I'll try to make this as interesting as possible. If you like space, you'll like this talk. So my background in brief, I'll talk a little bit about ZIP two and PayPal, and then mostly about space and what we're doing in space. So I originally came out California to do energy physics at Stanford actually and ended up putting this is in ninety five, and ended up putting that on a hold to start ZIP two.
And ZIP too.
I'll tell you a little bit about the thought process of exactly what happened there in ninety five. It wasn't at all clear that the Internet was going to be a big commercial thing. In fact, most of the venture capitalists that I talked to hadn't even heard of the internet, which sounds bizarre. On Sanduil wrote, so, but I wanted to do something in there. I thought it would be a pretty huge thing, and I thought it was one of those things that only it came along once in
a very long while. So I got a deferment at Stamford, and I thought i'd give it a couple of quarters and if it didn't work out, which I thought it probably wouldn't, then I'd come back at school and Actually, when I talked to my professor and I told him this, he said, well, I don't think you'll be coming back,
and that was the last conversation on having him. But there weren't a lot of waste Again, the only way to get involved the Internet in ninety five that I could think of was to start a company, because they want a lot of companies to go and work for Apart from Netscape, maybe one or two others. So and then I didn't have any money, so I thought, well, we've got to make something that's going to return It's going to return.
Money very very quickly.
So we thought, well that the media industry would need help converting its content from a print media to electronic and they clearly had money, so if we could find a way to help them move their media to the Internet, that would be an obvious way of generating revenue. There was no advertising revenue on the Internet at the time, so and that that was really the basis of ZEP two and I ended up building quite a bit of software for the media industry, primarily the print media industry.
So we had as investors and customers Hearst Corporation, night Ridder, most of the major us Print Publishers. We built that up, and then we had the opportunity to sell to Compack in early ninety nine, and basically.
Took that offer. It was for a little over three hundred.
Million dollars in cash, and that's that's a currency I highly recommend. So we had that and and but I wanted to do something something more after ZEP two. So post the sale, in fact, immediately post the sale, I didn't really take any time off.
I was trying to think of where where.
The opportunities in this in early ninety nine, where the opportunities remained in the Internet, And it seems to me that there hadn't been a lot of innovation in the financial services sector. So and when you think about it, money is low bound with You don't need some sort of big infrastructure improvement to do to do things with it. It's really just an entry in the database. The paper form of money is really only a small percentage of
all the money that that's out there. So it should land itself to innovation on the Internet.
And so we thought of a couple of different things we could do.
One of the things was to combine all of somebody's financial services needs into one website, so you could have banking, brokerage, insurance and all sorts of things in one place.
And that was actually quite a difficult.
Problem to solve, but we could solved most the issues associated with that. And then we had a little feature which took us about a day. That was the ability to email money from one customer to another. So you could type in an email addressed or actually any unique identifier and transfer funds or conceivably stocks or mutual funds
or whatever from one account holder to another. And if you try to transfer money to somebody who didn't have an account on the system, it would then forward an email to them saying, hey, why don't you sign up and open an account. And whenever we demonstrate these two sets of features, we'd say, well, this is a feature that took us a lot of effort to do, and look how you can see your bank statement and your mutual funds.
And insurance and all that. It's all on one page, and look how convenient that is.
And people got home and then we'd say, and by the way, we have this feature where you can enter somebody's email address and transfers funds and they go, wow, so we we're like okay. So we focused the company's business on on email payments and in the early game going the companies called x dot com and then there was a there was another company called Confinity, which had actually also started out from it from a different area.
UH.
That they started out with the PalmPilot cryptography, and then they had as a demo application the ability to beam token payments from one PalmPilot to another by the infrared port UH. But then they had a website which is called PayPal, where you'd reconcile the beamed payments and and what they found was that the website portion was actually far more interesting to people than the than the pomp pilot cryptography was. So they started leading their business in that direction.
UH. And then in basically early.
