From launch to launch: Peter Beck on building Rocket Lab’s orbital business

Breaking into the launch industry is no easy task, but New Zealand’s Rocket Lab has done it without missing a step. The company has just completed its third commercial launch of 2019, and is planning to increase the frequency of its launches until there’s one a week. It’s ambitious, but few things in spaceflight aren’t.

Although it has risen to prominence over the last two years at a remarkable rate, the appearance of Rocket Lab in the launch market isn’t exactly sudden. One does not engineer and test an orbital launch system in a day.

The New Zealand-based company was founded in 2006, and for years pursued smaller projects while putting together the Rutherford rocket engine, which would eventually power its Electron launch vehicle.

Far from the ambitions of the likes of SpaceX and Blue Origin, which covet heavy-launch capabilities to compete with ULA to bring payloads beyond Earth orbit, Rocket Lab and its Electron LV have been laser-focused on frequent and reliable access to orbit.

Utilizing 3D printed engine components that can be turned out in a single day rather than weeks, and other manufacturing efficiencies, the company has gone from producing a rocket a year to one a month, with the goal of one a week, to match or exceed its launch cadence.

Seem excessive? The years-long backlog of projects waiting to go to orbit disagrees. There’s demand to spare and the market is only growing.

Peter Beck, the company’s founder and CEO, sat down with us to talk about the process of building a launch provider from scratch, and where the company goes from here — other than up.

Devin: To start with, why don’t we talk about the recent launches? Congratulations on everything going well, by the way. Any thoughts on these most recent ones?

Peter: Thanks, it’s great to be hitting our stride. We wanted electron to be an accurate vehicle and we’re averaging within around 1.4 kilometers. When you get into what that means, at those speeds it takes 180 milliseconds to travel 1.4 km, so we’ve got the accuracy down pat.

What that means for customers is we can tell them exactly where their spacecraft is within minutes of separation. The last couple missions have had spacecraft that need to be contacted immediately, to be able to boot up. So we’re able to provide the customers access to their spacecraft immediately. That’s proven to be a very valuable thing that no one else has been able to achieve.

Devin: In some ways one launch is very like another, but in many ways each is also highly individual. What has made each of these launches different for the company and for you?

Boring is good in this business.

Peter: Our first NASA launch had 13 little spacecraft on it, which is a really complicated deployment. We don’t subscribe to just blowing spacecraft out like a sea of gravel, we ensure each satellite is deployed to a precise, individual orbit.

Then the next mission was a single large spacecraft that took up the whole payload, and we had very precise launch windows to hit, so that presented more challenges. And this last one we had a total payload mass of over 180 kilograms, which is close to the maximum for Electron.

But the vehicle continues to perform perfectly. Boring is good in this business.

Devin: Right after your first commercial launch you announced this monster $140 million round. What can you tell me about that? Was it predicated on launch success?

Peter: That round was closed before we had launched, we just tied the announcement to after It’s Business Time. That round was… the best way we can describe it is powder in the keg. We have 3 R&D projects this year — we announced one last week, the Photon spacecraft. So a large portion will be dedicated to that project.

But for us it’s to also stretch our legs and grow the company. Rocket Lab is cash-flow positive now… this is purely for R&D, and for making sure we have large capital reserves for doing the projects we want to do.

Devin: 140 million is a lot of money but I imagine it was all committed to various operations the day it arrived.

Peter: It was very strategic for us — it wasn’t like it just arrived on our doorstep. We worked with our current and new investors to lay out plans for the future and what we may want to do. We’re profitable as a going concern, which enables us to do things like Photon. A lot of it is powder keg, it’s not assigned to projects.

It took the same amount of pain, capital and chaos to get to first flight as it did to get to commercial operations.

Devin: Scaling quickly can be a very difficult transition for a company and its employees. How do you control growth and keep people happy and on mission while also hitting aggressive milestones?

