In the second part of our conversation with Sir Peter Beck, we put a bunch of Sharesies investor questions to the Rocket Lab founder. Things like: Why space? What are the macro events that impact the space industry? And what's his favourite space movie?
Plus Sharesies co-founder and CEO Leighton Roberts gets a brief tour of Rocket Lab’s Auckland site.
For more or to watch on youtube—check out http://linktr.ee/sharedlunch
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I've got some questions that have come in from shareholders over the last couple of days. So the first one is what made you pick space?
So the reason I like space is that you can have maximum impact on this planet for kind of minimum resources and effort.
So think about this.
You can put a spacecraft in orbit, and we did take an example of a weather spacecraft we put in orbit a few years ago, and that whether spacecraft can provide data and services and knowledge to literally hundreds of millions of people every day times the duration of the spacecraft's lifetime, which could be ten years. So there's crazy little box of electronics can have just huge amount of impact to so many people. And there's very few industries that you can have that amount of impact or have that amount of reach. So that's primary, you know, the thing I love about space.
Plus it's cool. Yeah. Cool.
The next question is are you contributing to space junk and is there a plan to clean it up?
Yeah?
So I think anybody who launches anything to space, you know, has to put their hand on their heart and say, yet, well, sometimes we leave some stuff behind. We've always taken in the approach that we want to leave the minimum out behind as we can possible. So you know, the way that Electron goes to orbit is quite different to most rockets. You'll notice that there's like a little bit on the top called to kickstage, and we try and deorbit that wherever possible and just leave behind only the customer spacecraft. Now that's not the normal thing, like a lot of a lot of countries will just leave the whole spent upper stage of the rocket and orbit. So that you know, that's that's pretty nasty. And I think there's a there's a common misperception that space junk is just dead satellites. Actually it's like one third dead rockets and two thirds dead satellites or thereabouts. So we certainly do everything we can to you know, to make sure we have the minimum impact possible. And I would say as far as companies go or businesses go, we're probably the furthest leaning forward on kind of advocating for kind of regulation. Generally, as an entrepreneur, you don't want any regulation, but this is an instance where you know, we think that some traffic management is going to be critical, and we certainly certainly advocate for that.
Internationally, I mean, there's definitely seems to be an exponential curve and with regards to how much is going up, isn't it when you say d orbit like, so you've got to you have to some additional propulsion or.
Something, right, correct?
Ye, So that that keck stage has a little rocket engine on it and we circularize the orbit, deploy the spacecraft, and wherever possible, we will burn that engine again and put it into a into a declining orbit.
What we touched on a couple of these earlier. But what are the macro factors that impact the space industry and therefore rocket labe.
Yeah, so I think from a I guess purely from a sheer price standpoint. You know, there's there's there's plenty of you know, macro factors. You know that that that influence that that that we have no control over. But kind of generally the space industry seems pretty insulated from from a lot of these things, just because of the duration of the of the programs typically.
Yeah, do you have any sensitivities it's or much sensitivity to the interest rate environment and stuff obviously.
Absolutely, yeah, Yeah, within the share price, you know, you know, we can we can have a flawless launch and the share price goes down simply because of a macro environment kind of thing.
And favorite space movie.
Two thousand and one Space Odyssey, and as you want on track, Yeah, yeah, so as you walked into the facility, hopefully if you've watched that movie enough times, you'll recognize the entrance portal is actually the very similar to the portal of the you know, the Hell Computer.
What's the most accurate space movie?
Well, actually two thousand and one Space is actually very accurate. It's one of the few space movies that doesn't have sound in space. You find you see a lot of a lot of those movies, and you know, the cruiser will ignite its engineer here this roar.
It's no.
Right, it's fully over It quite a fundamental hurdle. I would say that, Yeah, what steps are you taking to improve the growth of Rock labment?
Yeah, well, I mean you can see you can see the you know, the growth rate today you need that seventy percent. So you know, we're always looking at new opportunities, and you know we're investing heavily into projects and products like neutron. You know, neutron is is going to be a huge needle mover. And then you know if you look at the combination of the space and the and the launch you know that in opening up that that three hundred and twenty billion dollar TAM, you know, we're moving reving pretty aggressively towards that.
And has Rocke Lab considered adding another launch site in New Zealand or Australia.
No.
