How SpaceX Is Making America Uncatchable

90% of the stuff headed to space this year will be carried on a SpaceX rocket, but the "useful space" around Earth isn't as big as you might think, giving the first ones to get the best spots a massive head start.

Like Starlink: with more than 6,000 satellites 400 miles above Earth, a nearly perfect height for global internet coverage, the short distance from Earth makes them cheap to deploy, and the time to beam a signal to Earth extremely low, effectively blocking other companies that want to do satellite internet from the best real estate.

And then, using their rocket launching expertise gained from deploying all those satellites to sell rides to countries and companies who want to put stuff in this orbit, 22,000 miles above Earth. Put something in this orbit and it'll stayright where you left it, always above the same point on Earth.

Perfect for monitoring war zones, suspected missile launch sites, the Suez Canal, anywhere you can't afford to miss something. The company and country with rockets that can take stuff up to space the fastest, they can fill the best spots, gaining an enormous information advantage that cannot be replaced.

Forget the spectacle of the rocket landing back on the pad, yes, it is impressive, but what it represents is the thing that has been unlocking, to use an overused term, new frontiers, and the vast fortunes that come with them for the past thousand years.

It's not the going, it's the coming back.

This video is sponsored by Wealthfront. More on them later.

They refused to go past this point. Beyond what eyes could see from the shore was called the Sea of Darkness. Not one person who had ever sailed that way came back. These stories, the heavy red sand blowing off the dunes over the churning water that barely covered a shallow reef.

Fifteen times the Prince of Portugal had sent a ship down to explore the world just a couple hundred miles from their home. Fifteen times that ship stopped, refused, and slowly made its way home. Currents are too strong, they said.

We saw monsters in the mist, they said.

Do not come home unless you have rounded the point.

Gillings didn't know it when he was commanded to set out on his 16th try. But the problem wasn't monsters. It wasn't the currents that kept anyone who tried this before from returning. It was the sails on the ships.

No one had figured out how to sail in any direction except the direction the wind was blowing. With one big rectangular piece of cloth attached to the mast and spread out across a long beam, a kite that floats would not be a bad description for these boats.

And all the wind did was blow straight down the coast of Africa. Fearing for his life when he got back, a sudden bout of courage, it's not really clear what drove him, but Gil just kept going. Past the Cape, and slowly, little by little, big rectangular sails fighting him the whole way, turnedright, going further into the Atlantic Ocean than anyone ever had.

Far enough to discover that the wind changed direction and blew back toward Portugal. It's the coming back. If we can come back, then okay, how far can we go? Sailors began asking. Not far enough with these sails. We need to be able to sail back against the wind.

What about those sails we've seen the Arabs using, the triangles, but on a bigger boat? Berthing what's called a latain sail, and the boat that changed it all. The Caravel was the SpaceX rocket of the time. It was high technology, handing Portugal a near monopoly on the ocean for almost 80 years, and was the single reason anyone from any country could venture past their shores.

The fear of not coming back had been relieved. It is the edge of something. A clear line between what is known and what is not. What is so interesting about where we areright now is a new physical frontier hasn't been opened in more than 100 years.

Going all the way back to the plane. If there are any doubts about the space frontier opening up, this is the number of rocket launches each year for the past 65 years. Straight up. More rockets will breach the Earth's atmosphere this decade than the previous three decades combined.

That line between what is known and what is not, once it breaks, the other side is open. A tale as old as history. We're talking the railroads opening the American West, the Caravel opening the oceans and distant worlds, canals, planes, even the simple digging beneath the surface of the Earth to create mines and explore what's under our feet.

It's not quirk or randomness. There is a powerful and known combination of forces that make the unlocking of new physical frontiers the most reliable wealth creation force in history. These three forces, as you're about to see, bring what's rapidly unfolding in space into focus.

Because if you want to answer the question of what is SpaceX worth, or what will SpaceX be worth later, that is a question downstream of this question. What is space worth? If you parked a satellite above a store and counted all the cars in the parking lot, you could make a lot of money.

So they parked one over the Target in Richmond, California, and found 146 out of 540 spaces were full. There had been three more cars in the lot at the exact same time the previous year. One at a time, a satellite took pictures of the parking lots of every Target, Best Buy, Walmart, and the other 40 publicly traded retailers in the US.

Bet against the bottom 10 and bet on the top 10, and you could make 15 to 20% on your money every year, a return protected for almost a decade. Because it was incredibly difficult to get another satellite in the sky for less than half a million dollars.