Two thousand, uh X dot Com acquired Confinity UH and then about a year later we uh we ended up changing the company's name to PayPal. And that's that's kind of how the approximate evolution of the company and the PayPal is really a case of where the whole viral marketing. It's really a perfect case example of viral marketing like hotmail was where one one customer would essentially act as a salesperson for you, for all of you, for bringing in other customers, so they would send money to a
friend and essentially recruit that frend into the network. And so you had this exponential growth. The more customers you have, the faster it grew. So it was like bacteria in a petri dish, you know, it just goes like does this s curve? And in fact I ran paypoaler for about the first two years of its existence, and we launched after year one and by the end of year
two we had a million of customers. So it gives you an example, you know, to give your sense for how fast things things grow in that scenario.
And we didn't have a sales force.
We actually didn't have VP of sales, we didn't have a VP of marketing, and we didn't spend any money on advertising. In about February of last year, for those some of your probably following it, In February of last year, PayPal went public and we were I think we were the only internet company to go public in the first part of last year. It went off reasonably well, although I think we had more sec rewrites than any company I can imagine, Like we.
Said a record on sec rewrites. This was right around the.
Enron time and when there was all sorts of corporate scandal, so they put us through the ringer.
And then shortly thereafter.
In about June July, we struck a deal with eBay to sell a company to eBay.
And for about four and a half billion dollars. But that was when eBay's.
Stock price was about fifty five dollars and they hadn't split, so I guess in today's dollars with about three billion dollars, so that worked out pretty well. It happened coincidentally that in the first part of last year I've been doing just some background research on space, and let me talk
a bit about that. So essentially, I was trying to figure out why we had not made more progress since Apollo in nineteen In the sixties, we went from basically nothing, not being able to put anyone into space, to putting people on the Moon and developing all the technology from
scratch to do that. And yet in the seventies and eighties and the nineties we've kind of gone sideways, and we're currently in the situation where we kind of even put a person into low Earth orbit, and that doesn't really well, with all of the other technology sectors out there, the computer that you could have bought in the early seventies, you know, would have filled this room and had less computing power than your cell phone.
And so just about every sector of technologies improved.
Why has this not improved? So I started looking into that. Initially, I thought, well, perhaps it's a question of funding, and that funding can be garnered by really marshaling public support. So I thought, well, one way to get the public excited about space would be to do maybe a privately funded robotic mission to Mars.
And so we figured out.
A mission that would cost about fifteen to twenty million dollars, which isn't a lot of money, but it's about a tenth of what a low cost and NASA emission would be. And the idea was called Mars Oasis, where we would put a small robotic glander on the surface of Mars with seeds and dehydrated nutrients. They would hydrate upon landing, and you'd have plants growing into Martian radiation and gravity conditions, and you'd also be maintaining essentially lifeesport.
System on the surface of Mars. And this would be.
Interesting to the public because they tend to respond to precedents and superlatives, and this would be the furthest at Life's ever traveled in the first life on Mars, so pretty significant. And then when I started looking at launch vehicles that the lowest cost vehicle in the US is Boeing Stalt for two, which costs about fifty million dollars, and that's a bit that's a bit steep what we were
trying to do. So I made three visits to Moscow to Russia to look at buying a Russian launch and it's actually pretty interesting going to moscout to negotiate for a refurbished ICBM, if you know, on the range of interesting experiences, that's pretty pretty far out there. But we actually did get to a deal, but there were so many complications associated with the deal that it didn't I
wasn't comfortable with the risk associated with it. So when I got back from the third trip, I thought, well, you know, why is it the Russians can build these low cost launch vehicles, because it's not like we drive Russian cars, fly Russian planes, or have Russian kitchen appliances, And you know, when's last night I brought something Russian that was in vodka.
So I think the US is a pretty.
Competitive place and we should be able to build a cost efficient launch vehicle. So I put together a feasibility study which consisted of engineers that have been involved with all the major launch vehicle developments over the last three decades, and we iterated over a number of saturdays in the beginning of last year to figure out, well, what would be what would be the smartest way to approach this problem of not just launch cost but also launch reliable.
