SpaceX Is Now One of the World’s Most Valuable Privately Held Companies | Hacker News Reader

SpaceX Is Now One of the World’s Most Valuable Privately Held Companies

nytimes.com

423 pointsiloveluce294 comments

> Mr. Musk faces competition from another billionaire. Blue Origin, a rocket company founded by Jeff Bezos, the chief executive of Amazon, aims to send tourists and supplies into space.

Is that line even close to true? Last I heard Blue Origin was years away from revenue and far behind SpaceX in terms of capability and manufacturing.

I think it would be far more correct to say "Mr. Musk faces potential competition from another billionaire."

Though ULA is buying engines from BO.

The BE-4 is an impressive engine [1], at 550,000 lbs of thrust it's about 1/3 of a Saturn F1[2], and it's stage combustion lox/methane. Blue Origin is building some impressive hardware.

What's interesting to me is the dichotomy between Musk and Bezos vision for humanity in the Solar System. Musk is Mars focused almost exclusively. Bezos has talked about space habitats (O'neil cylinders for example [3]) as how he thinks things will play out. Certainly room for both.

Bezos isn't playing, he's going all in, selling $1 billion of shares a year to fund Blue Origin [4]. One way to look at this situation is Musk and Bezos competing to be king of transportation infrastructure for the Solar System. High stakes indeed.

[1] https://en.wikipedia.org/wiki/BE-4

[2] https://en.wikipedia.org/wiki/Rocketdyne_F-1

[3] https://en.wikipedia.org/wiki/O%27Neill_cylinder

[4] http://www.cnbc.com/2017/04/06/bezos-is-selling-amazon-stock...

>> Bezos isn't playing, he's going all in, selling $1 billion of shares a year to fund Blue Origin [4]. One way to look at this situation is Musk and Bezos competing to be king of transportation infrastructure for the Solar System. High stakes indeed.

I used to wonder what could happen if the guys with billions decided to do something interesting with all their money. This is some of the most interesting stuff I've ever seen. Some guys buy sports teams, some buy hookers, some just fucking blow me away with their ambition.

Yep. At one time a mark of being super-rich was owning a megayacht and a palatial estate.

Nowadays you haven't really arrived until you can afford to fund your own space program. :-)

As stated in the show Billions, sports franchises are how people are knighted in today's society.

Space travel may be another level above that.

Really form my UK perspective a businessman buying a football club is a sign of either insanity or criminality some times both.

Oh, that's very much how it is in America. Our knights are also mostly white-collar criminals and/or insane.

Well, you need some way to separate yourself from those that are merely rich.

Repeat:

Well, at a net worth of approximately 90 billion and assuming a 5% return rate, he can spend 4.5 billion dollars every year forever on the blue origin and never lose a pennY.

This is play money for him when you are that rich.

All in?

Charles Foster Kane: You're right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at the rate of a million dollars a year, I'll have to close this place in... 60 years.

Musk did go all in though, at one point he was dead broke from pouring all his money into spacex.

It's one of my favorite stories about SpaceX

Early on in their life as a company, they had 3 back-to-back failures. They were a laughing stock of the industry for the most part. The idea that this little (by comparison to NASA or some of the established private players) company could take on rockets and make them reusable was a joke.

But Elon (and IIRC Peter Thiel) poured more money into it in spite of this, and they were finally able to get moving and are now (at least in my mind) at the forefront of the industry in many areas.

The BE-4 is an impressive idea for an engine. It's never had a successful test fire, and is behind the Raptor in development.

It's not behind the Raptor in development. The Raptor has test fired but only a sub-scale. BE-4 design is finished and should not change anymore. We don't know if it has been test fired or not, they are in the middle of the testing campaign and Blue Origin does not share that information.

The first BE-4 will be done long before Raptor, and it will fly before.

The BE-4 blew up on the test stand a couple months ago when they tried to test it. It's not complete because they are likely redesigning to fix that. We know it hasn't had a successful test or they and especially ULA would be trumpeting it.

The subscale Raptor was successfully tested nearly a year ago and is twice the power of anything BO has ever made.

Sorry that is wrong, the BE-4 did not blow up. A test of a component failed, problems like that are normal and they are still within the planed time line.

The idea that if the had success they would 'trumpet it' is simply wrong, this has not been true in the past for Blue Origin and nothing has changed.

Raptor might be further along now but we don't have the information.

He's not Mars-focused anymore. Recently admitted that was a pipe dream: https://www.wired.com/story/spacexs-mars-plans-hit-a-pothole... (Conveniently enough, right after NASA came out and admitted they didn't have funding for a real Mars mission)

Of course Musk is still Mars focused. That is the goal of what he and the people working at SpaceX are doing. If you watch the source video[1] for the Wired piece (journalists aren't selected for truth telling), you can see Musk controlling the impulse to call NASA a do-nothing, scaredy pants organization. He explicitly states that people going to Mars will not be "safety first" people (implying NASA people are). Musk would love to use rockets to land the Dragons back on Earth but getting them to pass NASA safety tests is too difficult to be worth it with his current understanding of propulsive landing. He and his team have recently determined that there is not as much overlap in the design of a rocket landing Dragon that would land on Earth and the ones they would use for Mars as they originally thought. As Earth Dragon development does not support much of the Mars efforts, they will just go with parachuted Dragon for NASA approved Earth landing and design Red Dragon with more customization for Mars only landing (and liftoff?).

[1]https://www.youtube.com/watch?v=BqvBhhTtUm4

ULA isn't buying anything from BO. They have an option to if BO makes far more progress.

Everybody knows that BO is basically in. They string along the other engine to reassure the military.

ULA has one foot outside the launch business already. The BE-4 won't be ready for years. It's not inkkely ULA exits the launch business completely before it's ready, it's at a huge cost disadvantage even with the BE-4.

I doubt ULA will exit the launch business in the foreseeable future. Congress will not allow the US to be reliant on a single launcher, and they'll provide enough money to keep Atlas available.

ULA isn't out at least until BO has a few good launches under its belt, which means BE-4 or something similar is reliable.

The Vulcan might not fly in 2019 but it will fly by 2021. ULA still has money coming in and it will get more government contracts for quite a while, at least until Blue Origin New Glenn flies, so that will require BE-4 anyways.

I'm a big fan of both companies, but having watched them grow I think the answer to whether or not it is true that Blue Origin is a competitor is, "No, yes, maybe?"

If SpaceX can get Falcon Heavy to work then no, so much of the oxygen will be sucked out of the launch services market that Blue Origin will be hard pressed to compete. At that point. I see them much more likely as a ULA acquisition to insure engine supply rather than a continual drain on Jeff Bezo's net worth.

If on the other hand Falcon Heavy continues to slip, or if their early attempts at launching them are unsuccessful, or they are unable to recover the three boosters (which I think is 'baked in' to the market expectations) then Blue seems to be in a position to take some of the heavy launch business, except that there isn't nearly as much of that business as there is the small/medium launch business.

Finally the dark horse here is the 'previously unexploited used for heavy things in space' which is to say some business or process that is tremendously more competitive in space than it is on Earth which grows the heavy launch business faster than SpaceX can scale up.

Musk recently said, while discussing Falcon Heavy difficulties, that he'll be happy if Falcon Heavy clears the tower before exploding[1]. I personally believe orbital tourism will be the next big thing (dark horse as you say).

