Elon Musk runs not one but 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 these insane milestones. But I’m not
being an Elon hater here. Hiring a great operator to help execute a massive vision 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.
Elon is known for setting really ambitious goals, but Gwynne is the person who actually
makes those dreams a reality. Lots of founders hire “adult supervision” when
their companies start to get really big. Mark Zuckerberg hired Sheryl Sandberg as his
Chief Operating Officer in 2008, when the company 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 new SpaceX rocket might blow up,
it’s Gwynne Shotwell who flies all over the world to assure key business partners that the launch
will go according to plan. She’s a steading force in the company, but that doesn’t mean she isn’t
100% aligned with Elon’s ambitions. She wants to create a Mars colony as much as Elon does,
but unlike Elon, she has a financially viable plan for how 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’s allowed her to
scale SpaceX so effectively. The space industry is highly regulated, extremely capital intensive,
and just incredibly difficult to succeed in. 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 tons of startup ideas that don’t require highly technical expertise,
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 had 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 the third grade, how a car worked. 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 to just
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 think of themselves as their job title. 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 skillset 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 Gwynne, 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, but it’s actually quite simple in practice. Residual capability
just means building profitable business lines around technology you already have,
in order to support longer-term projects. And this is Gywnne’s second key success factor.
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 multi-planetary after all.
In fact, Elon Musk probably hadn’t thought about providing internet service from space at all when
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 on Mars.
See, the cost of each incremental SpaceX launch is decreasing over time. 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 dollar 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 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, 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 so it was expensive to do, but it was a much more
efficient path than starting from scratch.” 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 at 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. And this is
Gwynne time or Elon time? That's Gwynne time. I'm sure Elon will want us to go faster.”
This response tells you everything you 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 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 technology is going in the future,
and she is 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 Gwynne’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 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” - they would almost certainly spend 50 years on the project!
But the downside risk of setting an absurd goal is 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 Gwynne 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 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 going really is a desire to improve the life of future generations.
She already has children and has said she wants grandchildren. So even if SpaceX can’t accomplish
every single goal within her 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 JohnCoogan.com,
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