WEBVTT 1 00:00:01.360 --> 00:00:03.680 I'll try to make this as interesting as possible. If 2 00:00:03.720 --> 00:00:09.320 you like space, you'll like this talk. So my background 3 00:00:09.880 --> 00:00:12.240 in brief, I'll talk a little bit about ZIP two 4 00:00:12.400 --> 00:00:18.000 and PayPal, and then mostly about space and what we're 5 00:00:18.039 --> 00:00:21.920 doing in space. So I originally came out California to 6 00:00:22.280 --> 00:00:25.679 do energy physics at Stanford actually and ended up putting 7 00:00:25.839 --> 00:00:27.879 this is in ninety five, and ended up putting that 8 00:00:27.920 --> 00:00:31.000 on a hold to start ZIP two. 9 00:00:32.320 --> 00:00:34.320 And ZIP too. 10 00:00:35.359 --> 00:00:37.159 I'll tell you a little bit about the thought process 11 00:00:37.200 --> 00:00:41.359 of exactly what happened there in ninety five. It wasn't 12 00:00:41.399 --> 00:00:43.079 at all clear that the Internet was going to be 13 00:00:43.799 --> 00:00:46.200 a big commercial thing. In fact, most of the venture 14 00:00:46.240 --> 00:00:49.679 capitalists that I talked to hadn't even heard of the internet, 15 00:00:49.759 --> 00:00:56.880 which sounds bizarre. On Sanduil wrote, so, but I wanted 16 00:00:57.039 --> 00:00:59.159 to do something in there. I thought it would be 17 00:00:59.159 --> 00:01:02.439 a pretty huge thing, and I thought it was one 18 00:01:02.479 --> 00:01:05.200 of those things that only it came along once in 19 00:01:05.239 --> 00:01:10.560 a very long while. So I got a deferment at Stamford, 20 00:01:10.760 --> 00:01:13.239 and I thought i'd give it a couple of quarters 21 00:01:15.159 --> 00:01:17.120 and if it didn't work out, which I thought it 22 00:01:17.120 --> 00:01:21.480 probably wouldn't, then I'd come back at school and Actually, 23 00:01:21.480 --> 00:01:23.560 when I talked to my professor and I told him this, 24 00:01:23.599 --> 00:01:25.640 he said, well, I don't think you'll be coming back, 25 00:01:25.680 --> 00:01:30.280 and that was the last conversation on having him. But 26 00:01:30.719 --> 00:01:32.359 there weren't a lot of waste Again, the only way 27 00:01:32.359 --> 00:01:34.120 to get involved the Internet in ninety five that I 28 00:01:34.120 --> 00:01:36.400 could think of was to start a company, because they 29 00:01:36.400 --> 00:01:37.680 want a lot of companies to go and work for 30 00:01:38.120 --> 00:01:42.760 Apart from Netscape, maybe one or two others. So and 31 00:01:42.799 --> 00:01:44.280 then I didn't have any money, so I thought, well, 32 00:01:44.519 --> 00:01:48.239 we've got to make something that's going to return It's 33 00:01:48.280 --> 00:01:49.120 going to return. 34 00:01:48.879 --> 00:01:52.239 Money very very quickly. 35 00:01:52.439 --> 00:01:56.760 So we thought, well that the media industry would need 36 00:01:57.239 --> 00:02:02.040 help converting its content from a print media to electronic 37 00:02:02.359 --> 00:02:05.439 and they clearly had money, so if we could find 38 00:02:05.439 --> 00:02:08.080 a way to help them move their media to the Internet, 39 00:02:08.319 --> 00:02:11.520 that would be an obvious way of generating revenue. There 40 00:02:11.520 --> 00:02:13.639 was no advertising revenue on the Internet at the time, 41 00:02:14.319 --> 00:02:17.439 so and that that was really the basis of ZEP 42 00:02:17.479 --> 00:02:20.000 two and I ended up building quite a bit of 43 00:02:20.039 --> 00:02:23.240 software for the media industry, primarily the print media industry. 44 00:02:23.800 --> 00:02:29.120 So we had as investors and customers Hearst Corporation, night Ridder, 45 00:02:31.159 --> 00:02:35.680 most of the major us Print Publishers. We built that up, 46 00:02:35.719 --> 00:02:38.879 and then we had the opportunity to sell to Compack 47 00:02:39.439 --> 00:02:42.000 in early ninety nine, and basically. 48 00:02:41.599 --> 00:02:44.479 Took that offer. It was for a little over three hundred. 49 00:02:44.240 --> 00:02:47.240 Million dollars in cash, and that's that's a currency I 50 00:02:47.280 --> 00:02:56.960 highly recommend. So we had that and and but I 51 00:02:57.000 --> 00:03:00.560 wanted to do something something more after ZEP two. So 52 00:03:02.400 --> 00:03:04.680 post the sale, in fact, immediately post the sale, I 53 00:03:04.680 --> 00:03:05.919 didn't really take any time off. 54 00:03:08.240 --> 00:03:10.120 I was trying to think of where where. 