[1] https://www.youtube.com/watch?v=2tESpswQVXI

I believe I read about a month or so ago that Bezos plans on selling ~$1 billion worth of stock annually to fund BO, I could be misremembering the exact figures though. Even at that burn rate, assuming Amazon continues to do well, I don't think it will be too much of a drain on his wealth. Plus, he seems like a pretty long term thinker so I don't think he'll throw in the towel even in FH captures a big chunk of heavy lift. BO is currently investing around $200 million in a new production facility in Huntsville. I'd say it's more likely that Boeing/LockMart try to rid themselves of ULA than ULA acquiring BO.

This article provides the $1B/year figure, right after the part I quoted :-).

Oops, now I feel dumb for not reading the article. Thanks for the heads up!

Well, at a net worth of approximately 90 billion and assuming a 5% return rate, he can sped 4.5 billion dollars every year forever on the blue origin and never lose a penny.

I don't think he's too worried

Can't assume return rates for CEOs like you do with people with diversified investments. Most of his wealth is in Amazon stock, about $80B of it.

Bezos started BO around the same time as SpaceX, and has spent just as much money if not more, and accomplished next to nothing. He will need to pour many additional billions in to even make a race of it, the way the BO turtle moves.

Maybe he's hired the rocket guys who can't take SpaceX's speed and like to actually spend evenings at home with their family :)? Only half kidding here.

Because Amazon treats their employees so well.

Bezos, famous for creating a family friendly environment at Amazon? :)

Just for the sake of argument it's feasible a person can be mentally flexible enough to apply different management standards to retail and rocket science.

Or maybe Bezos didn’t understand orbital mechanics and picked the wrong approach: They went into space and landed again, but they did not go into orbit yet (as far as I know) and landed again. De-orbiting and landing is different from just going straight up and returning to the launch site that is below your feet.

What an absurd claim. They were not to stupid to understand how to get to orbit. The made the choice to focus on a sub-orbital tourist effort first.

Absurd in the orbital mechanics portion but not the rest. It seems that spacex has chosen the waffle cone, ice cream scoop and add sprinkles later approach whereas BO has focused solely on the sprinkles.

They do it more step by step. But with the BE-4 and BE-3/BE-3U they have developed two fantastic engines that they can both potentially sell for use in orbital rockets.

They are also already far into the development and production of a orbital rocket themselves.

They focus on the cone, and slowly build up. By 2021 they will fly the third biggest rocket in the world with some unique capability.

The BE-3 is half the power of the Merlin and has only been fired in tests.

The BE-4 is a collection of parts thats never been fired together successfully.

2021 is hugely optimistic given BOs track record.

This interview with Tom Mueller (CTO of SpaceX) suggests that competitors have had to go back to the drawing board after seeing SpaceX accomplish wrt their low cost systems.

https://www.reddit.com/r/spacex/comments/6b043z/tom_mueller_...

That rocket is going to be the real game-changer. I would say that the Falcon 9 is evolutionary, you know, a reusable rocket that greatly reduces the cost of access to space. Maybe we can achieve ten reduction in cost over, you know, like what ULA or the Russians or the Chinese are doing, with the Falcon. But we want like a hundred or more reduction in costs; and that’s what the Mars rocket’s gonna do. That’s going to be the revolutionary rocket.

So once we’re flying that, all other rockets will probably be obsolete. <laughs> Likely Blue Origin is working on a fully-reusable rocket <inaudible> But we’ve really changed this industry that the other guys are really scrambling. It’s pretty funny to watch this, because when we first started the company 15 years ago, my fifteen-year anniversary was Monday, May 1st. <clapping> Thank you.

We started the company on May 1st, 2002. Well, I started there; I consider—. Elon incorporated the company I think in February, but he didn’t have any employees yet. But I consider when he had his first employees when he had his company. But anyway, over the fifteen years, we’ve gotten, you know, this far; and when I was first hiring people, you know, that’s when I heard <inaudible> money to develop this rocket. And then we built the Falcon 1, which had a single Merlin engine on it, could throw about 1k lbs into LEO; and they said, you guys, you guys were able to build a small rocket. But you’ll never be able to build an EELV-class, EELV-mission class rocket. And so we built the Falcon 9 and started flying it. And they said you’d never be able to reuse it; you’ll never be able to get to the space station. And at some point, you stop listening to it. And I think it’s great, you know, if people think what you’re doing is impossible then you must be doing the right thing. You can still find the YouTube video online where people are critiquing our recovery thing as being photoshopped or CGI’d. That’s pretty high praise, when people don’t actually believe you’re doing. <laughter>

And you know, we were ridiculed by the other big companies in the launch vehicle business. At first, they ignored us; and then they fought us; and then they— we found out; they found out that they couldn’t really win in a fair fight because we were successful and we were, you know, factors of two or three or probably even five lower costs than what they can do. So then it becomes an unfair fight, where they, you know, try to destroy you politically, and use other means. And then at some point, they figure out that they’ve got to do what you’re doing. So there’s a lot of talk at these other companies about how they’ll make reusable rockets; recover the engines, recover the stages, come up with a much lower-cost rocket so that they can compete. You know, there’s no way that they ULA would have considered buying engines from Blue Origin except for the pressure that SpaceX is putting on them. There’s no way that the French would have quickly abandoned the Ariane 5 and moved to the Ariane 6 design because— except for the pressure we’re putting on. So we’re really changing the world. The Russians are saying they’re coming up with a rocket that can beat SpaceX, which is entertaining, <laughs> which is entertaining, because they’ve been working on their Angara rocket for 22 years, and launched it once. And suddenly they’re going to be coming up with a low-cost one.

Yes, let's just listen to one company's exec bashing his competitors... I also find it hilarious how he completely glosses over the fact that the Falcon 1 was supposed to be their product and utterly failed in the market.

He is a rocket engineer that built Merlin and is now working on Raptor. Also, I don't know why it is important that Falcon 1 failed, they used the tech to go where the real money is. That just smart business.

The ULA will be able to get by for a while on their record of having gone 100+ launches without a failure. As long as SpaceX keeps innovating there's the chance they'll make a mistake. So for an expensive enough satellite you'll probably want to go with ULA. But for the majority of the launch market SpaceX is certainly the best deal.

Maybe not right now, but I wouldn't ever underestimate Bezos.

Musk and Bezos are both people I wouldn't bet against, but they're so drastically different in their styles. Musk is flashy, but gets shit done. Bezos knows how to get shit done quietly... and suddenly he's dominated and bought everything around you.

Amazon has a load of terrible products. Even their store is getting worse and worse. The fire phone was a complete flop. Amazon cloud drive and music are not at all at the same level as their competitors. Google Home is looking as though it's going to surpass the Echo.

Amazon is successful because they are fine with taking losses, only just recently making a small amount of profit compared to their scale.

If you are not failing, then you are not trying enough new things. Amazon has been successful a lot, a LOT more often than they have failed.

I think that is probably false. They have way more failures than successes, but the successes far outpace the losses in output.

I think more failures than successes can be interpreted as a healthy appetite for product experimentation. The other option in todays world would be not to innovate except through purchases of established product families from other companies and acquisitions.

Amazon phone, lol.

So yes the phone failed, but how about the 50 services they offer on AWS? Failures on their part are heavily publicized, but successes move along silently.

Or AWS itself. Doesn't seem like a good fit for a company like Amazon.

>Amazon is successful because they are fine with taking losses, only just recently making a small amount of profit compared to their scale.

I thought this tired narrative was almost over? For decades Amazon chose to invest in infrastructure and logistics.

Now they're "making a small amount of profit compared to their scale"? Who's at that same scale setting the bar for profit? Remember that "scale" doesn't equal revenue.

Every book I've bought for the past 8 years has been on kindle.. I don't think they're doing that bad..