There were less than 200 satellites in total that could even take images of Earth. Even if you did have the money, these things took 10 years to build and launch. What if we launched a phone up into space?

Would it work? Would it be too cold? After having worked together at NASA and after having found out that, yes, shoot a phone, the HTC Nexus One specifically, into space, it will take and send back pictures for over a week.

So you're telling me that if we just buy off-the-shelf cell phone parts, put them in these cages, launch them into space, we could take pictures of every spot on Earth every day? Yes, you can. On rockets flown by SpaceX, 36, then 64, then 100 per year, for less than the cost of one giant traditional satellite, Planet Labs has sent 600 satellites into orbit around Earth, taking high-resolution pictures of the entire planet every day.

A photographic timeline of every inch on Earth that anyone can access for a price. It's not free, but it's far cheaper than what was available before. So many different companies and people use it that if you knew where to listen, you heard a very loud uproar when they shut off the service for all imagery of Iran in the Strait of Hormuz three days into the Iran War.

During that time, you know when everyone wanted a bird's-eye view of Iran and the Strait to see what was happening. The physical space, the band around Earth that Planet Labs occupies is now theirs. They didn't buy it. It didn't have a value.

They acquired it simply by putting themselves in it. You want to launch a phone into space and take pictures, a lot of them? I don't think that's going to work, but if you fill out that paperwork over there, yeah, you're more than welcome to try.

The term would be gatekeepers. However you want to define your version of gatekeepers, people that already own the land, the different organizations that tell you what you can and can't build, that's not safe, or we'll get back to you in three months.

The grip of the gatekeepers in the old world is naturally loosened by distance, and even simply by just not knowing what exactly a gate would make sense to go in front of. A few sparse treaties exist for space, but in practice, and with any frontier, it's first come, first serve.

Rules exist for a reason. They round down the rough edges, keep the worst from happening. A lack of gatekeepers then clearly makes the frontier a double-edged sword situation where you're responsible for creating your own safety net, where losing everything is at least as possible as staking your claim and keeping it.

So the people that venture out into the unknown will always be looking for tools to help them survive. The things required to keep going. Setting up one of the biggest opportunities of all time, selling picks and shovels. I'm hesitant to keep reaching back into history, but the settling of the American West has so many connections to space that I just, I can't help myself.

Look at this. $4,358. That's how much this exact parcel of land was bought for,right around San Francisco in 1867. In today's money, they were just giving land away. Literally, the US Congress got together and decided that if you went out west and built a house, you could either have 160 acres of land for free after five years, or you could buy it.

$4,358 was the buyout cost. Some people took them up, threw their stuff in a wagon, bought some horses, and in a fairly brave act, just walked there. And then a lot of people took them up on it. Nothing changed about the proposition except the Pacific Railroad finished the connection between the East and the West Coast.

I'll go, but I'm not walking there. Each person paying the tax to the railroad for the ride. Something the game of Monopoly did get veryright. The railroads are the best set of properties to own, providing the longest consistent return over the length of the game, which is how frontiers play out.

The first, most valuable thing, and the one that lasts the longest, is getting people to it. Everyone needs a ride. We think tech is dominant now. By 1881, railroads were basically the US stock market, 63% of the whole thing.

So I agree, it doesn't feel like it, but it's not very close. Technology only just this year hit 52% of the stock market, and that's with a very relaxed definition of technology. Transportation is the root of the picks and shovels world.

Selling the thing the vast number of people or businesses will require just to exist goes from second thought to the only thought. It makes perfect sense if you think about it from the point of view of.

The hierarchy of needs.

There are five, according to our man Abraham Maslow. One, fundamental requirements for survival: air, water, food, shelter. Two, security and predictability. Three, social connection. Four, recognition, competence, and respect. And number five, realizing one's full potential. Unsure of what is safe, what that thing is, how to make it to tomorrow, the only thing that can possibly matter in a new world is the bottom two layers.

And at the very start, it's just layer one. This is the important part. It's obvious. Everything that goes to space will, without question, need a ride. As things stay in space for longer, they will require water, energy, communication.

Anything that's built that effectively serves those needs will be bought. But what do people want? What is social connection exactly? What service do you offer to help someone realize their full potential? Things become foggy once you move off the bottom two layers.

