Is Spacex About To Rule The World

TITLE: Is SpaceX About to Rule the World? CHANNEL: Maxinomics DATE: ---TRANSCRIPT--- 90% of the stuff headed to space this year will be carried on a SpaceX rocket, but the useful space around Earth isn’t as big as you might think. Giving the first ones to get the best spots a massive head start like Starlink. With more than 6000 satellites 400 miles above Earth, a nearly perfect height for global internet coverage. The short distance from Earth makes them cheap to deploy, and the time to beam a signal to Earth extremely low, effectively blocking other companies that want to do satellite internet from the best real estate, and then using their rocket launching expertise gained from deploying all those satellites to cell rich countries and companies who want to put stuff in this orbit 22,000 miles above Earth. Put something in this orbit and it’ll stay right where you left it. Always above the same point on Earth. Perfect for monitoring war zones, suspected missile launch sites, the Suez Canal, anywhere you can’t afford to miss something. The company and country with rockets that can take stuff up to space the fastest. They can fill the best spots, gaining an enormous information advantage that cannot be replaced. Forget the spectacle of the rocket landing back on the pad. Yes, it is impressive, but what it represents is the thing that has been unlocking, to use an overused term, new frontiers and the vast fortunes that come with them for the past thousand years. It’s not the going. It’s the coming back. This video is sponsored by Wealthfront. More on them later. They refuse to go past this point. Beyond what eyes could see from the shore was called the Sea of Darkness. Not one person who had ever sailed that way came back. These stories to have you read. Sand blowing off the dunes over the churning water that barely covered a shallow reef 15 times the Prince of Portugal had sent a ship down to explore the world just a couple hundred miles from their home. 15 times that ship stopped, refused, and slowly made its way home. Currents are too strong, they said. We saw monsters in the mist. They said. Do not come home unless you have rounded the point. Gillings didn’t know it when he was commanded to set out on the 16th try. But the problem wasn’t monsters. It wasn’t the currents that kept anyone who tried this before from returning. It was the sails on the ships. No one had figured out how to sail in any direction except the direction the wind was blowing, with one big rectangular piece of cloth attached to the mast and spread out across a long beam. A kite that floats would not be a bad description for these boats, and all the wind did was blow straight down the coast of Africa. Fearing for his life when he got back a sudden bout of courage. It’s not really clear what drove him, but Gale just kept going past the cape and slowly, little by little, big rectangular sails, fighting him the whole way turned right, going further into the Atlantic Ocean than anyone ever had. Far enough to discover that the wind changed direction and blew back toward Portugal. It’s the coming back. If we can come back, then okay, how far can we go? Sailors began asking. Not far enough with these sails, we need to be able to sail back against the wind. What about those sails? We’ve seen the Arabs using the triangles, but on a bigger boat berthing what’s called a Latin sail. And the boat that changed at all. The caravel was the space rocket of the time. It was high technology, handing Portugal a near monopoly on the ocean for almost 80 years, and was the single reason anyone from any country could venture past their shores. The fear of not coming back had been relieved. It is the edge of something, a clear line between what is known and what is not. What is so interesting about where we are right now is a new physical frontier. Hasn’t been opened in more than 100 years, going all the way back to the plane. If there are any doubts about the space frontier opening up, this is the number of rocket launches each year for the past 65 years. Straight up, more rockets will reach the Earth’s atmosphere this decade than the previous three decades combined. That line between what is known and what is not. Once it breaks, the other side is open. A tale as old as history. We’re talking the railroads opening, the American West, the caravel opening, the oceans and distant worlds. Canals, planes, even the simple digging beneath the surface of the earth to create minds and explore what’s under our feet. It’s not quirk or randomness. There is a powerful, unknown combination of forces that make the unlocking of new physical frontiers the most reliable wealth creation force in history. These three forces, as you’re about to see, bring what’s rapidly unfolding in space into focus. Because if you want to answer the question of what is space worth? Or what will space be worth later, that is a question downstream of this question. What is space worth? If you parked a satellite above a store and counted all the cars in the parking lot, you could make a lot of money. So they parked one over the target in Richmond, California, and found a 146 out of 540 spaces were full. There have been three more cars in the lot at the exact same time the previous year, one at a time. A satellite took pictures of the parking lots of every target, Best Buy, Walmart and the other 40 publicly traded retailers in the US bet against the bottom ten and