For Elon Musk, economies of scale are not rocket science… or are they?
When SpaceX became the first private company to carry two people into Earth’s orbit on May 30, and then to the International Space Station the next day, Elon Musk won many fans overnight who until recently dismissed him as a blowhard.
Why did NASA choose SpaceX, a company considered by many as little more than a startup, over the venerable Boeing, founded in 1916, with more than 160,000 workers? Firstly, SpaceX is far from a startup: in its 18 years, its more than 8,000 employees have reached numerous milestones other companies have failed to do, reaching a market valuation of $36 billion.
But its size, significantly smaller than Boeing’s, was obviously not the reason why NASA chose SpaceX for such a radically strategic mission. The real reason was the vision of its founder, and specifically, his obsessive idea about economies of scale. Anyone who doesn’t understand the concept should check out the impressive video in which two of its rockets land at the same time in the Kennedy Space Center, because that’s where the real idea comes in: an entirely manufacturing oriented design with reusable components. This apparently simple idea, that of manufacturing in a completely automated way and reusing as much as possible, is the basis for SpaceX to build more than one rocket per week with the final goal of…
