Tag Archives: Reading

Liftoff: How Elon Musk Built SpaceX

At 1310 East Grand Avenue in El Segundo, just south of Los Angeles, sits a large white building. In 2002, it housed only about a dozen people. There wasn’t even a receptionist.

Deep in this building was a small group of cubicles, staffed by about a dozen men. This tiny group had an audacious goal: sending the first humans to Mars.

Their leader was a young internet entrepreneur named Elon Musk. He had just made $180 million from the sale of PayPal. Many men in his position would buy an island and relax, or perhaps begin a career in philanthrophy. But Elon toiled away in this nondescript warehouse instead, building the future.

This is the subject of an outstanding new book I just finished called Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX.

From this tiny team, Musk built SpaceX, which now does two thirds of all commercial satellite launches in the world and owns the most powerful rocket on earth, the Falcon Heavy. That small group of employees has mushroomed to nearly 10,000.

To go so far so fast, Musk needed the best people in the business, and he focused like a laser on finding them. One engineer’s wife got a job at Google in the Bay Area, which meant he couldn’t accept Musk’s offer to work at SpaceX. Undeterred, Musk called the CEO of Google and got the engineer’s wife a transfer to Los Angeles. Sure enough, he got the engineer he wanted.

Musk went so far as to personally interview the first 3000 people SpaceX hired. Musk paid less and his company was unproven, but he excelled at inspiring people to join him to revolutionize space travel.

Even with Musk’s drive and a superb team, SpaceX faced many struggles. By 2008, they had three failed flights and barely a month’s worth of cash left. Even Elon’s considerable fortune had run dry supporting both SpaceX and Tesla. But Musk and his team stayed focused and successfully launched a rocket into orbit in the nick of time. This achievement won them a NASA contract that kept the company alive.

SpaceX questioned everything about how business is normally done in aerospace. Most companies buy parts from established suppliers, but SpaceX built almost everything itself, substantially lowering its costs. For the parts it did buy elsewhere, SpaceX ignored common practice as well. Instead of paying in 30 days, SpaceX paid in as little as 24 hours. This got their orders prioritized, which helped them move faster than other rocket companies.

Today, only one other private company, Rocket Lab, has reached orbit. Jeff Bezos’ Blue Origin, despite all his money, has never reached orbit. Indeed, SpaceX is so dominant that customers sometimes spread around a few of their orders, just to make sure its competitors don’t all go out of business.

If I had seen Musk in that empty warehouse twenty years ago, I would never have believed what SpaceX would become. But Musk saw it, and stopped at nothing to get there.

When the first man steps on Mars, will it be Musk?

Dig into these posts for more on Elon Musk and space:

Photo: “SpaceX Dragon Propulsive Descent Landing Test” by NASAKennedy is marked with CC PDM 1.0

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Amazing Drugs Are Going from the University to the Graveyard, While Patients Pay the Price

Was the cure for cancer invented in a university, only to be shelved for a lack of funding?

University labs are creating incredible drugs on a regular basis. Unfortunately, most will never get to the patients that need them so desperately. This is the conclusion of an intriguing book I just read, Preserving the Promise: Improving the Culture of Biotech Investment, by Scott Desain and Scott Fishman.

The problem is that universities don’t have the massive funds it takes to bring a drug candidate through clinical trials to FDA approval. What about Big Pharma? Well, they’ve been cutting their R&D budgets drastically for years.

This leaves early stage biotech investors to fund much of the commercialization of new drugs, and there simply aren’t enough of them to fund all the good candidates. Indeed, the number of investors specializing in this area is shrinking. This doesn’t surprise me given that most early-stage investors focus on software startups and have a software background themselves.

This does leave the few angel investors who specialize in biotech in an enviable position though: more great companies out there than there are angels to fund them means big slices of great companies for less money, and thus higher returns. This is an area that I may be branching out into in the future. Being even a tiny part of creating a new lifesaving drug or medical device would be incredible.

University policies also hinder the effective commercialization of research, the book notes. Technology Transfer Offices own the patent, but sometimes are hesitant to license it unless they can get lots of revenue for it right away, which is hard for a fledgling company to provide. In other cases, they bury the patent, thinking it unpromising. And university conflict of interest policies can often stop the inventor from continuing to work on the research with company funds. This separates the technology from the person who is best positioned to advance it.

In all, this seems like a neglected area with a lot of problems. That we rely on it for virtually all new drugs is scary. But investors like myself should eye the area with interest, especially given rich valuations in software startups.

