The fundamental reason Hyperloop will not happen

Casey Handmer is confident that Hyperloop will never happen. While the talented engineers involved were able to solve the known technical challenges like levitation and vacuum construction, a subtle but critical issue derailed the project. The core problem is that the faster you travel, the further you need to be from the Earth's surface for safety.

The faster you go, the further you want to be away from the surface of the earth. And you would understand this as a pilot yourself, if you make a habit of flying through canyons and mountains, sooner or later the cone of ground that you can get to with a 7G turn completely intersects ground itself and then you die. And the same thing applies whether you're in a tube or not.

This principle means a cross-country Hyperloop network would require drilling almost the entire way to maintain a safe, straight path. The cost of moving that much rock would be enormous. Casey compares it to the California high-speed rail project, which is over $100 billion. For that same amount of money, you could build and operate a fleet of 737s for 30 years, moving more people more quickly than Hyperloop ever could.

The life and forgotten legacy of industrialist Henry Kaiser

Henry Kaiser's career spanned numerous industries. He grew up poor, left high school, and started in photography before moving into hardware and then large-scale construction. He was a key figure in massive projects like the Shasta and Grand Coulee Dams, and was the principal behind the Hoover Dam, then called the Boulder Dam. He was known for an incredible work ethic, working 20 hours a day until his death at 85.

During World War II, Kaiser applied the techniques learned from dam construction to shipbuilding. In shipyards like the one in Richmond, California, he produced hundreds of ships. This included a famous Liberty ship built in just four days.

That was a propaganda exercise. But still they built a ship in four days. It was pretty effective propaganda. The more typical duration on the ways would be more like 11 days.

Kaiser's ventures were diverse. He invented employer-sponsored healthcare, which evolved into Kaiser Permanente. He was also involved in building towns, aircraft like the Spruce Goose, and automobiles, establishing South American manufacturing for brands like Jeep. Despite his vast impact, he is not as well-known today. This is partly because he did not plan for succession effectively. After he died, his assets went to his second wife, who had little interest in running the empire and sold off many parts. While pieces like Kaiser Aluminum and Kaiser Permanente still exist, the larger empire fell apart.

The tinkerer's mindset can solve energy abundance

Industrialist Henry Kaiser, similar to Elon Musk, started as a roads contractor and continually sought new technical challenges with the attitude that "it's not that hard, it's only physics." He moved from roads to dams, mechanizing construction and undertaking massive projects like the Colorado River Aqueduct. His strategy involved building a team of capable executives, constantly compounding their efforts, and leveraging personal relationships with bankers. This first-principles thinking allowed him to enter diverse industries like shipbuilding, cars, and planes, viewing a plane as simply a car that flies.

Kaiser was a tinkerer at heart, with workshops dedicated to experimenting with new ideas. This hands-on, inventive spirit is common among today's ambitious hardware entrepreneurs. Casey Handmer notes a stark contrast with many modern engineering graduates who lack this passion for building outside of academic requirements.

Can you give me an example of one project you ever built using your skills that was not required for a class? And they're like, why would I do that? And I'm like, I don't know, because you just spent four years of your life deciding to specialize in this particular field.

The key trait of industrialists like Kaiser, Howard Hughes, and Musk is viewing their core competency not as a specific field like rockets or roads, but as engineering itself—a skill set broadly applicable to many domains.

This philosophy is embodied in Casey's company, Terraform, which creates natural gas from solar power, atmospheric CO2, and water. As solar energy becomes cheaper, it's now financially viable to reverse the process of burning gas for electricity. The process uses electricity to extract hydrogen from water and combines it with carbon from the air in a reactor to produce hydrocarbons. This creates a carbon-neutral fuel cycle, as the carbon is sourced from the atmosphere and returned to it, much like burning wood. This approach provides a path to energy abundance, as sunlight is available almost everywhere, unlike geographically concentrated oil reserves. The synthetic process is also about 100 times more efficient than photosynthesis. Ultimately, this suggests that instead of flying less, we can solve the climate impact as a technology problem by creating zero-carbon jet fuel, allowing for unlimited travel within a closed carbon system.