The Kindle is good and Echo is great. Every other hardware product they've ever made has been complete dogshit, which is why the packaging for most of them advises buyers to set them on fire.

Well, i know another company (G) with just 2 or 3 good products. Most others don't have even one.

The newer kindles are kinda shitty for the consumer, much better for Amazon no doubt.

The switch to touch screen and adverts all over your library & store is really jarring. So much so that my tech friends now just buy second hand kindle 4s when their old ones break.

It's possible that library lock in will stop them migrating away from kindles when the supply of kindle v4s runs out but not I think certain.

If so, point them to Calibre. While I currently use the Kindle app to read my books, I have made it my "policy" to on each purchase ensure that I am still able to break the DRM and store a backup copy in a non-DRM'd format. The moment that changes, I'll stop buying Kindle books.

Some purists would prefer to avoid buying DRM'd products in the first place (and I do when I have an alternative), but this is "second best" to me - I'll tolerate easily breakable DRM, but not one I can't remove.

The upside is reduced lock-in - it may affect usability (the Kindle app is still the best reader app I've used for Android as well - if anyone has recommendations for any actually usable ebook reader Android apps I'm all ears) but I know I can read all my books on any device, using free/open apps.

That makes incredible sense. What tool do you use to back up your books?

Calibre, as I mentioned [1]. I don't know if I should link directly to DRM removal tools here, but if you search for DRM plugins for Calibre they're readily available.

[1] https://calibre-ebook.com/

A while back I stopped using kindle and migrated my library to epubs. Apple's ibooks reader is much better and I didn't find much benefit out of eink devices. With ibooks you can sideload your own epubs, so it isn't much of an issue. Adobe reader also has a good reader mode for pdfs. Also I have iCloud library for my sideloaded books, so it's all cloud synced.

The only real benefit of kindle is the library selection and prices. The ereader software itself is mediocre.

I agree with that last point. Beyond that the reader and the store could be better integrated. It's surprisingly difficult to, say, find out if any of my ten favorite authors has released a book since the last one I read.

I don't mind the touch screen. I very much do mind ads, but you can pay $20 more to not have any. If anyone says they don't like ads but isn't willing to pay slightly more money to not have any, then I have to question their sense of priorities.

Amazon can fail a lot because money for private companies is a lot more expensive and harder to get than for public companies. Musk is playing on hard mode because he wants to retain control.

It what sense does Bezos lack control?

Being public means that the company is transparent, not that it is out of control.

that is completely not actual reality.

it depends on who the investors/share holders are and the balance between lots of small investors and a few large investors.

as long as investors see a way to make money out of the ceo (dividends or rock-star growth pushing share price up) they are happy.

and all of that pushes thinking towards making targets for the quarter or year.

and if it get's bad enough -> not enough money being made -> people being put on the board to mind things -> eventual ousting.

do you want a visionary to spend their time thinking of the next great idea or how to keep the money people happy?

You need both. A visionary alone needs the discipline that comes from having to choose which vision of many and finish it. A financial focused manager will never bet on any but the most obvious ideas and thus lose when someone else makes something work.

Ideas are easy. Implementation is hard. The least creative person has enough ideas to bankrupt even the biggest company if you start a team to implement them all as the idea occurs (a car obviously takes more people than a paper notepad, but you should expect to have all those ideas)

A visionary who never thinks about money will eventually run out, or worse bounce between ideas and never finish one. The person who only thinks about money will not invest in the things required to continue making money.

I've heard it stated that you need a visionary CEO and a close second who is a financial realist. The visionary has lots of great ideas, the financial realist reigns them in and forces the visionary to choose which vision(s) to focus on and finish; and let the others go. This works great until the visionary CEO steps down (dies, retires...), when you put the realist second in charge all the visionary projects are stopped, for a couple quarters the company makes more money, but there are no visionary things in the pipe so the company dies a slow death.

Yes, and that sounds rather like Apple now

This is what happened to LucasFilm/Arts... when Lucas left, the CFO got control...

It means the shareholders decide who is control. This is not about having control now, it's about retaining control.

Musk doesn't want to be beholden to shareholders because their interests (profit) might not align with his objectives (Mars). Presumably Bezos does not fear any such misalignment of interests between himself and his shareholders.

Musk claims he won't take SpaceX public because public investors have short attention spans and would require profit/return too soon. Because he wants goals set out further than the next quarter, he has kept the company in the hands of like minded investors.

That may just be bloviating on his part, but it does seem at least sensible on the surface.

Dell voiced something similar when he took his namesake company private after years of being publicly traded.

And it appears the quality of their consumer products rose dramatically afterwards.

My understanding is that Musk wont take it public until the strategy of getting to Mars is protected.

Branson said the same thing about the Virgin Group when he turned it from a public to a private company.

>That may just be bloviating on his part, but it does seem at least sensible on the surface.

His biography definitely seemed to emphasize keeping SpaceX private until Mars starts to unfold

Musk is not wrong about this. Space exploration is not a moneymaking venture. It's very risky. The odds are probably worse than gambling.

Plug: why Amazon has a load of terrible products http://constantbetasoftware.com/2015/12/11/bezos-amazon-cult...

I skimmed the video and read the notes. Pretty interesting. Makes sense.

I think Amazon cloud is a mixed bag of excellent and terrible.

I love EC2 but not a big fan of their other more advanced services. I tried Azure, Digital Ocean, GCE... for IaaS and they just didn't have the same richness of features and flexibility as EC2.

Not sure Google home is looking to surpass the Echo from here.

http://static3.uk.businessinsider.com/image/59123ef6dd089554...

Maybe, but how can you tell from that chart? It lists an overall delta and the current breakdown. There's no way to know the relative deltas.

What you describe is exactly how you come to dominate retail business and become monopoly power online.

Amazon's reference point is Wal-Mart. They are in ever expanding price cutting small margin business.

Another good comparison in Microsoft in 80's and 90's. MS dominated over IBM, Apple and others several decades with sup-par product everybody hated by attacking and destroying potential competitors, not by improving products.

Bezos knows what he is doing.

> They are in ever expanding price cutting small margin business.

If you sink all of your profits into expansion, then on the books you made zero profit. If you made zero profit, you pay zero taxes. This is a common tactic with farmers. They use this year's returns to buy next year's supplies. If amazon stopped growing and suddenly reaped their profits, there would be a big tax bill to go with it.

There's a middle ground: don't grow as much, and pay some taxes. Not saying it's optimal (for any party, or on any axis), but it's not like there's just this binary choice of "growth consumes all profit" and "don't grow at all."

At some point that will happen. Companies can't experience exponential growth indefinitely.

This isn't how accounting works. You can't just buy a warehouse and expense it in year one. You have to depreciate it overtime. You can look at their FCF its about 10 billion. Their market is 50x of that. For comparison walmart is ~20 billion and they are worth half of Amazon.

Do you think NT4 was a worse product that netware ?

You remember only the end.

MS-NET, LAN Manager and MS/IBM joint effort with OS/2 LAN Server were all inferior to Netware. MS battled decades against Novell with inferior products and shady market practices eating their profits. Finally Novell was taken down and crumbled when networking became a core system component in PC operating systems.

Throwing money against to superior product from smaller competitor until you can eat their lunch is proven tactic.

So what you're saying is you can displace an entrenched competitor by putting in enough money to end up with a superior product?

That seems... reasonable.

Not at all and you know it.

No, I don't know it. What do you mean?

