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Bold Moves and Strategic Acumen: SpaceX Pushes on Toward the Next Frontier

By: , and :: Published: April 15, 2015

On April 14, Elon Musk’s SpaceX attempted a historic landing of a reusable rocket on a drone ship in the Atlantic Ocean, but for the second time failed to land the Falcon 9 onto a small floating platform. Despite the setback, SpaceX refuses to give up and vows to try again, recognizing this as a critical step in transforming the feasibility of space travel.

SpaceX has proven its resilience time and again, continuing to push forward even at the verge of bankruptcy in 2008 after its first three launches had detonated before reaching orbit. Now, with its commitment to continue development of reusable rockets, the company is demonstrating strategic, long-term thinking by taking initiative to make commercial space flight more affordable.

Just a few months ago, SpaceX joined forces with fellow tech giant Google. SpaceX received $1 billion in financing from Google and Fidelity in exchange for just less than 10% of the company; Google expanded its terrestrial wireless capability by partnering with SpaceX to create a network of hundreds of satellites that could not only connect people on Earth to the web, but also people on Mars.

SpaceX founder Elon Musk is fueled by a bold vision of space travel to Mars.  He thinks big about future possibilities and takes audacious moves to break new ground in tough industries and uncertain times.  Of course this is no easy task, but as we observe Musk and his colleagues, they are increasing the viability of landing their mission by demonstrating six disciplines of strategic thinking as detailed in a new book “Winning the Long Game: How Strategic Leaders Shape the Future” by Steven Krupp and Paul Schoemaker.  One of the exemplary leaders profiled in the book, Musk epitomizes how these six disciplines enhance long-term success. 

Like many of Musk’s ventures, SpaceX looks beyond the here and now to anticipate the needs of the future, or more accurately, what will drive a better future. Through its collaboration with Google, SpaceX takes a leap toward Musk’s ultimate vision of colonizing Mars. The partnership presents a strategy to build the same infrastructure for connectivity that we have here on Earth that will certainly be needed if, or some say when, his vision is realized. In Musk’s eyes, Mars is the next frontier, and he’s one of the few that is taking steps to get there.

Leveraging satellites as a cost-efficient means to provide the entire world with Internet challenges the current growth of Internet connectivity. Fiber-optic cables are cheap and easy to install. The cables can transmit huge amounts of data, while Internet satellites transmit data limited by the available spectrum. By choosing a different mode, Google and SpaceX have placed a very risky bet. However they have a chance with significant decreases in the cost of deployment, as well as the growth of micro-satellites and drones that can operate at lower orbits with performance comparable to larger, more expensive satellites.

It’s clear SpaceX knows the value of reusable rockets, and they saw the wide implications at the outset. With such rockets, the cost of space access will drop to levels at which more companies would consider participating. Inviting more entrants and investors will build out the industry and infrastructure that will move the space ecosystem forward, including SpaceX’s business itself. This is the same motivation Musk exhibited when he released Tesla’s patents, allowing competition to more easily build electric cars and subsequently creating a stronger supporting infrastructure for the entire e-car industry. By seeing the long-term implications early, SpaceX is tackling the major obstacles to its growth now instead of later.

Google and SpaceX are not alone in building their global Internet service. Virgin invested in OneWeb to build a network of low-orbiting satellites. OneWeb has a crucial advantage over SpaceX at present because it owns rights to the radio spectrum that would allow data transmission, and Virgin claims there is not enough bandwidth for a competitor in the spectrum. Rather than seeing the decision as binary – to concede the project or partner with Virgin – Google and SpaceX are now pushing for other options, including exploring other new methods for transmitting data.

With the founding of any company, funding can be difficult. In the beginning, SpaceX negotiated to be one of two partners of NASA, which had finally decided to look outside of its traditional contracting approach and invest in a commercial space program. This allowed SpaceX to collect $396 million from NASA and also $454 million in outside capital by aligning many of Musk’s friends in Silicon Valley to the vision of SpaceX in 2006. This skill again was put to the test with the partnership with Google as financing only gets more complex when the sums increase. By bridging the vision of the two companies and the mutual benefit each could share, SpaceX was able to negotiate an impressive $1 billion in financing.

Though a proven entrepreneur with two successful start ups, Musk was no rocket scientist when he started SpaceX. He knew he needed to learn about the industry in a deep manner. To go toe-to-toe with aeronautics experts and push them toward new thinking, he practically memorized textbooks to better understand the frames of the people he was working with. He also translated his learnings from his other companies to create an entrepreneurial culture that is redefining the space industry. 

SpaceX exemplifies the power of a bold vision, a long view and the six disciplines of strategic thinking as exhibited in its launches, collaborations and initiatives. By applying strategic acumen, SpaceX is shaping its own future.  As technology continues to evolve, and competition comes from unexpected directions, more business leaders will need to apply the type of strategic thinking we see in Musk and outlined in “Winning the Long Game.” In a world of accelerated change, leaders must determine how they can guide their organizations toward new sources of growth and generate game-changing innovation.  Those who don’t raise their strategic game will be left behind.  Those who master strategic agility and foresight will increase their chances of winning the long game.

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