Electrification will win on the ground, but not in the air

Taxing aviation fuel to reduce emissions is a regressive approach, according to Casey Handmer. While flying accounts for about 2% of emissions and is done mostly by the wealthy, such a tax disproportionately affects people on the economic margin. It might mean the difference between someone flying once in their life versus five times. Casey's radical alternative is to make aviation cheaper and more accessible to everyone, not just the richest 10 or 50 million people. He envisions a future with hypersonic magnesium aircraft fueled by liquefied natural gas.

This leads to a broader question: which technologies will be electrified, and which will continue to use hydrocarbons, albeit cleaner synthetic versions? Casey predicts a split. Ground-based transport, like cars and trucks, will likely become fully electric. He would not be surprised if, in several decades, nearly all ground vehicles are electric. However, he sees aviation expanding dramatically, possibly by 20 or 50 times, which would require immense amounts of fuel.

The reason for this divergence is energy density. Batteries simply cannot compete with jet fuel for aviation.

Jet fuel is two orders of magnitude, it's 100x more energy dense by unit weight than batteries. And so it'll be a while before you can build the battery powered 777.

Casey is skeptical that battery chemistry can ever match the energy density of fuels like LNG. Therefore, high-speed, long-range transportation—including large aircraft, fast aircraft, and long-range shipping—will likely remain dependent on hydrocarbon fuels. He does see a place for electric power in short-range aviation, such as eVTOLs. Other industries that will continue to rely on hydrocarbons include paints, chemicals, plastics, and pharmaceuticals.

The conversation also touched on powering AI data centers. A common method is using industrial gas turbines. While this might seem counterintuitive to a clean energy future, Casey explains that the market is just beginning to solve this puzzle. He believes that for AI data centers to operate at scale, they will ultimately need to be powered by solar and batteries. He considers this a more viable path than waiting for small modular nuclear reactors (SMRs), which he feels will not be available at the required scale quickly enough.

A worldview of solar maximalism and hardware optimism

Casey Handmer's worldview can be summarized in two main points. First, he is a solar maximalist, believing that people have not fully internalized the dramatic cost improvements and learning rate of solar energy. He thinks this will radically change the world and that worldviews should be updated to reflect solar's inevitable dominance. His company, Terraform, is a bet on this future. Second, he is a techno hardware optimist who believes we should be doing more difficult things and that people should start hardware companies.

However, he clarifies that starting a hardware company is not for everyone; it's a path he describes as "cursed in a way." It is best suited for those with the right skills, mindset, and determination to achieve something highly ambitious. He points to the example of Henry Kaiser, who, despite a successful career in road building, saw a greater opportunity to bring water to the American West. Kaiser bid on the Hoover Dam project, which the government estimated would cost $38 million and take seven and a half years. His plan was to complete it two years ahead of schedule. He succeeded, finishing in five and a half years and earning an $8 million profit, demonstrating a model of successful, ambitious government acquisition.

Solar power's exponential cost decline and market dynamics

The growth of solar power is exponential, but people struggle to understand their position on an exponential curve and project it into the future. The cost of solar panels improves by roughly 40% for every doubling of production. Since production currently doubles about every two years, this translates to an annual cost reduction of around 20% for the panels themselves.

A common objection is that panels are a small part of the total installed cost, so the overall price isn't falling as fast. Casey Handmer likens this to computer chips, where the cost per transistor plummeted, but a Microsoft Windows license did not follow the same curve. However, building systems with fewer intermediate layers allows one to better capture these fundamental cost savings. This is absolutely essential for producing synthetic fuels, which demand the cheapest electricity available.

As panels get cheaper, the surrounding systems can become simpler. For example, it becomes more economical to install more static panels rather than using expensive systems that track the sun. Casey believes these trackers should have been abandoned years ago.

We should have deleted trackers in 2016.

He suggests their persistence is partly due to market dynamics and cozy oligopolies, making the industry ripe for disruption. Panel costs can still fall much further. Casey sees a clear path to costs dropping by half again, from 8 cents a watt to 4 cents a watt, a price he calls "absurdly low." The theoretical limit, based on physics, is at least ten times cheaper than current technology.

When asked why his company doesn't manufacture these cheaper panels, Casey clarifies that the panel producers are doing a great job. The inefficiency lies with the companies that package and sell the solar arrays. He references David Senor's business principle of building a business by commodifying a complement. The goal is to take the commodified solar technology and add a valuable service layer for the end customer.