Generally I avoid launch sites. They are giant cost centers. It costs a lot of money to operate a launch site, to staff it, to to keep it, to keep it running. So I want the minimum amount of launch sites possible to achieve our launch manifest because they are you know, they're.
P and L burners.
So we don't we don't want more of those.
What are the competitive advantages in operating out of New Zealand and what are the challenges?
Yeah, great question. So the reason why we have operations in New Zealand is primarily because of that launch site. So all the launch sites in the United States are pretty much flat out, and we made a strategic decision to not have to line up behind the you know, the big players in the industry and way to turn. So you know, it wasn't an easy one because we had to you know, there had to be a technology safeguard agreement signed between the two countries. A bilateral treaty had to be created between New Zealand and the US. A whole lot of rules and regulations had to be created and amended. A Space Agency was created. So like, it wasn't an easy thing to do, but we realize it now because you know, we are the third most frequent launch rocket in the world. And what we're able to do is poke our head outside the hangar and go, today's a good day for launch.
We'll guard launch today.
And moreover, it's it meets our business model where customers move around on us. So if you're lined up at the cape and you miss your window, you're going to wait months to get your next window. Whereas if we want to move a couple of days down to Mahre, no big deal.
We'll just move a couple of days. Any other companies using the MA here inside or was it just.
I mean, we operate the only private orbital launch site in the world.
I'll ask this one because it's here so tasty? Or eat them cheese nice? Now we've got the important stuff out of the way to give into this one. Once Neutron R and D is complete and the rocket is operational. Do you anticipate that you'll need to reduce your engineering R and D headcount become cash flow positive or will the staff be able to be reassigned to further space systems development while still maintaining a healthy profits.
Ye, that's a great question. So if we were just going to stop at Neutron, maybe, but we're not. You've seen you've seen our kind of growth a gender here. You know, Neutron is one important piece of a puzzle to get to an endo ends space systems company and and really move into those products and services and delivering infrastructure and or bit And I mean the same question could have been asked of Electron. But the one thing I will say is the one thing that that has always been a throttle on this business is talent. And we can never pipe enough people, enough engineers into this business to you know, to continue on.
The growth trajectory that we want.
So I just can I never see that that being you know, a challenge and and I think you know, Neutron is is a very transformational kind of product line in its own right, and the amount of engineers that that you have to you to deliver that product isn't is as many as you think, and those engineers will be quickly kind of you redeployed into into other growth opportunities.
There's a good question a bit of a site to it at the moment. So where are we, Peter, and what we got here?
So this is sort of part of the foyer and this is actually a recovered upper stage of an electron rocket. So this is the very first rocket that we brought back down from space and we cut it up and stuck it in the foyer. And if you ever want to touch something that's been to space and back, then now is a chance.
Very cool. And where did you Where did you find it?
So we fished this out of the ocean. So this was on a return to send a mission. Yeah, so flight sixteen and you know it separated in its normal trajectory and then followed a ballistic arc. We re entered the atmosphere and then landed in the ocean and then picked it back up.
So one of the coolest receptions, well certainly the corest reception of you've been into we heard a story about the idea of this. When you walk into rocket Lab, you can tell us a little bit about the thinking into the space.
Yeah, so as you into the portal behind you there, it should look a little bit like two thousand and one Space Odyssey, And you know, you want to be transformed when you come in here into what the space business is actually like. So you know, this area is kind of a reception for sure, but also behind all those glass panes there is you know, that's mission control. So it gives a great opportunity for staff, for visitors to come here and actually experience a launch and watch watch mission control as it kind of happens.
Yeah, and what are the people in their mission there's no launches today, but we've got a bunch of people in there. What are they sort of up to on the day to day.
Yes, so on on a day to day basis, you know that they're running either whole stage tests or stack tests or launching. We also run some some of our satellite missions out of there, where share five mission controls across all of our sites in the world, and at any one time, you know, we're controlling spacecraft or launching rockets and various kind of testing activities out of all of those mission controls.
Yeah. Great, and we've got a sort of NAIs deck.
It looks like the Bell site or something from But can you sell us a little bit why you chose to the nasdack is the place to list the company?
Yes?
So, I mean from from a high growth tech company standpoint. The Nasbeck narsdeck exchange, you know, just really suited us, you know most it's most accurately represents who we are as a company. Investing involves risk. You might lose the money you start with. We recommend talking to a licensed financial advisor. We also recommend reading product or sclosure documents before deciding to invest.