For more posts on biotech, check these out:

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Photo: The co-founders of BioNTech, a biotech success story. “Forschungszentrum der Biotech-Unternehmen BioNTech AG und Ganymed Pharmaceuticals AG” by MWKEL-RLP is licensed under CC BY-NC 2.0

What I Learned From James Watson, Co-Discoverer of the Structure of DNA

We wish to suggest a structure for the salt deoxyribose nucleic acid (DNA). This structure has novel features which are of considerable biological interest.

So begins the famous Nature paper by James Watson and Francis Crick, who discovered the structure of DNA in 1953. Their discovery revolutionized biology and won them both the Nobel Prize.

I just finished reading Watson’s book The Double Helix, and as a layman I found the inside view of the process of scientific discovery intriguing. What struck me most was the importance of collaboration.

We are used to thinking of scientists as lone geniuses hunched over a lab bench until they exclaim “Eureka!” But Watson’s book makes clear how important the many scientists surrounding him at the University of Cambridge were to his discovery. He repeatedly checks his findings with others more experienced than he in a particular area, like structural chemistry. And without the long conversations with Crick, the discovery would never have happened in the first place.

Being in the right environment was so important to Watson that he left the University of Copenhagen, against the terms of his fellowship, when he realized he needed the expertise of the Cambridge circle to make a real breakthrough. He did what was necessary and asked for permission later. What would’ve happened had he sat around waiting for permission?

The casual sexism with which Watson treats Rosalind Franklin, the expert in X-ray photography that wound up playing a major part in the discovery of the double helix, was striking to me reading the book in 2021. Watson tends to characterize her opinions and insights as obstinancy or rudeness. He doesn’t view his male colleagues the same way.

If cooperation is so critical to science, I can’t help but wonder what Watson could’ve achieved with a more collaborative attitude toward Franklin. Would the breakthrough have come even sooner? Would they have been able to make even more discoveries together if Watson had been more open to her expertise?

I loved getting a view of what is in a scientist’s mind as they make a major breakthrough. Watson was by no means certain he was right at first, but he worked methodically to prove what he suspected. That even such a genius has doubt in his ideas can cheer the rest of us!

The great chemist Linus Pauling had suggested a different structure of DNA, which turned out to be incorrect. But when he saw the elegance of Watson and Crick’s double helix, he was in awe and thrilled, rather than upset at being proven wrong.

I find that attitude to be one of the great things about science. There is both collaboration and competition, but in the end, everyone is working toward one goal: understanding.

In all, I found Watson’s book interesting and instructive. Since it was written in 1968, I’m not sure how many people are still reading it, but it’s worth a look. Check it out!

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What I Learned From an Investor Who Turned $100,000 into $100,000,000

Above: Angel investor Jason Calacanis

The angel investor Jason Calacanis got in on the ground floor of Uber, Thumbtack, and other highly successful software companies, multiplying his $100,000 investment into $100,000,000 in just 6 years. With results like that, you know I had to read his book!

The idea of helping, even in a very small way, to build the future appeals to me a great deal. And if my investment multiplied many times over, well, I wouldn’t mind! 🙂 In this superb and brief book, Calacanis lays out a detailed game plan on how to achieve results like his.

He suggests beginning with syndicate deals, in which an angel investor invests alongside more experienced angels. You can begin with as little as $1,000 per investment, and such syndicates can be found at AngelList, SeedVest, and elsewhere. In fact, the author has his own syndicate, here. Unlike most investment managers, the syndicate lead only gets paid if he scores for you. There is no management fee at all, but the lead does keep 20% of any profits for his/her trouble.

You can build your skills, experience and connections in those syndicate deals, and then move on to deals on your own. Calacanis explains that you have to evaluate the founder himself/herself more than the product. It’s the person behind the company that will make or break it. Products can change a lot more easily than people can. What are is the founder’s chances of suceeding in this business, and in life?

I was struck by how similar the approach to finding investments is to podcasting, journalism, or for that matter, blogging. Calacanis advises asking short questions and writing down the founder’s answers at length. Then, you write deal memos when you invest, to lay out the thinking behind the investment. These could help remind you of your reasoning if times get tough for the company, and also guide future investments.

There’s a ton of actionable details in this book, and I won’t get into all of them here. But if you’re even remotely considering investing in early stage companies, I strongly suggest giving this entertaining and highly readable book a look!