David Senra

It turned out that the materials cost of a rocket was around 2% of the typical price, which is a crazy ratio for a large mechanical product.

2%.

Your car's raw materials are maybe 20 to 30% of the sticker price.

Consumer electronics are similar.

But rockets?

98 cents of every dollar was going somewhere other than what it was made of.

Where was it going?

Three places, it seems.

Supplier markup stacking through contract layers, each tier adding 15 to 30 percent margin.

Custom designs that couldn't achieve manufacturing scale.

And expendable hardware thrown away after every flight.

None of these are the laws of physics.

Traditional aerospace treated high costs as fixed constraints, but what if you treated them as variables?

How do you actually capture that 98%?

I'm reading an early copy of this book called The Book of Elon.

It's written by my friend Eric Jorgensen.

It'll be out in a few weeks.

So back to the essay, another subheading, rethink from first principle.

Start with the actual product.

If you accept existing solutions, you accept their cost structure.