Kiwi tech entrepreneurs must look outside NZ for funding, says Rocket Lab CEO Peter Beck
Tina Moore speaks with Rocket Lab Founder and CEO, Peter Beck, on how space is an integral part of our everyday lives, why being in Silicon Valley doesn’t matter, and why Kiwi tech entrepreneurs need to dream bigger.
Why are we all so obsessed with Space?
Well, I’m not sure we are… Certainly, anyone who works at Rocket Lab probably is. I think humans see space as the kind of enigma that’s hard to explain. Humans have a natural, almost organic tendency to explore. So when you’ve explored your own planet, we look to other places to explore. I think as we look out at space, it is kind of, depending on your belief structure, the creator of everything. So, we are really trying to understand our position in the universe and how we all came about – that’s something I certainly ponder, and I’m probably the worst person to go outside and look at the night sky with because you end up trying to answer those really big questions.
You’d be quite a daunting person to watch the night sky with! Given the vastness, the complexity, the inaccessibility, and the overall expense of going to space, what convinced you to lean into this business idea? It seems so bold.
Firstly, it’s so important. Space is used by all of us down on earth in so many ways, and the thing is, I think it’s just basic infrastructure. A lot of this infrastructure is hidden because you can’t see it. Whether you’re trying to get from A to B with Google, or you’re trying to get some UberEats, it’s all enabled in some way by space. So, I think for me personally, the thing that gets me up in the morning is not launching rockets or anything like that, it’s the impact you can have on the earth’s population with space, and with making even moderate improvements in space it has pretty major outcomes on earth, so that’s the bit that really drives me.
Certainly, there have been many developments that started out as technological advancements designed for space, that have then come and made our earthly lives much easier. The most obvious thing I can think of is velcro. What other technologies from space development have impacted on the average person’s life?
Well, GPS is a great example. GPS is a constellation of spacecraft originally put up by the US military, and it’s still operated by the US military, and was originally designed for military purposes – but we all use Google maps and things like that, we understand the mapping principles of GPS. Think about when you call an Uber, it’s all enabled by that GPS constellation to know where you are and where the car is, same with Uber eats. Even things like weather, for example, ninety percent of all the weather data sent to us comes from space. And of course, sitting at home and you’re watching the TV and you’ve got that little grey dish on your roof pointing to the sky, that’s all coming from space too. So, there’s a tremendous amount of data that flows from space. All global shipping, aircraft movement – it’s all tracked from space. If you turn off the GPS constellation, logistics would just grind to a halt. Space is just such an integral part of everyday lives. Like I said before, it’s a hidden infrastructure – you can’t see it so it’s harder to appreciate how big an impact it’s having on the way we live our current lives. The cool thing about space is that when you launch a spacecraft, it orbits the Earth every ninety minutes, so there is no need for building a piece of infrastructure that just serves one particular country. We launched a spacecraft last year that can provide data to Australia, a few minutes later we’re providing data to America, to Europe… Every ninety minutes they’re beaming down data and solutions that impact our everyday life.
It’s so immense when you put it like that. Not everyone would have an appreciation for the impact that the work of Rocket Lab, and others in the space industry, truly has on our day to day lives.
Yeah, the space industry for New Zealand is relatively unknown, but the space industry forms $360 billion dollars of the market annually, which is predicted to go to around $1 trillion dollars by 2030. So, it’s not an inconsequential industry.
No, not inconsequential at all. But from the outside for many New Zealanders, all they know about Rocket Lab is those very exciting launches and big hero events. For the most part, news about what you’re doing has been, in terms of mainstream news, very limited to just those key events. What do you think about the representation of New Zealand technology in the media?
Well if I’m honest here, it’s woeful. Rocket Lab is much bigger and much more well-known internationally than it probably is in New Zealand, and arguably recognised. The reality is that I think that New Zealand has wonderful entrepreneurs and some really great tech companies. The challenge is the scale of these companies – the aspiration of scale is just not there. My message to New Zealand Entrepreneurs and the companies that I get involved with is that we need to be thinking much bigger and solving much, much bigger problems. The tyranny of distance has completely evaporated, especially with the COVID situation. So it doesn’t matter if you’re in New Zealand or if you’re in Silicon Valley – it really doesn’t. Your ability to impact the world is pretty much a level playing field right now. The bit that’s missing is just ambition at scale. When I started Rocket Lab, I said I was going to build a space business that was going to be a billion-dollar company. I get that people can snicker at the space business, but the equal snicker was at the intention to build a billion-dollar company. That’s the bit that’s frustrating, that ambition should just be a given, not an unusual characteristic.