And we came up with a default design and that actually sort of fortunate timing. That feasibility study finished up right around the time that we agreed to sell PayPal the eBay, so coincident with that sale, I moved down to la where there's actually the biggest concentration of aerospace industry in the world. It's actually the biggest industry in southern California, much bigger than entertainment or anything else. I was living in pala Alta for about nine years before that, anyway, So just to.
Talk it a little broadly about space and where things.
Are today, Obviously US government man's exploration is not in a great place. We've got the three remaining shuttles agrounded, it looks like first flight might only be a year from now if that, and we've got a vehicle that is incredibly expensive and really quite dangerous. It's so you know, for reasons mentioned there, it's got a side mounted crew compartments, so if there'sn't an explosion, it's basically instant death.
Uh.
The you've got solid rocket boosters, which once you denite them, you can turn them off. And there's something fundamentally dangerous about pre mixing your fuel and oxidizer or I think, uh. And then it's you've got wings and control surfaces when you when you re enter, you've got to maintain a precise angle of attack. Even a momentary variance in that
can break the whole vehicle apart. So and and then of course it's got no escape system, so if anything does go wrong, your toast and and that you've got a cost that is really pretty hard to fathom. The shuttle program, where you add up all the pieces, is about.
Four billion a year.
And so you can divide uh four billion by the number of flights and I'll tell you what the cost is. And if there's say four flights a year, which they haven't been for a while. Then you're talking about a billion dollars of flight. The plans for the muted future are obviously we've got to continue building the space station, so we're going to keep flying the Shuttle, but I think it's probably going to be the minimum number of Shuttle flights that we need to launch.
The long term plans are.
Build something called overital space plane and would safe plane in quotes, because one of the options is a capsule, so it should be called, you know, maybe overtal space thing.
But the basic idea is to have something that's.
Hopefully a little cheaper and a lot safer than the space Shuttle. So in particular, it's going to have an escape system so if something does go wrong, you can abort to safety. The downside is that it's still while it might be a little cheaper, it's still going to
be pretty darn expensive. Estimated cost per flight of overital space plane is someone in the region of three hundred to four hundred million dollars a flight, and of that amount, two hundred just two hundred million dollars alone goes to Boeing for the Delta four heavy expandable booster and it's a fifteen billion dollar development effort and expected to be completed in nine or ten years now.
Typically, typically things have.
Not been under budget and under time, so it's unlikely I think, given historical precedent that it will stay within fifteen billion dollars and the twenty twelve twelve timeline, and a bit about what's going on elsewhere in the world in Russia, that this is really the Sayers is our only access to space station. It's considerably cheaper, considerably safer. The Sawyers has a very good track record. The crew is top mounted, it has an escape system, there are
no wings or control services to go wrong. Overall, it's a pretty good system. And the estimated carts are about sixty million dollars a flight, which is an auto more than Auto Bank two less than the Space Shuttle. The thing that constrains them, obviously, is the weakness of the Russian economy. It's very hard for them to embark on ambitious programs with an economy the size of Belgium. So China is probably the most interesting thing that's going on in space.
This month.
