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Shit Elon Says - Transcript - Singapore Satellite Industry Forum 2013 - Opening Keynote - Gwynne Shotwell

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This is a speech given by Gwynne Shotwell the COO of SpaceX and NOT by Elon Musk.

Singapore Satellite Industry Forum 17 June 2013 - Opening Keynote - Gwynne Shotwell

- - - - -

Good morning, it was a pleasure to be invited to speak at this particular event. Its the first time for my attendance, although I've had my team here for years. I wanted to chat very briefly about SpaceX; by the way, just to clarify, I'm President and Chief Operating Officer - I have a boss, who is the CEO. So I wanted to chat very briefly about SpaceX, what were doing now, chat very briefly about the market and the industry and then talk, really try to talk about some future things, things to look forward to. I'm gonna start the video, so you get a good sense what SpaceX is all about.

*Starts SpaceX Video*

So what you saw in that video, was our most recent mission to the International Space Station. So Dragon is the capsule - or the spaceship, Elon likes to refer to - the space ship, that carries cargo here from Earth up to the International Space Station and back, returning critical cargo - as well as other things - from space. Falcon 9 is the launch vehicle that flies Dragon and I'll chat a little bit more about both those systems as we go on. We've been very pleased to have executed three missions to the International Space Station in the last ten months, and look forward to lots of activity there. So [didn't get that one] the sense of what SpaceX is all about, we're a Space Transportation Services Provider.

One of the reasons I was really thrilled to be asked to come chat at this panel, or this discussion this morning, is because of the uniqueness of the market in this area. CASBAA represents a tremendous market for launch vehicles as well as satellites. There is 76 - actually there is a number of different organizations that counted different satellites, I took the average of 76 - satellites in the region. Tremendous.

In addition CASBAA represents the market sector that has the most growth projected - at least in the fixed satellites services - over the next decade. So you are an important, important market and a critical group of folks. So it's a pleasure to be here.

So what has SpaceX done? What we're trying to do - We're definitely trying to revolutionize access to space. We have focused since the beginning on reliability, although fortunately, or unfortunately we are most known for low cost. We are trying to change - like I said revolutionize - access to space. Our goal is to fly often and not to make a ton of money on a few launches, but to make a good amount of money on tons of launches. Were really trying to expand the market. I'll talk a little bit about the technologies necessary to do that in a bit.

So SpaceX is a private company, we were founded in 2002. Again - with the singular goal of providing highly reliable, low cost access to space. My founders focus primarily to take humans into space. Many think that in this industry, that that's irrelevant, to that particular group. Humans only go on space transportation system that have demonstrated incredible reliability, so why wouldn't the satellite and services sector benefit from that particular focus.

So we were founded in 2002, we have about 3300 organic employees right now, 3500 including our full time contractors, so we have had tremendous growth over the last 11 years. Its been really an extraordinary, extraordinary journey getting here. We have over a million square feet [~92.900 m] of factory in the Los Angeles area. I do invite you, to come visit the rocket factory, if you are near Los Angeles Airport, we're about 5 miles east of there. What you'll see is metal blocks and metal sheets coming in to the factory and rocket stages and engines leaving. Really, its a fascinating place and I do invite you to come. We have launch sites at Cape Canaveral, that's where we launched Falcon 9 thus far and we are just opening up our launch site at Vandenberg Airforce Base to be able to service the entire market; that should be later this summer. Our propulsion and structural test facility is in Central Texas, that's also a very interesting place. We launch, or excuse me, we fire rocket engines every day there, so its like a launch every day. Its in a little bit of a remote place, its halfway between Dallas and Austin, harder to get to. We are looking at a commercial launch site, given the robust manifest that we have, we definitely are gonna need more launch sites than we currently have.

Talk a little bit about the business, I've already talked about the - you're not supposed to say explosive growth in this industry, but I'll say it none the less, hopefully not jinxing myself. But we have grown tremendously, we have put 5 billion dollar worth of business on the manifest. We have over 50 missions to execute. Our largest customer is NASA, with the servicing contract for the International Space Station. Although we've sold - and plan to execute - far more commercial space launches, which is really exciting for us. We've made tremendous strides in marketing to this particular region, with AsiaSat, Asia Broadcast Satellite, NSPO and Thaicom. Other customers include other regional operators, from Israel, Mexico, United States, Canadian Governments, Argentina as well, and then SES, IntelSAT and some of the other: Telecomunications, Constellations, Orbcomm and Iridium.

We have an open pricing policy, we do put our prices on our manifest. Our competitors don't like that, but we'll continue to do that, I think pricing transparency is really important to drive change in the industry, which is one of the things we're trying to do.

