One of Elon Musk's earliest recorded public talks. At 32, a year after founding SpaceX and while still building Tesla's predecessors, he recounts Zip2, X.com and PayPal, and lays out why he turned to rockets and Mars.
Elon Musk
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 Zip2 and PayPal, and then mostly about space and what we're doing in space. So I originally came out of California to do energy physics at Stanford, actually, and ended up putting this in 95 and ended up putting that on hold to start zip two. And zip two. I'll tell you a little bit about the thought process of exactly what happened there in 95. 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 Sand Hill Road. 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 came along once in a very long while. So I got a deferment at Stanford and thought I'd give it a couple quarters, and if it didn't work out, which I thought it probably wouldn't, then I'd come back. 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 I had with him. But there weren't a lot of ways to get. The only way to get involved with the Internet in 95 that I could think of was to start a company, because they weren't a lot of companies to go and work for, apart from Netscape, maybe one or two others. And then I didn't have any money, so I thought, well, we got to make something that's going to return. That's going to return money very, very quickly. So we thought, well, 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 was really the basis of Zip2. We 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, Knightritter, most of the major US Print publishers. We built that up. And then we. We had the opportunity to sell to compaq in early 99 and basically took that offer. It was for a little over $300 million in cash, and that's a currency I highly recommend. So we had that, but I wanted to do something more after Zip2. So how post the sale. In fact, immediately post the sale. I didn't really take any time off. I was trying to think of where the opportunities in this is in early 99, 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. And when you think about it, money is low bandwidth. You don't need some sort of big infrastructure improvement 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's out there. So it should lend itself to innovation on the Internet. 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 solved most of 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 address 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 in the system, it would then forward an email to them saying, hey, why don't you sign up and open an account? So, 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, your mutual funds and insurance and all that. And it's all on one page and look how convenient that is. And people go, and then we'd say, and by the way, we have this feature where you can enter somebody's email address and transpose funds. And they go, wow. So we're like, okay. So we focused the company's business on email payments. And the only going the company was called x dot com. And then there was another company called Confinity, which had actually also started out from it a different area. They started out with PalmPilot cryptography, and then they had as a demo application, the ability to beam token payments from one PalmPilot to another via the infrared port. And then they had a website, which is called PayPal, where you would reconcile the beamed payments. And what they found was that the website Portion was actually far more interesting to people than palm pilot cryptography was. So they started leading their business in that direction. And then in basically early 2000, X.com acquired Confinity. And then about a year later, we ended up changing the company's name to PayPal. And that's kind of how the approximate evolution of the company. But PayPal is really a case of. Of where the whole viral marketing, it's really a perfect case example of viral marketing like Hotmail was where one customer would essentially act as a salesperson for you, for all, for bringing in other customers. So they would send money to a friend and essentially recruit that friend into the network. And so you had this exponential growth. The more customers you had, the faster it grew. So it was like bacteria in a petri dish. It just goes like, there's this S curve. And in fact, I ran PayPal 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 customers. So to give you a sense of how fast things grow in that scenari. And we didn't have a sales force. We actually didn't have a 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 you are probably following it, in February of last year, PayPal went public. And 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 set a record on SEC rewrites. This was right around the Enron time when there was all sorts of corporate scandals. So they put us through the wringer. And then shortly thereafter, in about June, July, we struck a deal with ebay to see sell a company to ebay and over for about $4.5 billion. But that was when eBay's stock price was about $55 and they hadn't split. So I guess in today's dollars, we have about $3 billion. So it 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. Well, let me talk a bit about that. Essentially, I was trying to figure out why we had not made more progress since Apollo in the 60s. 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 70s and 80s and the 90s, we've kind of gone sideways. And we're currently in a situation where we can't even put a person into low Earth orbit. And that doesn't really gel with all of the other technology sectors out there. The computer that you could have bought in the early 70s would have filled this room and had less computing power than your cell phone. And so just about every sector of technology has 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 15 to 20 million dollars, which isn't a lot of money, but it's about a tenth of what a low cost NASA mission would be. And the idea was called Mars Oasis, where we'd put a small robotic lander on the surface of Mars with seeds and dehydrated nutrient gel that would hydrate upon landing. And you'd have plants growing in a martian radiation and gravity conditions. And you'd also be maintaining essentially a life support 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 that life's ever traveled and the first life on Mars. So pretty significant. And then when I started looking at launch vehicles, the lowest cost vehicle in the US is Boeing's Delta II, which costs about $50 million. 