Peter: Good question. It’s funny to look back now, and to look at our emerging competitors getting ready for their first flight or first rocket engine hot fire. It took the same amount of pain, capital and chaos to get to first flight as it did to get to commercial operations.

If you’d asked me if that was going to be the case a couple years ago, I wouldn’t have said that, and I wouldn’t have seen the scaling problems and challenges we’ve faced. We’re over 500 people now, a year ago we were half that. [500, not 150, as originally written here.]

There’s a lot of things that go into providing a launch once a month that have nothing to do with the rocket. And those are really meaningful challenges. Launching one is one thing, but to continue to do it with high accuracy and reliably, that takes a pretty massive effort.

A couple years ago you’d look across the office and it’d be 90 percent engineers. Now if you do it it’s probably, I don’t know, 60-70 percent engineers. That’s the overhead required to produce at this rate.

Devin: What were some of those challenges? Go ahead and get specific.

Peter: The biggest transition was going from being a purely R&D company to a production company. When you’re doing your first flight, all you care about is having your rocket perform, and the performance of that one mission. When you transition into full commercial services, you’re no longer the center of the operation; it’s all about the customer.

That transition, while very obvious, is actually really one of the biggest challenges we had to overcome. And it happens so fast. Sunday you’re an R&D company, Monday you’re a commercial services company. But there’s so much that goes into that!

When you’ve got all the time in the world to produce one rocket… I mean that first flight, it took us two years to build that rocket. The second took a year, third one about 6 months, now we’re spitting them out once a month.

Sunday you’re an R&D company, Monday you’re a commercial services company.

In order to achieve that, the volume of things like ERP systems, quality control… We only achieve our mission success through just insane levels of quality and inspection and diligence.

And that takes a lot of paperwork, we need to know where every single component came from, where the metal came from, right back to the mill. So you may have a valve made out of aluminum, the paperwork that goes with that valve may have more mass than the valve itself!

Any company that’s gone from prototype into full production faces this. The added challenge here is there’s no warranty call. You can’t bring it back from the field if there’s an issue.

Devin: We’ve seen NASA dealing with a pretty serious, long term scam by a supplier that cost hundreds of millions. Have you ever encountered anything weird or shady like that?

Peter: We’re fairly diligent on that. I can’t say we’ve ever found something that’s been super dodgy. Generally we try to put systems in place to avoid any of that.

Somewhere between 90 and 95 percent of electron is built in house. We do more in house than anybody.

Some of our early suppliers didn’t necessarily fully appreciate the level of detail that we needed to go for. I remember once that a component was supplied in a different grade of aluminum, and when we called them they said, “well it’s aluminum isn’t it!” But these are just teething issues, growing pains as a company grows out.

Devin: I’m curious, how much of your work, roughly speaking, is done by contractors, and how much is in house? Obviously NASA works a ton with contractors, but it’s less common in aerospace.

Peter: Somewhere between 90 and 95 percent of electron is built in house. We do more in house than anybody, We’re purposely very vertically integrated in the supply chain.

Left to right: Planet Labs Co-Founder Will Marshall, Rocket Lab Founder & CEO Peter Beck, Accion Systems Inc. CEO and Founder Natalya Bailey, and Moderator Devin Coldewey speak onstage during Day 1 of TechCrunch Disrupt SF 2018 at Moscone Center on September 5, 2018 in San Francisco

Devin: How was the decision made to get into satellite manufacturing?

Peter: In the very first pitch that I gave in Silicon Valley when I was trying to raise the A round, this was the last slide in the deck. So this has been very intentional from day one.

It always was perplexing to me that a launch vehicle or rocket has basically the same equipment as a satellite. They’re really part of each other. When we announced the kick stage [i.e. what deploys satellites once they arrive at the desired altitude] we thought everybody would look at it and say, “well, they’ve built a satellite.” If you look at the kick stage it has everything a satellite has in it, it stays in orbit for a long time and whatnot.

