Space Policy Edition: SpaceX's Early, Desperate Days (with Eric Berger)

Mat Kaplan: Hello again, everybody, welcome to the March 2021 Space Policy Edition, Planetary Radio. I'm Mat Kaplan, the host of the weekly show that you can catch all the time at planetary.org and all over the web, all those places where you can also find this monthly program for which I am joined as always by our chief advocate, the Senior Space Policy Advisor for The Planetary Society, Casey Dreier. And, Casey, my goodness, do we have a great interview with one of our space journalism heroes that you've conducted for us today.

Casey Dreier: Eric Berger, he's the Senior Space Editor at Ars Technica. He's a great reporter in terms of space topics. I recommend if you don't read him, to read him. And he's got his first book out, which is all about the early days of SpaceX and the flight of the Falcon 1 rocket. And kind of how SpaceX almost didn't make it. Really interesting book, interesting piece of history, particularly as we see the company now, trying to, in a sense, repeat the style of approach of developing their, not just single engine little rocket, but a mega rocket, Starship, and the super heavy. So, it's an interesting context and reminder that this company is really new. It's only 15 years ago that this story happened, and a lot can change in that period of time.

Casey Dreier: So, really interesting book, I recommend the interview. Eric's a great guest. And we really go into the history and kind of broader implications about what it means to have that kind of company culture, commercial space flight, and the role of public investment in it.

Mat Kaplan: So, let's get through some other business, including our regular reminder to you to go to planetary.org/join.

Casey Dreier: Oh, Mat, I have a better reminder for people.

Mat Kaplan: Oh, I know what you're going to get to. It's even more immediate. But for this one, if you want to help us create all the other stuff that's going on, join us, become part of The Planetary Society. But Casey has something else, which you still have time to be part of.

Casey Dreier: For the next few weeks throughout March, you can still join us for our virtual Day of Action, that's happening March 31st this year. If you live in the U.S., we will arrange meetings for you virtually with your members of Congress, give you some training, give you talking points, opportunity to meet other Planetary Society members, and really speak up for space exploration for space science, for planetary defense. It's our first virtual Day of Action, for all the obvious reasons, this year, and so, it's an experiment, but we're looking forward to it. So, you can go to planetary.org/dayofaction to learn more about it. And again, you can sign up as late as March 24th. So, consider doing that, and I hope that I'll see you there.

Mat Kaplan: So, how is this going to work? Is it going to be as much as possible, a virtual version of everybody getting together and going off to their various congressional offices?

Casey Dreier: That's the idea. So, we're working with a partner that is going to be organizing individual Zoom meetings with the offices of various members of Congress, so, you will join those Zoom meetings with fellow constituents, fellow society members, and speak to either the member themselves or their staff representative, just like you go to in Capitol itself, but from the safety and comfort and convenience of your own home. That's the idea.

Mat Kaplan: Are you doing something to try and replace the really cool social elements of past Day of Action where everybody basically, it was a big party?

Casey Dreier: Well, yeah. We'll do what we can. I mean, we'll have a big training Zoom call with everybody, and then I plan to have an active ongoing Slack channel, so we can all stay in touch and share success stories, and questions, and pictures of our virtual advocating while it's happening as well. So, there'll be a social component, but let's face it, there's nothing quite as fun as grabbing a beer after a long day of advocating for space in the nation's Capitol and celebrating your success with the fellow members of The Planetary Society. So, we'll do what we can virtually, but I look forward to next year seeing you all in person. So, let's hope that happens.

Mat Kaplan: And how, and I hope that I can join you there inside the beltway, Casey. Before we get to that conversation with Eric, which you've done a great job of introducing, is there any other policy news for us space geeks?

Casey Dreier: Big picture, not really. We've had the Biden administration clarify now that it supports Artemis, which is great, supports Space Force, so, no big changes there. And we've seen, I think, really interestingly, I guess we should acknowledge this, Mat, from the last time we recorded this, that we did have a successful landing of a Mars rover-

Mat Kaplan: Oh, yeah, that happened.

Casey Dreier: ... on the red planet, which I was so excited to see. And I believe we said that we would celebrate it a little bit together. So, how awesome was that. But advocacyward, and that advocacy was space policy-wise, the President highlighted Perseverance, he watched the landing, called and congratulated the engineers and scientists at Jet Propulsion Laboratory, and brought it up unprompted at a meeting of European allies, saying that missions like Perseverance and Mars sample return, our big priority going forward, is a perfect example of how the United States and its allies can work together on big ambitious projects. That is music to my ears.

Casey Dreier: Mat, you just had an episode about the NASA spin-offs this week, I still argue, one of NASA's greatest spin-offs is its international alliances and strengthening partnerships with other nations to work on these peaceful projects of exploration together. And so, seeing President Biden use that specifically, call that out specifically about opportunities with our European allies and other nations, to go to Mars and bring something back, perfect. So, very happy to see that. However, in the meantime, more basics, still, as we record this, no NASA administrator nominated, and still, no new budget for the upcoming fiscal year 2022, probably be a few months away yet from that.

Casey Dreier: So, good words, good intentions, but clearly, still a little low on the priority list, and we are waiting for some important personnel to be put into place at the U.S.-based agency.

Mat Kaplan: It was nice to see acting administrator, Steve Jurczyk, who's a good guy, he's been heard on Planetary Radio, he was at JPL. He was there to help celebrate those seven minutes of triumph, I'll call that instead of terror, and yeah, a good guy. And I know there have been rumors and rumors of interest in becoming an administrator, including from a former senator from Florida, but no real indication yet of where this is going to go. Huh?

Casey Dreier: Not yet. As he said, rumors are everywhere. We don't really traffic in those level of rumors. Obviously, The Planetary Society commits to work with whoever the NASA administrator will be. We may learn. I'd say, there's a good chance maybe within between now and our next episode that we may have someone to talk about.

Mat Kaplan: Excellent. All right, let's go to your great conversation. I can say that because I just finished listening to it, it was part of producing the show, with Eric Berger. We'll meet you back here, everybody, on the other side.

