[[Home|🏠]] <span style="color: LightSlateGray">></span> [[Interviews]] <span style="color: LightSlateGray">></span> April 18 2024 **Insider**: [[Peter Beck]] **Source**: [OPTO](https://www.youtube.com/watch?v=ALxxgz-aOUQ) **Date**: April 18 2024 ![](https://www.youtube.com/watch?v=ALxxgz-aOUQ) 🔗 Backup Link: https://www.youtube.com/watch?v=ALxxgz-aOUQ ## 🎙️ Transcript >[!hint] Transcript may contain errors or inaccuracies. **Hayden Cox:** Welcome Peter, it's great to have you on the show. How are things? **Peter Beck:** Very good thanks, great. **Hayden:** Well, thanks again for taking the time to be with us. I want to start with an intro question, mainly for the people that aren't as aware of Rocket Lab, and then we'll get into the detail of some of your technology and your plans for the future. So for anyone unfamiliar with the company, what separates Rocket Lab from peers and how do you currently generate the majority of your revenue? **Peter Beck:** I think most space companies are easily defined as sort of a launch company or a spacecraft or a satellite company. What's unique about Rocket Lab is we're both. We have a raging launch business with our Electron launch vehicle, and a similar size business with respect to our satellite and spacecraft division. But what makes us even more unique is we don't just build spacecraft, we build the majority of the components that go into the spacecraft at very low-level details. Every reaction wheel or solar panel or even solar cell from a wafer, we produce. Really, the best way to think of Rocket Lab is a one-stop shop from spacecraft through to launch and even operations of spacecraft on orbit. ### How Peter Beck Founded Rocket Lab **Hayden:** Fantastic. I think that's a nice introduction. We'll get back to the detail of a lot of that in due course, but perhaps we can just circle back and cover your background and introduce you as a person to the listener. I was reading some of your biography on the Rocket Lab website, and it talked about how you've been building rockets for a long time, starting out creating water rockets as a teenager. Around the same time, I think you turbocharged your Mini, which was pretty interesting to hear. I think maybe there's a general theme there of just being interested in rockets certainly, but combustion more generally. Perhaps you can just talk to us about where you think that came from? **Peter Beck:** You've done your research. If you look too much further, you'll see rocket bikes and rocket-powered scooters and rocket packs, so I would stop your research at this point. But I've always been fascinated and drawn to really difficult engineering. The more difficult the engineering problem is, the more I enjoy it, and high degrees of energy and horsepower. If you combine those two things together—high amounts of energy and really difficult engineering—you kind of naturally end up building rockets. So there's the engineering side of it that I really enjoy, there's the space side which I think is hugely captivating, and there are very few things that have such large impacts as the space industry. Then later, of course, as the hobby grew into a business, the business side of it really fascinates me as well. **Hayden:** Absolutely. We'll touch on those early business experiences setting up Rocket Lab as the company that we know today, but before we get there, perhaps we can just work through chronologically. I read that your experience spans working with appliances at Fisher & Paykel—that's not a company I was aware of, so perhaps you can give me a bit of detail there—through to working with some advanced composites for high-performance applications as part of a government research institute back in 2003. I'm just interested, as we speak to a lot of founders on the show as well, how formative were those early experiences? **Peter Beck:** Tremendously so. For me personally, I started off my career as a tool-making apprentice—precision engineering on the tools. I was always building rockets in my spare time, but I went through tool-making apprentice, then went into the design office and did product design, and then production design where I helped build production lines. Then into analysis and CFD and a whole bunch of other things, and then as you pointed out, went to a government research institute and did advanced composite materials, supporting things like the America's Cup boats and things like that. So really bleeding-edge stuff. All those things provide for a great repertoire of engineering knowledge, skills, and experience. I'm equally happy working in metallics as I am in composites. So I was very lucky to have a very broad education in that sense. It's not like I studied just the fracture mechanics of metallics—I was in the field, breaking boats and wind turbines and living real-life experiences. So very lucky to have such a broad upbringing in such a wide range of engineering disciplines. **Hayden:** Absolutely. It sounds completely formative. Then to take us to the business experience that you reference, I think you founded Rocket Lab in 2006, launching Ātea One in 2009. But I'm pretty curious about how you launch a rocket startup in New Zealand, obviously where you're from, and how then you go about securing early funding, how you go about forging relationships for a company like that. Talk us through that process. **Peter Beck:** The original plan was to head