55 00:03:10.000 --> 00:03:12.879 The opportunities in this in early ninety nine, where the 56 00:03:12.919 --> 00:03:15.080 opportunities remained in the Internet, And it seems to me 57 00:03:15.080 --> 00:03:16.879 that there hadn't been a lot of innovation in the 58 00:03:16.919 --> 00:03:21.599 financial services sector. So and when you think about it, 59 00:03:21.599 --> 00:03:24.039 money is low bound with You don't need some sort 60 00:03:24.039 --> 00:03:28.280 of big infrastructure improvement to do to do things with it. 61 00:03:28.280 --> 00:03:31.039 It's really just an entry in the database. The paper 62 00:03:31.360 --> 00:03:33.919 form of money is really only a small percentage of 63 00:03:33.919 --> 00:03:36.879 all the money that that's out there. So it should 64 00:03:36.960 --> 00:03:39.439 land itself to innovation on the Internet. 65 00:03:40.759 --> 00:03:42.879 And so we thought of a couple of different things 66 00:03:42.919 --> 00:03:43.240 we could do. 67 00:03:43.400 --> 00:03:47.039 One of the things was to combine all of somebody's 68 00:03:47.039 --> 00:03:50.919 financial services needs into one website, so you could have banking, brokerage, 69 00:03:50.919 --> 00:03:53.759 insurance and all sorts of things in one place. 70 00:03:55.039 --> 00:03:56.960 And that was actually quite a difficult. 71 00:03:56.560 --> 00:04:01.319 Problem to solve, but we could solved most the issues 72 00:04:01.319 --> 00:04:03.560 associated with that. And then we had a little feature 73 00:04:03.759 --> 00:04:07.240 which took us about a day. That was the ability 74 00:04:07.280 --> 00:04:11.439 to email money from one customer to another. So you 75 00:04:11.439 --> 00:04:13.400 could type in an email addressed or actually any unique 76 00:04:13.439 --> 00:04:19.360 identifier and transfer funds or conceivably stocks or mutual funds 77 00:04:19.399 --> 00:04:23.759 or whatever from one account holder to another. And if 78 00:04:23.759 --> 00:04:26.120 you try to transfer money to somebody who didn't have 79 00:04:26.839 --> 00:04:28.839 an account on the system, it would then forward an 80 00:04:28.879 --> 00:04:31.000 email to them saying, hey, why don't you sign up 81 00:04:31.040 --> 00:04:36.480 and open an account. And whenever we demonstrate these two 82 00:04:36.519 --> 00:04:39.439 sets of features, we'd say, well, this is a feature 83 00:04:39.439 --> 00:04:41.079 that took us a lot of effort to do, and 84 00:04:41.240 --> 00:04:42.920 look how you can see your bank statement and your 85 00:04:43.319 --> 00:04:44.279 mutual funds. 86 00:04:44.000 --> 00:04:46.560 And insurance and all that. It's all on one page, 87 00:04:46.600 --> 00:04:47.560 and look how convenient that is. 88 00:04:47.600 --> 00:04:50.759 And people got home and then we'd say, and by 89 00:04:50.759 --> 00:04:53.360 the way, we have this feature where you can enter 90 00:04:53.399 --> 00:04:56.319 somebody's email address and transfers funds and they go, wow, 91 00:04:57.519 --> 00:05:03.279 so we we're like okay. So we focused the company's 92 00:05:03.319 --> 00:05:06.879 business on on email payments and in the early game 93 00:05:07.000 --> 00:05:09.879 going the companies called x dot com and then there 94 00:05:09.920 --> 00:05:12.600 was a there was another company called Confinity, which had 95 00:05:12.600 --> 00:05:15.279 actually also started out from it from a different area. 96 00:05:15.879 --> 00:05:16.040 UH. 97 00:05:16.040 --> 00:05:19.800 That they started out with the PalmPilot cryptography, and then 98 00:05:19.800 --> 00:05:22.600 they had as a demo application the ability to beam 99 00:05:23.120 --> 00:05:26.319 token payments from one PalmPilot to another by the infrared 100 00:05:26.439 --> 00:05:29.920 port UH. But then they had a website which is 101 00:05:29.920 --> 00:05:35.079 called PayPal, where you'd reconcile the beamed payments and and 102 00:05:35.120 --> 00:05:37.680 what they found was that the website portion was actually 103 00:05:37.720 --> 00:05:39.600 far more interesting to people than the than the pomp 104 00:05:39.600 --> 00:05:42.560 pilot cryptography was. So they started leading their business in 105 00:05:42.560 --> 00:05:43.079 that direction. 