Terraform's business of turning solar energy into storable methanol

Terraform's nominal design size for its kits is one megawatt. For context, one megawatt can power a few hundred homes in Europe, or about 20 to 30 large, air-conditioned homes in America. The company sells a kit that captures solar power and produces hydrocarbons, essentially creating instant oil. The goal is to have the first paying customer for these hydrocarbons, who isn't just part of a demo, as early as next year.

The company is currently focused on producing methanol rather than natural gas. Casey Handmer explains that natural gas prices are set by the marginal producer and are quite cheap. Methanol, however, provides roughly six times higher revenue per carbon atom. Terraform's core function is to convert intermittent solar energy into a tangible, storable commodity. While they produce hydrogen as an intermediate product, Casey notes it's difficult to sell directly because there are no mechanisms for transporting it to market in bulk.

By combining hydrogen with carbon dioxide, they create methanol. Methanol is chemically similar to water and can be stored easily in a tank. This storable product can then be sold to a traditional refinery, which can convert it into gasoline. Terraform focuses on its core competency and doesn't build its own refineries. This would require licensing the Methanol to Gasoline (MTG) process, which was developed by Mobil in the 1970s. Even though the patents may have expired, the process is protected by trade secrets and requires deep institutional knowledge.

Even if I had all the patents in front of me right now and blueprints of the plant, it's just process knowledge and access to half a dozen expert chemical engineers who've done this before. And then I went and built it. I promise you it would still not work. It's a very finicky process. I think it involves blood sacrifice to get it right.

The economic challenge of carbon-neutral cement

Cement production accounts for about 7% of global emissions. A process called the lime calcite cycle can be used to capture CO2 during manufacturing. This involves calcinating calcium carbonate to produce calcium oxide, the active ingredient in cement. This part of the process already addresses 60% of the difficulty in making cement.

The primary challenge, however, is not technical but economic. Traditional cement is very cheap, selling for about $40 a ton at the plant. This makes it difficult for new, carbon-neutral alternatives to compete. Casey Handmer notes a common mistake in the climate tech sector is developing impressive technology that isn't commercially viable. Having a working demo is not enough if people are not willing to buy the product at its price.

He points to Rivian as an example. The company makes a beautiful product, which is an achievement in itself, but they have yet to make a profit.

They've just got to figure out how to delete about 30% of the components and they'll be in business.

The same principle applies to cement. A carbon-neutral cement priced at $60 a ton might find enough buyers willing to pay a premium for carbon credits to stay in business. However, if the cost were $6,000 a ton, its market potential would be very slim.

China is using massive solar deployment as a geopolitical tool

While German solar subsidies may have played a role, their impact is hard to quantify. Even if Germany hadn't acted, other countries like Spain and Australia were making similar moves. Any delay would have likely been short-lived once China began its own large-scale deployment. In contrast, Chinese interventions in the solar market were enormously impactful. China is rapidly becoming an "electrostate."

China has deployed more solar in the last three months than the United States has ever deployed ever.

This rapid electrification is a key part of a broader geopolitical strategy. The United States has formed an alliance with Australia, Japan, and others to control oil transit through the South China Sea. The belief is that this control provides political leverage to make China "play nice." China, which currently imports 12 million barrels of oil a day through sea lanes it doesn't control, understands this vulnerability.

However, the US strategy may be based on an outdated assumption of China's energy dependence. For instance, a key component of this strategy involves Australia receiving Virginia-class nuclear submarines in 2035 to help police the Strait of Malacca. Casey questions the relevance of this timeline.

Do you think by 2035 China is still going to be as dependent on oil through the Straits of Malacca? I don't. At the rate that they're deploying right now, they could cut off that supply if they needed to.

By drastically increasing its solar capacity, China is reducing its dependence on foreign oil, thereby neutralizing a major point of strategic leverage held by the US and its allies. China is achieving this energy independence primarily through electrification, though synthetic fuels could be another future option.

How China subsidized the solar panel industry

China subsidized its solar panel industry by providing government-backed, zero-interest loans and cheap capital to manufacturers. Interestingly, a lot of the underlying solar technology was initially developed in Australia. The conversation briefly touches upon the business environment in the United States, acknowledging that while there are things to complain about, it is still a great place to do business with sufficiently cheap capital available.