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 Moscow to negotiate for a refurbished ICBM on the range of interesting experiences. That's pretty far out there. But we actually did get to a deal. But there were so many complications associated with the deal that I wasn't comfortable with the risks 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, or have Russian kitchen appliances. And when's the last time you bought something Russian that wasn't 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 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 reliability. 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 to 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 Palo Alto for about nine years before that. Anyway, so just to talk a little broadly about space and where things are today, obviously US government manned exploration is not in a great place. We've got the three remaining shuttles are grounded. It looks like post 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, you know, for reasons mentioned there, it's got a side mounted crew compartment. So if there's an explosion that's basically instant death. You've got solid rocket boosters which once you ignite them, you can turn them off. And there's something fundamentally dangerous about premixing your fuel and oxidizer, I think. And then you've got wings and control surfaces 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. And then of course it's got no escape system. So if anything does go wrong, you're toast and you've got a cast that is really pretty hard to fathom. The shuttle program where you add up all the pieces is about 4 billion a year. And so you can divide 4 billion by the number of flights and that'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 a flight. The plans for the immediate future, 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 to build something called orbital space plane and it says plane in quotes because one of the options is a capsule. So it should be called maybe orbital 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. The estimated cost per flight of orbital space plane is somewhere in the region of 300 to $400 million. Flight flight. And of that amount, just $200 million alone goes to Boeing for the Delta IV heavy expendable booster. And it's a $15 billion development effort and expects to be completed in nine or 10 years. Now typically things have not been under budget and under time. So it's unlikely, I think, given historical precedent that it will stay within $15 billion and the 2012 timeline. And a bit about what's going on elsewhere in the world in Russia. This is really the Soyuz is our only access to space station. It's considerably cheaper, considerably safer. The Soyuz has a very good track record. The crew is top mounted. It has an escape system. There are no wings or control surfaces to go wrong. Overall, it's a pretty good system. And the estimated costs are about $60 million a flight which is more than order of magnitude 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. That 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's it is likely to be China's ambitions in space and hopefully a sense in America that we want to at least keep up with China. And they have grand ambitions beyond just Lilith 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 us that I think might ultimately surpass all of that stuff is entrepreneurial space activities where things are led by the spirit of free enterprise. And I think there's perhaps an analogy here where just as DARPA served as the initial impetus for the Internet and underwrote a lot of the cost of developing the Internet in the beginning, it may be the case that NASA has essentially done the same thing by spending the money to develop some of the fundamental technologies in the beginning. And then once we can bring sort of commercial free enterprise sector into it, then we can see the dramatic acceleration that we did that we saw in the Internet. So there are several Cirrus launch vehicle efforts underway. Talk about each one. There's Burt Rattan of Scaled Composites. Burt Rattan is one of the world's foremost aircraft designers and he's developed a suborbital vehicle that they're actually flying out of Mojave. This is an X Prize class vehicle. There's John Carmack, who wrote Quake and Doom. He'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 takeoff and 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 on the order of a billion dollars over the next 20 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 drives space exploration. So a little bit about each one that's a picture of the Bertra 10. If it's called White Knight, it's 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, I should make that point, quite a lot of capital that's entering this entrepreneurial space sector as well. The only drawback I think of this architecture is that it's not really scalable for something that would get to orbit. This is pretty good for suborbital, but I think the architecture would need to change for an orbital vehicle. And there's John Carmack's effort. He's a little irreverent. This is from his website. His vehicle is a vertical takeoff and landing vehicle. 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 and like three buddies. So. And I think they will make something that works actually. If you can check out their website, Almadella Aerospace, it's pretty interesting stuff. But in order to get to orbit, this would require a substantial improvement in the mass efficiency and 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. From what I understand, this is our effort. We're spending quite a bit more than the three prior entities that I mentioned. In some cases probably an order of magnitude more because what we're doing is really an order of magnitude more difficult. We're building an orbital launch vehicle. It's a 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, and so that's what we're going after initially. And then with that as kind of a revenue base, we will move into the human transportation market. So long term aims of the company are definitely human transportation. I think the smart strategy is to first go for cargo delivery, essentially satellite delivery. And our eventual upgrade path is to build the successor to Saturn V. Build a super heavy lift vehicle that could 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 our first