106 00:05:44.040 --> 00:05:46.560 UH. And then in basically early. 107 00:05:46.360 --> 00:05:51.480 Two thousand, uh X dot Com acquired Confinity UH and 108 00:05:51.519 --> 00:05:55.319 then about a year later we uh we ended up 109 00:05:55.360 --> 00:05:59.839 changing the company's name to PayPal. And that's that's kind 110 00:05:59.839 --> 00:06:05.319 of how the approximate evolution of the company and the 111 00:06:05.439 --> 00:06:10.720 PayPal is really a case of where the whole viral marketing. 112 00:06:11.319 --> 00:06:14.720 It's really a perfect case example of viral marketing like 113 00:06:14.759 --> 00:06:21.680 hotmail was where one one customer would essentially act as 114 00:06:22.920 --> 00:06:25.680 a salesperson for you, for all of you, for bringing 115 00:06:25.720 --> 00:06:28.279 in other customers, so they would send money to a 116 00:06:28.319 --> 00:06:31.600 friend and essentially recruit that frend into the network. And 117 00:06:31.639 --> 00:06:34.959 so you had this exponential growth. The more customers you have, 118 00:06:35.160 --> 00:06:39.439 the faster it grew. So it was like bacteria in 119 00:06:39.439 --> 00:06:41.519 a petri dish, you know, it just goes like does 120 00:06:41.519 --> 00:06:47.160 this s curve? And in fact I ran paypoaler for 121 00:06:47.199 --> 00:06:51.800 about the first two years of its existence, and we 122 00:06:51.879 --> 00:06:54.279 launched after year one and by the end of year 123 00:06:54.319 --> 00:06:58.040 two we had a million of customers. So it gives 124 00:06:58.040 --> 00:06:59.399 you an example, you know, to give your sense for 125 00:06:59.519 --> 00:07:01.680 how fast things things grow in that scenario. 126 00:07:02.360 --> 00:07:03.600 And we didn't have a sales force. 127 00:07:04.160 --> 00:07:06.360 We actually didn't have VP of sales, we didn't have 128 00:07:06.360 --> 00:07:09.079 a VP of marketing, and we didn't spend any money 129 00:07:09.120 --> 00:07:16.759 on advertising. In about February of last year, for those 130 00:07:17.000 --> 00:07:19.279 some of your probably following it, In February of last year, 131 00:07:19.759 --> 00:07:22.920 PayPal went public and we were I think we were 132 00:07:22.959 --> 00:07:26.079 the only internet company to go public in the first 133 00:07:26.360 --> 00:07:31.600 part of last year. It went off reasonably well, although 134 00:07:31.639 --> 00:07:36.680 I think we had more sec rewrites than any company 135 00:07:36.720 --> 00:07:38.079 I can imagine, Like we. 136 00:07:38.000 --> 00:07:40.480 Said a record on sec rewrites. This was right around the. 137 00:07:40.439 --> 00:07:43.079 Enron time and when there was all sorts of corporate scandal, 138 00:07:43.199 --> 00:07:44.759 so they put us through the ringer. 139 00:07:47.079 --> 00:07:49.000 And then shortly thereafter. 140 00:07:48.680 --> 00:07:53.399 In about June July, we struck a deal with eBay 141 00:07:53.560 --> 00:07:55.560 to sell a company to eBay. 142 00:07:57.120 --> 00:08:02.439 And for about four and a half billion dollars. But 143 00:08:02.519 --> 00:08:03.959 that was when eBay's. 144 00:08:03.560 --> 00:08:07.319 Stock price was about fifty five dollars and they hadn't split, 145 00:08:08.680 --> 00:08:11.319 so I guess in today's dollars with about three billion dollars, 146 00:08:13.439 --> 00:08:18.879 so that worked out pretty well. It happened coincidentally that 147 00:08:20.600 --> 00:08:22.759 in the first part of last year I've been doing 148 00:08:22.839 --> 00:08:27.120 just some background research on space, and let me talk 149 00:08:27.160 --> 00:08:32.200 a bit about that. So essentially, I was trying to 150 00:08:32.200 --> 00:08:35.200 figure out why we had not made more progress since 151 00:08:35.240 --> 00:08:39.559 Apollo in nineteen In the sixties, we went from basically nothing, 152 00:08:39.759 --> 00:08:41.639 not being able to put anyone into space, to putting 153 00:08:41.679 --> 00:08:46.440 people on the Moon and developing all the technology from 154 00:08:46.519 --> 00:08:50.559 scratch to do that. And yet in the seventies and 155 00:08:50.600 --> 00:08:53.919 eighties and the nineties we've kind of gone sideways, and 156 00:08:54.200 --> 00:08:55.840 we're currently in the situation where we kind of even 157 00:08:55.840 --> 00:08:59.559 put a person into low Earth orbit, and that doesn't 158 00:08:59.559 --> 00:09:03.320 really well, with all of the other technology sectors out there, 159 00:09:04.799 --> 00:09:07.559 the computer that you could have bought in the early seventies, 160 00:09:07.879 --> 00:09:09.559 you know, would have filled this room and had less 161 00:09:09.559 --> 00:09:10.879 computing power than your cell phone. 