China is expected to be only the third is expected to launch their first person into space. They will make them only the third country ever to put someone in orbit, and they put a lot of money and effort into this program. If anything serves as a spur for human space exploration, it is likely to be the China's ambitions in space, and hopefully a sentence in America that we want to at least keep up with China. And they
have grand ambitions beyond just low with orbit. They're planning on setting up a space station, putting a base on Mars, and eventually sending humans to Mars. So what's happening in the US that I think might ultimately surpass all of that stuff is entrepreneurial space activities, where things are led
by the spurt of free enterprise. And I think there's perhaps an analogy here where just as DARPA served as the initial impetusiple for the Internet and underwrote a lot of the costs of developing the Internet in the beginning, if may be the case that NASA has essentially done the same thing by spending the money to developed some of the fundamental technologies in the beginning, and then once we can bring sort of the commercial pre enterprise sector
into it, then we can see the dramatic acceleration that we did that we saw in the Internet. So there are several serious particle efforts underway. Talk about each one. There's there's Burt Ratann of Scale Composites. Bert Rattan is one of the world's foremost aircraft designers, and he's developed a subor little vehicle that they're actually flying out of Mohave. This is an X Prize class vehicle. There's John Cormack,
who wrote Quake and Doom. It's probably one of the best software engineers in the world, one of the best engineers that I know period, and he's developing a vertical take open landing vehicle. Jeff Bezos, who I understand was here last week, is a huge space advocate, and it's my understanding that he intends to spend something in the order of a billion dollars over the next twenty years on space exploration, and then space then.
My company SpaceX, and I think within the next.
Several years, these entrepreneurial efforts will actually be what derives space exploration. So a little bit about each one. That's a picture of the Rotratan effort. It's called White Knight is the carrier plane, and then spaceship one is the thing that's held in the belly there. And this project is supposedly funded by Paul Allen, so there's quite a lot of capital also, it should make that point, quite a lot of capital that's sort of entering this entrepreneurial
space sector as well. The only drawback I think of this architecture is that it's not really scalable for for something.
That would get to orbit.
This is pretty good for sub orbital, but I think the architecture would need to change for an orbital vehicle. And there's a John Comas effort. He's a little irreverent. This is from his website.
His his vehicle is a vertical takeoff and landing vehicle. He's made.
He's made really incredible progress for somebody who has no background in.
Aerospace engineering and.
Is also kind of doing it all himself with him in like three buddies.
So and I think that will make something that works.
Actually, if you can check out their website Amgeller Aerospace, it's pretty interesting stuff. But in order to get to orbit, this would require a substantial improvement in the mass efficiency, in the engine efficiency, and probably be a two stage vehicle. Jeff Bezos, who I'm sure almost everyone here is aware of.
He is a pretty huge fan of space.
In fact, his high school valedictorian speech was about the necessity of humanity expanding to other planets, so it's pretty important to him.
From what I nderstand, this is our effort.
We're spanning quite a bit more than the three prior entities that I mentioned. In some case is probably an order of magnitude more, because what we're doing is really an order of managetude more difficult.
We're building an orbital launch.
Vehicle to two stage, very high efficiency engines, very high mass efficiency launch vehicle, and it's targeted to the satellite delivery market. So our approach is really to make this a solid sound business. And so I've predicated the strategic plan on a known market, something that we know for a fact exists, which is the need to put small to medium sized satellites into orbit. And so that's what we are going after initially, and then with that as a as kind of a revenue base, we will move
into the human transportation market. It's the long term age of the company. Are definitely in human transportation. I think the smart strategy is to first go for cargo delivery essentially satellite livery and our eventual a great path is to build the successor to Saturn five, build a super heavy lift vehicle that could you know, be used for setting up a Moon base or doing a Mars mission.
That would be the Holy Grail objective.
On the upper right there you can see a test firing of our engine, and on the lower right you can see the our first stage tank. This is an engine test of our main engine, which is called Merlin Yeah, and that that generates about roughly seventy five pounds of thrust.
At sea level. This is our upper stage engine.
It's about it's about seventy five hundred pounds of thrust in vacuum. And this is a accelerated version of our launch sequence. Our first launch will be from the SpaceX Launch Complex at Vanderberg Air Force Base an approximately March of next year, basically early next year, and we will
be flying a Navy satellite, maybe communications satellite. So it's notable because often launch picle companies are not able to get somebody that get a paying customer on their first flight, but we've been able to do that.
This is also the Falcon development.