over to the states and go and work at NASA or one of the large space contractors. I went over to the states and did a bit of a rocket pilgrimage, and really from that trip, I learned two things: one, as a foreign national, it's very, very difficult to get involved in the US space industry; and two, a lot of the things that I thought were important weren't really being worked on. So I came back, and when walls are put in front of you, you can choose one of two things: turn around and go in a different direction, or just start digging a hole under the wall. So I just started digging a hole under the wall and created Rocket Lab. Early funding came from local New Zealand investors and tiny amounts of funding, of course. Then later funding, I jumped on a plane and went to Silicon Valley. I had the mindset that I'll either be run out of town or come home with a check. In the end, I only actually pitched to three VCs—there were only three VCs that I wanted to work with—but was very lucky to come home with a check. It's funny now because I look back on all those years and somewhat feel like an old soul of the industry, because I can remember a time when running around Silicon Valley trying to raise like $5 million for a space company was an absurd thing. We've seen people raise like a billion dollars, and it's crazy to see how far things have moved so quickly. ### Rocket Lab's Evolution **Hayden:** Incredibly so, and that's obviously one of the many reasons we wanted to speak to you. The story from start to finish is fascinating. I guess to bring us to closer to present day, you're one of the few commercial rocket companies spread across two continents. We talk about New Zealand, but then obviously you've got your setup in the US as well. You're also operating at scale, which separates you from a few other industry peers that we'll talk to in a second. But how has the company's evolution and that geographic split, more particularly, changed your role as a CEO and founder? **Peter Beck:** We've been global from day one, so it kind of... nothing is like, I just get on a plane. There's nothing new there. There was zero space industry in New Zealand when we started, so it's not like we had a local market. It was always big global from day one. Quite frankly, the only reason we have any operations in New Zealand at all is because of the Mahia launch site, where we launch Electron from, which is the only operational private orbital launch site in the world. It gives us a huge advantage. So we started off as a New Zealand company. I think 2013, we flipped into being a US entity with a New Zealand subsidiary, but we've been global from day one, and that's just normal. ### Industry Landscape and Scaling Challenges **Hayden:** All right, well, let's get into the competitive landscape and the industry at large, as I alluded to a moment ago. In terms of the industry's overall evolution, a number of rocket companies exist now, with infinitely more satellite firms, something that we'll speak to later on. I just wondered if we should expect increased consolidation as the industry matures. How do you see that panning out between launch and satellite companies? **Peter Beck:** Let's talk about launch first. I would say that we were at the beginning of a small launch evolution. We weren't actually the first—Virgin Orbit was, I think, the first. But we were tracking at one point 140 startups in small launch, and we were not picked to be the favorite. Virgin Orbit had over $1.2 billion poured into it, and to give your listeners some context, that's $1.1 billion more dollars than we spent getting our first rocket into orbit. So if you're running a book, the odds weren't stacked in our favor. But at Rocket Lab, we have a couple of core fundamentals. I often find myself up on the stage with a lot of the other rocket CEOs, and I look down the stage, and generally, I'm the only non-billionaire sitting on the stage. The reality is, at Rocket Lab, we have no money, so we have to think. We can't outspend our competitors; we just have to outthink them or outwork them. That's the only way we can be competitive, and that has been the foundation of the success of the company. Sometimes too many resources makes you lazy. The industry went through the beginning, and then there was a tremendous amount of money that flowed into the industry. We saw things get funded that we were just sitting there scratching our heads over, to values that didn't make sense. That's typical of any kind of almost-bubble, if you will. But the one great thing about the space industry is that you can be very aspirational, which is awesome. But the other side of the coin is, at some point, you have to deliver. There's been a tremendous amount of aspiration in the industry and very, very little delivery. I think what you're seeing right now is the rubber is hitting the road, and a number of launch companies have hit the wall, gone bankrupt, gone public, failed, or carrying on. So yes, ultimately, at the end of the day, you have to deliver. It's very, very difficult in this industry to deliver. It's very easy to talk about exciting things. So we've really seen the separation from aspiration to delivery, and I think there's a bit more of that yet to come. **Hayden:** Fantastic. I wanted to draw down to that point because it does seem that a lot of those weaker propositions have been cut away at this point. There's