Kimbal Musk on SpaceX: Shocked when U.S. government forced $1B budget | Trending Now

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0:48Hey guys, Graham here. It's Friday, which means we get to share with you another one of our most popular clips from a past interview. The clip you're about to hear is trending on our Instagram right now. Hope you enjoy. We were talking a little earlier about SpaceX, and I'm curious the first conversation you remember having where it was about, hey, we might build a rocket company here. I was in a conference room. My brother asked me to join, and it was more like a nonprofit venture. I don't think we used the words nonprofit because we didn't really know what that meant at the time. But it was a philanthropic venture for sure to take a potted plant, just like a little ceramic jar with leaves on it, and get it to Mars.

1:39Just to prove that it can be done. Not like build a business or anything like that. And then that turned into, well, maybe the best way to do this is as a for-profit. And I remember thinking to myself, well, I'm going to invest because I love to support my brother. but also kind of cool to go watch rockets launch and blow up and stuff. And so that all kind of worked out pretty well. You were talking earlier about the price structure, and then the alternative SpaceX ended up coming around and offering with COS Plus. I'm sorry, the alternative to COS Plus. So the military-industrial complex, the reason why it has such a bad reputation is the government wants control and the for-profit companies want cash flow.

2:29So they're like, okay, let's all come up with an idea. Well, why don't we just do cost plus? Whatever it costs you, we will give you 10 % above that as your cash flow. So the natural outcome of that is for Boeing and Lockheed to say, turns out it costs us a lot, like a lot. We need 50 ,000 people for this launch. And it takes forever. And it takes forever, because the longer it takes, the more money they make. And so that, of course, wasn't the intention, but that's just how human nature works. And so SpaceX came along and said, look, we're doing the math on this. This thing's not going to cost that much.

3:05It's not going to cost a billion dollars. It's going to cost$50 million. And the government would say, but we'll pay you a billion. We just want you to do it our way. No, but that's the wrong way. you should do it this way that's 50 million we were very happy with that price the government was like no we don't want that and we actually couldn't believe it we're like but you must want it for a lower price actually they didn't care that much about price especially the generals the generals and the military they really didn't care about price because they really needed it I had one conversation with the general it was very enlightening he was like I need you to understand I am a general I am in charge of success in war.

3:49I need it to be the way I need it to be. You need to understand where I'm coming from. I need to control this. And it was enlightening because it's not untrue that if you're a general, you don't want to lose control. But it had gotten so out of hand. In fact, it was Senator McCain who fought for us in government to allow the government to do a different business model. We have a lot of respect for him. We spent good time with him. But without someone like him, like a maverick inside a government to say, hey, there's a different way here. We would still be in this world where you cough in the direction of space and it's$10 billion.

4:27As opposed to a SpaceX, we're able to do a launch now twice a week. And it's all cost. It's all you. We charge you a price and you pay the price and we deliver. Just like it is if we're Amazon. And that's how we ended up. I think we now run 80 % of the launch business in the country. I want to take you to September 28, 2008. Tell about Disneyland that morning and everything you remember from the fourth launch that followed. Well, so remember we had three failed launches. They're all in Kwajalein. So Kwajalein is in the mid-Pacific. It's a military base. And that's the only place where we were allowed to launch rockets because we couldn't hurt people.

5:09And they were right because we blew up the first three. So at this point we had no capital left. 2008 was a disaster for all around, it wasn't just SpaceX. And there wasn't also much to do, so we didn't fly to Quag. We were in LA. The control room is actually in LA, so control room is this sort of mobile home in a parking lot. It's literally as cheap as you can imagine. so the rather than stay in the in the control room my brother and I went to Disneyland with our kids and we had we had the best day because you're standing in line we didn't have any VIP passes and you're just kind of like you're just letting the day pass like it's a way it's a way to use up the day and we had we had a great time and we checked our watches you know the launch is at I remember it being at 4 o 'clock, and it was like 2.30.

6:08So we should probably get back. It wasn't like, let's get back with much time to spare. So what actually turned out is we got there maybe a few minutes before the launch. So we almost missed it. But we were just kind of in the flow. We get there, and the launch goes off successfully. and it wasn't like a celebration. Everyone just started crying. It was just this emotional release of years of working and people hugging each other. It wasn't like a celebration experience. It was like an emotional release. It was just beautiful. And I started tearing up and crying as well because just the energy in the room is so emotional.

7:04What we had done had never been done before. Launched a private company, launched into orbit, and it was the last shot we had before we'd be out of business. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required.

7:37Compatibility and availability varies 18+. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. It was done by a team of 500. Boeing's comparable division has 50 ,000. I mean, this was truly a startup, and startups don't do these things.

8:22Startups work on internet apps, so they work on whatever, you know, like kind of normal things. This is a government, this is what governments do. And then you get a$1.6 billion NASA contract a couple days before Christmas. Yeah, it was NASA saying, okay, you deserve to live. As always, thanks for listening. To see more trending clips from my team, go to youtube.com slash Graham Bensinger.

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