At SpaceX is the fastest launch picle development in history, including wartime. That's actually Vanderberg Airport Base, which is about two hours away from Santa Barbara. Common themes between zip two and PayPal, well, I guess both of them involved had had software at the as the heart of the technology. Even though zip two was in was servicing the media sector and obviously PayPal was servicing the financial sector, the the heart of it was really software and Internet related stuff.
So certainly that's a huge commonality. They were both in pala Alta, where I lived. I think we, you know, took a similar approach to building both companies, which was to have a small group of very talented people and and keep it small.
You know.
I think PayPal had at its height, probably thirty engineers for a system. That's I would say it is more sophisticated than the Federals of clearing clearing system. I'm pretty sure it is, actually because the Federal was a clearing system sucks, So what else is there it generally, you know, I think the way both zip to and PayPal uprade was was really your It was your canonical Silicon Valley startup. Uh, you know, pretty flat, a hierarchy, you know, everybody had a roughly similar cube, and.
Anyone could talk to anyone.
We had a philosophy of best idea wins, as opposed to you know, the person proposing the idea winning because they are who they are, even though there were times when I thought that should have.
Been the way it goes.
And obviously, you know, everyone was was an equity stakeholder.
I can't give us anything.
If if there were two paths that you know, let's say we had to choose to do one thing or the other, and one wasn't obviously better than the other, then rather than spend a lot of time trying to figure out which one was slightly better, we would just pick one and do it.
And sometimes we'd be wrong, and and we'd picked these off the more path.
But often it's better to pick a path and do it than to just vacillate endlessly on a choice. We didn't worry too much about intellectual property, paperwork, legal stuff.
We really were very focused on.
Building the best product that we possibly could. Both to PayPal were very product focused companies. You know, that's incredibly obsessive about how do we build something that is really gonna be the you know, the best possible customer experience and that that was a far more effective selling tool than having a try salesforce or thinking of you know, marketing gimmicks or.
Twelve step processes or whatever.
I'm not super familiar with Friendster certainly. I mean, the essence of viral marketing is do you have something that one customer is going to where one customer is going to sell another customer without you having to do anything.
And there are there are lots of instances of that. Friends there might be one.
Obviously, Hotmail was one, PayPal was one, eBay was one. And in a situation like that, going back to what I said about product, product matters incredibly because if you're going to recommend something to somebody, you've got to really love.
The product experience.
Otherwise you're not going to recommend it because you don't want to burn your friend. Hurdles in the space industry. Entering the space industry, well, you know, it is a very complicated regulatory structure, as you might imagine when somebody tries to build an orbital launch vehicle, which is not really all that distinguishable from an ICBM. There's a lot of regulation and they probably should be because you know, you don't want to launch something and end up hitting LA.
Where I live.
So probably the regulatory stuff was very difficult. The environmental approvals certainly proven very difficult, much more so than we expected. I mean here in silicon value. You look, you know what I came to appreciate is silicon value. You live in a libertarian paradise. There's almost no regulation. And what can be very frustrating is that regulation is often irrational.
It doesn't make any sense. But you've got somebody there who's simply executing a set of rules independent where those rules make sense, and you can try to convince them that rules don't make sense, and they won't listen to you. So probably regulation is the most annoying.
Thing I would say.
Overall, though, I'm very pleased because I think we've had a very smooth development process and on the whole I can't complain at all. Yeah, why is it so expensive to send something into space? Well, let me tell you what makes a rocket hard. The the energy and the velocity required to get into orbit is so substantial that compared to say a car or even a plane, you have almost no margin to play with. Typically, a launch vehicle will get about two percent of its liftoff mass
to orbit. So, and that's the case for for a Falcon. And so if you can only get two percent of what your rocket ways to begin with to to orbit, you can if you're wrong by two percent, you're not gonna get anything to orbit. You know, come crashing down on the Pacific noway. So that means all of your calculations have to be right. If you miss, if you mis calculate something, you get an answer wrong, it blows up.
And it's very.
