Ben Gilbert: belief

Transcript context

…Yup because again, from the Lockheeds, the Boeings perspectives, the higher the total price, the better, the more money they made because they were just getting a straight percentage. Yeah, so interesting. It's funny, I didn't articulate it quite the same way you had, but I tried to write out the bullet points of the business model, which is one, get paid exorbitant fees but not as exorbitant as everyone else for every launch. NASA's willing to pay this because the Old World competitors had crazy high-cost structures and importantly no reusability, hasn’t been apart yet but will be. I think they're gross margin-positive on every launch now on the first try even without re-use, I'm not totally sure but that's what some estimates suggest. Two is take those profits to fund the development of more usability and lower-cost systems. Three, make even more margin from doing that and getting paid for those contract launches of satellites et cetera. Four, enjoy these fat margins while everyone else is trying to catch up to reusability and trying to vertically-integrate or squeeze all their suppliers. As a data point here, SpaceX charges less than their competitors but obviously well above their cost basis. If they're actually able to harvest all this margin, they would have been giving away by vertically-integrating. The data point is that the Falcon 9 missions even took the US government with the additional $30 million in cost to go for under $100 million, and ULA's contract that was, I can't remember which one but basically has all of the launches at $400 million. There's just so much margin in there. Then component five, use the funds from these fat margins to fund their own, owned and operated businesses like Starlink or like the Mars stuff that I think we'll talk about here, basically, SpaceX themselves will be able to charge for those owned assets on an indefinite basis. They're able to bootstrap the production of rockets using NASA and then bootstrap their owned and operated business with all this margin that everyone lets them play with. It’s like this two-step bootstrap. Yeah. It’s pretty awesome. A couple of quick ones I want to hit on. One, we've alluded Blue Origin a little bit on this and that's probably another episode for another day, but with different strategies, different approaches, but it strikes me as interesting back to the whole fun analogy I use with ‘mo’ money, mo’ problems.’ Bezos is putting $1 billion a year into Blue Origin.…

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