All the obvious things taken, moats formed, money is left to chase fewer clearly obviously useful things. You get bubbles, inflation, and you could look aroundright now and be like, that's today,right? He's talking about today's world. But open up something new.

We call this the frontier vent. Arguably the most powerful economic lever that exists. That new vant might be good for my team. Maybe I'll try it too. We desperately need fuel. Create it, bring it, whatever. We will buy it from you.

Opening an entirely new place for money to be put to work by people seeking their fortune. But where, exactly in space? It seems so vast, so infinite, so desolate. But the area within range of the rockets we have today, there are only a few, and they are very well understood choke points that everybody wants to control.

No different than Earth, except one major exception. Movement becomes a three-dimensional dance. Navigating the pull of gravity coming from the Earth, the Moon, the Sun, each with its own intensity. How do you stay where you want to stay?

Where would you want to stay? Where could you stay? What happens if someone else gets there first?

Shortly after the boosters burn out, andright before the main engine kicks on, we've reached Low Earth Orbit, 100 to 300 miles above the Earth's surface.

Things in this layer whip around the Earth about once every 90 minutes. High enough for one satellite to see a chunk of the Earth's surface, but still close enough to be able to capture high-resolution imagery. And in short, sending a signal back and forth will only take a few milliseconds.

Planet Labs lives here. Starlink lives here. Being the first comer, they've been able to learn what the best height for space-based internet actually is. Placing their first satellites in one orbital height, they found that actually, what if we move them closer?

We have the rockets to send up replacements if gravity drags them into Earth's atmosphere. Let's move them closer. 100 miles closer. Ensuring the time it takes to receive or send a signal from Earth is lower than anyone else, because competition for Low Earth Orbit is hot.

Amazon, China, OneWeb, and a variety of others, everybody wants the constellation. You must be able to build enough satellites and then get them there. But assuming you do, this is starting to be the preferred place to be if you want to have constant communication with things on the ground.

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Time to head deeper into space. Burning the engine for precisely four minutes, fighting what remains of Earth's gravity to reach the most limited, most expensive band of real estate that exists around Earth.

Welcome to Geostationary Orbit, a circle around Earth that sits 22,000 miles directly above the equator. Put an object in this belt and it will stay over the same place on Earth. Pulled on by just enough of Earth's gravity, like finding the sweet spot in the middle of a pencil so it balances on your finger.

The current, preferred spot for communication networks. Bouncing a signal to a satellite and then down to an aircraft carrier as it crosses the Pacific. And wonderful, for monitoring the entire Middle East. Things in this belt are how we know when North Korea does a missile test.

They see the heat signature via special cameras and send an alert. NOAA monitors the weather from here. 1,845 slots exist in this belt. That's it. Not because we can't physically cram more into it, closer together, but because the point of a satellite is to communicate, to send and receive signals.

Too close together, and the signal from one will mess with the one from its neighbor. Prime real estate, beachfront, boardwalk, central park. This is the expensive neighborhood of Dish Network, SiriusXM, and DirecTV. They really do have their own satellites parked up here in spots picked so each one can see as many potential customers as possible.

Their slots, about 30 across all three, are some of the most expensive slots in the entire Geostationary Belt. They have to be able to see the entire United States, and there are at best 60, maybe 70 slots on the arc that have a useful line of sight to US customers.

The US, being a very important country, huge market, those spots are naturally more expensive than, say, one that looks down on the middle of the Pacific where there's nothing but water. This has been the battleground for the past 50 years.

But now, with the ability to put thousands of satellites up at a time, Low Earth Orbit is not far from being able to offer a lot of what's so nice at Geostationary. Enough satellites and you can always ensure one that can see that one spot on Earth you want to watch.

Just hand off from one satellite to the next one as they whip around Earth. These two orbits, they're interesting, they're necessary, they're useful. But it is the next one we'll arrive at that will tip the scales of power in favor of whoever pulls it off.

Even though it will take three days to arrive, our final engine burn will consume just one quarter of what it took to get off Earth, gently pushing us 230,000 miles from Earth. Welcome to the Moon.

There are valuable deposits of metal on the Moon. It will be mined. There are valuable deposits of helium on the Moon. But more importantly, there is rocket fuel on the Moon, almost entirely in an area the size of Switzerland at the south pole of the Moon.

Switzerland is tiny, with far more flat land to build on. So land is limited. I mean, perhaps we get up there and discover it's better than we think. But for now, the first to show up and those able to transport enough equipment and people to build a base in and around that area will, at minimum, influence how the Moon is governed.