Expensive trying to get all your answers right and then double checking that they're right and testing them all and doing as much as you can on the ground. I think that's a lot of what makes rockets expensive. The low launch rate typically is also what makes rockets Brook's expensive. If you had, you know, thousands of flights a year, then it would be a lot cheaper. Although it's a bit of a chicken and egg because it needs to be cheaper in.
Order to have thousands of flights a year. But at the end of the.
Day, when you in the final analysis, I would say that rockets.
Really should be a lot cheaper than they are today.
And I think the way they're both the way they're operated is just very inefficiently.
And I think.
With with SpaceX and Falcon, we're going to we're going to show that that's that's the case. Our vehicle will sell for about six million dollars a flight.
That our nearest.
Competitor is the Pegasus from Orbital Sciences, which is about twenty five million dollars a flight, and that has less capability than our rocket. So Falcon well represent a pretty substantial breakthrough on the cost of access to spaces. Yeah, the customer base with SpaceX is just it's dramatically different, obviously from PayPal. PayPal is a consumer product, whereas SpaceX we're selling rockets, and the number of people who want
to buy rockets is quite small. If anyone here has six billion dollars and once a rocket, I don't know if they glance to sell it to a but so it's much more of an individual selling process. There's a great deal more thought that goes into any purchase of a launch, much more so than signing up a PayPal account, which doesn't really cost you much. So, Yeah, and there's not a lot of viral marketing that's going to happen with the rocket.
I suspect.
I'm hoping that, you know, I'm not counting on it.
It's a.
I think a successful entrepreneurs probably come in all size of shapes and flavors. I'm not sure there's any one one particular thing.
For me.
You know, some of the things I've described already I think are very important. I think really an obsessive nature with respect to the quality of the product, it is very important. So, you know, being obsessive compulsive is a good thing in this context. Really really liking what you do whatever area that you get into, given that you know, even if you're if you're the best, the best, there's always a chance of failure. So I think it's important
that you really like whatever you're doing. If you don't like it, life.
Is too short, you know, i'd say if.
And also if you if you like what you're doing, you think about it even when you're not working. I mean, it'll just it's something that your mind is drawn to, and if you don't like it, you just really can't make it work.
I think SpaceX is about thirty people and what we do internally at SpaceX is we do all of.
The design analysis, integration of hardware testing.
And then launch operations.
But a lot of the heavy manpower stuff like welding together our primary structure, the heavy machining and so forth, that we outsource, So we'd be a much larger company for do all of that internally.
And sorry, you had another party question.
Oh yeah, Actually we don't have any lawyers. The regulatory stuff that we deal with is very technical. It's it's it's really a lot like trying to get an aeroplane certified with the FAA.
We're just getting a rocket certified.
So so our documentation is it's very I wish we could offload it to some latch. They wouldn't know what the heck to do. So you know, how did the Wharton degree help? I think it A business degree teaches you a lot of the terminology. It introduces you to concepts that you would otherwise.
You know, this terminology is somebody to be said for that.
It introduces you to concepts you you would otherwise have to learn them perrectly.
I mean, I think, I think you can.
You can learn whatever you need to do to start a successful business, either in.
School or out of school.
School, and you know, theory should help accelerate that process.
And I think it. You know, oftentimes it does.
It's it can be an efficient learning process, perhaps more efficient than per learning lessons, but really I think you them. There are examples of success entrepreneurs who never graduated high school, and there are those that have PhDs.
So I think the important principle is to.
Be dedicated to learning what you need to know, whether that is.
In school or in Perkeley.
Well, I should point out that a Falcon outpost vehicle, it doesn't really have the same capability as either the Chinese, the Russian or the Space Shuttle vehicles that I mentioned.
Falcon would be in the in the.
Light class of launch vehicles, whereas the Space Shuttle would be a heavy class launch vehicle. So it's not it's not quite an Apple Staffle's comparison. However, the right comparison would be Falcon compared to the Pegasus from Overtal Sciences. Falcon is six million, the Pegasus is twenty five million.
