SpaceX won early customers by fixing a weak launch market

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 1:37

   Can you take us back to the day where you initially get this call and you're like, hey, there's this thing. Like, what is the arc of the decision look like? And how did you get convinced to underwrite this business? Like, just walk us through that. Okay. Well, Elon underwrote it, right? I just worked there. Yeah. But the story is a little crazy, actually. So I was going out to lunch. One of my best friends, who I was working with, was going to go work for Elon.

2. 2:14

   And I took him out to lunch, kind of a going-away lunch. And he's like, oh, when I dropped him back off, he said, oh, come on in and meet Elon. I'm like, ah, he's busy. You know, we don't need to do that. But we did it anyhow, and I met him. And I said, hey, I think you really need, I think you need a full-time person to run your business development shop. You know, you've got kind of a part-timer, he's a contractor, you know, it's not a great look.

3. 2:38

   And he looked at me very thoughtfully and, you know, kind of scratched his head. And then we said goodbye, chatted a little bit, said goodbye. And then I got back to my office and I got a call from Elon's assistant, Mary Beth. And she said, Elon wants you to apply for the new vice president of business development position. Can you come interview? I'm like, now? No, I have a job. I can't go now. Tomorrow?

4. 3:03

   Okay, sure, tomorrow. And then it took me like four weeks to decide, yes, I was being a total idiot. But at the time, what was the scale of that business? What did you think it needed that it didn't have? Because it was still very much an R&D. It was very R&D, but Elon had an investment and he wanted some return. He wanted cash, right? He wanted customers. And I was doing that work anyhow in the space industry.

5. 3:27

   Turned out I was pretty good at it. um uh but uh yeah so he so what did it look like i was the seventh employee to sign my contract i took i gave two weeks notice and took a week off to remodel a bathroom because i knew i would never have time to do it once i started working for elon came three weeks later employee number 11 and we just got to it and we sold a rocket about 12 months later and that's and that's about a rocket there wasn't a rock there wasn't a rocket yeah so what does that sales cycle look like, how do you convince somebody that they can actually take that risk and maybe give you the deposit you need to start the cycle to build?

6. 4:07

   So the timing was great. By the way, SpaceX should never have existed, right? If the other launch providers were great, then a new entrant can't make headway, right? Because they were so entrenched. So we should have never made it. But it turns out, you know, customer service wasn't great. Rockets were incredibly expensive. And so there was that piece, right? And then the other piece was 9-11. At that time, the military was desperately looking for someone who could come in and do rapid launch. They kind of knew where the bad guys were for about four hours after the events of 9-11, and they really wanted to be able to get some capability in theater. It took us a while to do it, but we did what we said we were going to do. So it really was sort of like out of tragedy this opportunity gets born to some extent yeah that's and it wasn't specific to

7. 5:02

   SpaceX it was just the state of the industry at the time and then obviously you know very very famous first chapter where you guys get almost to the brink and you need this last launch to work and um your role started to evolve pretty meaningfully by that point so can you walk us through like what was the internal dynamics of that business that kind of like put you into that position? So it was very startup-y. I was the sales lady. But then when you have sales, you need, you know, to manage your customers and you need a finance function. And even though we were little, and I think one of the defense contractors at the time said, they're a fly on my, you know, on a giant, on my big toe or something. I was like, well, I don't think you should have flies on your toes. But you still need a government affairs function. You need to

8. 5:51

   defend yourself. We never go on the offensive in Washington. We're always in defense mode. So I just kept taking on more and more. And then when we were getting our largest contract at the time, it was the cargo resupply contract. We call it CRS. And this was 2008. Elon was super busy with Tesla, quite busy at SpaceX as well. There was a lot going on and he needed a partner at the time and i think he was trying to pick when on this side or maybe one of the other guys who had kind of taken on gobbled up more technical scope and he asked me to do it on our way to our final negotiations for this 1.6 billion dollar contract with nasa on the runway it's like hey do you want to be president i was like do i well no not not initially for like that nanosecond like well i I love my job. I love the guys, my teammates. And then it's like, okay, I'm being an idiot

9. 6:48

   again. Yes, I want the job. So now fast forward, maybe just to come to where we are today.