Casey Dreier: Eric, thanks for joining us today. How are you doing?

Eric Berger: I'm doing great, Casey. Lovely to talk to you.

Casey Dreier: I've been looking for a reason to have you on the show for a long time. So, thank you for writing a book to make that easy for me to have you on here. The book, of course, is, Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX. I read it, very interesting history about the formative years of the company. I wanted to get right into it with you, help us set the stage. We're talking now right before a test flight of the Starship. We're seeing SpaceX land and reuse its stage boosters all the time, they're launching people into space, but what was this company like in the early 2000s? Take us back to that period of early SpaceX, when they were just getting started.

Eric Berger: Yeah. So, everything you're seeing with Starship is writ large with the original plans that Elon Musk set out for SpaceX right at the beginning. When I talked to Gwynne Shotwell, she's now the president of the company, about her first interaction with Elon back in the summer of 2002, she said she was a little overwhelmed with him because he was talking about sending humans to Mars back then. And this was like in a 10-minute interview in their offices in El Segundo. And she said he was compelling, scary, but a little compelling. So, this has been his vision from day one. He realized that to do anything meaningful in space, you had to bring the cost of launch down. And so, really, that was his first goal in building the Falcon 1 rocket.

Eric Berger: To understand where SpaceX is today, you really do need to go back to those early years and understand where he was coming from and the company, and how they started.

Casey Dreier: We look at Starship now, and they have a track record that we take them seriously on. But in early two 2000s, how were they seen by the larger aerospace community as they were working on this Falcon 1 rocket, and of course, developing the engine, Merlin engine at the same time?

Eric Berger: I think Shotwell may have said it best when I talked to her. She said, "We were a bunch of jackasses." And I think that's how the industry probably looked on them. Elon Musk was not the first rich person to come along and say, "I'm going to disrupt the launch industry." The idea that we needed a FedEx or a UPS of space delivery in terms of sending satellites to orbit had been around for decades. The fact of the matter is, a number of companies who'd come along and try just that, and they'd all failed. So, when Elon Musk rocks up in 2001 and 2002 and says, "I'm going to start this company, and we're going to bring down the cost of launch," the big players in the industries, the Lockheeds, the Boeings, they all looked down their noses and said, "Yeah, right. Just another one of these guys." And so, everyone expected them to fail, I guess is the good way to put it.

Casey Dreier: Yeah. And I guess not without reason, for the exact point you just made. I was struck reading the book that there were many attempts before this. Was it Rotor... I forget that, Rotor Launch?

Eric Berger: Rotary Rocket. Yep.

Casey Dreier: Rotary Rocket.

Eric Berger: The Aerospace, AMMROC, Microcosm. I mean, there are a dozen.

Casey Dreier: I mean, there's a joke about it. That's how common it was. Right? If you want to regale us with it, what's the common aerospace joke?

Eric Berger: The best way to become a millionaire in space is to start out as a billionaire. Right?

Casey Dreier: Right. Why do you think it was SpaceX that bucked that trend and didn't fail? What combinations of things that happened? Because again, these first few years are these really key formative years. What happened during those years to make sure that they didn't become a Rotary Rocket Company?

Eric Berger: First of all, they almost did fail on multiple occasions, and the doubters were almost right in terms of they failed three times before they finally got to orbit and they almost ran out of money a couple of times. But what was different really, you have to start with Elon Musk, who is a unique individual. Whether you like him or not, whether you like his politics or the controversial things he says on Twitter or not, or the way he treats people, the fact of the matter is, his essential defining characteristic is this internal drive to get things done. He's relentless, I guess, is the best way of putting it in terms of pushing the people who work for him forward and his partners in the industry, and trying to get government agencies to work with him. And he just is this preternatural force moving things forward.

Eric Berger: Another thing that he's really good at is hiring. I note in the book that he interviewed the first 3,000 employees of SpaceX and hired them all. And most of them were engineers. He's very good at finding smart people, but not just finding smart people, finding those people who would be willing to commit themselves to working their tails off to forward his ambitions or to work for his company. And it's not like the people going into the company didn't have eyes wide open. I mean, if you go to work for SpaceX, even back then, you knew you were going to work 80-hour weeks. But Elon offered them something that really wasn't an option.

Eric Berger: Like, if you were to go work for NASA, or Lockheed, or TRW, or Rockwell, or someone back then, you would be one of thousands of people on a program. At SpaceX, you were one of dozens, especially in the early days, making this happen. And so, you were touching hardware, you were building things that were going to fly. I mean, you were playing a pivotal role in the success of the company in the early days. And so, he was very good at finding people who would buy into that and were willing to give their all. And then, as I say, he's just an exceptional motivator, either through motivations, positive or negative, and getting things done.

Casey Dreier: I like in your book that you interview a number of early employees from the company, and they talked about their motivations for joining or how Elon Musk convinced them to come. I was struck by that, that very point that you made, the importance of the vision too. And they're resonating with this bigger purpose and the ability to feel like they're doing something. I think you had an anecdote from an employee who said they could have stayed at Lockheed their entire lives working on the sourcing of a single screw for the F-35. Yeah. Or they could go to SpaceX and have their hands inside of an engine that could be test-firing the next day, or literally inside a rocket on an airplane, taking it to its launch site to fix something. It's almost like giving a sense of meaning and purpose in the work, that is this really powerful draw beyond payment, beyond stability, that seem to really attract a certain type of people.

Eric Berger: Yeah. I mean, the people who went to work for him early on were not going there by and large for a paycheck. Some of the people I talked to took pay cuts to go work for SpaceX. The fact of the matter is, they went there because they thought that what he was doing was either interesting, or would ultimately let them go into space one day, or they felt that the industry just needed this kind of injection of energy.