Industrial policy and the strategic importance of cheap energy

The success of German and Chinese subsidies in developing the solar industry raises questions about the role of industrial policy. While Silicon Valley often has a libertarian bent, top-down government intervention was impactful in accelerating solar technology's arrival. This challenges the idea that government should always stay out of innovation.

Casey Handmer explores this by looking at the Soviet Union's industrialization, a subject covered in the book Red Plenty. While the Soviets achieved incredible feats, their GDP growth at its peak was slower than the US's at its slowest. This suggests that while state-led efforts can produce results, a freer market might have been more efficient.

In the US, the relationship between government and industry is nuanced. Silicon Valley companies don't complain when the government provides large contracts for projects like the atomic bomb or for services from companies like Palantir and AWS. In fact, much of Silicon Valley's history, from Raytheon to Lockheed's Skunk Works, is rooted in government work. This model, where the government acts as a major customer, seems to work well for the US economy.

However, this is different from the Department of Energy picking winners in domestic manufacturing, which could distort the market. Still, there are areas where decisive government intervention is necessary. Chief among these is energy. Countries with cheap energy can afford to make mistakes in other areas and still maintain prosperity. The US is an example of this, especially when contrasted with countries like Japan and the UK, which have expensive energy and flatter GDP growth. The lesson is that when a new technology like solar emerges, a country must be able to deploy it at scale to stay competitive. China is already out-producing the US in crucial metals, partly because its energy is cheap, demonstrating the high stakes involved.

Streamlining solar deployment and reclaiming US manufacturing

To speed up solar deployment in the US, the single biggest intervention would be to allow by-right development of solar panels on private land, and even on Bureau of Land Management (BLM) land. Casey Handmer suggests thinking of it as "electron ranching," similar to how BLM land is already used for cattle ranching with little friction. Currently, permitting a solar array can be as difficult and expensive as permitting a new chemical plant, even though solar is a net benefit for the environment.

The discussion then shifts to US manufacturing. While some believe the US can't compete in areas like consumer electronics, Casey argues this view is misguided. He contends that for the US to maintain the ability to rapidly prototype electronic systems, it must have a domestic manufacturing base. The solution isn't cheap labor but advanced automation. He points to the Starlink terminal factory in Bastrop, which is 99.99% automated, as a model for how the US can compete effectively.

This whole idea, like comparative advantage that the United States should just be intrinsically bad or uncompetitive at certain kinds of things is crap. It has every advantage it can possibly want.

The hard-edged nature of successful hardware manufacturing

When considering models for US manufacturing, SpaceX's Starlink terminal plant is a very impressive example, producing around a million terminals a year. Other success stories include Hadrian, which makes parts for military aircraft by increasing the machine-to-machinist ratio with software. A common strategy for new manufacturers is to establish a beachhead with a premium, high-value product, as Impulse has done with its stoves. The approach involves starting with a mostly automated factory producing a few thousand units annually, then scaling up to drive down prices through economies of scale.

The discussion then shifts to what people misunderstand about Elon Musk's methods. Casey Handmer argues that Musk's hard-edged, uncompromisingly demanding nature is not an incidental trait but a necessary component for succeeding in hardware manufacturing in the United States. Casey explains that he once believed it was possible to build a company like SpaceX without that intensity, but his perspective changed after running his own hardware company.

I ran my own hardware company. And I finally worked out that no, actually people are in general capable of achieving far more than they would think. But almost always they require extrinsic motivation to do that.

Hardware is exceptionally difficult, and a software company is statistically a surer path to wealth. Beyond his demanding style, Musk's success is attributed to his work ethic, his ability to compound knowledge, and his understanding that physics is the ultimate law. When observing a highly successful person like Musk make seemingly crazy decisions that consistently work out, it's worth considering that their model of reality might be superior in some way. Rather than dismissing their actions, one can try to infer the knowledge they have that others don't.

The difficulty of replicating this success is evident in the struggles of SpaceX alumni who start their own rocket companies. Despite having firsthand knowledge of the lessons learned at SpaceX, many have struggled. SpaceX's dominance, holding about 95% of the global market share, is described as an 'anomaly in the matrix'. It's a massive wave, much like the phenomenon of solar power getting cheaper every year, that people haven't fully recognized or learned how to leverage.