That doesn't align with the actual history at all. One of the extremely well known, defining characteristics of Microsoft in the 1980s and 1990s, was releasing a weak product that they then improved substantially over several versions. Your premise is they didn't improve products as a means to conquer, when that's exactly how Windows took its market share after a horrible initial release that flopped: it got a lot better; ditto for plenty of other examples such as IE vs Netscape.

It applies to at least: MSDOS, Windows, Office and most of its products, Internet Explorer, SQL Server

In fact it was so well known that's how things worked, it was a saying that they only finally got things right by version three.

The guy who does 100 things and wins at 10 still comes out above the guy who does 2 things and wins at 2. This is despite the previous guy having a failure rate of 90% and latter guy having a success rate of 100%.

Depends on the cost of failure and the benefits from winning. Fewer bets tends to mean larger bets which can pay off more.

Being the richest man in the world shows some level of success ;-) Also allows him room for a lot of failures.

Well, he also has his stock in a company with a P/E ratio of 257.38, that's one very large bet. Cranking up earnings is clearly possible, but Amazon is also showing signs of imploding as for example people simply don't trust fulfilled by Amazon to mean anything.

Blue Origin has turtles in it's coat of arms because the strategy is slow and steady...Bezos doesn't feel the need to compete on speed here.

I'm neither an Amazon nor Bezos fan, but that ethos is something I respect. Rocketry isn't something you rush.

Frankly I'm surprised SpaceX hasn't had more mishaps given the breakneck speed at which they operate.

Most kinks of space travel were worked out in the '60s and spacex is pushing for reliability specifically, not for payload capacity - coincidentally that's where they're pushing the envelope and getting most of the failures.

Regardless, designing a modern reusable launch platform isn't anywhere close to trivial.

Not really. In the 60s we basically verified that certain rocket and engine designs work and that we could go beyond earth orbit. Creating a reliable, long lasting and reusable space rocket/vehicle is, in my opinion, orders of magnitude more difficult. Just look at the Space Shuttle failure as an example of trying to do space on the cheap. Also, remember it took about 5% of the US GDP in the 60s to put men on the moon. I believe in Musk but trying to make space cheap is just simply a difficult problem and one I wished we funded more.

Shuttle is not a rocket tho. check out Saturn V failures instead.

Eh? The shuttle absolutely was a rocket. The 'spaceplane' bit only kicked in for landings. On the way up it was 100% reaction mass driven.

A reliable, long use rocket is not exactly new either. Delta II first launched in 1989, 153 launches, 151 successes. There will be another launching this fall for JPSS-1.

At a slower cadence and prices 3-4x that of SpaceX

The vast majority of SpaceX's current success is attributable to government funded research and experiments (the entire space program for the last several decades) and government funding (currently) that Musk is taking advantage of. They don't have more mishaps because the innovations they're undertaking are small relative to the existing body of research and experiment, and built on a solid foundation that already exists.

It's popular in some circles (not directed to your comment, here) to lionize Musk as some exemplar of how the government sucks and to promote privatized space exploration but that's just not in line with reality as it actually is.

The vast majority of government research for space launches was done by the Nazis. Everyone has access to that and NASAs research, yet...

SpaceX is currently launching space shuttle sized payloads for a price that is over 40 times less than the shuttle, and less than half the cost of other private competitors, and at a cadence none of them have ever achieved.

Re-use is the key launch technology of the future and its greatest and only commercial application has been done by SpaceX.

The key is to no longer take the fuel with you up there.

They're a private company the same way any company that is effectively funded by government contract is. Technically it's true, but they haven't demonstrated actual viability in the private market (much less profitability). And the achievements you note have little or nothing to do with their status as a private company and almost everything to do with taking advantage of government research from the past half-century.

The bit about Nazis is entirely irrelevant.

Maybe you missed the part about it being 1/40th the cost.

No, I did not:

> the achievements you note have little or nothing to do with their status as a private company and almost everything to do with taking advantage of government research from the past half-century

> The vast majority of government research for space launches was done by the Nazis

The extreme majority of government research for space launches has occurred since 1950. The extraordinary resources put into the US space program, including the research necessary, makes the Nazi efforts look hilariously trivial by comparison.

You are quite right that the space launch industry and the technology it uses wouldn't exist without government research and funding. That's perfectly true.

But it's also true that without Musk there would currently be no prospect of significant rocket component reuse for another generation. Rocket launch costs would be double or triple what they currently are. It also seems very likely now that within my lifetime we will see launch costs to orbit close to 100th what they were just a few years ago. Some of us think that's a good thing.

A graph of the improvement in rocket technology from 1945 to now would look like a hockey stick early on, levelling off more or less flat for the last 40 years. Musk has bent that curve back up into a hockey stick shape again.

I'd argue that Musk, using the facade of "Private Market Hero", has made government spending on research in this area palatable enough (again) to make progress. Sure, he's a key personality, but it's not like he's accomplishing these things outside of the context of being heavily funded and guided by the government.

So what? Do none of the achievements of the engineers that drove the US space programme through the last century 'count' because they were government funded? What a bizarre world view.

As it happens none of the re-usability programme (Grasshopper, the drone ships, etc) was actually funded by the government. That came from around a billion dollars of private capital investment. Musk talked about this in a TED talk.

I'm generally for private enterprise, and It seems rather questionable to me to say that everyone who takes any Government money under any circumstances is equivalent. Musk has indeed taken a lot of Government money, and more importantly IMHO hired a bunch of people who got their experience in space and rocketry at NASA, but does that make him more or less private than, say, Lockheed-Martin or the other usual contractors?

I would say that the aerospace companies doing cost-plus contracting for loosely defined projects with fuzzy requirements and no prospect for sustainable private operations are in a very different business than companies that do fixed-price contracts with the Government for specific services with an eye towards capturing a private market in the future. The cost-plus guys are IMHO government agencies in all but name, plus some fat paychecks and kickbacks going to a few connected people. The fixed-price guys are IMHO normal private companies that happen to contract with the Government for their normal profitable services sometimes. I don't think it makes much difference if the first business that funded initial development was all government contracts - the private market for launch services is real, and SpaceX has a plan for making a profit in it and is progressing towards capturing a solid market share in it.

SpaceX also operates at a seemingly breakneck speed because they've taken a lot of production in-house. A lot of places contract out in order to get things manufactured, and that takes a lot of time and money because you're going back and forth instead of being able to directly take a design and go to a technician for manufacturing.

Well he's not competing on anything here, not yet.

It seems that's the case. It was founded two years before SpaceX.

No, they don't compete now and probably never will. Yes, unwise to ever bet against either.

I thought amazon was also a bubble of some kind, relying on aggressive growth to swallow the market and then change it's policies because it's unsustainable ?

Musk seems a little more down to earth (sic) here.

That's more Uber than Amazon.

Amazon didn't turn a profit for years because they were heavily reinvesting in more/better infrastructure (their "fulfillment centers") and services. One of the biggest services out of this reinvestment is AWS, which AMZN built for AMZN, and then realized it was such a good product they started selling it to others (also part of Bezos' ethos and their large initial costs: if you can't sell your internal tools to other people, you shouldn't be using it)

However, Amazon is making a profit these days, and is still growing, so I think it's sustainable.

Uber, meanwhile, is/has been subsidizing many/most rides with VC money in order to get market share, which is an entirely different thing and more in line with your perception.

They are the only direct competitor on technology development. In 10 years, BO aims to be flying reusable rockets larger than the Falcon 9. You can't say that about and other company (except for SpaceX).

They are more directly a competitor for talent. Rocket engineering is a small world.

One time I can say "God Bless" to competition!