At maximum, we'll flex complete control over the deep craters housingice deposits that never see sunlight. Ice is water, is H2O. Break off the O, liquefy it, and you have yourself rocket fuel. Or to put it bluntly, the Moon is a gas station.

Not just a gas station, one gas station in one little area, and it's the only gas station before you get to Mars. Everything in space is about fuel. The rocket is huge because it needs to carry enough fuel.

We must first review the overall mission plan. The lunar spacecraft will lift off from the Earth and go into orbit about it. At the proper time, the spacecraft will inject onto its lunar transfer trajectory. As the spacecraft approaches the Moon, it slows down and goes into lunar orbit.

Seems complicated. Why not go straight at it?

The spacecraft actually consists of two separate vehicles: the command module, which remains in orbit around the Moon during the period of lunar exploration, and the lunar module in which two of the three Apollo crewmen will descend to the lunar surface.

Split one rocket into three. No wonder this wasn't option number one.

After a period of lunar exploration, the astronauts will lift off in the ascent stage of the lunar module. Rendezvous and dock with the command module, retransfer to the command module, and return to Earth, leaving the ascent stage in orbit around the Moon.

Imagine these guys have to tell their wives this plan. You tell your wife yet? No, no, no. Not yet. They call it, and this is true, the tyranny. For every pound of stuff you put on the rocket, you need to add more fuel.

But of course, adding more fuel means that you need to add even more fuel to carry that fuel. Summed up by this fairly simple-looking equation called, this is also true, the rocket equation. It is the gospel of rocketry.

101 level stuff, the alphabet of launching stuff into space. This partright here is the fuel part. And it's why option number one was scratched. Option number one was exactly what it should have been. And what you think it was?

Big rocket, lift off, go to the Moon, land on the Moon, blast off from the Moon, come home. Let's not make this complicated, folks. Own ship. Warner Von Braun was German. He was the biggest name in rocketry, and this was his thing.

Own ship. The plan was presented, and immediately it was like, oh boy, that's a really big rocket you have there, Von Braun. Twice as big as the Saturn V rocket that would end up taking Apollo 11. 430 feet tall, 50 feet wide, twice as heavy.

Highlighting exactly the tyranny, because it needed to carry enough fuel to lift off twice. Once from Earth, burn fuel on the way to the Moon, and then lift off from the Moon. But the rock back buzz. No, we can't take any rocks.

We have been over this.

That's allright. I don't mind a bit.

Option number three started climbing up the charts. By the time they did the math, looked at the size of the rocket for the simple there and back way, the cost, the complexity, and the time it would take to get it done, it was just too much.

So they kidnapped three guys off the street and made them do it. No pilot would touch this plane. Nonstarter. Why do you think they're chained to their seats during takeoff? You get in there. You're going to be a hero.

Kidding, of course. Got a lot of jokes today. It's very simple if you think about it in reverse. If you can fuel on the Moon, then you don't need to launch with enough fuel to get home. All that savings on fuel can then be used to increase the amount of useful stuff you can launch off Earth.

It is the only path to making space truly viable for very big projects. Everyone knows the shipping container. Stuff it full and it can hold 30 tons of cargo. Starship, the biggest rocket that exists, can carry one to the Moonright now and have enough fuel to get back.

But lose the fuel we need to carry for the return trip, and that becomes four fully loaded containers. If you look at the bottom of the Moon, it's not flat. There are only so many places to set up shop.

Be the one that can bring four times more than anyone else. You can crowd out, you can partner with, you can overwhelm all other campaigns trying to establish a base. Great, great, great, great. But here's where we all stop.

Like, allright, cool. So we're basically going to the Moon so that we can come back because what is on the Moon that we really care about? We're really going to build stuff on the Moon. And the answer really is yes.

As just one example, Jeff Bezos' company, Blue Origin, demonstrated a fully functioning system that takes in Moon dust and outputs solar panels. Like it's actually done it. Turns out a lack of air, space being a true vacuum, and its much lower gravity actually make it easier to make solar panels on the Moon than here on Earth.

On Earth, we have to create these huge expensive vacuum chambers to make solar panels. But it's not just the panels either. Same thing for aluminum wires, iron, oxygen. The hardest part is getting the initial stuff to get the process started to the Moon.