162 00:09:13.159 --> 00:09:16.279 And so just about every sector of technologies improved. 163 00:09:16.279 --> 00:09:23.480 Why has this not improved? So I started looking into that. Initially, 164 00:09:23.480 --> 00:09:25.320 I thought, well, perhaps it's a question of funding, and 165 00:09:25.399 --> 00:09:29.639 that funding can be garnered by really marshaling public support. 166 00:09:30.519 --> 00:09:32.720 So I thought, well, one way to get the public 167 00:09:32.879 --> 00:09:36.000 excited about space would be to do maybe a privately 168 00:09:36.000 --> 00:09:37.919 funded robotic mission to Mars. 169 00:09:39.039 --> 00:09:42.039 And so we figured out. 170 00:09:41.919 --> 00:09:44.519 A mission that would cost about fifteen to twenty million dollars, 171 00:09:44.519 --> 00:09:47.519 which isn't a lot of money, but it's about a 172 00:09:47.639 --> 00:09:50.080 tenth of what a low cost and NASA emission would be. 173 00:09:50.960 --> 00:09:55.080 And the idea was called Mars Oasis, where we would 174 00:09:55.320 --> 00:09:57.960 put a small robotic glander on the surface of Mars 175 00:09:58.279 --> 00:10:02.000 with seeds and dehydrated nutrients. They would hydrate upon landing, 176 00:10:02.080 --> 00:10:06.080 and you'd have plants growing into Martian radiation and gravity conditions, 177 00:10:06.240 --> 00:10:09.639 and you'd also be maintaining essentially lifeesport. 178 00:10:09.279 --> 00:10:11.240 System on the surface of Mars. And this would be. 179 00:10:11.200 --> 00:10:13.200 Interesting to the public because they tend to respond to 180 00:10:13.360 --> 00:10:17.200 precedents and superlatives, and this would be the furthest at 181 00:10:17.200 --> 00:10:19.879 Life's ever traveled in the first life on Mars, so 182 00:10:20.080 --> 00:10:23.840 pretty significant. And then when I started looking at launch 183 00:10:23.960 --> 00:10:27.279 vehicles that the lowest cost vehicle in the US is 184 00:10:27.480 --> 00:10:30.080 Boeing Stalt for two, which costs about fifty million dollars, 185 00:10:30.960 --> 00:10:34.480 and that's a bit that's a bit steep what we were 186 00:10:34.440 --> 00:10:37.919 trying to do. So I made three visits to Moscow 187 00:10:38.000 --> 00:10:44.559 to Russia to look at buying a Russian launch and 188 00:10:44.799 --> 00:10:49.200 it's actually pretty interesting going to moscout to negotiate for 189 00:10:50.120 --> 00:10:54.919 a refurbished ICBM, if you know, on the range of 190 00:10:54.960 --> 00:11:01.519 interesting experiences, that's pretty pretty far out there. But we 191 00:11:01.559 --> 00:11:04.399 actually did get to a deal, but there were so 192 00:11:04.399 --> 00:11:08.960 many complications associated with the deal that it didn't I 193 00:11:09.080 --> 00:11:13.039 wasn't comfortable with the risk associated with it. So when 194 00:11:13.080 --> 00:11:15.039 I got back from the third trip, I thought, well, 195 00:11:15.440 --> 00:11:17.519 you know, why is it the Russians can build these 196 00:11:17.559 --> 00:11:23.720 low cost launch vehicles, because it's not like we drive 197 00:11:23.759 --> 00:11:27.960 Russian cars, fly Russian planes, or have Russian kitchen appliances, 198 00:11:28.440 --> 00:11:30.200 And you know, when's last night I brought something Russian 199 00:11:30.200 --> 00:11:30.960 that was in vodka. 200 00:11:31.399 --> 00:11:34.559 So I think the US is a pretty. 