In 10 years they hope to only be 15 years behind SpaceX?

BO's New Sheppard is far advanced into sending tourists into space, albeit not in orbit.

It's only about 10% of the way to orbit. It's practically a toy.

But to fair, as far as toys go, it's a pretty cool toy.

Launching a liquid fueled rocket to space (even if it's just space) and then landing it is not easy.

Bezos is the richest man in the world, and he definitely knows what he is doing. If anyone is able to compete with Musk it is Bezos... sorry for all these assorted Commies on the other side of the globe.

These two images are telling:

http://pop.h-cdn.co/assets/15/52/1600x800/landscape-14508878... http://pop.h-cdn.co/assets/15/52/1450888612-bevsx.jpg

T̶h̶e̶ ̶f̶i̶r̶s̶t̶ ̶p̶i̶c̶t̶u̶r̶e̶ ̶i̶s̶ ̶k̶i̶n̶d̶ ̶o̶f̶ ̶m̶i̶s̶l̶e̶a̶d̶i̶n̶g̶.̶ ̶F̶a̶l̶c̶o̶n̶'̶s̶ ̶b̶o̶o̶s̶t̶e̶r̶ ̶d̶o̶e̶s̶n̶'̶t̶ ̶u̶s̶u̶a̶l̶l̶y̶ ̶r̶e̶a̶c̶h̶ ̶t̶h̶e̶ ̶K̶á̶r̶m̶á̶n̶ ̶l̶i̶n̶e̶.̶ However, as it is apparent from the size in the second picture, Falcon needs much, much more thrust to help put things to orbit. Going to space is kind of easy, the hard part is staying there.

Falcon 9's first stage certainly reaches and (fairly greatly) exceeds the Kármán line in RTLS boostback, as the graphic shows.

Even in an ASDS landing, it exceeds the Kármán line. I think the typical apogee is around 120-130 km.

Stage sep happens below the line, however.

Thanks for correcting me instead of just downvoting.

Having played several hundred hours of KSP I can confirm you shouldn't underestimate momentum. It's amazing that it's even possible. I think the number I've heard is if the earth's gravity was something like 10% stronger this wouldn't be feasible.

Can you elaborate on this? Are you saying with a 10% higher gravity we wouldn't be able to escape Earth's field with any amount of thrust? What?

Possibly not able to carry enough chemical fuel to lift the fuel into space and return and do a controlled landing without refueling? That seems more plausible.

Fuel is heavy, and most of it is spent on... lifting fuel.

But the way the rocket works is creating a continuous explosion behind it. The propellant explodes, pushing the rocket. It's not just the rocket equation, but the explosion from a central point BEHIND the rocket that pushes it further.

Having a nuclear explosion for example behind the rocket would surely be enough to push it into space... even on Jupiter.

Sure, which is why I said chemical fuel. New propellants change the equation.

"But the way the rocket works is creating a continuous explosion behind it."

Not quite, it's all about mass flow.

Yes, this is what I was referring to. Though there's probably another percentage that makes most rocket fuel also insufficient for anything more than LEO.

You can't escape the rocket equation.

With a modest increase in Earth's gravity, none of the rockets we have ever built would have been able to put even a small payload into even low earth orbit. Even a Saturn V wouldn't be able to launch Sputnik. Increase gravity a little more and no chemical rocket we could feasibly construct given known materials and methods would be able to do the job.

It's not about the amount of thrust. It's about being able to carry enough fuel to sustain that thrust long enough, without the weight of the fuel making the rocket too heavy to lift high enough to reach orbit.

If gravity was 10% stronger rockets might be much more powerful and been reusable much sooner. Having the military need to produce nuclear powered rockets for effective ICBMs would have produced a very different nuclear power development path than the one on this Earth.

And pigs would fly. Their squat powerful bodies would have developed wings!

Project Orion would like to have a word with you...

Think of Musk as Howard Hughes+, think of Bezos as John Carmack+.

Really? Wouldn't Musk be the consummate engineer and Bezos the unflinching entrepreneur?

It's crazy that Bezos is investing a billion a year consistently into BO. At some point you'd think BO would catch up.

It could've that BO can't attract enough talent. Bezos might not be spending enough time at BO and perhaps the prospects aren't as great there.

I worked for SpaceX but now I work for Bezos. I definitely think BO is years away... but not a decade. I don't think they'll compete for the same payloads at first but eventually they will. Bezos has significantly more money to dump into this problem than Elon.

There are plenty of other reasons, beyond the money, I don't think it will be that long before BO really starts to compete.

That one is pretty straight-forward. They'll start to really compete when New Glenn is ready.

Forbes seems to have always been wrong about Musk's net worth unless I'm missing how it works. By my estimations, now he should be worth around $23B. $11B from Tesla. $11.5B from SpaceX.

Obviously they haven't updated for this news yet, but they still won't be at $23B.

Regardless, going from having invested all is PayPal money by 08 and in dire straits to being $20B+ 9 years later is awesome. And depending on what narrative you believe, money to this degree isn't what he cares about anyway.

Kudos to Elon, SpaceX, and everyone working there.

Whence this myth that Musk doesn't love money, just because he makes his money making cool tech?

http://variety.com/gallery/elon-musk-buys-fifth-bel-air-home...

http://www.businessinsider.com/elon-musk-mclaren-f1-hypercar... wrecked-it-2015-6

People feel practical businessmen are money-focused. They think folks who appear to "risk it all" are altruistic.

Musk doesn't project the image of being practical. He claims to have almost gone broke when investing in Tesla/SpaceX, and now makes super-optimistic predictions: fully self driving cars in a year, and AGI in 2030-2040.

To some, this sets him apart from the "money-focused" crowd. Yet, you can think of ways his actions benefit him.

By predicting things earlier than most researchers, he can appear to have some knowledge they don't, thus attracting more young (cheaper) AI talent, and a public following whose understanding of machine learning is understandably limited.

It's unfortunate because those who research machine learning remember the last AI craze of the 80s and the ensuing AI winter. The same thing happened. Over-hyped technology couldn't meet the wild expectations of the general public. These expectations had been stoked by entrepreneurs who thought (or lied) that they could create AGI. For example, Thinking Machines Corp.

Nobody is 100% altruistic. When we mistakenly afford someone that quality, we elevate them to god-like status where they can do no wrong.

It's a tough position for practical machine learning researchers. There are a lot of advances that will be made in the next few years. I hope more people will try out machine learning to get their own understanding of its power and limitations. Getting all your information on a subject from sensationalized news or recent products isn't as educational as studying/using the subject yourself.

Thanks, this was a really well-thought-out post.

Thanks. Did you know your account is banned and all your comments are flagged dead? Most people can't see them unless they've changed their settings to show dead comments.

They were told in this comment that their account was banned: https://news.ycombinator.com/item?id=13855630

So, he's actually saying those things (AI skepticism, or that some general AI would happen in 20 years) just to attract cheaper and younger AI people in his companies? Seems to me like he just actually believes in those things, as he put so much money in OpenAI that he could have invested in Tesla to make all those researchers work on his self driving (granted he took Karpathy recently, but there's still tons of highlevel researchers working at OpenAI)

> So, he's actually saying those things (AI skepticism, or that some general AI would happen in 20 years) just to attract cheaper and younger AI people in his companies?

Possibly. He certainly benefits from the talent in operation at OpenAI. Whether people come over directly like Karpathy, or via networking, or through knowledge transfer.

> he put so much money in OpenAI that he could have invested in Tesla to make all those researchers work on his self driving

It could be cheaper to go through OpenAI. Other people invested in that company -- not just Musk. Also, a lot of machine learning tech and knowledge is transferrable across domains.

