SpaceX employed several key strategies in its early years to drive growth and innovation:
Vertical Integration and Closed Systems
SpaceX favored vertical integration and closed systems organizationally. This allowed them to tightly control the design and manufacturing process to drive down costs and accelerate development.
Mobilizing Resources
Elon Musk was able to effectively marshal tremendous resources towards SpaceX’s goals. This was enabled by his large personal stake in the company and ability to stir public and investor emotions, even if the business logic wasn’t always clear.
Lean Development and Manufacturing
SpaceX built a ruthlessly lean development and manufacturing culture to drive efficiency. They pioneered innovations like 3D printed rocket engines and a carbon fiber fuselage to cut costs.
Conservative Initial Designs
SpaceX’s early rockets like Falcon 1 and early Falcon 9s were conservative designs that contained no new technology. This allowed them to rapidly iterate and improve without taking on too much risk.
Bespoke vs Platform Strategies
Research shows that bespoke, one-off projects are prone to poorer outcomes than projects built on a repeatable platform. SpaceX’s focus on reusability and rapid iteration allowed them to drive down costs and improve reliability.
Competing with SpaceX Today
SpaceX’s success has opened up the space launch market, with over 150 new launch companies founded in recent years. However, the conventional wisdom that “SpaceX will eat your lunch” is overly simplistic.
To compete with SpaceX today, new entrants need to:
- Pursue fundamentally distinct technologies with separate constraints from SpaceX.
- Target large and growing addressable markets with near-term revenue potential.
- Demonstrate proprietary and unique technology for differentiation.
- Employ proven leadership teams with deep industry expertise.
- Show clear commercial applications beyond just government customers.
- Use innovative business models emphasizing flexibility and affordability.
- Move quickly to become cash flow positive with less reliance on up-front capital.
While SpaceX has a massive lead, the space launch market is large enough for multiple players to succeed. The key is pursuing a differentiated strategy rather than trying to replicate SpaceX’s approach from 15 years ago.