201 00:11:34.279 --> 00:11:38.039 Competitive place and we should be able to build a 202 00:11:38.080 --> 00:11:42.360 cost efficient launch vehicle. So I put together a feasibility 203 00:11:42.360 --> 00:11:45.679 study which consisted of engineers that have been involved with 204 00:11:45.799 --> 00:11:48.440 all the major launch vehicle developments over the last three decades, 205 00:11:49.000 --> 00:11:51.639 and we iterated over a number of saturdays in the 206 00:11:51.679 --> 00:11:54.679 beginning of last year to figure out, well, what would 207 00:11:54.720 --> 00:11:56.960 be what would be the smartest way to approach this 208 00:11:57.039 --> 00:11:59.960 problem of not just launch cost but also launch reliable. 209 00:12:01.000 --> 00:12:03.840 And we came up with a default design and that 210 00:12:03.919 --> 00:12:09.799 actually sort of fortunate timing. That feasibility study finished up 211 00:12:09.879 --> 00:12:12.240 right around the time that we agreed to sell PayPal 212 00:12:12.279 --> 00:12:16.200 the eBay, so coincident with that sale, I moved down 213 00:12:16.240 --> 00:12:20.399 to la where there's actually the biggest concentration of aerospace 214 00:12:20.399 --> 00:12:23.600 industry in the world. It's actually the biggest industry in 215 00:12:23.840 --> 00:12:27.360 southern California, much bigger than entertainment or anything else. I 216 00:12:27.440 --> 00:12:34.000 was living in pala Alta for about nine years before that, anyway, 217 00:12:34.039 --> 00:12:35.000 So just to. 218 00:12:34.960 --> 00:12:38.519 Talk it a little broadly about space and where things. 219 00:12:38.360 --> 00:12:42.519 Are today, Obviously US government man's exploration is not in 220 00:12:42.559 --> 00:12:47.000 a great place. We've got the three remaining shuttles agrounded, 221 00:12:47.080 --> 00:12:49.840 it looks like first flight might only be a year 222 00:12:49.879 --> 00:12:54.080 from now if that, and we've got a vehicle that 223 00:12:54.159 --> 00:13:00.440 is incredibly expensive and really quite dangerous. It's so you know, 224 00:13:00.480 --> 00:13:03.480 for reasons mentioned there, it's got a side mounted crew compartments, 225 00:13:03.480 --> 00:13:06.559 so if there'sn't an explosion, it's basically instant death. 226 00:13:07.159 --> 00:13:07.960 Uh. 227 00:13:08.440 --> 00:13:12.039 The you've got solid rocket boosters, which once you denite them, 228 00:13:12.080 --> 00:13:14.440 you can turn them off. And there's something fundamentally dangerous 229 00:13:14.440 --> 00:13:17.799 about pre mixing your fuel and oxidizer or I think, uh. 230 00:13:17.879 --> 00:13:20.559 And then it's you've got wings and control surfaces when 231 00:13:20.559 --> 00:13:22.279 you when you re enter, you've got to maintain a 232 00:13:22.279 --> 00:13:26.519 precise angle of attack. Even a momentary variance in that 233 00:13:26.600 --> 00:13:30.360 can break the whole vehicle apart. So and and then 234 00:13:30.399 --> 00:13:32.240 of course it's got no escape system, so if anything 235 00:13:32.279 --> 00:13:35.360 does go wrong, your toast and and that you've got 236 00:13:35.360 --> 00:13:39.200 a cost that is really pretty hard to fathom. The 237 00:13:39.679 --> 00:13:42.440 shuttle program, where you add up all the pieces, is about. 238 00:13:42.279 --> 00:13:43.200 Four billion a year. 239 00:13:43.799 --> 00:13:46.480 And so you can divide uh four billion by the 240 00:13:46.559 --> 00:13:48.879 number of flights and I'll tell you what the cost is. 241 00:13:50.720 --> 00:13:53.679 And if there's say four flights a year, which they 242 00:13:53.679 --> 00:13:55.919 haven't been for a while. Then you're talking about a 243 00:13:55.919 --> 00:14:01.480 billion dollars of flight. The plans for the muted future 244 00:14:01.480 --> 00:14:05.000 are obviously we've got to continue building the space station, 245 00:14:05.759 --> 00:14:08.600 so we're going to keep flying the Shuttle, but I 246 00:14:08.600 --> 00:14:10.720 think it's probably going to be the minimum number of 247 00:14:10.720 --> 00:14:12.120 Shuttle flights that we need to launch. 248 00:14:15.639 --> 00:14:17.519 The long term plans are. 249 00:14:17.559 --> 00:14:20.440 Build something called overital space plane and would safe plane 250 00:14:20.480 --> 00:14:23.759 in quotes, because one of the options is a capsule, 251 00:14:24.600 --> 00:14:26.559 so it should be called, you know, maybe overtal space thing. 