bet on the top ten, and you could make 15 to 20% on your money every year or turn protected for almost a decade because it was incredibly difficult to get another satellite in the sky for less than half $1 million, there were less than 200 satellites in total that could even take images of Earth. Even if you did have the money, these things took ten years to build and launch. What if we launched a phone up into space? Would it work? Would it be too cold? After having worked together at NASA and after having found out that, yes, shoot a phone, the HTC Nexus One, specifically into space, it will take and send back pictures for over a week. So you’re telling me that if we just buy off the shelf cell phone parts, put them in these cages, launch them into space? We could take pictures of every spot on Earth every day. Yes you can on rockets flown by space X 36, then 64, then 100 per year for less than the cost of one giant traditional satellite. Planet labs has sent 600 satellites into orbit around Earth, taking high resolution pictures of the entire planet every day. A photographic timeline of every inch on Earth that anyone can access for a price. It’s not free, but it’s far cheaper than what was available before. So many different companies and people use it that if you knew where to listen, you heard a very loud uproar when they shut off the service for all imagery of Iran in the Strait of Hormuz three days into the Iran war. During that time, you know, when everyone wanted a bird’s eye view of Iran and the strait to see what was happening, the physical space, the band around Earth that Planet Labs occupies is now theirs. They didn’t buy it. It didn’t have a value. They acquired it simply by putting themselves in it. You want to launch a phone into space and, take pictures? A lot of them, I don’t think that’s going to work. But, if you fill out that paperwork over there. Yeah, you’re more than welcome to try the term would be gatekeepers, however you want to define your version. Gatekeepers, people that already own the land, the different organizations that tell you what you can and can’t build that’s not safe. Or we’ll get back to you in three months. The grip of the gatekeepers in the old world is naturally loosened by distance, and even simply by just not knowing what exactly a gate would make sense to go in front of. A few sparse treaties exist for space, but in practice, and with any frontier, it’s first come, first serve. Rules exist for a reason. They round down the rough edges, keep the worst from happening. A lack of gatekeepers, then, clearly makes the frontier a double edged sword situation where you’re responsible for creating your own safety net, where losing everything is at least as possible, as staking your claim and keeping it so the people that venture out into the unknown will always be looking for tools to help them survive the things required to keep going. Setting up one of the biggest opportunities of all time. Selling picks and shovels. I’m hesitant to keep reaching back into history, but the settling of the American West has so many connections to space that I just. I can’t help myself. Look at this $4,358. That’s how much this exact parcel of land was bought for right around San Francisco in 1867. In today’s money, they were just giving land away, literally. The U.S. Congress got together and decided that if you went out west and built a house, you could either have 160 acres of land for free after five years, or you could buy it for 4358. Was the buyout cost. Some people took them up, threw their stuff in a wagon, bought some horses and in a fairly brave act, just walked there. And now a lot of people took them up on it. Nothing changed about the proposition except the Pacific Railroad finished the connection between the East and the West Coast. I’ll go, but I’ll not walk in there. Each person paying the tax to the railroad for the ride, something the game of monopoly did get very right. The railroads are the best set of properties to own, providing the longest consistent return over the length of the game, which is how frontiers play out. The first most valuable thing, and the one that lasts the longest is getting people to it. Everyone needs a ride. We think tech is dominant now. By 1881, railroads were basically the US stock market, 63% of the whole thing. So I agree it doesn’t feel like it, but it’s not very close to technology. Only just this year had 52% of the stock market. And that’s with a very relaxed definition of technology. Transportation is the route of the picks and shovels world selling the thing. The vast number of people or businesses will require just to exist goes from second thought to the only thought. Makes perfect sense if you think about it from the point of view of the hierarchy of needs, there are five. According to our man Abraham Maslow, one. Fundamental requirements for survival air, water, food, shelter two. Security and predictability three. Social connection four. Recognition, competence and respect. And number five realizing one’s full potential, unsure of what is safe, what that thing is. How to make it to tomorrow. The only thing that can possibly matter in a new world is the bottom two layers. And at the very start, it’s just layer one. This is the important part. It’s obvious everything that goes to space will without question need a ride. This thing’s staying space for longer. They will require water, energy, communication. Anything that’s built