The Only Reason SpaceX Works (Gwynne Shotwell)

Elon Musk runs two incredible companies, Tesla and SpaceX. But what if I told you that he doesn't actually run SpaceX day to day? And I have the data to prove it. The flight logs from Elon's private jet make it clear that Tesla is his number one priority, but we'll dig into that later. Gwynne Shotwell is the real head of SpaceX. And she's the only reason that SpaceX keeps hitting all of these insane milestones. But I'm not being an Elon hater here. Hiring a great operator to help you execute a massive vision is. Is one of the best things that an entrepreneur can do. And Gwynne is seriously the best operator in the entire tech industry, but no one seems to talk about her. I have a bunch of theories as to why that is, but let me show you exactly how Gwynne runs SpaceX. First, Elon is known for setting really ambitious goals, but it's Gwynne that actually makes those dreams a reality. It's common for founders to hire adult supervision when their companies start to get really big. Mark Zuckerberg hired Sheryl Sandberg as his chief operating officer in 2008 when Facebook was just a few years old. Gwynne is chief operating officer of SpaceX, but she's also the president of the company, and that extra title is really meaningful. The title of president can mean a lot of different things depending on the company, but what I'm about to show you will make it clear that she's much more than a second in command. SpaceX would be nowhere without her. When Elon posts a crazy tweet suggesting that a brand new SpaceX rocket might blow up on the pad, it's Gwynne Shotwell, who flew flies all over the world to assure key business partners that the launch will go according to plan. She's a steadying force in the company, but that doesn't mean that she isn't 100% aligned with Elon's ambitions. She wants to create a Mars colony just as much as Elon does, but unlike Elon, she has a financially viable plan to actually get it done. I love analyzing leaders like Gwynne on this channel because there are so many key lessons that can be applied to any startup. I'm an entrepreneur myself, and learning about success stories like hers always inspires me to work harder and dream bigger. I put out videos like this weekly, so please consider subscribing. Not much has been written about Gwynne Shotwell, so I really had to dig through interviews and podcasts to figure out what allowed her to scale SpaceX so effectively. The space industry is highly regulated, extremely capital intensive, and just downright hard. It is literally rocket science after all. But I think I've nailed down how Gwynne thinks about business, so let me summarize it in three separate parts. First up is her background. Before she became President of SpaceX, Gwynne spent decades becoming an expert in the relevant skill sets needed to succeed in the aerospace industry. There are great startup ideas that don't require highly technical knowledge. Just look at all the social networks founded in dorm rooms by college dropouts that are now worth billions. But rocketry is a little different now. Gwynne didn't know that she wanted to work in the aerospace industry as a kid. She's actually said that she never dreamed of being an astronaut, which is kind of crazy since I thought everyone had that dream as a kid. But she did have a fascination with engineering and leaned into it at a young age.

I don't think I was nerdy, but I was definitely doing the things that the girls weren't doing. I asked my mom, who was an artist when I was in third grade, how a car worked, so she had no idea. So she gave me a book and I read it and sure enough, my first job out of my mechanical engineering degree was with Chrysler Motors in the automotive industry.

This is one of the best things about technical disciplines. Not many people are willing just to crack open a book and start learning, but if you can buckle down and learn the science, you'll have an incredible advantage over the competition. But Elon Musk didn't trust Gwynne to run SpaceX just because she was a talented engineer. By the time Gwynne joined SpaceX, she had worked in the aerospace industry for over a decade. And I can't stress enough how important this is. Many people tend to think of themselves as their job titles. A typical engineer might bounce around from an advertising company to a bank and then to a car company. And that can be a great career. But if you want to become a leader like Gwynne, it's much better to focus on developing a breadth of skills that are relevant to your specific industry instead of getting stuck in a particular division of SpaceX. When she joined, Gwynne was able to wear many hats because she had so much aerospace experience. She came in as head of business development, which is essentially a sales role. But because she understood the industry inside and out, Elon kept tapping her for bigger and bigger projects. It can be uncomfortable to take on new roles at a growing company. But Gwynne understands that building a diverse skill set is key to successful leadership. And you'll never build new skills if you don't take risks.

When I was considering joining SpaceX back in 2002, I was struggling with the decision and drawing it out for weeks. It seemed so risky for me personally to join this little startup in an industry where none had ever succeeded. At the time I was a part time single mother and this was just too far out of my comfort zone. I was driving on the freeway here in LA when it finally hit me. I was being a total idiot. Who cares if I tried this job and either I failed or the company failed. What I recognized at that moment was that it was the trying part that was the most important. Try that risky thing. Be a part of something exciting.