Product line; were flying Falcon 9 with the Dragon Capsule currently. This summer we will roll out the upgraded Falcon 9 [v1.1], it has about 50% more cargo capability and the fairing for the first time on this class of vehicle. So that mission - the first mission, will occur from Vandenberg very late this summer and then the first GTO mission will follow that up very closely thereafter.

Falcon Heavy, I'll talk a little bit in the future. I tell my engineering teams 'Cmon it cant be that hard, its just three Falcon 9 glued together, lets move it', but obviously its a little more complicated than that.

And then we're also flying the Dragon Capsule both to the International Space Station, it also serves as a nice scientific platform as a free flier.

Let's talk a little bit about flight history. I hope by this time next year I wont be able to fit all the successful missions on this particular chart, so hopefully I'll be stopping that. But we have flown Falcon 9 successfully five times, three of which went to the International Space Station. Critically the second flight that we had of Falcon 9, in December of 2010, took the Dragon Capsule to orbit, it orbited two and a half times times, it came back to earth and we became the first private company to do that. It was really an exciting time. As I mentioned we have flown Dragon four times, three times to the International Space Station. The Dragon Capsule is critical for business on Station, because it not only takes science and cargo up, but it's the only vehicle, that can take substantial cargo back and science back. A few of the other vehicles can take [I guess another word for trash, didn't understand exactly] back from the ISS, of which there is plenty, but Dragon takes the science back, which is why we have the ISS up there in the first place. So hopefully well see more capsules and more capability that can handle that particular mission.

So what else are we working on, besides getting the upgraded Falcon to Orbit, carrying out cargo missions every three months and in the near term taking Geostationary Transfer Satellites to their mission orbit? We do wanna turn the Dragon capsule into a crew rated capsule. Right now only two countries can take astronauts into space - and I think that's a shame, I think we need to see more - Russia and China. The US lost that ability when we retired the Shuttle in 2011. So hopefully we will see more organizations coming forward and taking astronauts to space - I think its a critically important function for us as humans actually.

So we've got an ascent test and abort test in early 14 and hopefully we will be flying demonstration flights in early 15 with crew. That'll be an exciting time, then everybody that wants to go to space, that can afford to go to space, should be able to go to space.

Grasshopper! - really important topic. What I said earlier; were really trying to change the way this industry operates, one of the most important elements of that - we feel - is reusability. I know it scares a lot of customers early on, but were gonna get this right and we gonna make it work. If you think about the airline industry, if you only flew a 747-jet once, we wouldn't be flying 747s. So were really trying to take this upside down in this industry and be able to fly our rocket stages more than once. So we're working on this technology, this reusable technology. The starter vehicle we call Grasshopper, what were doing, is we're doing hops at our facility in Central Texas - I'm telling you that's a really cool place to go visit. And I'm gonna show a video actually, that shows you what we are trying to do here. Its gonna be side-by-side, one is kind of a far out look at Dragon, or - excuse me - at Grasshopper, and the other one is actually on board the Grasshopper test vehicle. We have a Cowboy Mannequin there, named Sunny, we have got a little camera attached to his head.

*Starts Grasshopper Video* 'Sunny is on the right' 'Pretty *inaudible*'

So if you were standing next to Sunny that would have been a really fun ride and you would have done just fine. That was a 250 meter hop. *Claps from the audience* Yes, great! I love that videos too! *Laughs, Claps as well* That was a 250 meter hop, we just jumped 350 meters this Friday. And we will continue to add altitude to those tests, till were actually going trans-sonic. Were not going to be able to execute these tests in Central Texas however, we're gonna have to move to a more remote location. So we'll be moving the Grasshopper capability to New Mexico. So what we're trying to do is get almost an entire first stage burn and bring that stage back.

What we would love to do - I'm so excited to sell the operators here - a launch vehicle where really the only cost associated with that vehicle - the non recurring, excuse me the initial investment in the stages themselves but the cost of fuel and the mission operations. So if we get this right - and were trying really hard to get this right - "we're looking at launches to be in the five to seven million dollar range - Gwynne Shotwell", which would really change things dramatically.

So, though the folks that are licensing this technology, the Federal Aviation Administration, who are very supportive of SpaceX and what we are trying to do - this scares them a little bit. Michael Huerta the head of the FAA, when he found out publicly that we were doing this he said: 'They wanna do what?' So, we're keeping them on their toes.