that effectively serves those needs will be bought. But what do people want? What is social connection exactly? What service do you offer to help someone realize their full potential? Things become foggy once you move off the bottom. Two layers. All the obvious things taken modes formed. Money is left to chase fewer clearly obviously useful things. You get bubbles, inflation, and you can look around right now and be like, that’s today, right? He’s he’s talking about today’s world. But open up something new. We call this the frontier vent, arguably the most powerful economic lever that exists, that new that might be good for my team. Maybe I’ll try it too. We desperately need fuel, create it, bring it, whatever. We will buy it from you. Opening an entirely new place for money to be put to work by people seeking their fortune. But where exactly? In space it seems so vast, so infinite, so desolate. But the area within range of the rockets we have today there are only a few, and they are very well understood choke points that everybody wants to control. No different than Earth except one major exception. Movement becomes a three dimensional dance, navigating the pull of gravity coming from the Earth, the moon, the sun, each with its own intensity. How do you stay where you want to stay? Where would you want to stay? Where could you stay? What happens if someone else gets there first? Shortly after the boosters burn out and right before the main engine kicks on, we’ve reached low Earth orbit 100 to 300 miles above the Earth’s surface. Things in this layer whip around the Earth about once every 90 minutes, high enough for one satellite to see a chunk of the Earth’s surface, but still close enough to be able to capture high resolution imagery. And in short, sending a signal back and forth will only take a few milliseconds. Planet labs lives here. Starlink lives here. Being the first command, they’ve been able to learn what the best height for space based internet actually is. Placing their first satellites in one orbital height. They found that actually, what if we move them closer? We have the rockets to send up replacements. If gravity drags them into Earth’s atmosphere, it’s moving closer, 100 miles closer, ensuring the time it takes to receive or send a signal from Earth is lower than anyone else, because competition from low Earth orbit is hot. Amazon China, OneWeb and a variety of others. Everybody wants the constellation. You must be able to build enough satellites and then get them there. But assuming you do, this is starting to be the preferred place to be. If you want to have constant communication with things on the ground and maybe, just maybe, overtaking our next stop on this tour, there are two types of people in this world. Those glued to the screen watching the charts bounce all over the place. 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The current preferred spot for communication networks, bouncing a signal to a satellite and then down to an aircraft carriers across the Pacific. And wonderful for monitoring the entire Middle East. Things in this belt are how we know when North Korea does a missile test. They see the heat signature via special cameras and send an alert. NOAA monitors the weather from here. 1845 slots exist in this belt. That’s it. Not because we can’t physically cram more into it closer together, but because the point of a satellite is to communicate, to send and receive signals to close together, and the signal from one will mess with the one from its neighbor. Prime real estate beachfront boardwalk, Central Park. This is the expensive neighborhood of Dish Network, Sirius XM, and DirecTV. They really do have their own satellites parked up here in spots picked, so each one can see as many potential customers as possible. Their slots about 30 across all three, are some of the most expensive slots in the entire geostationary belt. They have to be able to see the entire United States, and there are at best 60. Maybe 70 slots on the Ark that have a useful line of sight to US customers. The US being a very important country, huge market. Those spots are naturally more expensive than, say, one that looks down on the middle of the Pacific where there’s nothing but water. This has been the battleground for the past 50 years. But now, with the ability to put thousands of satellites up at a time, low Earth orbit is not far from being able to offer a lot of what’s so nice a geostationary enough satellites. And you can always ensure one can see that one spot on Earth you want to watch. Just hand off from one satellite to the next one as they whip around Earth. These two orbits, they’re interesting and necessary. They’re useful, but it is. The next one will arrive at that will tip the scales of power in favor of whoever pulls it off, even though it will take three days to arrive. Our final engine burn will consume just one quarter of what it took to get off Earth. Gently pushing us 230,000 miles from Earth. Welcome to the moon. There are valuable deposits of metal on the moon. It will be mined. There are valuable pockets of helium on the moon, but more importantly, there is rocket fuel on the moon, almost entirely in an area the size of Switzerland. At the south pole of the moon, Switzerland is tiny, with far more flat land to build on, so land is limited. I mean, perhaps we get up there and discover it’s better than we think, but for now, the first to show up and those able to transport