focus on two leading companies in terms of launch schedule—that's yourself and SpaceX. What do you think it is about Rocket Lab and SpaceX that separates you from the rest of the industry, particularly in terms of your ability to launch at scale? **Peter Beck:** There's a number of things. Firstly, you need a product that works and that people want. That sounds logical, but that's actually not that easy to deliver in this industry. Then you have to successfully scale that product. I think Elon's on record in saying that actually scaling the Falcon 9, or in fact scaling any product, is like 100 times harder than building the first one. And this is absolutely true. As you can see from our background that we talked about in the beginning, I was a production design engineer developing production lines, so I know production well. As we were developing the Electron rocket, we were developing it with an eye on production. We didn't develop a product and then go, "Okay, now let's put it into production." That just doesn't work. So really, I think it's a unique mix of skills and experiences, and bringing a product that people want to actually use—the right product at the right time. There was a lot of debate in the small launch industry about what was the right payload class, and we were very resolute with what we felt was the right class, and we were right. That's great. We're doing the same again with Neutron. When we announced that product, there was some debate about our selection of the payload size, and I think we'll be proven to be right there again. But bringing the right product to the market at the right time and then scaling it successfully are two things. We've seen a number of people bring a rocket to orbit once or twice or even just a few times, but where the real separator is: one or two, that's actually not very impressive. But I can tell you that our 20th rocket was at least 100 times harder to build than our first rocket. We're approaching 50 now, and apart from SpaceX, as you point out, nobody else is building and launching at that frequency. It takes about 50 rockets before you start to get into even a groove. **Hayden:** That's why I was keen to point it out. I think it's an incredible pace that you've been able to set. You talked there about a strategic decision you've made about the payload size in relation to Electron, and then you've made a similar decision in relation to Neutron. How do you go about making those decisions? Because it's almost critical to the longevity of the company. Talk us through that decision-making process. **Peter Beck:** I'd like to pretend that it's more complicated than it is, but it's not as complicated other than looking at all the payloads that required launch, to what inclinations and what energies, and understanding your customers' business as well. You can wish a whole lot of business without actually talking to your customers and develop a product, but ultimately, you have to listen to what the market needs. We have a bit more of a bet with Electron because there was no small launch category, and we kind of created it. But at the end of the day, it's just a logical disseration of what was out there at the time and what was predicted in the future. With Neutron, I'd say we're in a much more luxurious position because we have so many relationships with so many customers that they just told us, "This is what we need." A lot of that largely converged. There are some things that didn't converge that you have to make decisions around. Like, if I make the rocket 10% bigger, my operational costs might be 20% more because I flip over a threshold. So I'm going to forgo 10% of the market to save 20% of the operational cost of the vehicle. You have to be sensible in the way you make these decisions. But I would say Neutron, in almost every respect, having a do-over is significantly easier than the first one. ### Space Industry Applications **Hayden:** Great, that's really interesting. We'll come back to Neutron, but just to talk about the current applications of your technology, just to make some of this less abstract again for people less familiar with Rocket Lab. I think we had circa 2,500 satellites in low Earth orbit around three or four years ago. Today we have close to 10,000. I mentioned this just to get a sense of the main applications of your rocket technology today. What are all these satellites being used for predominantly? **Peter Beck:** It kind of breaks up into a few different categories. I think the first one is communications, so we're starting to witness the rise of broadband or internet from space. There's a number of constellations in formation around the world that are coming together to service that market. We're right at the very beginning of direct-to-mobile, so once again, it's a communications platform, but direct-to-mobile applications. Then another big category is Earth observation, and within Earth observation, it breaks into a number of different verticals as well—obviously optical is one, and then synthetic aperture radar, and then RF. So various things, but it all kind of boils down to looking at the planet and looking at things or people or changes on the planet. Then you have the sciences, whether it be Earth or interplanetary sciences. And you have applications like direct-to-dish TV and entertainment, which you could largely couple into communications. And then other