I'll talk very briefly about Falcon Heavy. So from a commercial perspective Falcon Heavy, it's an over-sized vehicle. Its got more capacity than folks in this room need - unless we wanna put two of the biggest satellites on this vehicle and fly them both to GTO. That would yield a pretty respectable price for folks. But what we are really trying to do is, push the bounds of technology with respect to size of launch vehicles, and see if we can put some really interesting things into the solar system and hopefully land some things on Mars as well. This will be the largest vehicle flying since the Saturn moon rockets. We're sandbagging the GTO-numbers, actually analytically it looks like were gonna take 19 tons to GTO. But we're being conservative, with the 12 metric tons. And this will be - hopefully - a vehicle that takes many things to Mars.

So what else? I look forward very much to the questions you have. Hopefully they are provocative, it makes it much more fun. And I believe, I'm supposed to take Q&A now?

[Stage Management a little bit awkward there. We will be taking questions from the floor, if you have a question please raise your hand, and well get a microphone to you at some point. But I'm gonna take the privilege of the first couple of questions. I just have to say, when I was ten years old, I was given - as a birthday present - an ESTES-Rocket. Is anyone familiar with ESTES-Rockets? They are the little paint-them-yourself, glue-them-together. (You) stick the engine in, push the button and watch it go up in the air and then come back down - as long as it didn't hit a tree or break on landing, or whatever - you could stick the engine and then send it back again. So I think its great to see a really big ESTES-Rocket. And I've watched that clip on Youtube and I think its amazing. So as a-, as a- go into more into the idea behind re-usability. It seems like a logical one, but the difficulty in actually achieving that is pretty significant.]

Yeah, there's no question, this is a really hard thing to achieve - if it weren't, then I think others would have done it before now. We're getting very comfortable with the reentry with the Dragon-capsule. But the Dragon-capsule has a shape that is stable on reentry from orbit. Whereas rocket stages traditionally are not stable on reentry. So there is a lot of software involved, there is a lot guidance, navigation and control involved and then there's a lot of thermal protection required. So we have to make advances in all those areas. We also have to be able to restart these engines supersonically, which is gonna be a fun challenge. I'm pretty sure we're gonna see some really big, great, unsuccessful flights on video. But you know, if we only experience success in these tests, than we're not pushing hard enough and fast enough - this is hard business, we should see some failures. - On the test vehicles.

[...on the drawing board. Lets talk about growth, and development; because this is something, you're going essentially from a standing start. If I'm right, you were a really early employee - number seven, is that the right number?]

That's correct yeah.

[And you mentioned, with contractors, you're up to 3500 employees?]

Yes

[I mean that's a very substantial growth, in an operation sense, over the space of 12 years. How has that been managed and what are the challenges that it presents. I mean everyone can understand; its challenging. But where specifically?]

I think in managing that kind of growth, there is two primary areas: Leadership that works, with a kind of group of 50-200 people, is very different from leadership that works in a company of 3500 people. So you really need to be comfortable in moving your leadership team around - as necessary - to manage that growth. In addition communications had clearly been pointed out as being key. And by the way, I'm not saying we did it all right. As a matter of fact, when we're flying successfully every couple of weeks; I wanna take a little break and study the growth that we have had and what we could have done do things better. But the area that points out most strongly is communication. We still don't know how to communicate throughout an organization of 3500 people.

[The other kind of thing that comes to mind is: Elon Musk is the founder, the visionary behind it. He's got his fingers in a few other pots. I think having someone who sets out a vision like that; to go from PayPal to rocket science is a big leap and a very visionary thing. After a certain point, how important is it to have that input and that visionary leadership carry on? Or do you have to replace that?]

I have gotten asked that question many times actually. I think...

[Its not original but,]

I apologize, I didn't mean that.

[No, no, its ok, its alright.]

*laughs*

[Everyone was thinking it though...]

*laughs*

So what's really key, in what keeps SpaceX as a kind of a vibrant company. For those of you who haven't been there to visit it: It's got a really great buzz to it, people are really excited about what they're doing and what they're working on. And I think if you stop innovating, and if you stop working on visionary things, that's when you kind of contract. You probably get really good at doing what you're doing. But I think you become probably a little bit lethargic. It's the new entrants that come and really shake things up. And I think it is important for Elon to continue laying out really audacious goals.

[I think you're touched on something that also comes to mind. I mean, as an innovative company, as a game changing company, which is how you're selling yourself out to be. There comes to mind, I'm a big fan of the clash, the punk band from the 70s and 80s]

Yes, I was alive.

*laughs*

[Just making sure. Check your references. - But one of the lines was 'You grow up and you calm down'. The idea that today's radicals are tomorrow's moderates. Revolutionaries of today become the establishment of late. I mean, you've got 40% of the mix is government business right now. Obviously that's important to make a foundation and to set a stable income stream, but to a certain extend that also leads you more to the mainstream than away from it. There's a question in there somewhere, I'm sure.]

