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Chapter 1: What is the main topic discussed in this episode?
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Chapter 2: Why is the space industry experiencing a boom right now?
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Welcome to the Profiteer Markets Founder Series. I'm Ed Elson. The global space economy is projected to reach $1.8 trillion by 2035. What was once an industry dominated by governments is rapidly becoming one of the most important commercial markets in the world, shaping everything from national security and communications to scientific discovery and defense.
My next guest has built one of the leading companies at the center of that transformation. What began as a company focused on lowering the cost and increasing the frequency of small satellite launches has evolved into a full-scale space systems business. Today, the company designs satellites, builds spacecraft components,
and provides launch services that are helping shape the future of the commercial space industry. With more than $200 million in revenue last quarter and a backlog that has grown to roughly $2.2 billion, the company has emerged as one of the biggest players in the future of space. This is my conversation with Sir Peter Beck, the founder and CEO of Rocket Lab.
Peter, thank you so much for joining us on the show. I think what would be helpful to get started here is an explanation of what Rocket Lab actually does. Clearly, you're in the business of space, but there are lots of different things that are involved in the space industry. So what is Rocket Lab doing? What services are you providing?
Well, thanks very much, Ed. I think you did a fantastic introduction, by the way. There's not much more to be said, but...
Cut it there. Done. Interview over.
Yeah, yeah, done. We're good to go. No, I mean, so what we're really trying to build here is an end-to-end space company. So what that means is that, you know, providing services directly from space and everything below that. You mentioned launch. Obviously, launch is the keys to space and the ride to space. Then satellites are obviously the systems that provide the services.
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Chapter 3: What services does Rocket Lab provide in the space industry?
And, you know, I went on a bit of a rocket pilgrimage one year to the United States and I learned a couple of really important things. One, NASA wouldn't employ me.
Why is that? Sorry, if I could just ask, why wouldn't they employ you? Because you weren't a citizen or you applied and they didn't accept the application? What happened?
I'm a foreign national with no university degree. It's hardly the top of the list, is it? But the other thing I learned is I went around and visited a bunch of the little startup companies in the Mojave Desert and whatnot and looked at what they were doing. And what they were doing was absolutely no different to what I was doing here at home. So I'm like, hang on a minute.
So there's not a massive gulf between what I'm doing and what everybody else is doing. So maybe I should just do it.
I think the question we're all asking is how did a young man end up deciding to build rockets and how to even do that? If we could hear more about how that ended up happening.
Some of my youngest memories are standing outside with my father, and he was an avid enthusiast in astronomy as well. And I remember him pointing out to me that all those stars in the sky that you can see, most of them have planets around them, and on one of those planets there could be somebody standing there looking back at you.
And that moment for me was like, right, this space thing is bigger than anything. So this is what I want to do. And, you know, I had a natural propensity to engineering. So you mix those two things together and, you know, what else are you going to build but rockets? I mean, that's the obvious outcome.
At what age did you start actually building rockets?
So I was at school when it sort of got a little bit more serious. So because the metalwork teacher would let me use the metalwork room at lunchtime and the weekends. So, you know, that would have been probably 15, 14.
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Chapter 4: Who are the primary clients of Rocket Lab?
And, you know, before you knew it, we had a rocket on the pad and, you know, we're in orbit and flying customers and away we went.
You mentioned some of these insane valuations and these Series A rounds, $2.2 billion valuation for a company that hasn't actually built anything. Yeah, it's crazy. Just crazy. But then also you look at the valuations and the pricing on the companies that actually are building things, and the valuations are pretty stunning, the multiples are pretty stunning, including on your company.
And one thing that is... I think, notable about the space industry is we haven't really seen it be proven as a profitable business yet. So your company isn't profitable. It's expected to, analysts say, it'll be profitable in 2028. But I'm interested to know what the prize is from a business perspective for a lot of these investors, because clearly there's something out there
There's some prize that's going to be so great that will warrant these unbelievable valuations that we are seeing. What is that prize and what would this business look like, say, 10 or 20 years down the line?
Yeah, well, I think it's a little bit mean to say that space businesses aren't really profitable. I mean, I think you can look back through history and ensure that there's been plenty of bankruptcies as well. But there's also been plenty of profitability in a number of space businesses to address the valuation kind of element. And look, I completely agree.
There's some valuations that are completely untethered to reality. But I think with respect to us, Right now, there are two companies on this planet that have successfully scaled launch to any level of frequency and reliability. And, you know, that's SpaceX and us. So, you know, access to orbit on a regular and reliable basis
is rare it's like extremely extremely rare so um you know it's it's and you know when i started rocket lab and and uh you know when i started developing the electron class vehicle at one point we were tracking 142 companies uh trying to do exactly the same thing 142 companies And where are the 142 companies? That kind of gives you a sense of just how ridiculously difficult it is.
I wish it was way easier. That would make my life way easier. But it is insanely difficult. And when we were raising capital for Electron, the big show in town was Virgin Orbit. And Richard Branson had funded that business to the tune of $1.2 billion to do exactly the same thing that, you know, Electron does today. And it wasn't successful.
It's not even like if you just pay enough money, you'll be successful. It is like there are so many elements that have to be absolutely perfect and lined up to make a successful launch business in particular. that it's just incredibly rare. And anything that's rare attracts a certain value.
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Chapter 5: What factors are driving the soaring valuations in the space sector?
This is a bit grim. No, I'm super excited. I mean, so our Venus mission, for example, you know, if we could, like within the clouds of Venus, there's a predictor to the phosphine gas, and phosphine gas, we only know, currently we only know it's created by some symbiosis of life. So our Venus mission is to go to the clouds of Venus and basically we've got a nephelometer in the spacecraft.
And think of it as a green light, red light for life. Now, imagine if we could go there and get a green light for life in the clouds of Venus. Then I think that is such a massive question to answer for us as a species in the universe. It's like, okay. we're not the only life in the universe.
Because right now, I mean, we have no scientific evidence to prove that we are not the only life in the entire universe. And now I think that's unlikely, but nevertheless, that is the scientific fact. So imagine, you know, in our lifetime, I think we will prove, whether it's Rocket Lab or somebody else will prove that there is life outside Earth.
And either there has been in the past or there is now. And I think that is like one of the largest and most important questions we can ask and answer as a human species is like, are we unique or are we not? And if we're unique, then I think we better pull our resources and think about it a little bit harder. And if we're not unique, then it's equally as fascinating. So
I think these are super exciting and super important questions to answer. And I honestly believe that will be answered in my lifetime for sure.
Really? You think that we'll know the answer to aliens in our lifetime?
Well, I mean, aliens. But, you know, life, is life unique? I mean, right now, sitting on the surface of Mars are a whole bunch of drilled samples from the rovers that are highly likely to contain, you know, examples of ancient life. We just need to go and get them and bring them back. So, no, I think this is going to happen in our lifetime.
What is the rate of progress that we're seeing right now? Because, I mean, if it's exponential, then it seems that there's a higher and higher probability that we'll know the answers to these questions. As someone who's sort of building on the frontier, like how fast is the pace of progress that we're seeing in the space industry right now?
Crazy fast. Crazy fast. Yeah, no, it is, you know, the flywheel is spinning.
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