252 00:14:28.679 --> 00:14:31.080 But the basic idea is to have something that's. 253 00:14:32.559 --> 00:14:35.519 Hopefully a little cheaper and a lot safer than the 254 00:14:35.519 --> 00:14:38.600 space Shuttle. So in particular, it's going to have an 255 00:14:38.679 --> 00:14:41.039 escape system so if something does go wrong, you can 256 00:14:41.080 --> 00:14:48.039 abort to safety. The downside is that it's still while 257 00:14:48.039 --> 00:14:49.600 it might be a little cheaper, it's still going to 258 00:14:49.639 --> 00:14:53.000 be pretty darn expensive. Estimated cost per flight of overital 259 00:14:53.039 --> 00:14:54.960 space plane is someone in the region of three hundred 260 00:14:54.960 --> 00:14:59.080 to four hundred million dollars a flight, and of that amount, 261 00:14:59.320 --> 00:15:02.519 two hundred just two hundred million dollars alone goes to 262 00:15:03.360 --> 00:15:08.960 Boeing for the Delta four heavy expandable booster and it's 263 00:15:08.960 --> 00:15:12.639 a fifteen billion dollar development effort and expected to be 264 00:15:12.679 --> 00:15:15.440 completed in nine or ten years now. 265 00:15:15.440 --> 00:15:19.080 Typically, typically things have. 266 00:15:19.480 --> 00:15:25.840 Not been under budget and under time, so it's unlikely 267 00:15:25.960 --> 00:15:30.639 I think, given historical precedent that it will stay within 268 00:15:30.679 --> 00:15:37.080 fifteen billion dollars and the twenty twelve twelve timeline, and 269 00:15:37.159 --> 00:15:39.159 a bit about what's going on elsewhere in the world 270 00:15:39.200 --> 00:15:42.600 in Russia, that this is really the Sayers is our 271 00:15:42.600 --> 00:15:47.399 only access to space station. It's considerably cheaper, considerably safer. 272 00:15:47.879 --> 00:15:52.279 The Sawyers has a very good track record. The crew 273 00:15:52.320 --> 00:15:54.320 is top mounted, it has an escape system, there are 274 00:15:54.320 --> 00:15:57.799 no wings or control services to go wrong. Overall, it's 275 00:15:57.799 --> 00:16:01.679 a pretty good system. And the estimated carts are about 276 00:16:01.679 --> 00:16:04.600 sixty million dollars a flight, which is an auto more 277 00:16:04.639 --> 00:16:08.600 than Auto Bank two less than the Space Shuttle. The 278 00:16:08.639 --> 00:16:10.519 thing that constrains them, obviously, is the weakness of the 279 00:16:10.559 --> 00:16:13.080 Russian economy. It's very hard for them to embark on 280 00:16:13.120 --> 00:16:19.679 ambitious programs with an economy the size of Belgium. So 281 00:16:19.759 --> 00:16:23.080 China is probably the most interesting thing that's going on 282 00:16:23.240 --> 00:16:24.080 in space. 283 00:16:25.399 --> 00:16:25.960 This month. 284 00:16:26.720 --> 00:16:29.600 China is expected to be only the third is expected 285 00:16:29.600 --> 00:16:32.320 to launch their first person into space. They will make 286 00:16:32.320 --> 00:16:35.000 them only the third country ever to put someone in orbit, 287 00:16:36.360 --> 00:16:39.360 and they put a lot of money and effort into 288 00:16:39.360 --> 00:16:42.799 this program. If anything serves as a spur for human 289 00:16:42.840 --> 00:16:48.279 space exploration, it is likely to be the China's ambitions 290 00:16:48.279 --> 00:16:52.440 in space, and hopefully a sentence in America that we 291 00:16:52.519 --> 00:16:57.919 want to at least keep up with China. And they 292 00:16:57.919 --> 00:17:01.039 have grand ambitions beyond just low with orbit. They're planning 293 00:17:01.039 --> 00:17:04.119 on setting up a space station, putting a base on Mars, 294 00:17:04.279 --> 00:17:09.480 and eventually sending humans to Mars. So what's happening in 295 00:17:10.160 --> 00:17:13.400 the US that I think might ultimately surpass all of 296 00:17:13.440 --> 00:17:19.880 that stuff is entrepreneurial space activities, where things are led 297 00:17:19.880 --> 00:17:23.279 by the spurt of free enterprise. And I think there's 298 00:17:23.319 --> 00:17:29.839 perhaps an analogy here where just as DARPA served as 299 00:17:29.880 --> 00:17:34.440 the initial impetusiple for the Internet and underwrote a lot 300 00:17:34.440 --> 00:17:36.640 of the costs of developing the Internet in the beginning, 301 00:17:38.279 --> 00:17:41.599 if may be the case that NASA has essentially done 302 00:17:41.640 --> 00:17:44.160 the same thing by spending the money to