Even when they do have big ambitions, the average kiwi tech entrepreneur tends to struggle with funding in order to achieve them. What would you say to those who are finding their way through the ecosystem of tech funding?
My first recommendation is always to leave New Zealand to look for funding. This is not something that New Zealand really has the scale to do. I’ll preface that by saying that seed funding and early-stage funding is good, except that it’s highly dilutive, and the market here in New Zealand is kind of out of whack with the rest of the world. Without fail, every company I’ve invested in here in New Zealand we’ve taken them to Silicon Valley – the evaluations are an order of magnitude out of whack, and we’ve ended up re-capitalizing the company one hundred percent of the time. Because New Zealand’s investors take very large stakes with very low valuations, when it comes time to actually raise real capital, the company is unfinanceable, because the founders are left with stakes that are just not reasonable. That’s something I’m very passionate about, and wherever I can try I will try and rectify it. We need to go where the market, and where the money is. It comes back to building something big; if from day one you’ve decided you’re a global company, then you should be looking for global financing and global locations. There’s no way Rocket Lab could have ever financed itself in New Zealand, we raised over US$280 million dollars. It’s not just the funding itself, it’s the experience and the contacts that come along with that funding, that create real value for a company. If you think globally from day one, then automatically you’re thinking globally for funding, globally for markets and globally for locations of where you should be.
Even though you’re a global entrepreneur, and always thinking global – what do you appreciate most about the New Zealand tech ecosystem? Do you feel a part of it?
I think our engineers and entrepreneurs are some of the best in the world. The challenge is that our entrepreneurs are in an environment that doesn’t really enable them to reach their potential. So, the thing that I love about New Zealand is that there is no shortage of great ideas, no shortage of great entrepreneurs, engineers, and scientists. I think there’s something very unique to New Zealand in that an engineer or entrepreneur can generally cover a lot more bases than those in other nations – we have a lot more diversity in our skill sets, and when you’re building companies that’s very important. So Kiwis are perfectly conditioned to build successful companies and are incredibly well respected. In Silicon Valley, we have a reputation where they know what comes out of our mouths is solid. We’re very trustworthy people.
Absolutely, we do have a very good reputation overseas, that’s for sure. What proportion of your business would you consider “made in New Zealand”?
We have operations in Virginia, we have headquarters in Long Beach in Los Angeles, we just bought a company up in Canada, we have people in Australia, and five different sites in New Zealand. So, we build launch vehicles, we build spacecraft, we operate spacecraft, we have six ground stations scattered around the world, in Europe etc. So I guess we think of ourselves as a global business. I would say the majority of the research and development is done in New Zealand and that it is the gravitational centre of our people. It’s very much a global company, we have between 550-600 people spread around the world now.
Have you named a star, and if not what would it be?
Well, I guess I did name a star once – the Humanity Star, that we put in orbit. But no I have not named a long-living star. I think in order to name a star, you have to find it. I’m not interested in purchasing naming rights, the only way I would name a star is if I actually did the work to find it.
That’s a fair call, it’s way too easy to name a star, just Google it and buy a certificate…
That to me is undermining the great scientific effort that went into finding that star.
And if you weren’t building rockets, what would you be doing?
I don’t think there was anything other than that for me. For as long as I can remember my two passions have been engineering and space. This is really a perfect fusion of those two passions and aspirations. Back in primary school, Halley’s comet would be coming over and I would be doing the daily updates to the class about the comet. So, it’s always been space and engineering and if you combine the two things then inevitably you end up in this position.
What is the most fascinating thing you’ve learned about space in your journey and business?
The most fascinating thing is probably how little we actually know. Every day there’s something new to learn. The trajectory of growth in space has been exponential. So, 6 months ago, Rocket Lab was not going to the moon. Now we are delivering a spacecraft to the moon for NASA that enables a critical piece of communications to enable humans to return to the moon safely. And six months ago I knew very little about cislunar orbit and now I’m happy to go to the mat with anybody on it. I guess the most fulfilling thing about space for me is there is so much to learn and discover.
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