Launching rockets has traditionally been the domain of government space agencies. In recent years, the industry has been joined by high-profile tech billionaires like Elon Musk and Jeff Bezos who seem to have unlimited tolerance for high risks and sunk costs. Peter Beck, the founder and CEO of Rocket Lab, is a space entrepreneur who projects neither the glamor of NASA’s glory days nor the flash of today’s space moguls. What he does have, however, is a record of success few space companies have achieved.
Beck, a self-taught engineer who grew up in a middle class family in New Zealand, founded Rocket Lab in 2006 at a time when there were few commercial space companies in the world and little interest in the investor community to fund a rocket startup. Today, Rocket Lab is a $2.5 billion company publicly traded on Nasdaq. Its flagship vehicle, Electron, is the second most frequently launched rocket in the world, just behind SpaceX’s Falcon 9.
Rocket Lab specializes in lightweight, reusable rockets designed to launch small satellites into Earth’s orbit—a growing market in recent years. Before Rocket Lab came along, there were very limited commercial options for this task. Small satellites were launched by either government-owned rockets converted from intercontinental ballistic missiles or large rockets that had extra room while launching other missions, said Caleb Henry, a senior analyst at Quilty Analytics, a space industry research firm.
A growing number of rocket startups have emerged in recent years to fulfill this market void, but few of them have moved past the development and testing phases. Rocket Lab holds the record for successfully launching a rocket (the Electron) on only its second attempt, in January 2018. Since then, Electron has been flown 30 more times with 28 successes, a rare rate for a commercially developed spacecraft.
But Beck has no time for complacency. “Rocket is super hard,” he said. “Building a rocket company is like running through a maze at night with a shotgun at every dead end. You make one wrong turn, you are toast.”
A first-time entrepreneur with no college degree
Beck, 45, grew up in Invercargill, near the southern tip of New Zealand’s South Island, with two brothers in a family of engineers and educators. Beck’s late father, Russell Beck, was a gemologist and telescope engineer, and his mother is a retired school teacher. Russell Beck built New Zealand’s southernmost observatory at Invercargill’s Southland Museum and Art Gallery, where he served as director for 23 years. Beck said his father’s adventurous spirit imbued him with a love for space and machines at an early age and the confidence to pursue it.
“One of my youngest childhood memories is standing outside in the night sky, looking at the stars and just wondering,” Beck said. “Unlike a lot of kids who wondered what they wanted to do when growing up, I knew from the beginning that I wanted to build rockets.”
From as early as he could remember, every children’s book he picked up was about rockets, and everything he did outside of school was space related. When Halley’s comet last crossed Earth’s skies in 1986, then nine-year-old Beck was the resident expert of Halley’s comet in his class, he said.
Much of Beck’s teenage years were spent in the workshop behind his parents’ house building
In 1995, upon turning 18, Beck said he chose not to attend college because there were no university courses that could teach him how to build rocket engines. At the time, New Zealand didn’t have a space industry or a national space agency. Instead, Beck took on a tool and die-making apprenticeship at a local factory of Fisher & Paykel, an international appliance manufacturer. At the company workshop, he gained access to state-of-the-art machines and materials with which he could build more serious projects. Beck would spend his days working on production lines and machineries and nights experimenting with rockets and propellants. Among his creations were a rocket bike, a pair of rocket roller skates and a jetpack.
Beck’s enthusiasm for rockets can seem a bit obsessive, but people who have worked with him describe him as pragmatic and reasonable. “When you think of space, you think of extreme personalities—the Richard Bransons and Elon Musks type of people. I was really surprised by the practical view Peter was bringing to the business,” said Adam Spice, the CFO of Rocket Lab, recalling his first meeting with Beck in 2017. “He didn’t talk about going to Mars or flying to the Moon. All he talked about was building a durable and profitable business, and he has a very clear vision of all the steps it will take to get there.”
In 2001, Beck moved to Auckland for a material engineering job at Industrial Research Limited, a former New Zealand government science agency, working on composites and superconductors. That experience inspired some of the innovative technologies in Rocket Lab’s products later, including the use of carbon fiber composite in rockets and 3D-printed engines. He worked there until 2006, when his wife, who is also an engineer, had the opportunity to work abroad in the U.S. for a month. Beck traveled along for what he called “a rocket pilgrimage.” He visited various aerospace companies and government agencies he once thought he wanted to work for, only to find that nobody was doing what he believed was important for the industry at the time: building a dedicated small launch vehicle that could significantly reduce the cost of many space missions.
Upon returning to Auckland, Beck decided to start his own business. He was 29 at the time. Beck had no cofounders or seed money. Rounds of cold-calling and door-knocking led him to Mark Rocket, a New Zealand internet entrepreneur who loved space so much that he legally changed his last name to Rocket in 2001. He is also the first New Zealander to book a flight on Richard Branson’s Virgin Galactic back in 2006. (He is still waiting to go to space).