Casey Dreier: Yeah, to that very point, Thomas Zurbuchen, who's now the associate administrator of NASA's entire science mission directorate, at the time, was still a professor, I believe, in Michigan, in heliophysics, and wrote at the time, a somewhat, I wouldn't say controversial, but a take on SpaceX's hiring practices. He noticed that a lot of his best students were going into SpaceX. And he saw that SpaceX was able to bring in incredibly driven people. But can you share that aspect of it? Some people saw this opportunity happening earlier in SpaceX's development time.

Eric Berger: Yeah. What happened was, it was back in 2010 before the first Falcon 9 rocket took off, and Thomas was asked by Aviation Week to write a piece about how hiring trends were changing in aviation or aerospace or some such. He went back and looked at his 10 most driven, smartest students who he thought were success and found out where they ended up over the last decade. And of those 10, five had gone to SpaceX. And he was shocked by this because the company wasn't very big, certainly compared to its competitors, and it hadn't achieved anything like the reputation that it has today.

Eric Berger: He wrote the article and he said he was confident that the Falcon 9 would be a success because they were clearly hiring the best and the brightest. And then Elon reads the article and sends it out to the SpaceX staff and said, "Hey, look, you're getting noticed." And he invites Zurbuchen to California, and Thomas is like, "Yeah, I'll go." He can see his former students, it'll be fun. And he gets there and meets with Elon, and thinks it's just going to kind of be a tour, kind of a thing like that. And not long into the visit, Musk buttonholes in and basically says, "Who are the other five students?" Because he wanted to hire them. And that's just kind of an example of the way he's relentless about identifying talent and then going after it.

Casey Dreier: Why do you think we don't see, or do we see a similar kind of competition for talent from the more established aerospace companies? Or was Elon Musk the first person to really identify the opportunity as an untapped resource for individual talent to participate in that structure and that system?

Eric Berger: Well, I think part of it is, at a traditional aerospace company, you have the board, you have the CEO, you have the CFO, you have the president, you have HR, and then you have engineering departments. And at the beginning, it was a very flat hierarchy. It was just Elon Musk. He hired some vice presidents, then he hired some college students to work for them as engineers. He was the board, he was the CEO, he was the CFO, he was the chief engineer, and he knew who the hell he wanted to work for his company. I mean, he just made it a priority. It's like, "I know I can't hire 5,000 engineers, I can hire five, or I can hire 15. So, I'm going to find the very best who can help me get where I want to go."

Casey Dreier: I'm fascinated by this. And I do think Elon Musk's, one of his amazing skills is this, the management. And that's a hard thing to do is to manage and build a community of people who share your vision, and are able to execute that vision. It's almost like he saw that the top talent was actually a very finite resource that was not competed for strongly enough, because there's a lot of people with engineering degrees, but if you're looking at output, I know there's various studies about that. There's like some 20% kind of 80% rule, right? Where some 20% of your engineers are probably the 80% producing and quality of contributions to accompany.

Casey Dreier: Those top engineers are the real limited resource for all these companies. There's not enough of those to go around any engineering company who would want them. And so, by aggressively going after those very best people who will multiply their value back to the company, that seem to be some sort of insight that wasn't really integrated well through the aerospace community maybe prior to this, or the framework to really allow those contributions to occur maybe weren't established.

Eric Berger: Yeah. I didn't talk specifically to Elon about that, but I could very easily understand him learning that lesson in Silicon Valley, where there would have been extremely hot competition for the best programmers. Right? And then bringing that into aerospace, where everything was pretty Steady Eddie. You had the big players, they had guaranteed contracts for launch from Department of Defense and NASA. There just wasn't that kind of forcing function really driving them to desperation, I guess.

Casey Dreier: Yeah, if you were a top engineer and wanted to make a difference, you weren't going to go work for, to building a rocket, the Delta IV or something like that, right? Because that just wasn't what the point of that rocket was, in a sense. What was the rocket market like in the early 2000s that SpaceX was trying to break into, and particularly for the U.S., and then the U.S. in relation to the globe.

Eric Berger: The main rockets back then, the Atlas V and the Delta IV, hadn't yet quite made it to the market, they were still flying earlier Atlases and Deltas, and those had lost out commercially badly to the international markets. The Ariane rockets were launching a lot of the geostationary satellites, the Russian Proton rocket had a lot of the commercial satellite market, and U.S. had lost nearly all of it because Lockheed and Boeing were basically subsisting on government contracts, and so, they were not competitive. There was also the Pegasus vehicle, built buy Orbital Sciences, but that was about $30 million to launch a couple of tons into low earth orbit. So, it was still very expensive for a small launch vehicle. And so, SpaceX was trying to come in at $6 million for half a time to low earth orbit with the Falcon 1. That was the goal.

Casey Dreier: It was a policy consequence in a sense, and was primarily driven by Department of Defense, that needed to launch the most things into space, the most expensive things into space, and they were paying for that 0.99% reliability. So, every percentage extra bit of reliability, you're talking a lot more money ultimately, launch assurance. But they didn't care if you're launching a $2 billion national security satellite, you don't "care" that much if you're paying 300, $400 million for launch. So, the market response in the United States in a sense was, "This is our customers," the DoD, and to a lesser extent, NASA, they basically gave up on competing for the commercial satellite launch market as a consequence of that, because you can make a good enough living serving your single... It was a monopsony, for all intents and purposes.

Casey Dreier: The interesting thing was that, I guess, SpaceX saw this opportunity to come in and shake that kind of cozy relationship up. And this even predates the fact of ULA. They actually challenged that. So, what was the context of that? And how did SpaceX see and respond to the idea that there was even more consolidation in this launch industry happening around them at this point?

Eric Berger: Right. So, as SpaceX was trying to build the first Falcon 1, you had Lockheed developing the Atlas V rocket, and Boeing developing the Delta IV, and the Delta IV heavy rocket. They were hot, hot competitors for the government business, they were not competitors for commercial markets. There were some allegations of espionage, some Boeing engineers were caught with Lockheed documents. Then, as today, the military wanted assured access to space. And so, they wanted two different providers. And they were afraid that either Boeing or Lockheed was going to exit the market if the other one got supremacy, and so, with the ongoing lawsuits and this competition concern, the Department of Defense basically went to Boeing and Lockheed and said, "You need to merge your launch businesses into United Launch Alliance. As part of that, we'll give you a certain amount of money."