If you don't mind I'll just start chatting about it?

[Yeah sure, go.]

You know, in our partnership with NASA - you know by the way the Falcon 9 and the Dragon capsule was developed in partnership with NASA. NASA paid just under 400 million dollars for that and we, we SpaceX spent about 450 million dollars. NASA learned a lot in working with us and we learned a lot from NASA in that partnership. There are a lot of really great things that you can glean from working with kinda the state customers. And I think they benefit dramatically as well by working with entrants, who do things very differently. I don't think SpaceX - unless Elon gets hit by a bus, which really would be awful - I don't see SpaceX becoming the moderate. Its very contrary to what he is about and what he really wants SpaceX to be. So I don't think that'll happen.

[Obviously, this is a satellite industry conference, but I love the idea of manned space exploration and I think - again coming back to then ten year old boy with an ESTES-rocket - there's a lot of other people in this room, who are in this because of the sort of romance and the excitement of that. How realistic of a goal is that for a private operator to - I mean obviously you think its realistic, but, but?]

Oh, there is no question, I have no question that we can fly people in the Dragon capsule right now. Getting people to mars is much harder, getting Grasshopper to work is gonna be much harder. But when we started this job, in the Dragon capsule carrying cargo, you know it was pretty nerve wracking - we were a very you company, we got that effort with NASA in 2006. And we were, I don't wanna say scared to death, but we were pretty anxious about that activity. And we've got such a brilliant team of engineers that work really hard, we get through all the technical challenges. Not as quickly as we'd like to, but we always get through these technical challenges. So I don't see human spaceflight as an impossibility or even high risk for us at all. I think there's gonna be other projects that are gonna be harder. I'm not saying that we're not focused really hard on it. And I hope this particular audience in this industry sees, that SpaceX - and other competitors of ours - flying crew, can only make your missions more successful.

[I'll turn that onto the audience: if anyone has a question please raise your hand. I think we got microphones available. Two in the front row, if we can find...there we go.]

Viewer question *inaudible*

So the question is: "Will space travel be as ubiquitous as air travel? I don't think it will be as ubiquitous - I would love to say it is - but I don't believe the costs will ever get quite as affordable as air travel and hopefully I'm not gonna get fired by Elon for saying this. - Gwynne Shotwell" But it will increase thousands of thousandfold. Right now the cost to get to the ISS - to LEO - is 67 million dollars per seat and we'd like to see space travel, we'd like to see folks going be able to get to Mars for a couple of hundred thousands, maybe half a million Dollars.

Viewer question *inaudible*

Well in some respects you're quite right, this rocket looks very much like any other liquid fuel rocket that's flying. The innovations that we have, you know there is thousands of innovations on the Falcon 9 launch vehicle, that allows us to sell it for a pretty discounted price, compared to our competitors internationally and a dramatically discounted price compared to our domestic competitors in United launch Alliance. We've looked at this vehicle and this company as a company that needs to be profitable, that needs to sustain itself and we've looked at the vehicle, both the design and importantly the operations. And if you think about all the things that go into launching a successful mission and you work on every bit of that - you don't just work on a valve here or you work on a piece of structure there - but you think about the facilities that are involved, so it's those kind of innovation. Let me give you a couple of quick examples: So the vehicles in the United States - at least - use a mobile service tower, which is a high rise office building where you build the launch vehicle, that's right on top of the launch deck. And by the way it has to roll back for launch. So there is nothing inexpensive about this mobile service tower, its a high rise office building on wheels that needs to get out of the way, before you fly by. We use a horizontal approach - which the Russians use as well, by the way. So were not particularly innovative there - but its pulling all of those kinds of pieces together, that allow us to fly Falcon 9 for a nice price reduction in the industry. But the real key to changing things dramatically is this concept of re-usability. That's when you go from flying a 60 million dollar mission to flying a 5, 6 or 7 million dollar mission. That's really where the change is. But you have to have the business to start. I don't know if I answered your question, I gave it a shot.

Viewer question *inaudible* [Richard be nice, be nice] *laughter* Viewer question *inaudible* *Tell me, with all these flights into space, where is everybody gonna go?* *inaudible*

Actually I think its a great question. I was expecting something dramatically different from you, but *laughter* But I appreciate the lob. Not everybody believes that humans need to leave earth. Not everybody believes humans need to study science in low earth orbit on the International Space Station.

- - - This is up to 28:00 of the Video. I will be transcribing the rest of the speech during the weekend. I apologize for any mistakes I made, especially regarding spelling and punctuation. I am no Native English Speaker, but tried my best.


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