Introduction to Elon Musk and SpaceX: Elon Musk, an engineer-turned-engineering business tycoon and Earth’s very own manifestation of Ironman, grew up dreaming of one day setting foot on our distant neighboring planet Mars. One of his current businesses (no, neither the electric car nor solar company) is well on its way to allowing the 44 year-old, South African born entrepreneur to realize his enduring dream, which he intends will occur within about a decade . SpaceX is his true baby, hence his maintaining an estimated 20-30% stake in the company and decision to keep the organization private until it has achieved sustainable human flight to Mars, which enables the firm to focus on its long-term goals rather than more shortsighted quarterly earnings for shareholders . Musk and his team have effectively fine-tuned the company into a figurative lean, efficient, startup-like, and notably nonhierarchical rocket manufacturing and launching machine. SpaceX, as of October 2014, was in fact the world’s largest private producer of rocket engines .
It furthermore offers U.S. taxpayers a suggested 75% price reduction compared to the primary incumbent and previous default provider of space launch services–United Launch Alliance–to send objects into low Earth orbit [4,5].
Business Model: The mission of SpaceX is to make significant advancements in rocket and aerospace technology in order to expedite the human colonization of Mars, and more generally human interplanetary travel [6,7]. It provides launch services to both public and private entities with a significant cost advantage over its competitors. SpaceX claims to be cash-flow positive and profitable, having launched around 20 missions since its founding in 2002, and currently listing nearly 50 missions on its launch schedule for the future, which represents almost $5 billion in contracts [8,9].
Operating Model: Perhaps the most valuable element of SpaceX’s operating model is its incredible culture that entices many young engineers into being highly motivated while working at the company. Engineers are passionate and ultimately exercise their ultimate professional potentials for SpaceX, whose mission aligns so well with employee personal values. SpaceX has quite a cult-like following that has resulted in even top talent admitting that they would work at SpaceX if that involves wiping the floors . Having earned both his undergraduate and graduate degrees in engineering at MIT, the author can personally attest to the strong desire of some of the world’s brightest scientists and engineers to work at SpaceX, virtually irrespective of salary/benefits. The company is even thought to pay relatively low salaries to its highly qualified employees, who are known to routinely work 80+ hour weeks in a 40-hour-per-week industry because they truly love what they do [11, 12].
SpaceX’s processes largely benefit from the startup pedigree and applied physics background of its unconventional, science-oriented CEO, who stresses independent thinking grounded in first principles. He effectively inculcates his employees with this form of reasoning (though many engineers already do so naturally through training in physics and fundamental truths) that deviates from what Musk calls “thinking by analogy,” or acting based on ideas, processes, products, etc. that are already observable in our surroundings . Elon stresses instead bounding one’s imagination and decision-making only by physical laws, and especially not social constructs or potentially arbitrary industry norms. This primary tenet at the company has driven significant innovation and cost-reduction over just a few years, in addition to continued demand by top talent to continue working at the company.
The company has a very flat organizational structure in which its employees are enabled to exercise the utmost levels of autonomy, and consequently deliver to the best of their abilities. Elon Musk, worth over $10 billion and CEO of two companies, sits in a corner of a large, open room without any real features distinguishing his work area from his hundreds of employees in the same room, who are busy CADing parts, dreaming up new ideas for advanced propulsive devices, and of course hiring top talent [14, 15]. Employees are encouraged to collaborate and be completely open (and thus sometimes adversarial) in their thoughts to all other members of the SpaceX team, including Elon himself. This flat structure contributes to SpaceX’s powerful culture of openness, autonomy, and first-principles derivation of both truth and untruth.
The the company’s technology, facilities, and manufacturing processes are state-of-the art, such as the solid-state friction-stir welding process used to join sections of aluminum sheets to create the outer shell of SpaceX’s famous Falcon 9 rocket [16,17].
The firm operates with a host of processes designed to minimize the cost of flight both initially, and especially post-first flight. Virtually all engineering and manufacturing functions are conducted under the same roof in Hawthorne, California. The company is known for its pursuit of consistent first-stage rocket recovery after launch, which would reduce the cost of access to space by virtually “a factor of a hundred” . This program is currently well underway.
SpaceX can be characterized as highly vertically integrated, as it assembles or manufactures upwards of 70% of the Falcon 9 rocket components in-house at its Hawthorne production facility . Where possible, the company purchases standard commercial components deemed adequate for the purpose of achieving launch into low Earth orbit (LEO), and avoids buying strictly high-margin, specialized components like its key competitor ULA, which thereby arguably produces rockets built to perform beyond the specifications of their LEO missions . For example, Musk shares in his biography that his company reduced the cost of an on-board radio from the industry-standard $100,000 to $5,000 by building it in-house and to spec .
In summary: Through an engineering-oriented culture and nonhierarchical organizational structure that motivates employees to perform at capacity, a program devoted to creating reusable rockets to significantly decrease the cost of multiple missions to LEO, and a highly efficient, state-of-the art facility that employees lean processes in a tailored approach, SpaceX has become the highest-value player in aerospace rocket manufacturing, and is well on its way to realizing its mission to send a human to Mars in the 2020s.
 SpaceX employee (2015, December 9). Telephone interview.
 Vance, A. (2015). Elon Musk: Tesla, SpaceX, and the quest for a fantastic future. New York, NY: Ecco, an imprint of HarperCollinsPublishers.