SpaceX IPO puts Elon Musk’s ‘extreme’ ownership to the test

He faced Brian Manning SpaceX’s culture of extreme ownership from day one as an engineer at the rocket manufacturer. After a one-hour prep session a decade ago, he got his first assignment: designing a small part the next day. “The way I looked at it is there was very clear responsibility, independence and accountability,” says Manning, who took over the job and spent about two years at the company. “Instead of hiring people and telling them how to do it, they give them full ownership of making things happen.”

This principle has served SpaceX and its co-founder and CEO Elon Musk well. No company has delivered more into space. It has also become a leading provider of satellite internet while achieving previously unimaginable aeronautical feats, including reusing key parts of its rockets. SpaceX this week raised $75 billion by selling stock to investors in an initial public offering. That’s nearly three times what any company brought in from an IPO.

This record IPO reflects investor interest in SpaceX’s near-term goals such as building data centers in space and its long-term mission of establishing a permanent human settlement on Mars. But it also signals a big bet on Musk and the company’s longstanding ethos of extreme ownership.

Musk has 85.1% of the voting power in SpaceX, and most of the company’s board members are his longtime allies. The only way he can be removed as CEO is for him to vote to remove himself. Some skeptical investors have criticized the rulings as “novel and extreme” because they strip shareholders of oversight and make it nearly impossible to hold Musk accountable.

But on the other hand, the management structure is the ultimate expression of the extreme ownership mantra that took SpaceX from a handful of engineers in a Los Angeles-area warehouse in 2002 to the more than 22,000 employees working at the world’s most dominant rocket company today. Many companies like Apple and Google give their employees great responsibility, but many people who have worked on other technology and space projects in addition to SpaceX say the company’s approach is something more.

“At SpaceX, you really have a cradle-to-grave product,” says a former employee who started at the company in 2009 and spent about six years overseeing some of its programs. “I knew that if the software didn’t work, it was my damn fault. It’s letting the experts make expert decisions for better or worse, and it worked most of the time.”

The engineer, who requested anonymity to recount sensitive discussions, says they’ve seen Musk articulate this principle on numerous occasions, including a meeting during which the CEO cried because he allowed a key project to run significantly behind schedule. They recall Musk saying about the delay: “We’ll never get to Mars if this is what we accept.” They believe the team leaders in the room saw it as not just a rallying cry to get back on track, but also an instillation of trust and authority rather than “full micromanagement.”

Laura Crabtree, who joined SpaceX in 2009 as one of its first 600 employees and spent a decade there, believes the concept of extreme ownership emerged because employees were given shares in the company, which didn’t happen at the traditional aerospace companies they came from. Being a part owner makes employees more invested, and this sentiment has continued to spread over time.