things like GPS. I think the thing about the space industry is it's all hidden infrastructure. You jump on your mobile phone and get an Uber—I guarantee you that nobody getting an Uber realizes that is totally enabled by the GPS constellation in orbit. I joke if you turn off the GPS constellation, the planet just about stops. It'll literally be comical—you'll have ships driving into each other, planes flying around in circles, your Tinder date not knowing where to go. It would just be carnage. Space is literally hidden infrastructure that we absolutely rely on critically every day for just about everything we do. ### Rocket Lab's Revenue Channels **Hayden:** That's really interesting. To pull out maybe a less scaled application and one that's maybe less familiar even to those familiar with this industry at large, I think last year you delivered the first of four advanced spacecraft designed to facilitate in-space pharmaceutical manufacturing for a company called Varda. So it wasn't an application that I was aware of when I was reading about it, so perhaps you can just introduce to the listeners exactly what that is and how it works? **Peter Beck:** Certain protein crystals grow differently under zero-g. You have one G—one times Earth gravity—acting on a crystal, it grows a certain way. You take away gravity, and it grows in a much more pure sense. The purity of those crystals is very interesting to pharmaceutical companies because they can make more effective drugs. So that particular project, we developed and built a spacecraft—it's kind of like an on-orbit factory for a customer, Varda. Then we held it in orbit and operated it in orbit for a number of months. Then the real tricky thing is that we had to land it back in the Utah desert—the capsule—for them to recover the drugs. There's only one other commercial company that's re-entered something and landed it safely back on Earth, and that's our friends over at SpaceX. So once again, a very complex thing to do. But we don't do these things because we're trying to be cool. Every one of these projects is very strategic for us. The reason why we did that project is that at some point in time, we're going to have some astronauts aboard a Neutron capsule perhaps, and I'd much rather learn how to do re-entry on a pharmaceutical crystal than for the first time with astronauts aboard. That project really taught us how to do precision re-entry, and that is a capability the company now has. If you said to us, "We want you to re-enter a human spaceflight capsule in the Pacific Ocean," we would just go, "No worries." So everything we do, we do for a strategic reason. **Hayden:** That's really interesting. My next question was about whether that was an experiment aimed at kind of growing that as a properly scalable revenue channel moving forward, and whether you get a lot of demand for that type of product. But actually, was it more just that precision re-entry point that you mentioned? **Peter Beck:** We think that down-mass is interesting, and we think what Varda was doing was an excellent approach, and we're very keen to support their growth. As you pointed out, we have a number of these missions on the books. But that wouldn't be enough for us to do it. There has to be a strategic element of where we direct our engineering resources. We're in a slightly fortunate position in the fact that we get to choose our work. We have so many opportunities presented to us that we have to really be careful about what we take on and how quickly we grow, because the most important thing at Rocket Lab—and you can ask anybody—is you have to deliver, do what you say you're going to do. We never want to get into a position where we don't deliver for our customers, because we'd certainly like to think if you ask anybody in the industry what Rocket Lab stands for, that is that stuff is beautiful, stuff works, and we deliver. **Hayden:** Absolutely. On that point then, in terms of generally delivering for customers, I wanted to dig into your business model and generally the revenue channels and applications you see out there. We've discussed a couple of them already. I just wonder whether you get any sense of comfort in respect to the maturity of some of these revenue channels. When you look across at Amazon's Kuiper project, you've got SpaceX's Starlink—we talked about that earlier—does that resonate at all? **Peter Beck:** Absolutely. I feel like an old soul in the industry, but I remember when a lot of these projects were talked about, and there was going to be thousands of satellites in orbit, and everyone's like, "That's just crazy, it's never going to happen." When you see Amazon, MDA Global Star, Apple with their SOS platform now—when you see real companies utilizing space in really important ways to them, it's no longer science fiction. The democratization of space is going to occur—it is unfolding as you see it. In my short career, I've seen rockets go from purely a government program to now—especially the US government, there are less good examples around the rest of the world—but within the US, it's only the SLS rocket that's owned by the government now. Everything else is commercial. So space launch has been completely democratized in just a few short decades. ### Government Contracts and Engineering Approach **Hayden:** Absolutely. On government contracts then, or government applications even—government involvement