Liftoff by, Eric Berger

by James Dillard. Want to write a book-thought? Just reply to this email.

Note: I picked this book up before it was required to have an opinion on Elon Musk. I wouldn't say it's about him, but he's definitely a character in it so if you've reached your Elon quota, probably best to skip.

Before reading this book, I had no idea how close SpaceX came to collapsing. I knew that the company also ran out of money, but I hadn't realized that Elon had budgeted for 3 launch attempts to get to space, intending to walk away if he hadn't made it.

When the 3rd launch failed in frustrating fashion in August of 2008, he decided to give it one more go with something like 6 more weeks until total collapse[1]. So already things are a little dicey. They're 0 for 3 and now scrambling for a 4th and final shot against the clock. Except somehow it gets worse!

To meet this timeline, SpaceX had to fly a fuel tank from the SpaceX development facility in Los Angeles to their launch site at Omelek Island in the Marshall Islands instead of sending it by ship.

As the plane begins descinding into Hawaii, the air pressure outside the rocket becomes greater than the air pressure inside it. Fuel tanks are built with the opposite type of pressure in mind (more pressure inside than outside). The SpaceX team knew this, of course, and planned for it... except that the flight procedures they had checked for their military plane had recently been updated.

So with their backs against the wall, flying part of a rocket over the Pacific ocean, as they're descending into Hawaii, they start hearing loud sounds. The tank is collapsing in on itself. Somehow they convince the military pilot to circle around the runway one final time while a junior employee climbs inside the collapsing rocket to open up a pressurization line to allow the tank to rebalance. They land, check everything as best they can, and then, because they have no choice, launch the rocket. And it works! This is how close a company that topped out at 45% of their market's industry came to collapsing.

How is this not a movie?

I picked up this book to better understand how big leaps forward in hard tech innovation happen, but as I got to the end, including the annecdote above, all I could think about is whether or not history is contingent.

SpaceX is the most impactful possible example of the "find a company that uses a fax machine and compete with them" strategy of starting a business. The traditional space contractors are fat and lazy and not much of substance is happening in the industry. NASA and others realize this is a problem and start adjusting policies to allow to support new entrants. Someone filling this gap seems inevitable. And yet the company that exploited the opportunity is the one where a junior employee was willing to climb inside a collapsing fuel tank to save the launch.

I heard Ethan Mollick speak about a month ago and he made a point that has stuck with me: because entrepreneurship is a field that involves substantial luck, when you take lessons from the most successful company in a field, you're probably not learning actual wisdom.

The biggest winners in entreprenurial endeavors are those that make the biggest bets, not neccessarily the highest expected value bets. So if you focus on only the biggest winners in a field, you're likely to catch more noise than signal [2]. So instead, you're better off looking at the second or third most successful companies in a particular field and copying them because their tactics are more likely to bring repeatable success. No one writes books about them though!

  1. Tesla and Solar City were also near bankruptcy at the same time! ↩︎

  2. A longer version of Ethan's point is here on his substack. ↩︎