developed some 303 00:17:44.200 --> 00:17:48.240 of the fundamental technologies in the beginning, and then once 304 00:17:48.279 --> 00:17:51.599 we can bring sort of the commercial pre enterprise sector 305 00:17:51.640 --> 00:17:53.920 into it, then we can see the dramatic acceleration that 306 00:17:53.960 --> 00:17:58.960 we did that we saw in the Internet. So there 307 00:17:59.000 --> 00:18:03.000 are several serious particle efforts underway. Talk about each one. 308 00:18:03.720 --> 00:18:07.000 There's there's Burt Ratann of Scale Composites. Bert Rattan is 309 00:18:07.319 --> 00:18:10.799 one of the world's foremost aircraft designers, and he's developed 310 00:18:11.000 --> 00:18:13.920 a subor little vehicle that they're actually flying out of Mohave. 311 00:18:14.880 --> 00:18:18.240 This is an X Prize class vehicle. There's John Cormack, 312 00:18:18.400 --> 00:18:21.839 who wrote Quake and Doom. It's probably one of the 313 00:18:21.880 --> 00:18:24.000 best software engineers in the world, one of the best 314 00:18:24.119 --> 00:18:28.480 engineers that I know period, and he's developing a vertical 315 00:18:28.480 --> 00:18:32.000 take open landing vehicle. Jeff Bezos, who I understand was 316 00:18:32.039 --> 00:18:38.240 here last week, is a huge space advocate, and it's 317 00:18:38.279 --> 00:18:40.160 my understanding that he intends to spend something in the 318 00:18:40.240 --> 00:18:42.680 order of a billion dollars over the next twenty years 319 00:18:43.319 --> 00:18:46.880 on space exploration, and then space then. 320 00:18:46.759 --> 00:18:50.359 My company SpaceX, and I think within the next. 321 00:18:50.240 --> 00:18:54.960 Several years, these entrepreneurial efforts will actually be what derives 322 00:18:55.559 --> 00:19:00.240 space exploration. So a little bit about each one. That's 323 00:19:00.279 --> 00:19:05.240 a picture of the Rotratan effort. It's called White Knight 324 00:19:05.599 --> 00:19:08.079 is the carrier plane, and then spaceship one is the 325 00:19:08.079 --> 00:19:12.880 thing that's held in the belly there. And this project 326 00:19:12.920 --> 00:19:16.559 is supposedly funded by Paul Allen, so there's quite a 327 00:19:16.599 --> 00:19:19.200 lot of capital also, it should make that point, quite 328 00:19:19.200 --> 00:19:22.240 a lot of capital that's sort of entering this entrepreneurial 329 00:19:22.240 --> 00:19:26.880 space sector as well. The only drawback I think of 330 00:19:26.920 --> 00:19:31.920 this architecture is that it's not really scalable for for something. 331 00:19:31.720 --> 00:19:32.640 That would get to orbit. 332 00:19:32.720 --> 00:19:35.279 This is pretty good for sub orbital, but I think 333 00:19:35.279 --> 00:19:38.000 the architecture would need to change for an orbital vehicle. 334 00:19:39.960 --> 00:19:44.519 And there's a John Comas effort. He's a little irreverent. 335 00:19:44.559 --> 00:19:45.599 This is from his website. 336 00:19:48.640 --> 00:19:51.119 His his vehicle is a vertical takeoff and landing vehicle. 337 00:19:51.839 --> 00:19:52.279 He's made. 338 00:19:52.359 --> 00:19:56.400 He's made really incredible progress for somebody who has no 339 00:19:56.480 --> 00:19:57.160 background in. 340 00:19:58.759 --> 00:19:59.880 Aerospace engineering and. 341 00:20:00.200 --> 00:20:02.559 Is also kind of doing it all himself with him 342 00:20:02.559 --> 00:20:03.799 in like three buddies. 343 00:20:06.440 --> 00:20:08.920 So and I think that will make something that works. 344 00:20:09.200 --> 00:20:12.279 Actually, if you can check out their website Amgeller Aerospace, 345 00:20:12.880 --> 00:20:17.279 it's pretty interesting stuff. But in order to get to orbit, 346 00:20:17.359 --> 00:20:20.319 this would require a substantial improvement in the mass efficiency, 347 00:20:20.319 --> 00:20:23.720 in the engine efficiency, and probably be a two stage vehicle. 348 00:20:26.759 --> 00:20:30.279 Jeff Bezos, who I'm sure almost everyone here is aware of. 349 00:20:31.720 --> 00:20:35.200 He is a pretty huge fan of space. 350 00:20:35.240 --> 00:20:38.880 In fact, his high school valedictorian speech was about the 351 00:20:38.880 --> 00:20:43.559 necessity of humanity expanding to other planets, so it's pretty 352 00:20:43.559 --> 00:20:44.359 important to him. 353 00:20:44.799 --> 00:20:50.440 From what I nderstand, this is our effort. 