in general in any industry, I suppose, bolsters the total addressable market in the investment case if we're looking at it from an investment perspective as well. I did see the news of Rocket Lab's first National Reconnaissance Office mission from US soil. Perhaps you can talk to us about the strategic significance of that launch, achieved from your Launch Complex 2 in Virginia, I believe? **Peter Beck:** We've actually had a very long relationship with the NRO. That was our fifth launch for the NRO, first launch, as you pointed out, from US soil. We've launched the other four out of New Zealand, which is a really important partnership between the two countries as well. They're a great customer, probably the most discerning customer that you'll find. The stuff they're doing really matters to the national security of not just the United States but often the world. So as far as the upper echelon of customers that you can fly, that's really it. They fly on SpaceX, ULA, and Rocket Lab, and that's it. So tremendous responsibility to be trusted with such payloads. **Hayden:** Your point there around the discernment of a customer like that and the level of customer like that—you're clearing sizable administrative security hurdles to work with and to have those government contracts on your books. As you say, it's not the first of these missions, but just talk to us generally about how difficult it is to overcome those hurdles or work with the government to overcome them, and what that then means for the future of the business moving forward? **Peter Beck:** We've been super lucky that we've seen really strong government uptake and belief in the company and in the product. Like I say, all we care about is execution, and ultimately, that's all a customer cares about, especially a government customer. It's a different working relationship with a government customer, especially a national security customer, than a commercial customer. A commercial customer just wants a thing. A government customer wants a thing but wants to know how that everything about that thing and how it was made, and a tremendous amount of security aspects about that thing, and so on and so forth. That's fine, but it is a different beast. But I don't see it so much as overcoming issues to work with the government. I think the government has leaned forward very clearly into commercial space. It's been our experience, if you create a great product, a thing, or a service that is valuable, they're very innovative and adaptive to try and use it. ### Engineering Approach **Hayden:** Let's turn our minds briefly then to your engineering approach. We haven't gotten into the detail of that, so perhaps we can do that here, starting with launch. Perhaps you can just give us at a high level why you've chosen carbon composites versus other materials? **Peter Beck:** I have a unique background in both metallics and composites. A rocket is a giant engineering compromise, so you trade one thing against each other all of the time. As an engineer, it drives you insane because an engineer is always striving for perfection in every system and every component and every structure and every material, but that just doesn't exist. So you often find yourself sitting in the corner rocking backwards and forwards in total frustration. But the reality is that the lighter the structure you can make, or the lighter everything you can make, the more goodness you will have. We call it the "spiral of doom" at Rocket Lab. If you add, say, a kg of mass to a rocket, then you have to add 10 kgs of propellant to lift that kg of mass. But the reality is, to hold those 10 kgs of propellant, you need to add another kg of tank to lift that extra 10 kgs of propellant. So then you need to add another 10 kgs of propellant to lift that extra kg of tank mass, and on and on it goes, and you just end up with a rocket that just has negative performance. The reality is that somewhere between 1% and 5% of the total rocket's mass is actually the payload you put into orbit. So if you're a fraction of a percent out on anything, you just end up in the spiral of doom. If you can reverse the spiral of doom and say, "Well, my tank did weigh 10 kgs per unit length of tank, now it weighs 9," that means I can take out a bunch of propellant. Then I take out a bunch of propellant, I don't need so much tank, and it starts shrinking. So using a material—this is a very long-winded answer to your question, so I apologize—but if you can use a material that's just fundamentally lighter and stronger than traditional metallics in the first place, then you get to spend mass in other areas. This is even more true with Neutron. Neutron is a very large carbon composite rocket—some of the largest carbon composite structures produced. But the reason why we do that is that we save so much mass in that structure that all of a sudden, our propulsion system or our engines don't have to be so highly stressed. In a reusable rocket, the thing that you want just kind of idling and not screaming is your engines. So once again, giant engineering trade and compromise, but it's the lighter that you can make your structures, the better starting point you have. A carbon composite structure is the strength of steel but four times as light, or a quarter of the weight. ### Rocket Lab's Neutron vs SpaceX's Falcon 9 **Hayden:** Fascinating. I can see how you can quite quickly