You’ve probably heard of the PayPal Mafia. When eBay bought PayPal in 2002 its founders took the money, scattered, and built the next generation of digital monopolies.
Peter Thiel founded Palantir and seeded Facebook. Reid Hoffman set up LinkedIn. Chad Hurley and Steve Chen started YouTube. Max Levchin founded Affirm.
Elon Musk—who had merged X.com into PayPal two years earlier—went a different direction. He took his payout and leased a small warehouse in the El Segundo area of LA.
He bolted a sign on the front that read “Space Exploration Technologies Corp.”
We all know where that's gone.
Most people still think SpaceX is “just” a rocket company. But it’s actually a machine for producing world-class talent. A talented engineer takes a job at SpaceX, learns the Elon Musk “way” of solving impossible problems, then graduates as a force of nature ready to transform other industries.
After meeting dozens of SpaceX graduates in warehouses across LA, I’m convinced:
The SpaceX Mafia will create more wealth than the PayPal Mafia—possibly more than all of Silicon Valley combined.
If you can track only one alumni group in business today, this is the one. SpaceX is the new Harvard.
A hedge fund buddy of mine told me: “I’d pay real money for a database of ex-SpaceX employees.”
The article then goes on to list four companies founded by SpaceX alums - the "SpaceX Mafia" who are already solving really hard (and expensive) problems. Only two are space companies.
Sure there were rumors, but I was plausibly convinced that they wouldn'tdo this:
Key Points
SpaceX is preparing for a potential $1.5 trillion IPO as soon as mid-2026.
Elon Musk confirmed rumors in an X post.
The IPO could boost SpaceX’s goals, Musk’s wealth, and the entire space sector.
The numbers seems low at $1.5T and $30B - low if you think that Space is a huge growth sector (as I do) and considering that the company has been cash flow positive for years.
Why I thought that they wouldn't do this is that I think that Elon is driven by Mars colonization, and having shareholders dilutes his ability to focus on that.
Peter brings up a point I've been making for quite a while that is being highlighted by Elon's DOGE:
It doesn't give enough attention, IMHO, to the "poverty industry" of NGO's, consultants, therapists and others who make a good living out of "managing" or "addressing" the causes, effects and reality of poverty,without ever doing anything to resolve the issues they identify- because that would cut off their income, and nobody (at least, from their perspective) wants that.
Rich People's Leftismis one of the clearest explanations I've ever seen for the utter failure of government in Blue States:
With this new approach in mind, let me contrast Rich People’s Leftism (RPL) with Poor People’s Leftism (PPL).
RPL
thinks that its goal is to help poor people, while PPL thinks that
RPL’s primary goal is to ensure that wealthy leftists dominate and get
great jobs.
You really should
click through to read about Rich People's Leftism, which dates to 2010.
We've known about this for a long, long time. A different view is "red pill/blue pill":
...
an old post from Isegoria (you do read him every day, don't you?) gives
the best introduction to the topic, phrased in explicitly"Blue Pill"/"Red Pill" terminology:
The nature of the state
The state is established by citizens to serve their needs. Its actions are generally righteous.
The
state is just another giant corporation. Its actions generally advance
its own interests. Sometimes these interests coincide with ours,
sometimes they don’t.
You
should read Isegoria's post as well. Then think about the proposed
$3.5T spending bill that is before congress. Who will it help? Who are
we told that is is going to help, but won't? To ask the questions is
to answer them.
What is interesting about the opening moves of DOGE is that we are now getting names to put next to all the Rich People's Leftism projects.
An Extinction Level Event is when something - we typically don't really understand what - causes a mass die-off, with 60% or more of species disappearing. The most famous of these was the asteroid that finished off the dinosaurs (if you believe that; I'm skeptical that the answer to their demise is so neat and tidy).
Former President Donald Trump says that if reelected, he’ll create a government efficiency task force — and that Elon Musk has already agreed to lead it. During a speech in New York on Thursday, Trump said the new efficiency commission would conduct a “complete financial and performance audit of the entire federal government” and make recommendations for “drastic reforms.”
There's no need to look at Tesla's 50% Electric Vehicle market share, or compare SpaceX's launch rate to, well, the rest of the world combined. Most relevant to this discussion is how Elon cut 80% of Twitter's headcount, turning the company around.
Even though reports have Government employees cutting back expenditures in anticipation of potential cuts, lots of folks are skeptical that this can be done at all.
I'm not one of the skeptics, because I've seen this my very own self, in my career at Three Letter Intelligence Agency. It was the mid-1980s and I was a wet-behind-the-ears Electronics Engineer in the COMSEC R&D organization. Their recent triumph was the introduction of the STU-III secure telephone.
The STU-III was a technological marvel, providing high level (Type 1) encryption in a telephony device that, well, worked like a telephone. And it was delivered 2 years early because of a manager who might be described as the 1980s COMSEC version of Elon Musk.
As Deputy Director of Communications Security in the early 1980s, Mr. Deeley pushed the development and deployment of the STU-III secure telephone, which has been called the most significant improvement to the security of government voice communications in fifty years. He perceived the need for a new approach, and deployed an affordable and effective telephone security system within two years.
...
Walter Deeley was known as a strong-willed manager who pushed his subordinates hard to get results. While a tough taskmaster, the technical advances and mission achievements he led made the United States more secure.
Bold added by me. Let me give some additional color around that. He was a legend in the COMSEC R&D organization. His reputation was equal parts admiration and fear - it was almost like he who must not be named. People remembered the careers he derailed in his quest for an encrypting telephone.
One story told to me by an old hand was how Deeley had come into the office one Saturday to see how the program was working. He called down to the program office, and the phone rang and rang and rang. Finally one guy who happened to be in the office on the weekend answered. Deeley asked for the Program Manager. When told that the PM wasn't in because it was a Saturday, Deeley told the guy who was there that he was the new PM and to see him first thing on Monday. It was very Elon-Must-at-Twitter.
True story - at least I believed it was. And I for sure wasn't the only one there who did.
So to those who say you can't change how the Government works, color me skeptical. I'm skeptical because I've actually seen it change (well, heard from people who did).
The interesting question here is how you scale this throughout all the Federal Agencies. I think the answer is to use business-as-usual: different offices play office politics against each other to get budget and headcount. That's how the game is played. So set up an incentive structure for Office A to rat our Office B's inefficiencies and duplications to save their own skins. I expect that this would pay big dividends.
It's sort of like setting one type of dinosaur against another, in a battle to the death.
UPDATE 28 OCTOBER 2024 14:51: Elon says they can reduce the Federal budget by $2 Trillion.