enough equipment and people to build a base in and around that area will, at minimum influence how the moon is governed at maximum, will flex complete control over the deep craters housing ice deposits that never see sunlight. Ice is water is H2O. Break off the old liquefy and you have yourself rocket fuel. Or, to put it bluntly, the moon is a gas station, not just a gas station, one gas station in one little area, and it’s the only gas station before you get to Mars. Everything in space is about fuel. The rocket is huge because it needs to carry enough fuel. We must first review the overall mission plan. The lunar spacecraft will lift off from the Earth and go into orbit about it. At the proper time, the spacecraft will inject onto its lunar transfer trajectory. As the spacecraft approaches the moon, it slows down and goes into lunar orbit. Seems complicated? Why not go straight at it? The spacecraft actually consists of two separate vehicles the command module, which remains in orbit around the moon during the period of lunar exploration, and the lunar module, in which two of the three Apollo crewmen will descend to the lunar surface, split one rocket into three. No wonder this was an option. Number one. After a period of lunar exploration, the astronauts will lift off in the ascent stage of the Lunar Module rendezvous and dock with the command module re transfer to the command module and return to Earth, leaving the ascent stage in orbit around the moon. I imagine these guys have to tell their wives this plan. You tell your wife yet? Come. No, no. Not yet. They call it. And this is true. The tyranny. For every pound of stuff you put on the rocket, you need to add more fuel. But of course, adding more fuel means that you need to add even more fuel to carry that fuel. Summed up by this fairly simple looking equation called. This is also true the rocket equation. It is the gospel of rocketry one on one level. Stuff the alphabet of launching stuff into space. This part right here is the fuel part. And it’s why option number one was scratched. Option number one was exactly what it should have been. And what do you think it was? Big rocket lift off. Go to the moon. Land on the moon. Blast off from the moon. Come home. Let’s not make this complicated, folks. Ship. Wernher von Braun was German. He was the biggest name in rocketry. And this was his thing on ship. The plan was presented, and immediately it was like, oh, boy, it’s a really big rocket you have there. Von Braun. Twice as big as the Saturn five rocket. That would end up taking Apollo 11 430ft tall, 50ft wide, twice as heavy, highlighting exactly the tyranny because it needed to carry enough fuel to liftoff twice, once from Earth, burn fuel on the way to the moon, and then lift off from the moon. Put the rock back, buzz. Now we can’t take any rocks. We have been over this, that’s all. I don’t mind a better option. Number three started climbing up the charts. By the time they did the math. Looked at the size of the rocket for the simple bear and back way. The cost, the complexity and the time it would take to get it done was just too much. So they kidnaped three guys off the street and made them do it. No pilot would touch this plan. Nonstarter. Why do you think they’re chained to their seats during takeoff? You get in there, you’re going to be a hero. Kidding. Of course. Got a jokes today? It’s very simple if you think about it in reverse. If you can fuel on the moon, then you don’t need to launch with enough fuel to get home. All that savings on fuel can then be used to increase the amount of useful stuff you can launch off Earth. It is the only path to making space truly viable for very big projects. Everyone knows the shipping container stuffed full and it can hold 30 tons of cargo. Starship, the biggest rocket that exists, can carry one to the moon right now and have enough fuel to get back, but lose the fuel we need to carry for the return trip. And that becomes for fully loaded containers. If you look at the bottom of the moon, it’s not flat. There are only so many places to set up shop. Be the one that can bring four times more than anyone else. You can crowd out who partner with. You can overwhelm all of their campaigns trying to establish a base. Great great great great. But here’s where we all stop. Like, all right, cool. So we’re basically going to the moon so that we can come back. Because what is on the moon that we really care about, we’re really going to build stuff on the moon. And the answer really is yes. As just one example, Jeff Bezos company Blue Origin demonstrated a fully functioning system that takes in moon dust and output solar panels like it’s actually done. It turns out a lack of air space being a true vacuum, and it’s much lower gravity actually make it easier to make solar panels on the moon than here on Earth. On Earth, we have to create these huge, expensive vacuum chamber to make solar panels. But it’s not just the panels either. Same thing for aluminum wires. Iron, oxygen. The hardest part is getting the initial stuff to get the process started to the moon. Once you have solar panels, you have electricity. Once you have electricity, everything becomes easier to churn out solar panels and push them into space. There’s no air, so no friction, so it’ll go right to where you pointed it. Launch the chips from Earth, catch the solar panels, attach them together, your data centers in space. To be clear, this is not today. It