple , the company believes in the importance of controlling the entire system. "I do think it's important to, well, I hesitate to use the word 'control,' but to ensure that the whole system is done right," says Musk. When asked why he hesitates to use the word "control," Musk replied with a laugh, "I don't want to sound like a control freak."
The key to SpaceX's success, assuming its equipment functions as planned, is to convince customers to pay for services on a used spacecraft.