Challenge yourself and level up in your early career

For young, highly technical people, life exists on a continuum. Some things are easy now but will be hard later, and vice versa. If you see yourself as part of the technological elite, you should challenge yourself as much as possible. Find a worthy challenge to level up. Avoid places that put you in a holding pattern for years, as you only have about 40 years of highly productive work ahead.

The goal is to work at a very demanding place for as long as you can take it. You want to work with the best people on things you care about and not settle for second best. When comparing graduate school to a demanding job like one at SpaceX, Casey notes the trade-offs.

The psychic damage is the same, but the pay is better at SpaceX.

Immediately after graduating, it's more important to get a job and excel at it than to wait a year for the perfect role and compete with the next graduating class. Your first job out of school is crucial; it sets the foundation for your career. Even if it's not ideal, it's important to stick it out for 18 months to two years and ensure everyone there has something positive to say about you. This provides a solid base to build upon.

Booster seats, evolution, and the demographic decline

When considering his children's education, Casey Handmer emphasizes supplementing formal schooling with a rich home environment. School is valuable for learning social skills, or as he puts it, 'How do you deal with people who aren't like your immediate relatives?' However, the academic side is more than covered at home. This touches on the Bloom 2 Sigma effect, a major finding in education. The effect shows that one-on-one tutoring focused on mastery learning, where a student only progresses after mastering the current topic, yields far better outcomes. Schools, by their nature, cannot provide this individualized approach.

Casey suggests one can achieve a similar outcome through self-directed learning fueled by curiosity and access to resources. He reflects that he might have become a chemist if he had access to chemistry textbooks earlier in life. Ultimately, his goal for his children is not about their specific career path.

I don't really care what they do as long as they love it and they're as good as they can be. They have to love it and they have to try, they have to sweat. They have to contend with the material because incredible privileges have come to them... And I feel like you do have a social obligation to not waste that opportunity.

The conversation then shifts to the falling fertility rates and the subtle, often overlooked barriers to having children. A striking example is the 'booster seats contraception paper,' which highlights the unintended consequences of car seat regulations.

For reference, something like 58 children's lives saved in the United States every year, statistically, by car seats. And something like 10,000 births are averted by families who cannot afford to upgrade their cars, which is a bit of a problem.

While car seats are a marginal factor, they represent a class of problems, including housing and education costs, that collectively discourage people from having more children. Even a comprehensive 'pro-natalism law package,' like one Australia tried, may only create a temporary bump. The problem is complicated and widespread across developed nations. An evolutionary perspective suggests a deeper reason: humans never needed an innate desire to have children when sex drive and a lack of contraception guaranteed them. The powerful parental bond forms only after the first child is born.

Our evolution did not depend upon us in the past having a deep obsession with the need to have children because we didn't have contraception and we had sex drive. So children would just happen. But once you have kids, then you're all about kids... But until you have that first one, you don't realize, it hasn't come in yet. There's no evolved necessity to go out and have kids.

The demographic situation is now so dire that even a sudden, collective decision to have more children would not fix the deep hole societies have dug for themselves for many decades.

Pension systems face a crisis from aging populations

Pension systems are facing a crisis. In the UK, the "triple lock" system increases pensions by the largest of three factors, such as inflation or GDP, creating what is described as an "insane ratchet." This means pensions are currently rising much faster than inflation or economic growth. This problem is compounded by an increasing dependency ratio, as medical advances allow people to live longer. While longevity is a good thing, it creates a financial strain.

The situation is stark in other countries as well. In France, for example, the average pension is now reportedly higher than the average income for working-age adults. This raises questions about how society can provide for its aging population without bankrupting the system.

Casey Handmer suggests a radical solution lies in biotechnology. He hopes for a breakthrough that would fundamentally solve the problem of aging itself.

...invents a pill that keeps me young and everyone else young and lifts this burden of non-negotiable disease from every single person who's lucky enough to live through their youth.

Another potential solution is a massive increase in wealth from AI-driven productivity growth. However, Casey is skeptical that this new wealth would be distributed globally to solve the problem for every country.

