Rocket Lab founder: 'I want to make space accessible'

Peter Beck, founder of the space unicorn, Rocket Lab, and EY New Zealand Entrepreneur of the Year, talks about turning a troubled peninsula into ‘the space coast’.

What’s your business background?

I’m an engineer. Before I started Rocket Lab, I worked in a New Zealand Government lab, developing advanced materials, structures and superconductors. But even since I was a kid, I’ve built rockets. My very first one used hydrogen peroxide, which was very dodgy – very dodgy indeed.

How did you start the company?

I started the business about 10 years ago, because I wasn’t happy with how things were being done in the the space industry. The sector wasn’t looking at space with the right sense of scale. Space, so far, has been a domain for billionaires and Governments. I want to make it more accessible.

I took a holiday in the US for a month, hoping that I would find like-minded people in the industry. It was there that I realised two things. First, no one wanted to do what I wanted to do; and second, the rockets that I was building in my garage weren’t that less complicated than the rockets being creating in commercial enterprises.

I could see that satellites were going to get smaller and smaller. What the sector needed was a small launch vehicle to frequently and easily launch satellites, and build space infrastructure.

The approach [to launching payloads – cargo such as satellites – into space] is very old-fashioned. Space now is like the US was in the 1880s: you load your parcels onto this infrequent giant steam train, which traverses across the country. What I’m trying to create is the FedEx of space – so that small satellites and other payload items can be delivered rapidly.

How did you woo investors?

People get it. That has been consistent throughout the process. We funded the early development of the rockets with investment from New Zealand-based backers. I didn’t choose to set it up in my home country because I like it there; being a small island nation in the middle of nowhere is actually very helpful, because you can’t launch rockets over other countries.

Even as a Kiwi, when I approached investors for later-stage funding, people understood the concept. I had a very clear plan: I knew the industry and what needed to happen. We spent the first few years building our first rocket, which we launched in 2009.

I went to Silicon Valley and gave myself three weeks to either get a cheque or be run out of town. There were only three investors – top-level companies – that were suitable. We went with Khosla Ventures, because it understood what we were trying to achieve.

Building any team, whether it’s technicians or investors, is about getting the right people. People can be too eager to just take the money, especially when it’s a first funding round. Ask yourself if it’s strategic: will it look right in 10 years’ time?

Top-tier investors need two things: a credible path to a multi-billion dollar company, and something that’s going to change the world. Those are their criteria. It’s no good going into a meeting with them and asking for a few hundred million dollars for technology that’s a bolt-on to an existing product.

If you think about the industries that you can properly disrupt, there aren’t many. Space is like dot-com was; it’s ready to go. Now we’ve got two years of customer backlog, and right now, we’re focused on scaling up.

How are you looking to scale up?

We’re building a really strong research and development (R&D) organisation and building on top of that with a strong manufacturing arm, but the two don’t always go hand-in-hand.

Based on the few historical examples of this kind of business, you normally build a rocket, and then, eventually – when it works – some customers start to dribble in. So you’re scaling, but at a slower pace.

What happened with us is that we had sold two years of manifest before a test launch. The last investment round was entirely focused on scaling. We’re doing it at an unprecedented pace for this industry.

Building a supply chain has been interesting because we need to control that particularly well.

Most people assume that if you want to build lots of something, go to the US, but for us, it’s the opposite of that, because the guy working on our wire harness in New Zealand really will do anything to get the job done for us – work Christmas Day, for example, which he actually did. There’s no way that someone in Los Angeles would do that. We’re a tiny fish in a giant pond in the US. We’ve spent time building up the supply chain in New Zealand, where we’re the biggest customer – and it’s working well.

What do you enjoy most about business?

Our launch site is in a traditionally very socio-economically depressed region of New Zealand: The Mahia Peninsula, which is on the north island and best known for its gang culture in Wairoa, a nearby city. Now it’s building a reputation as the space coast. There are now signs in the township that say: “Wairoa, gateway to the galaxy”.

We send scientists out to local schools with rocket kits. It’s awesome.

Personally, that’s one of the most rewarding things about business: seeing the community support you and getting kids engaged in maths and science – then following that through by supporting university scholarships.

Being present in the local community and wider education also helps with recruitment. In the past month alone, we’ve received more than 8,000 CVs. Not just from locals, but from around the world.

How do you see the UK approaching the business of space?

The UK has a really exciting small-satellite industry – there are encouraging things happening there. The UK Government has put much-needed funding into developing aerospace and small-satellite technology.

The only criticism I have is that the UK Government needs to stop trying to build a launch site; it doesn’t have the geography for it. The country needs to stop talking about a launch facility in Scotland and focus on what it’s good at: building satellites.