Once you have solar panels, you have electricity. Once you have electricity, everything becomes easier. Churn out solar panels and push them into space. There's no air, so no friction. So it'll goright to where you pointed it. Launch the chips from Earth, catch the solar panels, attach them together.

You have data centers in space.

To be clear, this is not today. It isn't tomorrow, but it is the path these companies are on.

Pay attention to those close to this stuff, the people who really know what they're doing. And more importantly, the space companies started to make all of this possible, of which there are now hundreds, maybe even over a thousand.

You can already see their revenue march higher quarter after quarter, making it clear that this is where we're headed. Even the guy that didn't think the Moon was worth it, wanted to skip it entirely and go to Mars, has completely 180.

Whoever gets the gas station on the Moon working first secures a major advantage over everyone else. It's not the going, it's the coming back. A new prisoner's dilemma, keeping countries up at night. Wouldn't matter or be important if no one was able to do it.

But once one can and they start going after it, losing carries too high of a potential cost. It is one of the all-time best setups for wealth creation that has ever existed. The frontier has opened up. Gatekeepers are nowhere to be found.

The US and SpaceX, China, India, Europe, Japan, all of the deepest pockets, they will race ahead, dragging everyone else along, shelling out money to anyone who can sell them picks and shovels. And this is just the beginning of the space frontier, which really is infinite.

Time for everybody's favorite part. Footnote time. There are many things around what is happening with SpaceX and space in general that are worth exploring because they will shape a lot of the world going forward. So much so that we have a second video on SpaceX coming out in a few weeks.

This was the correct first step when looking at space and SpaceX. The broad zoomed-out view, what is space worth, sets the stage. The next one is much more targeted on the economics of SpaceX. It is a unique business worth examining.

A business like this really hasn't been formed since the 1800s. Allright, but those footnotes, the bits and pieces that didn't quite make it in or fit justright, but I still feel are worth sharing. One, I've been thinking about this one a lot.

Space has the properties of something that could become a bubble because of the choke point of launch availability. Space can only be utilized at the rate at which rockets can be launched, a rate far slower than imaginations can imagine a future.

As I've talked about in other videos, the dot-com bubble formed because we laid fiber optic cable all over the country, but didn't connect that cable the last mile to everyone's home. We could see the internet would be a big deal, but the physical gap, a choke point of internet speed, let imaginations get way ahead of the dial-up everyone was on until about 2005.

I'm not saying it's a bubble today or that it's a guarantee. Just that physical gaps like that tend to be a good foundation for bubbles to grow on. We'll take a closer look at that physical launch situation in that upcoming video.

Number two, SpaceX doesn't really sell rockets anymore. The rockets are the factory. The business model used to be how much someone would pay to have their thing taken to orbit, but now the rockets are mostly the cost SpaceX has to pay to take its own products out of Earth's atmosphere.

Starlink being the prime example that has proven the model works. Put your own stuff in the rockets, make money off that stuff once it's in orbit. That's how you get to this valuation, and that's why it's hard for a lot of people to swallow.

What you're buying is a call option on orbital data centers working into an extent from Starlink continuing to grow. It is most definitely not revenue generated from launch. There are valid points on either side of the valuation argument.

Bears will say a valuation of 100 times revenue is never something to invest in. Bulls will say they have a near monopoly on launch capacity and two new business lines that will grow exponentially and indefinitely from here. Both have a point, but the fun part is whichever way it goes, one of them will likely be very wrong.

Three, I mentioned the frontier event during this video, which is a real phenomenon. A vent implies that something is built up and needs to be released. Pressure has formed. I would argue that space never had a chance of developing into what it is today, a true industry or its own economy, until the world had accumulated enough capital, money to feel comfortable making bets on space ventures.

In an industry like space, capital can be seen as important as technology because space ventures need a massive amount of money that can sit for decades without a return. That kind of capital only exists when the broader economy has generated enough wealth that large pools of it can afford to be patient.

The more innovation in a country, the deeper its capital markets become, the more patient capital it has that can sit on ideas that will take decades to pay off. That leads to big innovation leaps, and then we wash, rinse, and repeat.

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And that is exactly what hitting the subscribe button signals. A signal I can use to know how much we can do, how big we can go, what kind of projects I can say yes to, what I have to say no to.

It helps a lot. Thank you for your support and subscribing and watching. And with that, we are done. So much great stuff coming out. I'm excited. I'll see you in the next one. See you.