end up in that spiral of doom, and working your way out of that could be mind-bending to an extent. You mentioned Neutron there. I meant to ask it earlier, but that competes more directly with Falcon 9 and SpaceX, whereas in the past, you focused on smaller rockets as we've already described. You listened to your customers—that's what they wanted—but to what extent is this a more crowded market, and how does the product aim to differentiate from the other products that exist elsewhere? **Peter Beck:** It's unashamedly a competitor to a Falcon 9. The Falcon 9 is an amazing vehicle, and it's created—it's right now arguably a monopoly, and that's fine. But there are very few examples in history where monopolies persist. We have a couple of unique advantage points. One, we've learned everything we needed to learn on a small rocket, including reusability, because we cut our teeth on reusability for Electron. We've learned a whole bunch of really expensive and hard lessons on that vehicle, which, when you go to apply to a larger vehicle, save you a lot of time and effort and energy. The other thing to remember is that a small rocket is by far the hardest rocket to build, and I can put my hand on my heart and say that because we've built a small one, and now we're building a big one. The reason why it's so hard is that there are so many things on a small rocket that don't scale. A quality control organization doesn't care if you're building a 12-inch valve or a 2-inch valve. It doesn't matter the size of the valve; it's the same size organization. Where that becomes challenging is that you have to have these organizations. You have to have flight safety teams, you have to have supply quality teams, you have to have your own internal quality team, and so on and so forth. But with a small rocket, in the case of Electron, it's sort of a $7.5-8 million sticker price. So you can't have a 50-person quality team amortized over an $8 million sticker price. You can easily do that over a $55 million sticker price. But nevertheless, none of those teams or functions or capabilities care what size your rocket is. You still have to provide that service or have them. We have been forced to innovate to fit all of those functions and all of those things and build a reliable product and a manufacturable product into a sticker price of $8 million. So when we look at a Neutron sticker price, call it $50-$55 million, it's like luxury. I've never had so much margin to do stuff before. How we think we're going to be competitive in this marketplace as well: firstly, we have created an organization that is just so lean and so efficient that when you apply that to a much larger scale, it's just awesome. And then we've had all the advantages of both our learnings and, quite frankly, their learnings to build a vehicle which looks very different from any other rocket. That's not because we're trying to be different; it's because we're applying all of those lessons combined that have been learned to a new vehicle, a new vehicle design, which we think is going to be extremely efficient. ### Keys to Build Space Infrastructure **Hayden:** Fascinating. I'm glad we went back to that question because that was something I think a lot of listeners would have been keen to hear, and that makes complete sense. I think to finish, it makes sense to turn our minds to what's next. In your bid to build a long-lasting space company, a company with real longevity, I discussed with Colin actually your concept of "space as a service," or the result of vertical integration strategy enabling this new kind of SaaS or provision of direct-to-customer capabilities. Perhaps for anyone that hasn't heard it, just give us a sense of what the vision is there? **Peter Beck:** I'm sorry I've monopolized this conversation around rockets, which tends to happen, but actually two-thirds of our revenue as a company comes from our Space Systems division. Rockets are the enabling keys to space, but actually two-thirds of the company's revenue is actually from our spacecraft and spacecraft systems. That kind of comes to the point of your question. My view of the large successful space companies of the future is not a standalone rocket company or a standalone spacecraft company. When you combine both a rocket company and a spacecraft company together, you have the keys to space and you have the ability to build any infrastructure in it. At that point, it's really a question of what service are you going to provide from space. Where Rocket Lab is ultimately going here, albeit very methodically, is ultimately we want to just provide services from space. We're at a really interesting inflection point where customers are coming to us now and asking not about how many kilowatts the solar panels you can provide us are, or how many newton-meters of torque your reaction wheels produce, or what's the payload of Neutron. No, they're coming to us and saying, "I want to do this thing on Earth, I think it can be done from space, I don't know anything about satellites—and quite frankly, I don't want to know anything about satellites and all of the operational constraints that go with them—I just want to provide the service on the ground. Can you do it?" So that's ultimately where I think all the large space companies will drive to. To be a competitive, successful large space company, you have to have your own rocket, you have to have