Eric Berger: It amounted to about a billion dollar subsidy, although every time I say that, Tory Bruno gets angry with me on Twitter. And he's great, but it really was a subsidy to basically ensure that they would build both Delta rockets and Atlas rockets going forward. And they've done a great job. They're entirely reliable. But Musk was sitting there in 2005 when this deal was announced, and he's like, "Wait a minute, this is terrible for the country, because, A, you've got one company doing all the launching. So, their prices are never going to go down." And he was right about that. And he's like, "One day, we want to be able to compete for these launches."

Eric Berger: And so, he sued to try to stop that merger. He lost, but it set up from the very beginning of the company. They've had an antagonistic relationship with the other companies in the industry. And that's just, again, sort of Musk's way of doing things. He wants to go fast, and he wants a level playing field. And he looked at that deal and said, "This isn't a level playing field, if all the government's launches are going to go to one company."

Casey Dreier: Yeah. And I just find this as really interesting from the policy decision from the defense department was not done to support a vibrant commercial American launch market. It was done to serve their needs, and really, in reaction to the 80s when the space shuttle was the sole launch vehicle, and then after Challenger, they had no way to get to space. Right? So, this is why they had to get some assured access to space. Let's just focus back on SpaceX, and in this context, they're scrappy small, you were talking about hundreds of people for the first few years.

Eric Berger: Yeah, they had about a little more than a hundred people at the time of their first launch in March of 2006.

Casey Dreier: So, building a rocket with like a hundred people, it just seems crazy to me. It was just like, what a wild thing to be able to do. So, they're building this Falcon 1, that's one engine, that's the one, what's the capability of this rocket? And how important is it? What are the stakes, I guess, of this first launch of the Falcon 1? What are they trying to show?

Eric Berger: It's even more remarkable than that because it was one rocket and there was two launch sites. Because originally, they were going to launch from Vandenberg, and they ran into some bureaucratic issues there, and they were really going to have to go slowly. And so, they built the second launch site in Kwajalein, way out in the central Pacific Ocean. So, they had developed a rocket and engine basically from scratch, and built two launch sites in about three and a half years, which is very fast with about a hundred people, which tells you something about the hours and how hard those people worked. The stakes of that first launch were, the military was interested in it because this was after 9/11, and so, they were interested in rapid responsive launch, the same kind of things they're talking about today, this ability to launch low cost rockets on demand.

Eric Berger: They were interested in that back when SpaceX was building the Falcon 1. So, they were throwing a few million here and there in development contracts. NASA was waiting in the wing to see what would happen, and SpaceX had some commercial contracts. But basically, the stakes were, it's one thing to talk a big game, but it's another thing to prove it. And so, with that first launch, Musk had his chance to show all the doubters that this company could build a rocket. And they kind of laid an egg because the first launch went up for 30 seconds then the engine had caught fire and flamed out and it crashed. And they'd made a really rookie mistake.

Eric Berger: They were launching from this tropical island the size of a couple of city blocks, and over the Christmas break in 2005 and in 2006, they'd left the engine out, exposed to this tropical spray, and it had corroded one of the main bolts on the engine that led to a fuel line leak and ultimately doomed that first launch. So, yeah, they were still kind of this startup and had lots of questions after that first launch.

Casey Dreier: You quote or say in the book that Elon Musk said that they wouldn't deserve to be a company if they couldn't launch after three attempts into orbit. So, that kind of gave you a sense. Is that just a self-judgment, or was that just a function of money?" Well, first, how much of Elon's money was running SpaceX up to this point?

Eric Berger: That's a great question. Up until that point, it was nearly all just Musk's money. They had about a $6 million grant from DARPA, they had some launch contracts, but by and large, it was Elon's money. They got a huge infusion of cash, more than $200 million in the summer of 2006. So, after their first failure, when they successfully competed for the first development contract for commercial cargo, so, for missions to the International Space Station. And that money, I think, ultimately helped get them through two more failures to the fourth launch.

Casey Dreier: Elon Musk was rich, but he wasn't the billionaire that he is today, right? He had something on the order of a hundred-ish million dollars that he put into SpaceX. Does that sound about right?

Eric Berger: He had 180 million, and he put about 100 million into space X. And basically committed 100 million and told his team, "This is enough money for three attempts." And as you said, he basically said, "Look, if you can't get to orbit on three attempts anyway, maybe you shouldn't be in the space business anyway."

Casey Dreier: What was fascinating about that is that the incentive totally changed when it was his money, and there was a much more centralized control over the business, versus a significant amount changed over the years, but a significant amount of government money which comes with a lot of strings attached. Is that why they were moving so fast those first few years at that kind of breakneck pace is because the money was finite and it was his money, and that he had a certain amount of time that was viable to work in?

Eric Berger: Yeah, it's interesting. When I talked to some of the early employees, he would always ask them, "What is the least amount of money that you would take to do this?" Or he asked Tom Mueller, "For how little money could you build a rocket engine if you could design it yourself?" That was a constant theme. And he gave lots of shares in SpaceX to the early employees. I mean, they're wealthy now because he gave equity in the company, with the idea that if you saved SpaceX's money by sourcing this part from another vendor, or were able to build it in-house, then the whole company's saved. So, yeah, it was a very cost-conscious program, and it still is today, I mean, they care very much about finding the lowest cost solutions to their problems. But obviously, his wealth today is almost unimaginable.

Casey Dreier: Yeah, right, because he was running another company at the same time as doing this, right? With Tesla. That's always kind of the remarkable undertone to this book, that Tesla was happening this entire time he was for it.