354 00:20:53.240 --> 00:20:57.000 We're spanning quite a bit more than the three prior 355 00:20:57.119 --> 00:21:00.480 entities that I mentioned. In some case is probably an 356 00:21:00.519 --> 00:21:03.359 order of magnitude more, because what we're doing is really 357 00:21:03.359 --> 00:21:04.720 an order of managetude more difficult. 358 00:21:04.759 --> 00:21:06.119 We're building an orbital launch. 359 00:21:05.960 --> 00:21:09.359 Vehicle to two stage, very high efficiency engines, very high 360 00:21:09.440 --> 00:21:13.880 mass efficiency launch vehicle, and it's targeted to the satellite 361 00:21:13.920 --> 00:21:17.240 delivery market. So our approach is really to make this 362 00:21:17.480 --> 00:21:23.119 a solid sound business. And so I've predicated the strategic 363 00:21:23.160 --> 00:21:26.119 plan on a known market, something that we know for 364 00:21:26.160 --> 00:21:29.119 a fact exists, which is the need to put small 365 00:21:29.160 --> 00:21:33.640 to medium sized satellites into orbit. And so that's what 366 00:21:33.680 --> 00:21:37.000 we are going after initially, and then with that as 367 00:21:37.039 --> 00:21:40.720 a as kind of a revenue base, we will move 368 00:21:40.759 --> 00:21:43.559 into the human transportation market. It's the long term age 369 00:21:43.559 --> 00:21:46.000 of the company. Are definitely in human transportation. I think 370 00:21:46.240 --> 00:21:49.640 the smart strategy is to first go for cargo delivery 371 00:21:49.720 --> 00:21:54.519 essentially satellite livery and our eventual a great path is 372 00:21:54.519 --> 00:21:59.559 to build the successor to Saturn five, build a super 373 00:21:59.559 --> 00:22:03.839 heavy lift vehicle that could you know, be used for 374 00:22:04.480 --> 00:22:06.839 setting up a Moon base or doing a Mars mission. 375 00:22:06.880 --> 00:22:08.240 That would be the Holy Grail objective. 376 00:22:10.000 --> 00:22:13.119 On the upper right there you can see a test 377 00:22:13.200 --> 00:22:16.160 firing of our engine, and on the lower right you 378 00:22:16.160 --> 00:22:23.799 can see the our first stage tank. This is an 379 00:22:23.799 --> 00:22:29.000 engine test of our main engine, which is called Merlin Yeah, 380 00:22:40.279 --> 00:22:50.319 and that that generates about roughly seventy five pounds of thrust. 381 00:22:48.640 --> 00:22:53.720 At sea level. This is our upper stage engine. 382 00:22:54.759 --> 00:22:57.200 It's about it's about seventy five hundred pounds of thrust 383 00:22:57.240 --> 00:23:07.319 in vacuum. And this is a accelerated version of our 384 00:23:07.359 --> 00:23:11.799 launch sequence. Our first launch will be from the SpaceX 385 00:23:11.880 --> 00:23:16.279 Launch Complex at Vanderberg Air Force Base an approximately March 386 00:23:16.319 --> 00:23:20.680 of next year, basically early next year, and we will 387 00:23:20.720 --> 00:23:26.519 be flying a Navy satellite, maybe communications satellite. So it's 388 00:23:26.599 --> 00:23:30.920 notable because often launch picle companies are not able to 389 00:23:30.920 --> 00:23:34.599 get somebody that get a paying customer on their first flight, 390 00:23:34.640 --> 00:23:35.880 but we've been able to do that. 391 00:23:36.599 --> 00:23:39.759 This is also the Falcon development. 392 00:23:39.359 --> 00:23:42.359 At SpaceX is the fastest launch picle development in history, 393 00:23:42.400 --> 00:23:56.400 including wartime. That's actually Vanderberg Airport Base, which is about 394 00:23:56.400 --> 00:24:01.240 two hours away from Santa Barbara. Common themes between zip 395 00:24:01.240 --> 00:24:05.960 two and PayPal, well, I guess both of them involved 396 00:24:06.119 --> 00:24:09.680 had had software at the as the heart of the technology. 397 00:24:11.319 --> 00:24:15.119 Even though zip two was in was servicing the media 398 00:24:15.200 --> 00:24:20.319 sector and obviously PayPal was servicing the financial sector, the 399 00:24:20.319 --> 00:24:26.079 the heart of it was really software and Internet related stuff. 400 00:24:26.640 --> 00:24:30.640 So certainly that's a huge commonality. They were both in 401 00:24:30.680 --> 00:24:38.039