And the way we've gotten.
Our prices low, our cost low, is we've really focused on every element of the launch vehicle.
There's really no one.
Silver bullet that has been responsible for a substantial portion of the cost savings. It's been really hundreds of small innovations and improvements.
And so we've done improvements in the.
Propulsion system, the structure, the avionics, and the launch operations, as well as maintained a very low overhead organization. And when you add up all the things we've done.
Those areas that allows us to produce the.
Launch vehicle at six million dollars.
As far as PayPal, there were a lot.
Of back office relationships that we needed to establish and to attach to various heterogeneous data sources. We needed to attach to the credit card system for prices and credit cards. We needed to attach to the Federal Reserve system for doing electronic funds transfers. We needed to attach to various fraud databases to run fraud checks. That there was a lot that we had to uh, we had to interface with and and that that that took. That took a while, but.
It all came together, I think roughly simultaneously.
I mean, developing the software and having it ready for for.
The general public.
Reasonably coincide with us being able to conclude those deals and interface with the outside vendors and all that took about a year. I think one thing that's important is to try not to serialize dependencies, So if you can put as many elements in parallel as possible. A lot of things have a gestation period and there's really nothing you can do to accelerate. I mean, there's it's very
hard to accelerate that justtion gestation period. So if you can sort of have all those things just dating in parallel, uh, then then that is one way to substantially accelerate your timeline. I think people tend to serialize things too much.
We did do a few.
Patents on pay on the PayPal system, although nothing that ever actually mattered. So patents are mostly useful in a defensive situation rather than offensive. It can be very difficult actually OFFENSI would prosecute a patent, so I think I think in certain industries like pharmaceuticals and so forth, patents can be incredibly important.
In software, particularly when you've.
Got a very rapid life cycle, where you know you made sure you've got a patent, but now it's redundant, So who cares It's less relevant.
In when you've got a rapid life cycle. Well, I don't you know.
I've looked at the various There are a couple of things that I think are pretty bogus. One is space mining, another is space solar power. I mean, if you if you calculate how much it costs to bring either the photons from uh space solar power, you know, back to Earth or the raw material back to Earth, it's the economics don't make sense. If you just can't close the economic case, not even by it's probably off by three
orders magn too. So I think the probably the biggest thing that can happen is if if we if we decide to establish a base on the Moon or based on Mars, and particularly if we if we attempt to make it self sustaining, uh self sustaining based self sustaining civilization on on.
The moon of Mars.
That that that is enormous opportunity on probably the trillion dollar level, because then you got basically interplanetary commoce going on. I think that that's pretty huge. But but it's it's it's you know, it's not going to be space all power.
It's not going to be space mind. I think. So let's see the government, you know, who knows.
Maybe we've been spied upon it, I don't know, but certainly we are. There are some restrictions which are really annoying, such as the fact we're only allowed to employ people who have at least a green card or a citizen of the US. We're not allowed to employ anyone who does not have permanent residence in the US. Basically, if they can't throw you in jail, they won't let you work work on rocket stuff.
And we have if we talk to.
Any foreign nationals, we need a technology transfer agreement or something like that from the State Department. So our second launch is actually a non US governmental launch, and it's taken us six months to get the State upon approval just to engage in a contract discussion with them, so that that is problematic. We had several offers actually from a number of different entities for PayPal, and in fact, the closer we got to IPO, the more more offers
we got. But we always felt that those undervalued the company, and subsequently, when we were in public, I think the public markets kind of indicated the value of the company. So I think that's one of the good things about the public markets is that they're an objective value of companies.
When you're a private company, it's very hard to.
Say how much you're worth because you have to basically think of some metric. You know, are you going to go for a multiple of future earnings? Are you going to go off some something of revenue? What are your comparable is going to be? There are all sorts of questions. It's really up for debate what sort of value your company is when you're public, it's it's you know, it's whatever the market says.
You're you're worth, that's what you're worth. So so yeah, so I.
