Elon Musk Lecture notes, Stanford 10/08/03

I was emailed a link to this lecture by Elon Musk, I took some notes
as the link was slow and stuttering. The Q&A session at the end had
some really quiet students asking questions. Not sure if there is any
new news in here, but they apparently have a second customer lined up
for the Falcon.

Enjoy,
Josh

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Elon Musk Lecture at Stanford U, Oct 8, 2003
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MSandE472 Entrepreneurial Thought Leaders' Seminar

http://scpd.stanford.edu/scpd/studen...de472video.xml

quick notes from video by Josh Gigantino

Other links on page include a lecture by Jeff Bezos
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lecturer spends first few minutes chewing out students over
attendance, introduces Elon.

Quick overview of his old companies: Zip2, Paypal

Zip2 - print-media-to-web software, clients included KnightRidder,
etc, sold for $300,000,000 in cash to Compaq

PayPal - started as idea for one web site for all a person's financial
needs. Email-money-to-someone feature was a quicky add-on feature,
took one day of initial development, "classic viral marketting", 1
million customers at start of 2nd year of operations, went public in
2002, sold in june to Ebay for 4.5 billion in stocks, now worth
3billion.

Was doing background space research in '01-02, why did we stumble
after Apollo? Computing analogy, mainframes filling rooms in 1970s,
etc.

The idea he settled into would generate public interest, advance both
science and engineering and be privately funded. It was a
$10-20million Mars lander. The lander would carry seeds and nutrients,
a miniature greenhouse, it would attempt to grow plants, the furthest
life would have travelled.

Went to Moscow looking for rockets, "We don't buy Russian cars,
kitchen appliances or computers. Why can the Russians build such
reliable, low cost launch vehicles?"

friends with group of aero-engineers from Mercury onward, put together
a feasibility study. This happened at the same time he was selling
PayPal, at this point he settled on "doing space" as his next business
enterprise.

Space now - US govt. spaceflight in bad shape, quick recap of Shuttle
status, losses, expenses, dangerous.

Slide - problems of Shuttle - kind of standard complaints.

Slide - OSP/Orbital Space Plane - "Pretty Darn Expensive" -
$300-400million/flight, Delta-IV Heavy is $200mil alone.

Between NASA and the industrial partners, things have traditionally
not been under budget and under time.

Soyuz has a good (safety) record, and only costs about $60mil/flight.

Russian economy is size of Belgian economy.

China's program is only current effort that could spur any new
government space programs, be it NASA, ESA, etc

Slide - dawn of a new era of space exploration
like DARPA, NASA could support entrepreneurs.
Burt Rutan, Scaled, Jeff Bezos, SpaceX could all benefit from NASA as
enabling customer.

Slide - Armadillo Aerospace

Slide - Bezos' Blue Origin

Slide - SpaceX -

Falcon is a 2-stage orbital rocket, initial target is satelite launch
business
small commsats- revenue base
long-term aim is human spaceflight
super-heavy lift, Apollo-class rocket for Moon, Mars, SpaceX "Holy
Grail"

Video - Merlin main engine test
Video - Upper stage engine test

First flight will be from SpaceX's pad at Vandenburg AFB, aiming for
March 2004, a Navy satelite


QA -
comparison of Zip2, PayPal

PP had 30 fulltime engineers, both were made of small teams,
software-based products

flat hierarchy, best idea wins, everyone in each company was an equity
stakeholder

on development, pick a path, do it instead of vacilating on design
decisions

both companies were very product focused.

q- biggest stumbling blocks for space entrepreneurs?

a - stifling regulation, jumping through regulator's hoops. Rockets
are still munitions, lack of regulations on software encouraged
development, Silicon Valley as "Libertarian Paradise"

Falcon has been the fastest development time ever for an orbital
vehicle.

(basic rocket/space questions)

Rocket development, "What makes space expensive?" - Low launch rates,
2/% of rocket's mass to orbit
low cost launch suffers from chicken-and-egg problem, need cheaper
flights to get a bigger volume of flights, need volume for cheaper
flights. (he doesn't say this, but Internet entrepreneurs like him
have the resources to solve the chicken-egg problem)

Compares Falcon to Pegasus, costs of $6 vs $25 million/flight

Q - XPrize - will it succeed in brining CATS, How did SpaceX get Navy
contract?

A- likes the XPrize, compares Carmac, etc, a very good thing. Mentions
that most of the other companies in his slides (Carmac, Rutan) are
pursuing the XPrize.

Navy contract took a lot of work, Falcon is an opportunity for navy
to do things they couldn't with Pegasus. A $5million satelite on a
$6mil booster vs $25mil booster makes sense.

Q- key to success as entrepreneur

A - entrepreneurship comes in all sizes, shapes and flavors.
obsessive nature with regard to the product
really like what you are doing
do something your mind is drawn to

Q- size of SpaceX, # of lawyers in company?

A - SpaceX is about 30 people, they do operations, design and
integration
heavy machining is outsourced, no lawyers.

Q - Do you have a business tree? (I think, some of the questionners
were REAL QUIET at the mic)

Q - Compare SpaceX to China's rockets, costs. PayPal question

A - Falcon is light launcher compared to Shuttle, Long March. Total
design of Falcon allows for far cheaper launch operations.

Q - Human exploration as longterm goal, why this end goal vs mining or
other commercial operations?

A - Mining and SPS are bogus markets, economics don't make sense for
returning minerals to Earth.

Q - Fuels for Falcon?

A - 1st stage has 310 second Isp, 2nd stage is 325 vacuum Isp. LOx,
kero (RP1?), gas generator combined cycle engine. 1st stage Merlin
engine may have best Isp of any engine in it's class.

2nd Falcon flight will be a foriegn government payload, had even more
paperwork than developing their rocket.

Falcon is very mass-efficient, cheap, uses Ethernet for communication
and control in the rocket. Use of Ethernet is a first, other rockets
use trunks of copper serial lines that add serious wieght to the
vehicle.

Space is a high-capital effort.