> Seems to me like he just actually believes in those things

He may well. I'm just saying it can also benefit his businesses to believe that AGI and fully self driving cars are coming soon.

This is of course all speculatory, but I think for many of us the things that sets him apart from the "money-focused" crowd are his goals and how outspoken he is about them. He wants to get people to Mars, which as a business venture will not turn a profit in his lifetime. I'm not saying he is altruistic but rather that he might be more of the 'fame and glory' type, wanting to leave a larger mark than a big digit in some future Wikipedia bio.

Yeah. It's speculatory, for sure.

> he might be more of the 'fame and glory' type, wanting to leave a larger mark than a big digit in some future Wikipedia bio

Saying things like going to Mars could still benefit him business-wise, whether he actually takes on that mission or not. It attracts people who believe he is at the cutting edge.

> for many of us the things that sets him apart from the "money-focused" crowd are his goals and how outspoken he is about them

I don't know if Musk plans to be outspoken or not. It seems to be an effective business strategy in itself.

So, I take it all with a grain of salt.

I think there's an important distinction between altruistic and someone that isn't interested in money so much as in accomplishing things they want.

Also, being so visionary and so much in the press, should definetly help stocks in his companies, because there's not really an objective way to value growth stocks.

How does wrecking expensive cars show that Musk loves money? To me it shows just the opposite!

Because you don't make the choices he made if you love money. You absolutely do not start a rocket company. "If you want to make a small fortune in the rocket business, start with a large fortune."

That being said, maybe we're looking at things differently. I'm sure he prefers having money than not having it, but the macro scale choices he's made imply he values other things more than his personal fortune.

The popular opinion is that if you start a rocket company you will fail but if Musk thought that he would fail, he wouldn't have started SpaceX. He thought he could succeed in rockets = he thought he could make money off rockets. Musk is a businessman just like all the others, he just has a public persona/PR team which appeals to "nerds."

From a Musk interview with Pelley a while back on SpaceX/Tesla:

>>Scott Pelley: How did you figure you were going to start a car company and be successful at it?

>Elon Musk: Well, I didn't really think Tesla would be successful. I thought we would most likely fail. But I thought that we at least could address the false perception that people have that an electric car had to be ugly and slow and boring like a golf cart.

>>Scott Pelley: But you say you didn't expect the company to be successful? Then why try?

>Elon Musk: If something's important enough you should try. Even if for you — the probable outcome is failure.

Yeah my point is that I absolutely don't buy that. If Bezos came out and said that the reason for starting Amazon is really altruism or if Kalanick, speaking to the NY Times explained that, actually, Uber is rooted in fixing the false perceptions people have that public transportation has to be ugly and slow and boring we would all see right through that. Those are obvious examples of bullshit but when Musk comes out and say the exact same thing we blindly believe it. Why? It's all marketing, Musk's marketing is just marketing that's targeted at "our" demographic.

> Musk's marketing is just marketing that's targetted at "our" demographic.

Couldn't agree more. Tech is a special demographic. If someone figured out how to target the newly wealthy tech crowd, they'd probably do pretty well.

>Yeah my point is that I absolutely don't buy that. If Bezos came out and said that the reason for starting Amazon is really altruism or if Kalanick, speaking to the NY Times explained that, actually, Uber is rooted in fixing the false perceptions people have that public transportation has to be ugly and slow and boring we would all see right through that.

Perhaps I'm naive, but I don't see any reason not to believe similar sentiments from Bezos/Kalanick (if they actually said them -- I think the fact that they don't adds credence to those that do), even after a brief stint at Amazon (and having a prior Amazon VP as an investor). Obviously I've heard both good and bad things about both in the media, but I don't know either personally well enough to make a judgement call on their primary drive to succeed.

Uber has solved huge problems in transportation. Amazon's beginnings were humble and (IMO) hugely important as well. Musk is clearly doing big things as well, and I'm glad that all of the above have developed tech that benefits everyone. I would believe that was their goal as readily as I would believe they were just in it for the money.

He could've bought it all with his PayPal money.

I meant to say if you believe the narrative that he doesn't care about this scale of money to the same degree as a typical person.

Personally, I do believe that's true. I don't think that precludes him from still using his money for some fun stuff.

I mean, SpaceX is great and all, but it's no Cargill or even in the same league as Cargill or other similar companies like Koch (which is #2 in the US):

https://en.wikipedia.org/wiki/Cargill

   Revenue: US$109.6 billion (2017)[1]
   Net income: US$2.835 billion (2017)[1]
   Total assets: US$55.8 billion
   25% of all United States grain exports 
   22% of the US domestic meat market

Yeah I found the valuation mildly depressing for similar contexts.. considering the total value of spaceX is less than half of the proposed ~increase~ to annual US military expenditure this year.

We could afford 2 fully-blown spaceX per year just by maintaining our present disproportionately large military rather than expanding it by roughly a Great Britain this year.

This can't be stressed enough. The military does a lot of R&D spending, but it's nowhere near as beneficial to the U.S. or the world than if we encouraged more space programs with that money.

It's unbelievably depressing to me that we could be leading civilization into a multi planetary age but choose not to.

The [space program] does a lot of R&D spending, but it's nowhere near as beneficial to the U.S. or the world than if we encouraged reduction in taxes so [private consumers and businesses] can instead spend that money.

History has demonstrated again and again that tax breaks are not an effective economic stimulus.

Each and every valuation attempt of a private tech company by the mainstream press takes the number of shares outstanding and multiplies it by the share price at the last round, pretending that preferred shares are valued as common. Since the round details are usually sealed (e.g., a company could in theory offer preferred shares with 100x liquidation pref and 25% annual preferred dividend, which would completely wipe out every shareholder except for the investors in the last round), the press doesn't really have a good way to value debt+equity instruments.

Also counting up the company value based on investor deals is weird in itself. Just because I buy 1% of a startup for $10k, doesn't mean I would buy 100% for $1m.

Wait a decade and spaceX will have the following line item:

100% of all interplanetary travel, shipping and trade.

lol want to make a bet on that?

I was being a little hyperbolic, but I'm curious, do you think Musk won't make it to Mars within 10 years or that other companies will be able to do it by then too?

"World's most valuable privately held companies". Sounds weird, no?

What about Vitol (https://en.wikipedia.org/wiki/Vitol), Saudi Aramco, Koch Industries (https://en.wikipedia.org/wiki/Koch_Industries) ... etc ?

This is what you call a fluff piece. HN and the broader computer technology industry is sycophantic for Elon Musk, and will ignore that all of his companies would be dead in the water if it weren't for the questionable appropriation of government funds, at least if they spent and marketed the way that they do. The products are great, but the money comes out of everyone's pockets. You're all paying for some guy's Model S.

Sure.

However, in space launch it's not like Lockheed Martin and Arianne didn't do the same.

The difference with SpaceX is that for once a government got value for money on an Aerospace deal.

I agree, I'm not against it at all. SpaceX is definitely improving the ROI of NASA, and I love it.

The old/print media likes to flaunt misleading headlines where Musks seems to be getting billion dollar subsidies from state and federal government but they're more like hit pieces if anything.

http://www.cnbc.com/video/2015/06/01/musk-article-on-subsidi...

> You're all paying for some guy's Model S

We're also paying for all the wars in the middle east that keep the oil flowing.

Wars, terrorism and many assorted niceties, both here and there.

You clearly have no clue how the rest of government contracting works.