So, what are the barriers to innovation in orbit? Obviously launch is a big one, but the second area is, I have to build a spacecraft. When you think of the companies out there doing this, they spend all this money and time on the spacecraft and you put it into orbit, it’s this hugely expensive process. What Photon does is removes all of that.

The Photon spacecraft platform is the next step in Rocket Lab’s evolution. By co-architecting our launch vehicle and upper stage, which can also serve as a long-life satellite platform, we have transitioned to a one-stop shop for both launch and space segments.

I’m incredibly proud of the team. Every executive says that they have the best team, but holy shit.

This lets customers focus on what really matters — their applications — without the needless distraction of developing or procuring a spacecraft platform that isn’t optimized for any particular launch vehicle. Electron and Photon fit together by design. The time and energy involved is an order of magnitude reduced.

Devin: Something I wonder about in this industry is basically imposter syndrome. You ever get up in the morning and think, there’s no way I’m actually running a rocket company trying to launch orbital payloads at a weekly cadence?

Peter: I mean, this is part of a master plan. It’s just the execution as far as I’m concerned. I’m incredibly proud of the team. Every executive says that they have the best team, but holy shit, we have the most amazing group of people from around the world. It seems there’s no problem too big and no solution too elegant.

If you look at the Electron launch vehicle, it’s just a beautiful machine. There’s nothing there I’m not proud of from an engineering perspective. We build beautiful stuff that works really well.

Devin: Orbital debris is of course one of the issues you’re serious about, and we’ve talked about it before [at Disrupt SF 2018, above]. Can you briefly explain how you’ve minimized the debris of your launch vehicles, and what practical measures you think others ought to be taking right now?

Peter: We approached this from day one – I didn’t want to go down in history as the guy who put the most junk in orbit. That wasn’t the goal here.

The architecture we came up with was to lead our second stage into a very elliptical orbit, then use the kick stage to get the payload into a circular orbit. [Peter recommended this existing explanation of the deployment and deorbiting process.]

This is truly the industry’s dirty little secret – in the small launch world everyone is just racing towards building a small launch vehicle, with zero consideration for stewardship of space. It’s not just disappointing, but reckless. Anybody who is going to back this kind of project these days, it really needs to be part of their design considerations.

Devin: Do you think the world is going to split up on launches the way it has on manufacturing, labor regulations, and intellectual property? Like if you want a cheap launch done fast, you go to China, but if you want it done right you go to New Zealand?

Peter: My answer to that is, it’s hard to know. The good news and the bad news is that it’s so incredibly hard to get to space in the first place, so incredibly hard to take a vehicle from first flight to production… the numbers of opportunities at least in the short term are going to be really low.

Everyone is just racing towards building a small launch vehicle, with zero consideration for stewardship of space. It’s not just disappointing, but reckless.

Over time I think it’s going to be a self-regulating issue, because as more stuff goes into orbit it becomes more complex to do so, and you decrease your opportunities and increase risk. I think there will be a tipping point someday when it makes commercial sense to not be reckless about it. In a sense space is still the wild west. But at least we’re not the ones that will be contributing.

Devin: Where do you see opportunities for startups in space?

Peter: I’ve always been of the opinion that the biggest thing that’s going to be done in space hasn’t even been thought of. This is the exact reason we developed Photon.

With a few people and a Photon you can do anything you want… well, not anything. But you should be able to deploy ideas into orbit, because all the crap is taken care of for you! You have to build good teams if you want to do anything in space, but the whole idea behind Photon is there’s nothing stopping a couple of people from deploying a sensor into orbit to measure methane, or whatever. The barriers to experimenting in space are the lowest they’ve ever been and they’re just going to drop and drop and drop.

This is why I get up in the morning, the whole point of our existence here really: To enable people to innovate in space, to create new businesses and opportunities for all of us down here on earth. We’re in a unique position, we get to see a lot of the emerging stuff — people come to us with ideas and spacecraft. I’m continually amazed with the concepts and spacecraft and that people come up with. It’s just mind-blowing.