stage tank. This is an engine test of our main engine, which is called Merlin. And that that generates about roughly 75,000 pounds of thrust. At sea level. This is our upper stage engine. It's about 7,500 pounds of thrust in vacuum. And this is an accelerated version of our launch sequence. Our first launch will be from the SpaceX launch complex at Vandenberg Air Force Base in approximately March of next year, basically early next year. And we'll be flying a Navy satellite, Navy communications satellite. So it's notable because often launch vehicle companies are not able to get somebody 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 vehicle development in history, including wartime. That's actually Vandenberg Airport base, which is about two hours away from Santa Barbara. Common themes between Zip2 and PayPal? Well, I guess both of them involved had software as the heart of the technology. Even though Zip2 was in, was servicing the media sector and obviously PayPal was servicing the financial sector, the heart of it was really software and Internet related stuff. So certainly that's a huge commonality. They were both in Palo Alto where I live. I think we took A similar approach to building both companies, which was to have a small group of very talented people and keep it small. I think PayPal had, at its height, probably 30 engineers for a system that I would say is more sophisticated than the Federal Reserve clearing system. I'm pretty sure it is, actually, because the Federal Reserve clearing system sucks. So what else is there? I think the way both Zip2 and PayPal operated was really your canonical Silicon Valley startup. Pretty flat hierarchy. 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 an equity stakeholder, give us anything. 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 we'd pick the suboptimal 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 Zip2 and PayPal were very product focused companies that, that's. We're incredibly obsessive about how do we build something that is really going to be the best possible customer experience. And that was a far more effective selling tool than having a giant sales force or thinking of marketing gimmicks or 12 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 where one customer is going to sell another customer without you having to do anything. And there are lots of instances of that. Friendster 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 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 Valley. What I came to appreciate is in Silicon Valley, 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 is simply executing a set of rules independent of where those rules make sense, and you can try to convince them that the rules don't make sense and they won't listen to you so fully. 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 energy and the velocity required to get into orbit is so substantial that compared to, say, a car or even a plane plane, you have almost no margin to play with. Typically, a launch vehicle will get about 2% of its liftoff mass to orbit, and that's the case for Falcon. So if you can only get 2% of what your rocket weighs to begin with to orbit, if you're wrong by 2%, you're not going to get anything to orbit, come crashing down in the Pacific somewhere. So that means all of your calculations have to be right. If you miscalculate 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 rocket rockets expensive. If you had 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, in the final analysis, I would say that rockets really should be a lot cheaper than they are today. And I think the way that they're built, the way they're operated, is just very inefficiently. And I think with SpaceX and Falcon, we're going to show that that's the case. Our vehicle will sell for about $6 million a flight. Our nearest competitor is the Pegasus from Orbital Sciences, which is about $25 million a flight and that has less capability than our rocket. So Falcon represent a pretty substantial breakthrough on the cost of access to space. Space. Can you talk a little bit about the difference in the customer base you have to target with SpaceX versus experiences with PayPal and how much more challenge that presents? Yeah, the customer base with SpaceX is just 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 $6 billion and wants a rocket, I mean, I'd be glad to sell it to them. 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, but, you know, I'm not counting on it. I think successful entrepreneurs probably come in all sizes, shapes and flavors. I'm not sure there's any 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 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 even 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. And also, 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 make it work. I think. SpaceX is about 30 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 if we did all that internally and. Sorry, you had another part to your question? Oh, yeah. Actually, we don't have any lawyers. The regulatory stuff that we deal with is very technical. It's really a lot like trying to get an airplane certified. With the faa, we're just getting a rocket certified. So our documentation is very. I wish we could offload it to some lawyers. They wouldn't know what the heck to do. How did the Wharton degree help? I think a business degree teaches you a lot of the terminology. It introduces you to concepts that you would otherwise. You know, there's terminology, there's something to be said for that. It introduces you to concepts you would otherwise have to learn empirically. I mean, I think you can learn whatever you need to do to start a successful business either in school or out of school. School, you know, in theory, should help accelerate that process. And I think it's. Oftentimes it does. It can be an efficient learning process, perhaps more efficient than empirically learning lessons. But really, I think you. There are examples of successful 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 empirically. Well, I should point out that Falcon, our first vehicle, 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 light class of launch vehicles, whereas the space shuttle would be a heavy class launch vehicle. So it's not quite an apples to apples comparison. However, the right comparison would be Falcon compared to the Pegasus from Orbital sciences. Falcon is 6 million, the Pegasus is 25 million. And the way we've gotten our prices low, our costs 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 maintain a very low overhead organization. And when you add up all the things we've done in those areas, that allows us to produce the launch vehicle at $6 million. 