Think eBay made a number of office prior to going public that were substantially blow our the value once went post public and that kind of cleared up the disagreement and then we sold them and what else it was, Actually
you had a second part of the question. Yeah, eBay had a it was initially bill Point, and there was eBay Payments and and it was really a pretty tough, long running battle of PayPal versus versus eBay's payment system, and it was certainly a very challenging I mean, I think it was you know, there were times where it felt like we were trying to win the land war in Asia and you know, they kind of set the ground rules or trying to beat Microsoft in their own operating system it's.
Really really pretty hard.
That took a lot of our effort to to actually beat eBay on their own system, and one of the long term risks, certainly for the company, was that eBay would one day prevail.
And one way to retire that risk, obviously, was to sell.
The eBay writing software. During the summer of ninety five, trying to make useful things happen on the Internet, and I wrote something that allowed you to get maps and directions on the Internet, and then something that allowed you to do online manipulation of content, kind of a really advanced blogging system. And then we started talking two small newspapers and media companies and so forth, and we started getting some interest, I mean half time to be like,
what's the internet un in Silicon Valley? But then occasionally somebody would buy it and they would get a little bit of money from them. And then there was basically only about six of us. There were myself, my brother who I convinced to come down from Canada, and a friend of my mom's so and then and then three salespeople we hired on contingency by.
Putting an ad in the newspaper.
But things were pretty tough in the in the early going, I didn't have any money. In fact, I had negative money. I had huge student debts so well, in fact, I couldn't afford a place to stay and an office, so I rented an office instead because that was that was actually I got a cheaper office than I could get a get a place to stay. And then we I just sort of slept on the futon and showered at the y m c A on Pagemall and al Camino.
That's in the best.
Shape I've ever been, you know, to shower, workout and you get to go. And then there wasn't There was an I s P on the floor below us, just to like a little tiny I s P. And we drilled a hole through the floor and connected a null modem cable.
That gave us our Internet.
Collectivity for like one hundred bucks a month. So, I mean, we had just an absurdly tiny bone rate, and we also had, you know, a really tiny revenue stream. But we actually had more revenue than we had expenses. So so when we went and talked to VCS, we can actually well, like I said, it's there's no silver bullet that I can point to as to why the our vehicle is a lot cheaper.
We've really focused on reducing the cost across the board.
I mean, one thing, our overhead in a thirty person company is, you know, an automatitude less than it is, and Lockheed're bowing just just for starters. So even if we did everything the same and both the same launch vehicle, we'd be considerably cheaper. And then every decision we've made has been with consideration to simplicity. And the reason simplicity is because that both improves the reliant ability as well.
As it reduces your cost.
If you've got fewer components, that's fewer components to go wrong and fewer components to buy. I think there's there's I think a fairly significant innovation in our airframe, which is a semi pressure stabilized monocoque with variable skin thickness and a common bulkhead. If you know what that means, I need a diagram to explain it all. But the net result is that it's very cheap, and it's very mass efficient, and I think easy to test and quite reliable.
Our avionic system.
To give you a non example our avionic system, we use an ethernet on the vehicle to communicate. They may that may not sound like a great innovation, but it is an Orange vehicles. Well, the other Orange vehicles communicate in the vehicle by these cereal cables that run the entire.
Length of the vehicle.
And so you've got these these giant copper bundles as thick as your arm running up and down the vehicle makes it heavy, it makes it expensive. And there's just so there's there's things like that which when you add them all up, it makes a huge difference.
No, that's that's a good question. That's a good question.
No, I would not. I think space X is not this is advanced entrepreneur and it may also you know, I can't tell you how many people have said that, you know, the fastest way to turn uh, the fast way to make a small portune in the aerospace industries to start with a large one.
So you know, hopefully that doesn't doesn't work out.
But I would definitely I think space is a tough one for first time entrepreneurs.
You're better off starting with something.
That that requires low capital, and space is a high capital effort.
Sorry, last question,