Analysis of SpaceX Performance Due to Various Factors

The human network (also called “social network”) is a theoretical concept used in social sciences to study any kinds of relationships between individuals, groups, organizations, and even societies. The ties between the actors in a network can be emotional, cultural, ideological, behavioral, etc. The networks are often used in various organizations to organize the control of human resources. With the help of the analysis of an organization’s network we can understand significance of each individual and his/her role in the organization’s performance and find out the reasons of various conflicts or decreases in the organization’s efficiency. I have analyzed the specific case of Elon Musk, as the founder of the company SpaceX and in this work, I will provide the reader with an overview of the networks that surround Musk and their influence on the company’s operations.

Elon Musk is a technology entrepreneur, engineer, and investor. He is the founder of SpaceX and the co-founder of such companies as Tesla, Neuralink, PayPal, OpenAI. Musk grew up in South Africa, then immigrated to Canada at the age of 17. He arrived in the US as a transfer student at the University of Pennsylvania, where he received an economics degree from the Wharton School and a degree in physics from the College of Arts and Sciences. He began a PhD in applied physics and material sciences at Stanford University in 1995 but deferred attendance to launch his first business, software company Zip2, and start his entrepreneurial career. Currently, Elon Musk is working to revolutionize transportation both on Earth and in space. (Forbes, n.d.) As he once said, “if the future does not include being out there among the stars and being a multi-planet species, he finds that extremely depressing”.

The first and the main network that I have identified is SpaceX (Space Exploration Technologies Corp.), the company itself. SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 by Elon Musk to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. (SPACE EXPLORATION TECHNOLOGIES CORP., 2017) Currently the company is focusing on the goal of reducing space transportation costs and enabling the colonization of Mars. In 2010, SpaceX became the first private company to launch, orbit, and successfully recover a spacecraft. In 2012, it was the first private company that sent a spacecraft to the International Space Station. And in 2018 – the first private company to launch an object into an orbit around the sun. These are not the only achievements of the company during 16 years of its operations, and the list will definitely be increasing in the nearest future.

The main actors in the network of SpaceX are Elon Musk, the CEO and the CTO of the Company, Gwynne Shotwell, which is the president and Tom Mueller, the Chief Technology Officer. The other actors are manufacturers, developers, technicians, engineers, and designers. All actors are working together towards achieving the main goal of SpaceX. The network of the company is formal and decentralized. Just like in most other private companies, hierarchy is present, and the network is exerted by people higher in the hierarchy, which, in case of SpaceX are the CEO, CTO, and the president. Elon Musk is identified as a hub in the network. As the CEO of SpaceX, he leads Space Exploration Technologies, where he oversees the development and manufacturing of advanced rockets and spacecraft for missions to and beyond Earth orbit. Musk sets objectives for the company and oversees the process of their achievement. Despite the fact that the company is private and influenced by a formal network, it is concerned with universal goals, and its’ main goal is reducing the risk of human extinction by establishing a human colony on Mars. The aerospace industry is exerted by means of formal regulations and control. However, because of the universal goals of the company, the social influence is a mixture of both normative and informational influences. The ties between actors of the network are strong and involve frequent interaction, due to organizational structure of the company. In rocket manufacturing engineers, developers, technicians, and designers must work as a team, in order to create a successful product.

The next network that influences the performance of SpaceX is NASA. NASA is an abbreviation for National Aeronautics and Space Administration. It is an independent agency of the United States Federal Government responsible for the civilian space program, as well as aeronautics and aerospace research. NASA was established in 1958, and since its establishment, most US space exploration efforts have been led by NASA. Its’ science is focused on better understanding Earth, advancing heliophysics, exploring bodies throughout the solar system and researching astrophysics topics. NASA’s impressive achievements include such programs as The Space Shuttle Program, that carried over 300 astronauts into low-Earth orbit, Apollo 11, that made NASA first to put humans on the moon, the Cassini mission for exploring Saturn and Juno mission for exploring Jupiter, and many other missions and operations. NASA and SpaceX are working hand-in-hand towards the goal of establishing a human colony on Mars.

Commercial Orbital Transportation Services (COTS) is a NASA’s program that is aimed at coordinating the delivery of cargo and crew by private companies to the International Space Station. In August 2006, SpaceX announced that it was selected by NASA to demonstrate delivery and return of cargo to the International Space Station under the Commercial Orbital Transportation Services (COTS) Phase 1 contract (SPACE EXPLORATION TECHNOLOGIES CORP., 2006). This contract was designed by NASA to provide 'seed money' through Space Act Agreements for developing new capabilities, NASA paid SpaceX $396 million to develop the cargo configuration of the Dragon spacecraft. These Space Act Agreements saved NASA millions of dollars in development costs, making rocket development ~4-10 times cheaper than if produced by NASA alone (Zapata, n.d.)

In December 2010, the launch of the COTS Demo Flight 1 mission, SpaceX became the first private company to successfully launch, orbit and recover a spacecraft. Dragon was successfully deployed into orbit, circled the Earth twice, and then made a controlled re-entry burn for a splashdown in the Pacific Ocean. In total, SpaceX has flown 16 resupply missions to the International Space Station under their partnership with NASA. SpaceX was also awarded with a $75 million further development contract from NASA, in order to develop a human-rated Dragon, that would transport astronauts to the ISS and return them to Earth. (Brost, 2011)

The network in NASA is formal and decentralized. It is based on formal relationships – contracts, state regulation. When it comes to the social influence of the company’s network, it is identical to the influence of SpaceX. NASA is concerned with more universal goals, since the actors in the network are working towards helping humanity, and not just the organization. The industry requires formal regulations and control, while still being exerted by means of knowledge-sharing, which makes the influence both informational and normative. The ties between actors of the network are strong and involve frequent interaction, since many tasks must be done in teams, where each person has his role.

The third network is quite important for SpaceX, and it is the network of investors. Investors are people that provide companies with capital with the expectation of a future financial return. There are two types of investors: retail investors and institutional investors. Retail investors are individual or angel investors, while institutional investors include venture capital and private equity funds, investment trusts, etc. As of May 2012, SpaceX had operated on total funding of approximately $1 billion in its first ten years of operation, provided by both retail and institutional investors. Of this, private equity provided about $200M, with Musk investing approximately $100M and other investors having put in about $100M. The remainder has come from progress payments on long-term launch contracts and development contracts.

The actors of this network are Elon Musk himself, venture capital firms like Founders Fund, Draper Fisher Jurvetson, and others, and other individual investors. The network of investors is informal, since it is based on informal relationships. The actors do not cooperate to work together during the same goal and do not depend on each other. Elon Musk is a hub in the network, being one of the investors and the CEO of the company at the same time. The goals of investors are particular, being mostly gaining profit. But each individual/firm has their own goals. The ties between investors are weak, since they involve rare interactions between the actors.

In conclusion, the activities of all the three networks combined together help Elon Musk with achieving his main goal concerning SpaceX. With the help of the analysis it was identified that such networks as NASA and investors have strong influence on SpaceX, each one in its own way. NASA is helping SpaceX with their missions and the development of spacecraft, providing funds and overseeing the process of the company working under the NASA’s contracts. Retail and institutional investors do not participate in SpaceX missions, however, still provide the company with funding, which is crucial in an aerospace industry.