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 processing 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. There was a lot that we had to. We have to interface with. And that took a while, but it all came together, I think roughly simultaneously. I mean, developing the software and having it ready for the general public reasonably coincided 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, it's very hard to accelerate that gestation period. So if you can sort of have all those things gestating in parallel, 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 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 to actually offensively prosecute a patent. So 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 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 things that I think are pretty bogus. One is space mining. Another is space solar power. I mean, if you calculate how much it costs to bring either the photons from space solar power back to Earth or the raw material back to Earth, the economics don't make sense. They just can't close the economic case, not even by. It's probably off by three orders of magnitude. So I think probably the biggest thing that could happen is if we decide to establish a base on the moon or a base on Mars, and particularly if we attempt to make a self sustaining base, self sustaining civilization on the moon or Mars, that is enormous opportunity on probably the trillion dollar level because then you've got basically interplanetary commerce going on. I think that's pretty huge. But it's not going to be space solar power, it's not going to be space mining, I think. So let's see the government, who knows, maybe we're being spied upon, I don't know. But certainly there are some restrictions which are really annoying, such as that we're only allowed to employ people who have at least a green card or are citizen of the US we're not allowed to employ anyone who does not have permanent residency in the U.S. basically, if they can't throw you in jail, they won't let you work on rocket stuff. And 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 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 offers we got. But we always felt that those undervalued the company. And subsequently when we went 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 valuer 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. Are you going to go off a multiple of future earnings? Are you going to go off something of revenue? What are your comparables 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. You know, it's whatever the market says you're worth, that's what you're worth. So, yeah, so I think ebay made a number of offers prior to going public that were substantially below our. The value at once went post public and that kind of cleared up the disagreement and then we solved them. And what else? Actually, you had a second part of the question. I was wondering if you were concerned that ebay's current solution was going to be in a crash so they didn't need another solution. Yeah, eBay had a. It was initially BillPoint and there was ebay payments and it was really a pretty tough, long running battle of PayPal versus eBay's payment system. And it was certainly a very challenging. I mean, I think it was, you know, there were times when it felt like we were trying to win a 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 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 to ebay. Writing software during the summer of 95, 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 to small newspapers and media companies and so forth and we started getting some interest. I mean, half the time we'd be like, what's the Internet even in Silicon Valley? But then occasionally somebody would buy it and we'd 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, and then three salespeople we hired on contingency by putting an ad in the newspaper. But things were pretty tough in the early going. I didn't have any money. In fact, I had negative money. I had huge student debts. In fact, I couldn't afford a place to stay and an office, so I rented an office instead because that was actually, I got a cheaper office than I could get a place to stay. And then I just sort of slept on the futon and showered. The YMCA on Pagemull and El Camino. I was in the best shape I've ever been. Shower workout and you're good to go. And there was an ISP on the floor below us, just like a little tiny isp. And we drilled a hole through the floor and connected a null modem cable that gave us our Internet connectivity for like 100 bucks a month. So I mean, we had just an absurdly tiny burn 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 could actually. Well, like I said, there's no silver bullet that I can point to as to why 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 30 person company is, you know, an order of magnitude less than it is in Lockheed or Boeing, just for starters. So even if we did everything the same and built 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 for simplicity is because that both improves the reliability as well as 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 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 avionics system, I'll give you another example. Our avionics system, we use an ethernet on the vehicle to communicate. That may not sound like a great innovation, but it is. Launch vehicles, all the other launch vehicles communicate in the vehicle by these serial cables that run the entire length of the vehicle. And so you've got these giant copper bundles as thick as your arm running up and down the vehicle makes it heavier, it makes it expensive. And so there's things like that which when you add them all up, it makes a huge difference. No, that's a good question. That's a good question. No, I would not. I think SpaceX is not, this is advanced entrepreneuring and it may also, I can't tell you how many people have said that, you know, the fastest way to turn, the fastest way to make a small fortune in the aerospace industry is to start with a large one. So hopefully that 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 requires low capital and space is a high capital effort. Sorry, last question.