Eric Berger: Yeah. We said the joke about you going to space and become a millionaire in space by becoming a billionaire. He's the rare example of going into space as millionaire and coming out a billionaire. It speaks to the success of SpaceX, as well as Tesla. And that's what makes the year 2008 so fascinating, because they had the third failure in August of that year, he's getting a divorce, Tesla is hemorrhaging money, the global economy, the U.S. economy is crashing, the big recession is starting, and he's got six weeks to save SpaceX. And really, the heroics that the engineers went through during that period to make that fourth flight a success. It just is a remarkable story.

Eric Berger: As I was reporting and writing this, it just felt like a privilege to be the one that really got to go in and interview all of these people who were on that plane, the C-17 with the Falcon 1 first stage, and on Omelek, trying to piece it back together and telling that story. Because it is one of the great moments in space history.

Mat Kaplan: What did we tell you? A great conversation, right? Casey and Eric Berger, we'll be right back after this quick break.

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Casey Dreier: I mean, why don't you set up the stakes for that fourth launch. So, three failures, they're learning something every time, but now it's 2008, they've been working at this for what? Five, six years?

Eric Berger: Yeah.

Casey Dreier: No successful launch. They're running out of NASA's money, they're running out of his money, broader global economic collapse. They have essentially one more chance to launch something into orbit to show that they know what they're talking about.

Eric Berger: Right. So, they had the pieces for a final Falcon 1 rocket, their fourth one in the factory. And so, the day after the third failure, he calls a meeting and says... in a past meeting, you might've expected him to go hard at whoever had been the cause of the failure or the problem, but in this case, he built the team up and said, "Look, we've got one more chance to do this. Build the rocket. You've got six weeks to go do it." It set up this chain of events which is pretty fascinating because, typically, the first stage was too big to fly from L.A. to Kwajalein, and so, they would send it by barge, and that took 28 days. Well, that was too long. They didn't have that much time.

Eric Berger: So, they had to hire a C-17 to take the first stage. And due to a pressurization issue, that rocket started crumpling, and basically, it was crushed like a beer can, on the way out there, and they had to do some heroics to save it. And then, as I say, we put it back together on Omelek. And NASA, that summer, was also considering... SpaceX and Orbital had ultimately won funds for development of the cargo, so, this would have been, for SpaceX, the Falcon 9 rocket and cargo Dragon spacecraft. And they'd won the 260 million for that. And that was great, but the big money was not development, but operations. So, paying for actual missions. And that contract was worth more than a billion dollars.

Eric Berger: And so, NASA was evaluating SpaceX, they were evaluating Orbital. And the fear at SpaceX and in Elon Musk's mind was that, if SpaceX was not showing signs of progress, all of that money would go to Orbital. And if SpaceX was unable on its fourth attempt to put a rocket into space, how much confidence could NASA have, that this company of jackasses could actually build a much larger rocket with nine engines in a real spacecraft? Everything really was on the line in that fourth launch. It all went to pieces on a couple of different occasions, and that it made it to orbit at all was remarkable.

Casey Dreier: You say that they couldn't make payroll after maybe the next couple of months at that point. They literally were running out of money right before this launch.

Eric Berger: Yeah. And I mean, who's going to fund the company in the middle of a recession that can't get to orbit after three tries? I mean, three tries is a lot of tries.

Casey Dreier: Do you think this period of scrambling to make the Falcon 1, I mean, and I guess, spoiler, it launches successfully and they win the contract ultimately a few months later for the commercial resupply services, do you think that period, that like six, eight weeks is what makes SpaceX the SpaceX we know it today?

Eric Berger: Yeah, I think so. I mean, it sort of hardened the DNA of the company as sort of this scrappy, hard-charging, succeed all cost mentality, do what has to be done. The Falcon 1 rocket is a world away from Starship. You could fit that entire rocket, I think, in the payload fairing of Starship in terms of launching it to space, but this is the same kind of attitude, like, they were doing iterative design back then with the Falcon 1, testing things, failing and moving on to the next thing. The other really important parallel with Starship is, Falcon 1, they were building the rocket they wanted to build. NASA, the military, wasn't paying them to do Falcon 1, they were going to sell contracts.

Eric Berger: And it's the same thing with Starship. Now, they have a little bit of money for a lunar Lander, but the billions of dollars that are going into development for Starship are by and large coming from SpaceX. And so, like during the Falcon 1, they can move at their speed, and they can build the rocket that they think they need to build. And you're seeing that the plans for Starship change almost on a weekly basis. And it was the same thing with the Falcon 1 back in the day. It was difficult for Shotwell to keep customers engaged because she said the plans for the rocket kept changing all the time. And Starship clearly is too.

Eric Berger: He's talking about now landing that on the launch tower, right? Yeah, it's the same kind of thing, but he's not a multimillionaire, he's one of the world's richest people, and he now has a track record of success. So, while it is so audacious to even talk about sending dozens of people at a time to Mars, you and I understand that that is just almost impossible, but some of the other things they've done have seemed almost impossible too, so, it's hard to bet completely against them.

Casey Dreier: Absolutely. And again, seeing this early story of... And I think that how important is it for their own self mythology too at SpaceX that they think about this period as, "We could have been dead as a company. We almost were." And through this kind of almost like Nietzsche and will to power resolve, that they were able to succeed despite the odds. I mean, that the power, again, of that narrative internally, not just for recruitment, but just for people's attitudes into what they commit personally to this endeavor seems just immense and long-lasting in terms of its reward.

Eric Berger: At the factory in Hawthorne, California, now, he doesn't spend a whole lot of time there now because he's basically living in Boca Chica, Texas, working on Starship, but he's got this executive conference room in the middle of the first floor. It's a U-shaped table with about nine chairs around it. And he sits at one end of the U. And from where he's sitting at this end, there's a big wall. And on that wall, there's this huge print of the Falcon 1 rocket launching above Omelek. This beautiful shot taken from a helicopter, I think. It's like constant reminder of where he came from and how failure is always around the corner. And so, yeah, the mythology of the Falcon 1 rocket lives on.

