The Exchanges

Q So Boeing, obviously with a cost plus culture, it was a culture that would just spend whatever it took to get things done, not trying to be super efficient. How's that different than maybe insights in the culture of SpaceX? What are some takeaways from there?

A Yeah, polar opposite. So, uh, I joined SpaceX as an intern in 2003. The company was maybe 30 people. Then went back 2004, 50 something people. That's when I joined full time. And even from that point, I felt like this team of, this really small team of people could ultimately do a better job than the thousands of people that were working on this other program. Um, it would take growing the team and everything, but the basic, the basic software that ran the company was all about Performance. It was all about, uh, cost adjusted performance, not extreme over reliability or let's take years and years and years to do this program. It was, let's go quickly and then let's optimize the system for delivering the most performance for the lowest cost. That was basically it. And it was whatever it took to do that is what you did. Um, I remember getting there on day one and reading the employee handbook and on the top of page one was just a single line that was in bold. And it said, uh, this is not a science experiment. So it was all about, we're not trying to do any crazy new technology. We're trying to get, uh, rockets to be much cheaper. And so we will just have to clean sheet engineer them to take costs out of the system. And that's it. And it was almost that simple.

AI assessment note: “let's optimize the system for delivering the most performance for the lowest cost.”

Q So going back to that a little bit, you saw what cost plus looked like for our listeners. What does that mean? How is Boeing different than SpaceX having experienced both of those?

A Yeah, so the U.S. space industry had been going on since, you know, the, the sixties, and, uh, there was all this hope that there, there'd be all this progress, and then it never really materialized the way people thought it would, and then the question was, well, well, why not? And I think, you know, the program I was on was, like I said, a cost plus program, and what that meant was, you know, as, as much as everyone at Boeing might have wanted stuff to move really fast and be exciting and innovative, The fundamental business model was, um, you do work and you get paid for the cost of that work plus some additional amount. So you might make 110% of the amount of money that you spent on the program. Um, and you know, if you do the, the simple logic, the way to make the most money then is make the program bigger and bigger and bigger.

AI assessment note: “you do work and you get paid for the cost of that work plus”