You're improperly editing... both the HN title and the NYT piece say "One of the (start your quote) World's most valuable privately held companies".

It's still kind of implying that it's up there with the big boys, but it's really not. Especially since this is just based on a round of funding which creates unreasonable valuations by design.

You're right. I should have edited my comment properly. I sincerely apologize. My point was to indicate that they are non startup companies, privately held, that are wayyy more valuable than SpaceX or Uber. Sorry about this.

The article says 7 venture-backed companies, but this awkward adjective was dropped from the title.

Saudi Aramco is indeed much more valuable than the lot combined, but it's not exactly a startup.

As much as I'd love to invest I'm glad they're avoiding the short term outlook being publicly traded would demand.

Does being publicly traded necessarily mean you focus on the short term nowadays? We've got companies like Snap who issue non voting shares. I imagine SpaceX could offer common shares that have no voting rights, accept all future dilution and require you punch yourself in the head on Tuesdays and they'd still have a pretty decent offering.

Your stock price still gets beat up if you don't meet earnings, which means you can't raise capital as efficiently (or even fairly) if you need to in the future.

I didn't say you could run a dumpster fire forever, just that you don't have to worry about your short term stock price because shareholders can't do anything about it (vote a new board in and vote you out) You'd make sure your ducks were in a row before any offerings of course.

And your employees are underpaid.

Being publicly traded means you become slave to shareholders. Their profit is ALL that matters.

Well, yes. That's the entire point of a corporation.

You're only a slave to voting shares. We're about to watch this play out with Snap.

Unless you pay employees in RSUs. Then short term share price fluctuations matter again.

Yes, because the people with voting shares gave you money in the hopes they would make something from their investment.

"The idea that all of the world should be measured in dollars to stockholders is actually a relatively new idea. It used to be that we thought that businesses had their purpose. Your purpose was to be making newspapers or fountain pens or whatever. And now we act as though the only purpose of a business was to enrich the people who trade it on Wall Street… Of course you’ve got to have profit, of course you’ve got to support your ownership. But that’s not why we’re doing it. We’re doing it because publishing a newspaper is a crucial thing to be doing." ~Andy Barnes

Companies use to be temporary, created for the public good (like building bridges) and did not exist to make a profit.

Sounds like a great quote, but when exactly were businesses just about "making stuff"? Look at the Hudson Bay company back in the 1600's. That was about profit, not making stuff.

And what is this "we act as though the only purpose of a business was to enrich the people who trade it on Wall Street"? No, the purpose is to make profit for shareholders, including the average everyday Joe with a 401k or pension.

How many centuries ago was that? Do we really want to go back to a world where the biggest threat to your life was starvation?

Less than 2 centuries. You think it's good to have bigger threats than starvation?

I think it's good that starvation isn't a concern and we can worry about lesser stuff.

You confuse "corporation" with "company"

You can be incorporated without going public. The ability to raise needed capital is a great thing, but it also comes with a lot of negative aspects as a result.

Sure, but on what timeframe? That's why small family businesses are some of the longest enduring - because their owners want them to generate earnings indefinitely. Investors who buy shares are often looking for much shorter term gains (1-5 years) and will put pressure on the board to sacrifice long term viability for a short term boost in share price.

Consider a world where your company always dies after 1-5 years. But for each dying company there's a new one. Investors still make profit, people still get products, employees still get jobs. In that kind of scenario do you really need a long living company? I'd argue you don't. Long life is an arbitrary factor that in itself has not much value.

And the longest living companies may actually be the biggest ones. At a certain size companies don't die anymore. They get merged with other big companies, restructured, or renamed.

Some (all?) products need more than 1-5 years of active development to really become awesome. Every time a company dies, a huge amount of knowledge is lost.

It's not that simple, though. The value of a company's stock is based on future earnings. If the company starts eating the proverbial seed corn you may get more profits disbursed, temporarily, but the value of the stock will go down to reflect the loss of future earnings. There's no free lunch, even for investors.

Why not have non-voting shares that pay dividends? Then the shareholders would be buying a variable annuity that they price based on their belief in management and the company can ignore them. If you're planning to make money on share price increase, you're looking for a greater fool - someone who is willing to buy when you think it's time to sell.

4 letters: amzn

Being publicly traded never necessarily meant you focus on short term. If that were actually true you'd never have seen Intel shelling out $15bn for a fab, or Westinghouse designing nuclear reactors.

Bad example. One of those companies went bankrupt recently.

I realize that, but it doesn't make it a bad example. Certainly the shareholders were taking the long view when they allowed such a massive R&D program to go forward. The fact that it didn't work out is neither here nor there.

So then only the bad companies do it, right? I just want that to be clear.

I'm not sure how you got that from what I wrote. Is Intel a bad company?

It makes me sad that SpaceX, a company that actually invents and makes stuff, is mentioned alongside Uber whose only product is evading taxes and regulations

Comparing SpaceX with Uber is like comparing apples to oranges.SpaceX may be inventing stuff but Uber solves a common problem for everyone around the world. I don't need to think twice about going from point A to point B without much hassle. And coming to the invention part, I believe rocket science is as much difficult as serving million requests concurrently and consistently without affecting user experience anywhere in the process. If Uber's product is evading taxes and regulations, then Google's products are just trying to make you click on some random ads. As a fellow hacker, you know what hard problems i am trying to talk about and we should respect that. I agree uber has some problems internally but they don't deserve to be disrespected.

I don't think that is a fair comparison, Uber has revolutionized the transport industry. It has direct impact on you and me right now. Space X does not have such a direct impact for the rest of us.

How has Uber revolutionized the transport industry? I could call a Taxi just fine before Uber.

Taxi apps pre-date Uber too

Did you expect it to turn up in 3 minutes, be clean and responsible and cost half of what it used to?

I sometimes feel as if people who criticize Uber didn't ever use taxi services in the pre-Uber times.

I don't know where you live, but here in Berlin taxis come quickly, are clean, and you pay what the meter states. I never had trouble with a driver. They could be cheaper, but I don't think that lowering prices by increasing competition is revolutionary.

Uber is not really cheaper, they are just burning their investors cash to project the illusion. When a) that runs out and b) they have to pay the same fees and taxes and follow the same regulations as other taxi companies, the true cost will be revealed

You're speculating. As it stands right now, Uber is absolutely cheaper than taxi's (at least where I am from). What they have to do in the future is anyone's guess.

Have they figured a way to get cheaper cars and fuel then? And are their drivers willing to work for lower pay than any other drivers?

At the end of the day, you can't sustain charging less for a service than it costs to provide, and make it up on volume.

That is only because Uber is currently subsidising the rides. This is well known.

Not everywhere around the world taxis are so awful as in USA. In my town, for example, Uber is both slower and usually more expensive than taxis.

Personally, I was talking about my experience in Russia and Israel. Where do you live?

Uber (and its competitors) have significantly improved lives of millions of people around the world. SpaceX only promises to do so.

Technically both company wants to take people from point A to point B. But those points vary widely though.

As someone from India, I have huge respect for Uber. The taxi unions here were looting people. They were quite arrogant. In Bangalore, most auto taxi drivers would happily stay idle for the whole day, and try to make some quick bucks during the rush hours by charging 300% or 400% extra, until Uber came and killed their arrogance.

Uber may not have had the same level of technical innovations as SpaceX. But they do have mammoth execution challenges, to the scale that no company might have had to face so far. For eg, in India, in each of the 29 states , they have to deal with the regulators of each state. In hundreds of cities, they have to deal with the respective taxi unions. Extrapolate it to a global scale , I can't even imagine.