Eric Berger: And the people who were at the 20s, 20-something engineers in their early 20s, just out of school, today, are now many of the senior managers at SpaceX. Some of them certainly have moved on. I mean, as we talked about, it's such a demanding work environment. Most people can survive about a decade in Elon's world and then need to get off that wild ride.

Casey Dreier: That's something that was kind of this theme that kept recurring in reading your book was this requirement, almost like a sacrifice. I'm trying to think about how I want to phrase this, because I don't necessarily mean it pejoratively, but it felt like nothing is free, in a sense. You can't succeed like this without a cost. And this recurring theme of people working 80, 100-hour weeks, missing important aspects of their kids' development, or missing their families, for this grander project. And then you profile a lot of them moved on in order to have a family, or in order to be with their kids. And they would go to other companies that wouldn't ask that of them.

Casey Dreier: It's this bigger issue, but is that a requirement of this type of success, in a sense of sacrifice for aspects of one's humanity to have a healthy balance of life and to be around your family? Or, to succeed like this, does it require the sacrifice of aspects of one's life that time just doesn't permit?

Eric Berger: Well, clearly, for Elon Musk and SpaceX, the answer is yes, it does require that sacrifice. At the same time, the results speak for themselves. I mean, you've got a comparable company in Blue Origin to SpaceX, right? Similar kind of thing. Bezos has even more money from Musk, and has for a long time, and has invested more money, frankly, in Blue Origin than Musk ever has in SpaceX. They move pretty slowly. They're not to orbit yet. They haven't put humans on New Shepard, even though they've been flying it for five years and it was developed as a commercial suborbital space tourism. If you want to move fast, and let's be real, no company industry moves or acts like SpaceX does.

Eric Berger: I mean, what they're doing in South Texas, building Starships at a clip of every two or three weeks. Now, these are not final vehicles, they don't have all the life support, and they don't have some of the stuff you need as a finished product, but these are big rockets with sophisticated propulsion systems, and doing pretty amazing things. And they're cranking them out, changing engines in a few hours, and fly them every month. I mean, that is just a remarkable pace of activity. I don't think they're trying to show the space industry up, but maybe they're trying to show the space industry that this can be done faster. But you're absolutely right, there is a price.

Eric Berger: I mean, you could go work at Blue Origin, or Virgin Galactic, or somewhere else, and have more of a work-life balance. The pace is lower. And so, what tends to happen with SpaceX is, you get people right out of graduate school or college, or young and hungry and eager, and maybe don't have families, or don't have lawns to mow or whatever, who are there for it. They're willing to make that their whole life for a while, make their mark and then move on.

Eric Berger: I got to sit in on a number of meetings that Musk had, sort of these senior-level meetings with his staff for Raptor, or for Starlink, or for Starship, or what have you. What was amazing to me, these are the engineers leading these projects, Casey, and it would be Musk, and there might be one or two people around the table who were in their 30s or 40s, but almost all the rest of them were in their 20s. He keeps finding the talented people. And the constant is him. I mean, he's almost 50 and he keeps doing it. You spend a couple of days around him, and I was exhausted trying to keep up. And he does this all the time. And it's a remarkable energy and drive that really propels him forward.

Casey Dreier: Again, I'm just fascinated by the question of personnel, and again, that motivation. And you're right, I mean, everyone who's there doesn't have to be there. They get to choose. It's their choice to be there. I'm sure, it's thrilling to do it. And there's this kind of philosophical or fundamental question of, is there a way to ever do this that's a more balanced way? Or does this fundamentally require action? And it may just fundamentally require.

Eric Berger: It's just slower and requires a lot more money. So, the question then becomes, why is he moving so fast? And I think the answer to that is, he realizes he has a finite amount of time to effect these huge changes on Earth. He doesn't know what's going to happen with the economy. Right now, he can raise money by snapping his fingers. That may change. If he really does want to get humanity to the Mars, or move transportation beyond fossil fuels, these are huge decades, long projects, and he's just got to go as fast as he can toward those goals.

Casey Dreier: Something that I've been a little obsessed with has been, I've been looking at the cost of wages for highly-skilled individuals. So, basically people with a master's degree or higher. It outpaces the rate of inflation, the cost of people. Over the last 40 years, it's outpaced inflation by something like 15 to 20%. So, people just get more expensive. I mean, as you know, people are at the core of space. It's the standing army costs of whether it's NASA, or even SpaceX, you're paying people to build the hardware, or to think of how to build the hardware, or to operate the hardware.

Casey Dreier: And one of the reasons it's hard to save money in space is that people just outpace inflation, the cost of people do, unless, and I think this is, in a sense, the innovation or instinct or insight that Elon Musk had, which was, "What if I have the same or fewer number of people, but I get twice the workout of each individual person?" Because then you've solved, in a sense, the cost equation. So, for the people working 80 hours a week, he's getting a two for one deal on that person's salary. That's one of the ways you're able to reduce the cost of space flight, is reducing the number of people because they're working harder.

Eric Berger: It's even like four for one, because you're paying someone in their 20s, who has a certain salary expectation, versus someone at NASA who's in their 50s and has been a government employee for 30 years. So, they have a much higher salary that they just get, right? And so, if Musk is hiring people in their 20s, he can pay them less.

Casey Dreier: I thought that was a fascinating just kind of thematic current in your book of that, to some, it wasn't necessarily a struggle, but people saw it as a cost. And some people either weren't willing to pay it or did for a while and moved on to other places that allowed them to have that balance. But it's like, again, to move that fast, to do what they're doing to innovate so rapidly, again, it doesn't come for free. There has to be some exchange of human balance to that cause, in a sense. And that's where you see almost the value of having, I mean, he's not just doing it to save Orbcomm some money on their launches, he's doing it for this big grand purpose. I see the value, in a sense, of having a motivation.

Casey Dreier: So, you're not just looking for screws to service the F-35 program, you're working to like maybe save humanity in the very long term. And that's like the value all funnels into how much can you motivate people to give back to this cause itself?