Beck met Rocket at an aerospace conference in Los Angeles during his 2006 trip to the U.S. “I was looking to invest in a space company at the time and Peter reached out. I was impressed by his enthusiasm and his obvious technical aptitude,” Rocket said.
Rocket became Beck’s first investor and began co-running the Auckland-based company with him in 2007 with 50/50 ownership. Two years later, Rocket Lab launched its first rocket, a 20-foot-tall suborbital vehicle called Atea 1, from New Zealand’s Great Mercury Island. It would take the company almost another decade to reach Earth’s orbit with a bigger rocket.
In its early days, Rocket Lab developed all kinds of quirky stuff for clients around the world, including a handheld drone for front-line troops and a special semi-solid rocket propellant partly funded by the U.S. Defense Advanced Research Projects Agency (DARPA). The company survived for several years with little fresh capital. “We weren’t really raising money. The company just bootstrapped from contract to contract,” Beck said.
A “crazy Kiwi” in Silicon Valley
In 2011, unnerved by Rocket Lab’s growing military connection, Rocket decided to leave the company to start his own commercial space venture. Upon exit, he sold out his shares to Beck—a decision he said he regrets very much in retrospect. The following year, Beck flew to the U.S. again, this time to Silicon Valley looking to raise more serious money to fund Rocket Lab’s next project.
In early 2010s Silicon Valley, the attitude toward space startups was distinctly different from what it is today. SpaceX was just beginning to test reusable rockets and stumbling from one test failure to another. Starting a private rocket company is among the last things venture capitalists would want to hear on pitch days, Beck said.
“Today, you can go to Silicon Valley and easily raise hundreds of millions of dollars to fund a rocket company. I was trying to raise only $5 million, and people thought I was this crazy Kiwi from New Zealand trying to build rockets,” Beck said.
“People knew the investors who were willing to put money into space startups by name. That’s how few there were,” said Quilty Analytics’ Caleb Henry.
Beck was lucky enough to find one of these individuals: Vinod Khosla, the billionaire founder of Sun Microsystems, which was acquired by Oracle in 2010. Rocket Lab eventually raised more than $5 million from Khosla’s venture capital firm, Khosla Ventures, in 2013. The same year, the company moved its registration from New Zealand to Huntington Beach, California.
Khosla’s vote of confidence opened more doors for Rocket Lab. Between 2015 and 2021, when Rocket Lab went public in the U.S., it raised four more rounds of venture capital worth more than $280 million from firms such as Bessemer Venture Partners, Ace Ventures and Future Fund. Khosla, which participated in multiple rounds, invested a total of more than $28 million in the company while it was privately held, according to a Rocket Lab filing with the Securities and Exchange Commission in 2021. That stake is now worth about $650 million.
There’s no such thing as a 100% reliable rocket
An orbital rocket typically consists of at least two stages: an upper stage carrying cargo or crew and a lower stage responsible for boosting the upper stage into space. Prior to SpaceX’s Falcon 9, all rockets were single-use transporters whose lower stages were either burnt away in the atmosphere or left floating dead in space.
Beck initially envisioned Electron to be an expendable rocket as well, because he was convinced it was technically impossible to recover the lower stage of a small rocket with the technology available at the time. He was so committed to the product design that he publicly said he would eat a hat if he ever changed his mind.
He did change his mind, of course, after discovering a new method of recovering rocket boosters. Instead of propulsive landing, Rocket Lab uses a helicopter to catch a used booster mid-air as it descends under a parachute (Musk’s SpaceX recovers its Falcon rocket by landing it on a ship). Electron completed its first reusability test in November 2020. Three months later, Beck made a video of himself eating a hat on camera (he first shredded a baseball cap in a blender).
“[Beck] has a deep understanding of rockets. He understands when it’s necessary to hold the course and when to change course,” said Henry, a former space journalist who has interviewed Beck multiple times.
Rocket Lab’s track record so far is impressive compared with its rival startups. Astra Space, a California startup developing a similar rocket for launching small satellites, has had only two successful launches out of nine attempts. BluShift Aerospace, another small rocket maker based in Maine, has had one successful launch out of six planned attempts (the other five were canceled at the last minute).
Henry said these companies all have different approaches that reflect their founders’ philosophies. “Astra’s approach is that failures are tolerable as long as the rate of innovation is high. But for Rocket Lab, reliability is paramount from day one,” he said.
“People make a whole bunch of assumptions about rockets that are completely inaccurate,” Beck said. “You can’t start off with a not-so-reliable rocket and hope it will improve later. You have to build a rocket with 100 percent reliability at the design stage. Then when you factor in realities, it won’t be 100 percent reliable.”
Rocket Lab is currently developing a larger rocket called Neutron that’s capable of flying astronauts someday. When asked if he ever dreams of going to space himself, Beck responded with a firm no. “Because I understand all the things that could go wrong,” he said. “You can build a wonderful, wonderful rocket, but it’s still high risk.”