isn’t tomorrow, but it is the path these companies are on. Pay attention to those close to this stuff, the people who really know what they’re doing, and more importantly, the space companies started to make all of this possible, of which there are now hundreds, maybe even over a thousand. You can already see their revenue march higher quarter after quarter, making it clear that this is where we’re headed. Even the guy that didn’t think the moon was worth it wanted to skip it entirely and go to Mars is completely 180. Whoever gets the gas station on the moon working first secures a major advantage over everyone else. It’s not the going, it’s the coming back. A new prisoner’s dilemma. Keeping countries up a night wouldn’t matter or be important if no one was able to do it. But once one can and they start going after it, losing carries too high of a potential cost. It is one of the all time best setups for wealth creation that has ever existed. The frontier is opened up. Gatekeepers are nowhere to be found. The US in space, China, India, Europe, Japan, all of the deepest pockets. They will race ahead, dragging everyone else along, shelling out money to anyone who can sell them picks and shovels. And this is just the beginning of the space frontier, which really is infinite. Time for everybody’s favorite part. Footnote time. There are many things around what is happening with space and space in general that are worth exploring, because they will shape a lot of the world going forward. So much so that we have a second video on space coming out in a few weeks. This was the correct first step when looking at space and space. The broad, zoomed out view. What is space Worth? Sets the stage. The next one is much more targeted on the economics of space. It is a unique business worth examining. A business like this really hasn’t been formed since the 1800s. All right, but those footnotes, the bits and pieces that didn’t quite make it in or fit just right, but I still feel are worth sharing one. I’ve been thinking about this one a lot. Space has the properties of something that could become a bubble because of the choke point of launch availability, space can only be utilized at the rate of which rockets can be launched, a rate far slower than imaginations can imagine. A future. As I’ve talked about in other videos, the.com bubble formed because we laid fiber optic cable all over the country, but didn’t connect that cable the last mile to everyone’s home. We could see the internet would be a big deal, but the physical gap a choke point of internet speed, let imaginations get way ahead of the dial up everyone was on until about 2005. I’m not saying it’s a bubble today or that it’s a guarantee, just that physical gaps like that tend to be a good foundation for bubbles to grow on. We’ll take a closer look at that physical launch situation in that upcoming video. Number two, SpaceX doesn’t really sell rockets anymore. The rockets are the factory. The business model used to be how much someone would pay to have their thing taken to orbit, but now the rockets are mostly the cost SpaceX has to pay to take its own products out of Earth’s atmosphere. Starlink being the prime example that has proven the model works. Put your own stuff in the rockets. Make money off that stuff once it’s in orbit. That’s how you get to this valuation. And that’s why it’s hard for a lot of people to swallow. What you’re buying is a call option on orbital data centers working in to an extent from Starlink continuing to grow. It is most definitely not revenue generated from launch. There are valid points on either side of the valuation argument. Bears will say a valuation of 100 times revenue is never something to invest in. Bulls will say they have a near-monopoly on launch capacity and two new business lines that will grow exponentially and indefinitely from here. Both have a point, but the fun part is, whichever way it goes, one of them will likely be very wrong. Three I mentioned the frontier event during this video, which is a real phenomenon. Event implies that something is built up and needs to be released. Pressure has formed. I would argue that SpaceX never had a chance of developing into what it is today. A true industry or its own economy, until the world had accumulated enough capital money to feel comfortable making bets on space ventures. In an industry like SpaceX, capital can be seen as important as technology because space ventures need a massive amount of money that can sit for decades without a return. That kind of capital only exists when the broader economy has generated enough wealth that large pools of it can afford to be patient for more innovation in a country, the deeper its capital markets become, the more patient capital it has. They can sit on ideas. It will take decades to pay off. That leads to big innovation leaps. And then we wash, rinse and repeat. Now, if you could do me a favor, I would love to count you as a subscriber to the channel. There is nothing that fuels me more than someone saying, yes, I want to see more of the work you put out. And that is exactly what hitting the subscribe button signals. A signal I can use to know how much we can do, how big we can go, what kind of projects. I can say yes to, what I have to say. No to. It helps a lot. Thank you for your support and subscribing and watching. And with that we are done. So much great stuff coming out. I’m excited. I’ll see you in the next one. See you.