Eric Berger: And he's extremely talented at motivating people. I mean, he has this messianic power over a certain subset of people that manifest on Twitter and elsewhere. But there is the healthy component of that, like, for the people working at SpaceX, by and large, are true believers in the mission. But you're right, I mean, there are philosophical questions about, should people be working that hard or be required to work that hard? I will say that the work-life balance is a little better today than it was during the Falcon 1 days. And I'd also say that all the people I talked to, and I talked to a lot of them, none of them regretted it. Ann Chenery, who got burnout, told me she had no regrets. It was the best time of her life. Wouldn't change it for the world.

Casey Dreier: One other thing I just wanted to touch on, we talked a lot about the SpaceX's role, the individual's role, their activities, their active role in making this succeed, in making Falcon 1 succeed. Something that struck me while reading your book though was how fortunate their timing was. SpaceX started, it was in 2002, right?

Eric Berger: Yep.

Casey Dreier: 2001, 2002. That was before the Columbia disaster.

Eric Berger: Yep.

Casey Dreier: So, they started to try to revolutionize the launch industry before they knew that NASA would need some way to provide cargo or crew to low earth orbit. But, I'd say arguably, had that disaster not happened, you probably would have still continued flying the shuttle for at least another 10 years, if not indefinitely, to some extent. The market for what they were selling at NASA never would have shown up, but at least not at the funding levels needed to make a huge difference to them. Right? So, I mean, the two NASA contracts that you mention in the book, the COTS and commercial resupply services, CRS, those kept the company alive.

Casey Dreier: So, I mean, you could have gone through the same story, and they could have heroically launched Falcon 1 on the fourth attempt, and then if there hadn't been a stay station to service, the company probably would have gone out of business, right?

Eric Berger: Yeah.

Casey Dreier: Since there wouldn't have been any customers for it. So, how important was just this timing aspect? And I wonder if that's the key compared to some of these other companies, was timing. Timing is everything, right? To go into old sayings.

Eric Berger: I mean, they also did make it to orbit where these other companies did not. But you raise an excellent point. And I think we're seeing that manifest in all these other small launch companies today that started out, plus or minus, building rockets on the scale of the Falcon 1. Rocket Lab, Firefly, Astra, Relativity, they are all planning to be not just launch companies, but in-space service company. Rocket Lab just came out with a Neutron rocket, which is a bigger rocket. They've got Photon, which is their in-space transportation system. Astra wants to do end to end delivery. The same with Firefly, which is going to deliver cargo to the moon as part of the commercial lunar payload services program for NASA.

Eric Berger: So, they all learn the same lesson that I think SpaceX learned, that you cannot get by commercially with just a small satellite launch vehicle, you need to be a full services company. And I mean, SpaceX, obviously, has become that, they launch orbital rockets, they are the world's largest satellite operator, they put humans into space. I mean, they're an end to end services company. And all these other small companies that came along a decade later, realized that, "Okay, the Falcon 1 wasn't a commercial success. And if I just have a rocket, I'm not going to be a commercial success either. So, I need to diversify." So, yeah, it's very much an open question whether they would have made it if they had just done the Falcon 1 rocket, and the fact that they pivoted away so quickly from it suggest that nah, they wouldn't have.

Casey Dreier: I think also just that interrelationship of, they got unfortunate in the sense that there were some smart policy being made by NASA at the time that really ran against, you covered this very well in terms of NASA still struggling with this in terms of who it, in a sense, rewards with its contracts, and what it is trying to do with those contracts. Is it just feeding an existing aerospace company? Or is it trying to, in a sense, create a new marketplace? which is where this policy eventually moved to was to specifically encourage companies like SpaceX to exist, and that they would have a market to carry them further.

Casey Dreier: And it just seems like that to me, could be the fundamental difference in terms of ultimate success or failure, that the commercial market may not have been able to sustain a company like that at that point. And now I think it's more debatable because in a sense, because of SpaceX's incredible success, that people are more open and see. And also, I think the diversification to things like mega constellations, a lot more people want to do things in space, but how important government was and still is to these private and nascent kind of startup companies?

Eric Berger: Let's be honest, government is essential. Astra's business is predicated, I think, on being a responsive launcher for DoD. Virgin Orbit is entirely predicated on offering responsive launch to the military. Rocket Lab initially, interestingly started out, one of the co-founders of the company said that they would never launch military missions because they were peace-loving, and that wasn't part of their mission. That philosophy had to change as well to basically meet the economic demands. I mean, Starlink may provide internet to Eskimos in Alaska, which is great, but it's probably going to be bread and butter communication for the military or forces that are deployed.

Eric Berger: So, yeah, I mean, all of these companies are still existing on government contracts. And the hope that I have, and I think a lot of other people have, is that, by leveraging these government contracts, some kind of commercial space industry will develop. And that's the thing that really attracts me about what SpaceX has done. With the Falcon 1 rocket, they did not build something that the government asked for, they built something they thought the government would want. They're not just taking their Falcon 9 contracts from NASA and Department of Defense and paying out dividends to investors, they're investing that money in making Dragon cheaper, or building Starship, or building reusable rockets.

Eric Berger: And all of those, that investment of government money in new technology, new research in search of a future market, I think does open the potential for lower cost access to space and much more activity in space, up to and including, as you and I have talked about, enabling a new class of planetary missions that can go out there on cheaper rockets, smaller satellite buses, and you can do a lot more planetary exploration, instead of half a billion dollar mission or $50 million mission. That's where, I think, commercial space really is revolutionary and it has changed the game over the last decade with SpaceX leading the way.

Casey Dreier: Yeah. And I think that's where this, it merges these two themes that I've been fascinated by talking with you today, this idea that, what's different about SpaceX is that they carry and hold their own independent vision about what they want, that's separate from what the government wants. So, they have services that align with what the government needs, and they can sell those to the government, and they can have that as a customer, but everything isn't dependent on that. So, it's not like the kind of prime classic aerospace companies, it's like, "We'll build you whatever you want. And if you don't want to build it, fine, we'll build something else for you." But there's no independent goal beyond that.

