Rocket Lab founder Peter Beck says a successful board of directors should push a CEO to think big. He asks why people would aim for a million-dollar business when they could build a billion-dollar one. Kate Geenty investigates.
Rocket Lab founder Peter Beck remembers the reaction he got when he told people he wanted to build a billion-dollar company and build rockets.
“I got scepticism about the rockets bit. It’s fair enough that that can sound absurd, but it shouldn’t sound absurd that you want to build a billion-dollar company,” he says.
“That should just be seen as standard. But in New Zealand, it’s not standard.
“If you’re standing out there saying you want to build a billion-dollar company, then you’re kind of weird.”
Beck may have once seemed weird, but now the Invercargill-born engineer has turned his childhood dreams of conquering space into a commercially viable, multinational rocket company, he’s being taken seriously.
His number one message to businesses and boards is to think big and go big.
“I think this is one of the things where New Zealand lets itself down, both from a company perspective, but also in the boardroom.
“Where are the board members who are pushing the chief executives to think much bigger? In New Zealand, we get to a certain size and then it just sort of stops. It just blows my mind.”
Merely looking to dominate the local market, or to cross the Tasman, doesn’t cut it for Beck.
“The definition of success seems to be ‘We’re selling in Australia now’. That’s the definition of failure.
“We’re only selling in Australia now, why aren’t we selling in the UK and Europe, and actually, take it a step further and why aren’t we the most dominant in that particular industry in the entire world?
“As a board, those are the questions that really should be asked of senior leadership… I won’t go on the board of any company unless they show me a roadmap towards a billion-dollar company.”
No one could accuse Beck of thinking small.
Rocket Lab is able to put a satellite in space using roughly the same amount of fuel as it takes a jetliner to fly between Los Angeles and San Francisco, and for a fraction of the cost of traditional launches.
After completing two successful launches of the Electron rocket from the company’s pad in Mahia Peninsula in May 2017 and January 2018, Beck says flights are now fully commercial.
The company has a backlog of customers, including NASA, commercial satellite providers looking to collect weather or maritime data, internet providers, and companies that provide GPS or earth-imaging services to space.
Don’t follow the money
Despite Beck’s billion-dollar ambitions, he’s focused on people, not money, to get there.
“For me, it wasn’t about the money, it was about who can grow our business the best. From a board perspective, who can we have on the board to make sure that the business succeeds?”
He says Kiwis hoping to follow in Beck’s footsteps need to take a strategic view of what they’re trying to achieve and then work out the best people to help them achieve that.
“Get on a plane and get over to Silicon Valley or New York, or the UK, wherever makes the most sense for you, go and get on the ground,” he says.
That’s exactly what Beck did back in 2013.
“I decided we were going to do the Electron programme, woke up one morning, jumped on a plane and went to America. I gave myself three weeks to either come home with a cheque or be run out of town.”
Beck’s first week in Silicon Valley was spent visiting successful startups. He says being a New Zealander helped.
“People tended to bend over backwards, because they think you’ve travelled a very, very long way to get there.”
Beck left town with a signed investment agreement with Khosla Ventures.
Rocket Lab is now headquartered in the US, but maintains a subsidiary and launch pad in New Zealand.
Attitude and vision
Beck says in the US, it’s okay to fail. In fact, it’s almost expected that a successful chief executive will have at least one failure under their belt.
Beck says the US is a country where you can go and do anything.
“But if we want to compare the cleverest ideas, then New Zealand punches above its weight. We’re just not always great at commercialising them.”
He believes boards can help turn that around, and create world-leading businesses.
“My biggest goal is that all board members go and sit in the bath, or stand in the shower, and reflect on why they aren’t asking the big questions.
“As board members, are we just sitting here to be comfortable and worried about the P&L (profit and loss) this month? Or are we actually... really talking strategy and really setting a vision for the founders or senior managers about how we can truly be the biggest and the best at this in the world?”
First published 28 February 2019
This article does not contain any financial advice and has not taken into account any particular person’s circumstances. Before relying on it, we recommend you speak with a financial adviser. This story reflects the views of the contributor only. Content comes from sources that we consider are accurate, but we do not guarantee that the content is accurate.
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