My respects to both Elon and Travis! Both are my heroes.

The best thing that Uber has done (whatever its other flaws) is challenge the Taxi/Union/Government monopoly.

More taxes and regulations are NOT good things.

The best thing Mr. Musk can do, in my humble opinion, is to never, ever take SpaceX public.

Why not do a limited IPO that ensures he retains control.

Don't the people working for SpaceX deserve to have liquidity?

Isn't it fair for the general public to have the ability to profit off of his epic feats?

> Don't the people working for SpaceX deserve to have liquidity?

There is a robust secondary market for SpaceX stock.

What is the most active secondary market for it?

> What is the most active secondary market for [SpaceX stock]?

The secondary markets for private securities trade "over the counter" [1]. There is thus no singular "market" which could be said to be the most active. (If you're looking for a more-actionable response, feel free to pop up your email.)

[1] https://en.wikipedia.org/wiki/Over-the-counter_(finance)

I'd love some more actionable info :-) eriaac at gmail. Thanks!

(And I was curious whether there was anything like SecondMarket/EquityZen/etc where they're frequently traded in a more standardized fashion)

Would you mind shooting me an email as well? My email is in my profile. Thanks!

https://news.ycombinator.com/user?id=enceladean

I'd greatly appreciate an email as well. Email address is in my profile. Thanks!

"Isn't it fair for the general public to have the ability to profit off of his epic feats?"

I have never ever heard of this being called fair in my life. Honestly, I would have to go with "I don't know" for this answer.

> Isn't it fair for the general public to have the ability to profit off of his epic feats?

That's a very weird definition of fair. Why does the general public 'deserve' to profit off of his feats?

His plan was "certainly not before we get to Mars", so don't worry about it happening any time soon. This big valuation will smooth the way to developing the BFR, though - and that's the big deal for SpaceX.

SpaceX will be bought by Tesla within 10 years anyway.

Shouldn’t the title include some qualifier like “tech company”, because there are private companies like Cargill out there that have yearly revenue above $20 billion.

Revenue != valuation

(but you might still be correct!)

I think it’s likely that a company with revenue in a year equal to another company’s total valuation might have a pretty high chance of having a higher valuation.

In 2011, Cargill was estimated to be worth $55 billion http://blogs.reuters.com/breakingviews/2011/01/20/cargill-va...

It's actually possible that your revenue is higher than your evaluation, because evaluation is mostly based on how much profit people think you will make in the future. It's true though that companies with big revenue often also have big inventory, and considering both usually yield an evaluation higher than the revenue.

Huawei is private and did about the same revenue as Google last year.

In somewhat related news:

https://www.axios.com/founders-fund-partner-leaves-to-launch...

Thinking about it a bit more, I don't believe that Blue Origin and SpaceX are competitors. In a sense yes, but they will not fight for customers. I believe there is very much demand for their services.

And what about Basecamp with its 100 billion valuation?

really? is that a joke?

Yes and no. It's clearly satire, but who can claim it's not a real valuation?

Basecamp is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.

https://m.signalvnoise.com/press-release-basecamp-valuation-...

In what world is SpaceX valued at $20B while Uber is valued at $69B?

World of demand, automobile industry was just the same 100 years ago.

$20B is right around NASA's budget. At least society is consistent in valuing space exploration.

Budget, as in expenditure per year no market value.

The budget is what the general voting public values NASA at for a given year, while the market cap of a firm is what the last sucker to buy a stock thinks it's valued at.

What the last buyer was willing to pay AND what the owners were not willing to sell for. What is the price America would be willing to sell NASA for? That's the market value.

Budget is basically equivalent to revenue. Public (government) to private.

Value of NASA is quite a bit more than their yearly expenditure.

A world where valuation is roughly proportional to the number of rounds of investment you went through.

If you already have a solid path to profitability, you don't need to court investors as often as a hemorrhaging company does.

A world in which a whole lot more people take cabs than buy tickets to space. :-)

No it is not. One of the most valuable private startups maybe.

Here's the top 15: https://en.wikipedia.org/wiki/List_of_largest_private_non-go...

So what are the most valuable private companies? Ikea, Bloomberg, Dell, Koch, Cargill, Bechtel, most of the big 5 accountancy firms...

I'm not so sure SpaceX is "one of the world's most valuable privately held companies".

Space-X is, at long last, getting their launch rate up. 9 Falcon-9 launches so far this year. For a while, they had commercial customers canceling because they were way behind on their launch schedule. It's quantity of successful launches that makes money in that business.

Not much is happening at the Brownsville TX site, where Space-X still hasn't done much more than pile up dirt and wait for it to settle. They're building on beach sand. They really need that site so they can have more pad time.

They don't need Brownsville, they need both the Florida pads up and running. Brownsville will add even more, but the Florida pads are more important.

Vandenberg on the west coast is also important to them. It's the only US polar orbit launch site.

Excellent news, even if the round is peculiarly undersized. First time I've seen them be so coy with the identity of the investor, too.

So.. Apple?

Based on most of the big funding rounds happening these days, I just assumed it was SoftBank.

>> Excellent news, even if the round is peculiarly undersized.

Yeah it smells like an attempt to increase their valuation, which this accomplishes. If they IPO those investors from a while back can cash out, but I wouldn't sell SpaceX at this point if I was able to own it. Unless there is some potential disaster we don't know about.

The coming disaster is Falcon Heavy.

They will need about 3-4 years before it is flying reliably.

It's surprising how little money was taken in this round. You'd have expected something closer to $1B. I'm sure $350M will help enough and it has been over 2 years since the last funding. So maybe it's fine. They can keep raise again soon if need be.

Especially with Bezos pumping $1B into Blue Origin a year.

Bezos is coming .. already $1B a year from Amazon stock. And Amazon is more successful every year. I am very curious how things will go.

The liberal backlash against Amazon is also coming.

I have nothing against Musk in particular except that every one of his companies runs off of government largesse one way or another--SpaceX is pretty cool, though, I give him that.

We shouldn't succumb to cults of personality.

It'll be interesting to watch if they can quickly catch up to SpaceX. If he really does sink 1 billion a year into the company they certainly should be able to.

I'm all for more competition driving down costs.

Is it just me or does it seem absurd that a company like Snap would have a comparable market valuation to SpaceX...

as an engineer doing non-hardware engineering, it is always satisfying to watch SpaceX succeed from afar.

Is a private company's value akin to a public one's market capitalization? How is this determined?

In the sense that it is a number that is taken to represent how much money someone would have to spend to buy it, but is only loosely correlated to the amount of money you would have to spend if you actually tried to buy it, yes.

It's different in that publicly traded company market caps are usually based on the value of common stock. The valuation touted in headlines for private companies is usually the implied value of a new, privileged block of stock. The common stock is not valued at the same amount.

But, only IPO all those special classes of stock convert to common stock. So in the success case, yes, valuation and market cap are eventually consistent.

In startup investments like this one the media basically make a simple factor of the percentage an investor gains and the price he's paying for it. There is no value to that number besides nice newspaper titles.

Real evaluation is the same as for any other company, however in a private company you have less data to go with, the data can't be relied upon as much (since the source is mostly the company itself), and all of these risks get increased by the company being relatively new and not profitable yet. In exchange for the risk investors hope to gain similar growth of company value after they purchased their shares. Therefore most investors mostly look for factors that show huge growth chances, instead of looking at traditional health factors.

Gradatim Ferociter baby

No surprise there.

Privately held, taxpayer funded, like most of Musk's endeavors.

Well, you are free to start your own company in the space or electric car industries.

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