Whether that wealth will find its way to alleviating the tax burden on the working class in the 200 countries on earth that don't have their own AI industry seems somewhat unlikely to me.

Ultimately, the problem of ever-increasing dependency ratios from systems like Social Security was predictable. Society was just fortunate to get rich so quickly that the consequences have taken this long to materialize.

Solving California's water shortage with thermal desalination

Casey is working on a hardware company called Terraform Desalination. The project aims to rip water off salt using a thermal approach, which he describes as "distillation on steroids." This process involves boiling water to separate it, but it can be done at low temperatures by reducing the pressure. The main challenge is to make this technology cheap enough to run intermittently on solar power and still be profitable.

Casey finds it insane that California faces water shortages despite its extensive coastline. He contrasts a proposed $20 billion project to recover 100,000 acre-feet of water with the potential of desalination. With the same investment, he claims, you could double the flow of the Colorado River. He believes California's reluctance to embrace desalination stems from being anchored to past solutions like dams and canals. Existing desalination plants are small, expensive, and used only for emergencies.

The plan is to deploy this technology at a massive scale and low cost. The process involves taking saltwater, extracting a portion of fresh water, and returning slightly saltier water to the ocean.

So you take 10 gallons of salt water and you pull out 1 gallon of fresh, and then you have 9 gallons of slightly saltier water that go out and mix, and it's fine because that's how rain is formed in the first place. Dilution is the solution.

The primary obstacle in California is the California Coastal Commission, which slows down coastal development. Casey clarifies he only wants to bury a pipeline under the beach, not develop the coastline. He believes it's possible to produce desalinated water for as low as $99 an acre-foot. This would be transformational, making it a primary water source rather than just an emergency backup. It could meet the state's demand for an additional 14 to 15 million acre-feet of water, boosting agricultural production.

A grand plan to revitalize the Salton Sea

The project could be paid for through land value appreciation. Casey Handmer's hobby horse is the Salton Sea, a body of water in Southern California formed by an irrigation accident in the early 1900s when the Colorado River burst its banks. It is about the size of the San Francisco Bay with 110 miles of coastline. Originally fresh, it became increasingly saline over time due to the evaporation of irrigation runoff. The Colorado River itself is quite salty because rivers erode rocks containing salts, which is also how the ocean gets its salt. The Salton Sea is now too saline for fish to survive and has become quite smelly.

Casey's grand plan is to revitalize it. He proposes adding about three million acre-feet of water to restore its 1990s level, stabilizing both its depth and salinity. This would involve building a canal from Mexico or San Diego. He envisions a vibrant future for the area.

And start like building gigantic hyperdrive cities around the edge to do like industrialization and like retirees and bit of everything. 110 miles of beautiful coastline with a climate like Phoenix and Tahoe, but warm.

The project could pay for itself through the increased value of the newly developed coastline. The Bureau of Reclamation, the U.S. agency historically responsible for such large-scale water projects, has not built a major dam in 50 years. A compelling aspect of this plan is that it addresses a previous human error, making conservationist arguments against development less potent.

Restoring the Salton Sea and greening Nevada with desalinated water

The Salton Sea is currently in a state of profound neglect, but it could be restored to unlock enormous economic value. Instead of viewing it as an environmental catastrophe to be stabilized, it could become the site of a new American city. The area has abundant resources, including effectively infinite solar power, critical minerals, and proximity to Mexico. A restoration project could even provide fresh water to Mexico as part of a deal where everyone wins.

The economic leverage is immense, estimated at a 50-to-1 return. Casey Handmer suggests a funding model similar to the development of Irvine, California. A developing entity, whether a consortium or a company, could be given a small fraction of the restored coastline, such as 10%. The value of that land would be enough to fund the entire project, leaving the vast majority for the people of California. He notes it is unusual to find mega-projects with so much value that you can be that generous.

Unlike commodities like natural gas, water delivered to a specific location like Los Angeles is a highly valued, specific project. This means that even in the early stages, there are customers willing to pay for an incremental water supply.

This concept extends beyond the Salton Sea. For example, Nevada is 90% federal land because, historically, nobody wanted it. However, it's possible to pump significant quantities of water there. An existing aqueduct runs from the California Delta down to the Cajon Pass. From there, water could flow downhill for much of the journey towards Nevada, with solar-powered pumps handling the rest. Casey envisions running a river the size of the Colorado through a dozen of Nevada's valleys. With water, he says, the state could have a climate similar to Switzerland's.