Casey Dreier: But because Elon Musk wants to go to Mars, or Jeff Bezos wants to have millions of people living and working in space, they'll build these things that can service these needs, but also have these broader visions. And so, when they do make money, when they do have those profits, it's exactly what you say, they pour that back into the vision that exists independently from the customer. And I think that's what's been so interesting that SpaceX has really paved the way on, that you see, and this new generation of these commercial companies, they have visions now about what they want for the future, and they're not just saying that, "We'll do whatever contract gives us money to do and we're fine with that, and nothing more."

Eric Berger: We've talked for decades about space hotels in low earth orbit. And the biggest stumbling block for that always was safe, reliable, low cost transportation. And we're not there yet with Crew Dragon, but within the next 12 months, there's going to be two purely commercial missions flying on Dragon. I mean, you're going to have seven space tourists going to orbit, and two different missions in addition to Michael Lopez-Alegria. And the biggest stumbling block for hotels was getting people up there. And so, I'm not sure Dragon is the answer, but it's at least the beginning of the answer of how we get there. The reusable part of that mission was not something that government asked for, it was something SpaceX did for their own purposes.

Eric Berger: And so, I think, yes, it was SpaceX, and then Rocket Lab, and a whole bunch of other companies coming in behind. When people talk about new space, that is what new space is, in my mind.

Casey Dreier: Eric, I want to thank you for joining us today on the Space Policy Edition. I want to, again, plug your book, Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX. You can find it pretty much anywhere people sell good books. You can also find Eric's writing at Ars Technica, where he's the senior space editor at Ars Technica, and on Twitter. So, Eric, thank you again for joining us today.

Eric Berger: Always a pleasure to talk to you, Casey. Thank you so much.

Mat Kaplan: Chief Advocate for The Planetary Society, Casey dryer, talking with Eric Berger of Ars Technica. What a terrific writer. And now I'm really intrigued. I want to get a copy of that book. And I think we are also going to be giving away a copy of the book, not in this program, because we don't have a contest on the Space Policy Edition, but the next episode of Planetary Radio, the March 10 episode, I think, we're going to have one for the winner of the space trivia contest that Bruce Betts announces on that day. Terrific conversation. I had to be reminded, of course, of my one and only one-on-one conversation with Elon, 2009. Still a troubled time.

Mat Kaplan: By that time, they had launched the Falcon 1, but they were trying to pull together the Falcon 9. And I've told this story before, a week before, I had been at Northrop Grumman, and I had to deal with the entire corporate aerospace culture, and trenched major aerospace culture, layers to go through to get up to the floor where I was interviewing a vice president, then a week later, to show up at SpaceX and be welcomed into what seemed like a Silicon Valley software application development company. Everything, very flat, the organization. Elon had a bigger cubicle than other folks, but still just a cubicle. So, we met in his conference room or one of the conference rooms there. It was a different time at SpaceX than what you find there now, but we had this great conversation.

Mat Kaplan: I closed it, perhaps mistakenly made the mistake of asking him at the end, "Hey, here, you're launching rockets, you're having some success, you're going into space, are you having fun?" And he seemed completely flummoxed, completely floored by that question. To be fair, he was facing a lot of other challenges, as you were just discussing now with Eric. But this idea of having fun, at least at that point, seemed to be just outside of his experience. I hope that has changed. It seems to have, if you follow him on Twitter.

Casey Dreier: Yeah. I guess, Mat, the older, never ask a question you don't know the answer to.

Mat Kaplan: I thought I knew the answer.

Casey Dreier: Yes. Elon Musk, best known, I guess, for his role as part of The Planetary Society board of directors, and I guess he's done a few other things since that in the early 2000s. But yeah, that was a fun conversation. And again, really interesting dive into the history of what has become probably one of the most important companies in space flight today.

Mat Kaplan: And clearly, Eric had almost unprecedented access. I mean, he was telling us some stories about some of the time that he spent with Elon, which I suspect may not be in the book, but really, I'm sure contributed to the level of storytelling to the journalism that he was able to create.

Casey Dreier: Yeah. Lots of interesting good interviews and insight in there. So, lots of good context to understand, I think, a lot of what we're seeing today in what SpaceX is trying to do and is doing.

Mat Kaplan: Casey, I guess, with that, we're ready to get out of here, but give us one more Day of Action reminder.

Casey Dreier: Yeah. Planetary.org/dayofaction, if you want to learn about it. You've got until March 24th to sign up. And hopefully, you do that earlier if you want to come, it's easier for us to book you meetings in that case. But March 31st is the day, and we will virtually meet and advocate for space as is our want here at The Planetary Society. So, I hope you can join us.

Mat Kaplan: Have loads of virtual fund, Casey, I look forward to getting your report on the Day of Action, when we talk next on the first Friday in April.

Casey Dreier: Thanks, Mat, looking forward to it.

Mat Kaplan: That's Casey Dreier, Chief Advocate and Senior Space Policy Advisor for The Planetary Society, who also is with me every month for the Space Policy Edition of Planetary Radio. Of course, you can join me next week. Right now, if you're hearing this right away just as this is published, you can still hear that conversation that Casey mentioned about NASA spinoffs. They've just published Spinoff 21. We talk with Dan Lockney, the Technology Transfer Program Executive at NASA. A lot of fun.

Mat Kaplan: Next week, a conversation about InSight and the mole. A fascinating conversation with Troy Hudson, who was there when we landed InSight on Mars, in a Planetary Radio live celebration, and has been going through all the ups and downs with that instrument since. It is a terrific conversation. I hope you'll join us next week, the March 10th episode of Planetary Radio. Thank you for joining us, everybody. And speaking of joining us, planetary.org/join is where you can become really a part of the action, not just the Day of Action, but year-round, become a part of The Planetary Society. Thanks, everybody. Have a great month, and we'll see you in April.