01:14:51 · Eric Jorgenson, Ty Morse
[01:14:51] S1: out? There's an auction at the toll booth to get off the planet and whoever can afford to pay the most, like, will get off the planet first. But to their credit, SpaceX is building as much capacity as they can. I think because one, they know how to use it and two, they know volume drives cost down and cost keeps them ahead. They have a large cost advantage. And if they can do a really high volume of Starships, like, nobody else will even be able to touch them. That's also how they achieve the the mission. Right? If the mission is Mars, the mission is not near term cash flow, maximize profits. If the mission is Mars, you need a massive volume of ships, and volume comes with cost. And so, yes, you'll come up with your own use cases to fill your cargo, but you also want all the customers you get because the customers are helping to fund, you know, and fund additional production, but also fill the volume that drives incremental cost down. [01:15:44] S0: There's an idea that Elon has that I don't think other entrepreneurs or most entrepreneurs share, which is this idea of thinking in limits. And so instead of saying, you know, we're gonna make this robot, and how do we make one robot? He'll he'll first kind of say, if we were gonna make like a billion of these robots, what would the... You know, how how would the curve of cost basically asymptote to zero? Right? And what is the raw material cost and and making that? What do you think the importance of thinking in Lomens is?
01:16:13 · Eric Jorgenson
[01:16:13] S1: I think it's incredibly valuable tool. You know, he does it at a really extreme level. Like, the the kind of entry level to this is Charlie Munger's idea that, like, great brands minimize or maximize a few variables. And so if you just start there and sort of continue it, you know, the the thinking in limits, the first principles thinking, the idiot index are all sort of linked. They're different lenses on the same kind of idea, but the thinking in limits really helps you illustrate... Helps you understand what the theoretically maximum perfect product is or perfect solution might be, and then everything between where you are and that theoretically perfect thing becomes one of these sort of obstacles to tear down or not tolerate or, question until it dissolves. And it's one of the things that I think makes them like a paradigm shifting set of organizations. Right? It changes from incremental improvements. How do we improve 10% to how do we improve 10 x? How do we get closer to this theoretically perfect thing? There's just a very imagination expanding thing. And Elon has a trick for this, which is like when you... Once you conceive of that theoretically perfect, just start asking what would it take? Like, not not why can't you, but what would it take in order to accomplish it? And sometimes the answers to that have been, you know, oh, we can't do this radically simplified, rocket engine design because this material, you know, doesn't have the tensile strength to hold up at this weight. Well, what did it take? It would take a material with different properties. Well, is it physically possible to create that new material, that new alloy? Well, in theory, I guess, why not? Okay. Is anybody on earth working on it? Has anybody made progress on it? Are there any papers written about it? Like, what would it take to build that new material that makes this new design that is a massive step function improvement better? And if you look at the, you know, the the meme of the three Raptor engines, like, there's probably 10,000 or a 100,000 of those decisions that drive simplicity and optimization and new materials and new designs, along that path that increase the cost and effectiveness of that, you know, that engine that's gonna be the thing that takes us hopefully all over the solar system.
01:18:28 · Ty Morse, Eric Jorgenson
[01:18:28] S0: I forgot which CEO tweeted this, but someone posted a picture of the Raptor three engine, and then the CEO commented like, oh, that is beautiful, but, like, it didn't show, you know, it's... They didn't really show the full thing. And then Elon's like, actually, here's a video of it firing. [01:18:44] S1: Yeah. Yeah.
01:18:44 · Eric Jorgenson, Ty Morse
[01:18:44] S1: Yeah. Yeah. [01:18:45] S0: This is in fact a full engine. Yeah. If something is easily measurable, Elon seems to try to expand the vision and expand the mission and create new things until it's almost impossible. It's like this option, like option value. If you think about the car business, right, first it's we sell cars, and then that becomes easily measurable. But having access to more capital and cheaper capital and having a higher share value may be useful. And other things like having, talent that wants to come join you because your vision is bigger. Suddenly he creates full self driving as a narrative. So suddenly, you can't really price it as a, you know, it's not actually a car company, it's a technology company. It's like a full self driving company. And then at some point, even that doesn't become, you know, people aren't gonna buy cars. They're just gonna rent them for an hour or thirty minutes or something as they're driving them. But then suddenly it's like, actually, Tesla's not even a car company. We're gonna build robots, and we're gonna be, like, the biggest robot producer in the world. We're gonna make a billion robots a year. Again, you just can't really measure it. It's, you know, fairy dust almost. And, you know, but he's got this track record to prove that he can make the fairy dust real. And then eventually he's just like, Tesla's an AI company, actually. And it's the same thing with SpaceX.
01:20:03 · Eric Jorgenson, Ty Morse
[01:20:03] S1: Yeah. And along the way become, you know, one of the biggest grid battery providers integrate backwards into, you know, refining their own lithium because that was the bottleneck for battery production. And, yeah, it's a really... [01:20:16] S0: What role does that like resetting what people's expectations are to just increase the size and scope so that it's impossible to pin down here is the value, here's how you should value it?
01:20:28 · Eric Jorgenson
[01:20:28] S1: Most companies seem to have one innovation. Right? They ride one s curve. Eugene Wei has a great story about Amazon sort of mapping those s curves and stacking them. And I think Tesla, Elon is referred to as a series of startups. Tesla and SpaceX both are this unprecedented stack of s curves. And so there's always some where it's like, you know, that happened a few years ago, and now, you know, the technology level has plateaued, and it's in a sort of a cash flowing state. And that's where, know, Falcon one, Falcon nine are now. Starship is sort of on its way up that. It's not an operating cash flowing thing, but we're, you know, rounding the corner into... But Starlink is really in that like, alright, we have a good sense of what that business is. We have the numbers. It's a good business. We don't know yet quite what data centers in space are gonna be. That's a little hand wavy, but that's kind of always how a new s curve feels. And it's not always clear that the math or math are exactly how it'll work out in reality, but there's also pretty good reason to believe, you know, given the series of s curves that have happened before that it'll work out. I I feel like we always have this funny dysmorphia of the present with regards to Elon where, like, we look at the things that were impossible that were achieved in the past that... And be like, oh my god. He... He's so good at this. I can't believe, you know, it's so fantastic that Starlink worked out. What a genius. And then we look at, to your point, the next s curve, the the pixie dust, the hand waves, and say, like, but that'll never work. We'll never have a mass driver on the moon. That's crazy. We'll never have, you know, data centers in space. That doesn't work. All the experts say that doesn't work. And even after twenty five years of him achieving the impossible, in this moment, we still feel qualified to sort of judge and dismiss, you know, what he's saying is gonna happen next. And, of course, he's not always right in the in the micro, but as he points out, he's like, I've lost many battles, I've never lost a war.