When opportunity knocks, you need to open the door. Joining a startup as employee number seven was extremely risky for Gwen. But by taking a big leap of faith, she put herself in the perfect position to expand her skill set and become a true leader in the aerospace industry. But all her ambition and experience would be nothing without execution. This was nearly 20 years ago after all, and SpaceX had a long road ahead of it. Becoming a successful rocket company would require an entirely new way of thinking about the business. And fortunately for SpaceX, Gwynne had discovered something incredible. If you've never heard the term residual capability before, that's completely fine. It's definitely pretty jargony. Residual capability just means building profitable business lines around technology that you already have in order to support your longer term projects. And this is Gwyn's second key success. She's a master of capitalizing on SpaceX's residual capability. There are a few great examples of residual capability really changing the game for SpaceX. The first is Starlink, their satellite Internet network. SpaceX didn't set out to create an Internet service provider. Their stated mission is to make human life multiplanetary after all. In fact, Elon probably hadn't thought about providing Internet service from space at all when he started SpaceX. The Internet is cool and all, but it doesn't have much to do with getting to Mars. At least that's what everyone thought before Gwynne created SpaceX's financial plan. Getting to Mars wasn't going to be cheap. The rocket required to take a crew of people on the months long journey will be absolutely massive. So Gwynne started breaking Elon's vision down into small steps that could ultimately lead to a Mars colony. We've all seen SpaceX launch satellites for other companies. But along the way, Gwynne realized that by launching their own satellites, they could create a sustainable business here on Earth and help build technology that will be needed for Mars. See, the cost of each incremental SpaceX launch is decreasing over time. And every time they launch another rocket, they are learning important lessons and becoming a more efficient company. Launching a network of satellites into orbit for Starlink would cost billions of dollars. But once they were up there, they would generate profits for decades to come. Additionally, a future Mars colony will need a communications network of their own. And all that experience setting up satellite networks here on Earth will translate pretty directly into a Mars satellite network. And Gwynne was the perfect person to lead the StarLink effort at SpaceX because she had championed a deal with iridium back in 2010. SpaceX had great relationships with government customers. But doing business with independent corporations would be important too. So Gwynne signed a $492 million contract to launch 75 Iridium satellites into orbit using Falcon 9 rockets. Gwynne figured out how to bring in extra business for SpaceX back in 2010, and and that experience allowed her to leverage that residual capability to start an entirely new business line with Starlink in 2015. But that's not the only time that Gwynne has championed this idea of residual capability at SpaceX. In fact, the entire design philosophy of SpaceX's Big Falcon Rocket is based on the idea of residual capability.

It's exactly this residual capability. So we developed the Merlin engine for the Falcon 1 launch vehicle. We could have tossed that engine and built an entirely new engine for the Falcon 9. It would have been called something different, obviously, because Falcon 9 is nine Merlin engines. But instead of spending a billion dollars on a brand new engine, we put nine of them together on the back end of Falcon 9 residual capability. Glue three Falcon 9s together and you have the largest operational rocket flying.

And that's not all. SpaceX is planning to offer point to point travel on Earth to allow people to get from New York to Shanghai in just 30 minutes. Developing this business from scratch would be nearly impossible. But because Gwynne had successfully executed on so many other SpaceX projects, they now have a real shot of making this a reality. Although it probably won't happen for years. Gwynne has been asked directly about when this point to point capability would be widely available.

Within a decade for sure. This is Gwyn time, or Elon time. That's Gwyn time. I'm sure Elon will want us to go faster.

This response tells you everything you need need to know about why Gwynne has been so successful at SpaceX. Elon is notorious for being overly optimistic about timelines, and Gwynne acknowledges that all while still maintaining ambitious goals. Too many people hear Elon announce an aggressive timeline and instantly write him off because it seems impossible. Gwynne understands that Elon's timelines might be overly ambitious, but he's still directionally correct about where the technology is going in the future. Future. And she's 100% on board with his vision. It's common knowledge that Elon can be a demanding boss, but Gwynne has been working alongside elon for nearly 20 years now, and she wouldn't stick around if they didn't see eye to eye on the future. And this is Gwyn's third key characteristic that makes her such a great leader at SpaceX. She loves absurd goals.

Set and try to achieve absolutely absurd goals and don't be afraid of failing if you can't achieve them.

This idea of setting absurd goals is extremely powerful, mostly because of human psychology. See, this relates to something called Parkinson's Law, which is the old adage that work expands to fill the time allotted. To put it simply, the amount of work required to complete a given task typically scales to the time available for its completion. So if the SpaceX team said something like getting to Mars will be really hard and will probably take 50 years. Years, they would almost certainly spend 50 years on the project. But the downside risk of setting an absurd goal is actually very minimal. Sure, people might make fun of you, but none of that matters. Just keep building towards that goal and you will eventually achieve great things. Elon is known to set particularly absurd goals, and Gwyn is typically a bit more realistic in her estimations. She has to keep the company alive, after all. But the key thing to note here is is that she is still 100% aligned with Elon on the goal. She has the same ability as Elon to think long term and imagine what's possible for humanity over decades instead of just years. She's made plenty of money at this point, but I think what keeps her really going is a desire to improve the life of future generations. She already has children and has said that she wants grandchildren. So even if SpaceX can't accomplish every single goal within her life lifetime, I think she'll be remembered for hundreds of years as someone who helped change the course of humanity forever. And that's incredibly powerful. If you want to go a layer deeper, just Enter your email on john coogan.com and please check out this recommended video. The YouTube algorithm thinks that you'll really like it.