Anything you want from terraform, it's like just solar panels plus other stuff.

When asked about Israeli desalination technology, Casey acknowledges their expertise in reverse osmosis. They are already using coastal desalination to refill the Sea of Galilee. He notes their production cost is around $400 per acre-foot, a price he would currently be happy to match. His long-term goal, however, is to get the cost down to $99. He believes that even at $400, the value proposition would be extraordinary.

Building an organization as an extension of the founder's mind

A valuable leadership concept is the idea of leadership through service, which can be visualized by an upside-down organization chart where problems flow downhill to the leader. Personal mistakes are crucial for growth. Making mistakes provides a deeper insight when reading about the challenges faced by historical leaders, such as Leslie Groves with the Manhattan Project or Hyman G. Rickover with the Nuclear Navy project. Their writings become more understandable after facing similar, albeit smaller-scale, problems.

Effective leadership requires a balance between being demanding and other factors. It involves holding oneself and others accountable. A key skill is learning to discern what people truly need, which may differ from what they say they want, and ensuring they get what is necessary. This can sometimes mean increasing one's level of demand.

One of the mistakes I've seen a lot of first time founders make is they assume that an hour of coaching is as good as an hour of firing.

Ultimately, a founder can only be themselves. The goal is to build an organization that functions as an extended mind, reflecting the founder's own ways of thinking and problem-solving. A company, like Stripe, often becomes a strong reflection of its founders.

Success is mandatory

When building a project, Casey Handmer found that the parts that weren't working were those he tried to build against his better judgment. Once he decided to do it his way, it suddenly started working because he could intuitively understand it. This required becoming more demanding in his approach.

This principle extends to managing people. It involves giving extremely direct feedback, coaching, and sometimes inviting people to build their careers elsewhere. Casey has had to let go of people he really likes and has been friends with for years. He believes that from a career perspective, allowing someone to fail in a role for an extended period is a disservice.

Nothing is worse for your career than sitting in a job failing for a year because you don't have the guts to quit and your manager won't fire you. It's not that you're not growing, you're going backwards in that time.

This has led him to adopt a philosophy where success is mandatory. While he is happy to help his team, ultimately, they have to succeed. This approach did not come naturally to him, but it now feels intuitively obvious.

Organizations should be built with a sunset clause to prevent decay

Concerns about the decline of institutions like JPL, the "jewel of space science in the United States," suggest a need for a new model for organizations. A better approach might be to set up labs and agencies with a built-in destructor. After a fixed period, perhaps ten years, the organization would sunset.

This doesn't mean firing everyone. Instead, it creates an opportunity to reconstitute the organization. For example, after ten years, NASA could be summarily executed and then reformed. During this process, it could sell off some labs to other agencies or acquire new ones that are more aligned with its current mission. This forced reorganization ensures an institution remains successful and relevant. Without it, organizations can wither and fester, becoming ineffective when they are needed most.

This failure to adapt has real-world consequences. NASA's entire job is to prevent "no more Sputnik moments," yet it has "lost the plot." This is why, despite the U.S. establishing the Artemis Accords to enable a land grab on the moon, China might get there first. This same pattern of decay can be seen in Silicon Valley. Most companies don't last long, and many that do become victims of their own success, like IBM. Casey notes that Elon Musk's companies are an exception. Despite their age and size, they have avoided this particular organizational pathology, and he suggests people should study why.

The challenge of building a Hyper America

The conversation concludes with a discussion about Casey Handmer's "Hyper America" shirt. He explains that it represents the need for more people to pursue ambitious hardware projects. Without this effort, the vision of a "Hyper America with a trillion Americans and a trillion planets" will not be realized, leaving the field to just "Elon and a few other wannabes."

Casey expresses disappointment that his company, Terraform, has only seen one competitor emerge in four years. He believes more competition would be beneficial. However, he also understands why others might be deterred by the difficulty of the work.

I'm kind of sad, actually, that at Terraform, it's been four years and there's only one other company that has come in... I think actually it would help us if there was competition. But it is really hard. I can understand why people look at it and be like, yeah, no, thank you.