How did Elon Musk's approach to building a rocket contribute to the value of SpaceX?

Elon Musk's approach to building a rocket significantly contributed to the value of SpaceX. Instead of buying a rocket at a high cost, Musk used the concept of 'first principles' to rethink the problem. He realized that the raw materials for a rocket only constituted about two percent of the total cost. Therefore, he decided to buy the raw materials and build the rocket himself. This approach not only reduced the cost of launching a rocket by ten times but also allowed SpaceX to make a profit. As a result, the value of SpaceX has significantly increased, with its worth estimated at around $74 billion as of September 2021.

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In 2002, Elon Musk wanted to buy a rocket to begin his dream to send humans to Mars. However, the price to buy one cost as high as $65 million dollars. Musk used a concept called "first principles" to think about how he could reduce costs enough to solve the financing problem. It turns out the raw materials only cost around two percent of the price of a rocket, so he purchased the raw materials and built one himself. Musk was not only able to cut the cost to launch a rocket by 10x, but did it at a profit. As a result, SpaceX is now worth roughly $74 billion as of September 2021.

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Ultimate Project Management Toolbox

Have you ever wanted to run a project like Elon Musk? What about the ability to predict a project’s success like a financial analyst at Goldman Sachs?...

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