the keys to space, and you have to be able to build whatever infrastructure you need to build. Then it's just a question of what services are you going to provide for whom. **Hayden:** Great. I mean, to join this point and this part of the conversation with the engineering one, I think I heard you describe on an interview, potentially with Forbes, how the industry maxed out on combustion efficiency, chemical propulsion, materials, etc., a long time ago. So as a result, we're seeing Elon just building bigger and bigger rockets. "It's all that's left to do," right? But is your view, in terms of what's next and what is left to do from Rocket Lab's perspective, this end-to-end, direct-to-consumer offering? **Peter Beck:** I think that is the—I mean, that example, I guess, is purely on the rocket equation side. There, we've reached chemical equilibrium. There is nothing more for the chemicals to yield. So unless there's a step change in the way we propel stuff—other than just burning things—then your only option is to just build a bigger and bigger rocket, get the cost per kilogram lower and lower. That's the only option. But that's on the rocket side of the equation. More holistically, if you just treat rockets as keys to space, actually, yes, the logical devolution, if you want to call it that, of what all this ends up as is just putting infrastructure and services in orbit and being that end-to-end. The space industry is best described as a whole bunch of mom-and-pop shops all at subscale. If you want to do anything at scale in space, it's just really difficult. As we've talked about in this conversation, no matter what, your biggest competitor in the space industry is physics, and everything you do is an engineering compromise. So the satellite that you put on the rocket is compromised against the G forces or the g-loading of the rocket, and vice versa. If you can start to make that a little bit blurry—the rocket looks a bit like a satellite, the satellite looks a bit like a rocket, and they're sort of built in tandem together—then that's when you can extract real advantage. **Hayden:** Absolutely. I want to finish on two questions. The first is just to think about the ultimate scale and total addressable market within this space. Market projections are testament to the unknowns here. I think projections say we'll hit anywhere between one and two trillion in terms of TAM. Do you think—maybe back to that SaaS/DTC model point—is that the thing that starts to justify even the low or high end of those projections? If not that, what else do you think can start to feed into that TAM? **Peter Beck:** I think it's exactly right. If you look at the TAM as it stands today across the industry, call it somewhere between 10 and 20 billion of the space TAM is launch, somewhere between 20 and 40 billion is satellites or space infrastructure, and over 300-350 billion of the TAM is exactly as you say—the services that you use down on Earth that come from space. So if you're just a brutally logical person and you stand back and look at the space industry, and there's three buckets of TAM that you want to play in, naturally you point to the big one. But the challenge is that to get to the big one, you kind of have to jump through the hoops of the first two. So that is just a pain—that it's so difficult to get into space and then operate there, otherwise this would be easy. But the reality is, there's no free lunch, and at the end of the day, the biggest competitor in this industry is physics. ### The Future of Space **Hayden:** Absolutely. I want to finish on a question then that we ask all of our guests. You've been really great with your time, so I just want to make sure we get this one in. It's the same question that we ask all of our guests. We speak to company founders, specialists from different themes and industries as well. We ask all of them to leave listeners with one takeaway, perhaps an exciting application that's yet to go properly mainstream. What's your next big idea within the space industry at large? **Peter Beck:** Firstly, I think it would be both commercially silly and probably slightly illegal if I disclose non-public information, so I'll be restrained in my view. But what I will say is, the biggest idea to happen in space has not been thought of yet. We are such at the beginning of the democratization or the commercialization—however you want to say it—of the industry. Call it three decades ago, we were all just standing in front of giant government rockets that launched a few times a year. This is the beginning of such a massive industry. It's a little bit almost like the internet. You think the internet was—yeah, email was going to be the thing for the internet, but who could have thought of all the crazy things that occurred after that? I think we are literally opening an entirely new domain. It's like standing on the shores of a beach, and all of a sudden there's boats. That's kind of where we're at. So not to be too waffly, but I truly believe that the biggest application is yet to be thought of, let alone executed. **Hayden:** No, absolutely, and not waffly at all. I think that's a fantastic point to finish on and something to look out for, listeners, moving forward. I think that just leaves me to say thank you very much, Peter, for joining me on the podcast. Been a real pleasure. **Peter Beck:** My pleasure, Hayden. Thanks very much.