By no means is Robinhood the first financial company in this world. There was a financial system that existed before we got there. How the heck are two scraggly-haired Stanford kids going to find some need in the market the big brokerages didn't find? And the thesis behind Robinhood was actually that mobile is this emerging platform. My thesis behind this was that low Earth orbit is a platform for commercial activity. How do you make something that is commercially competitive from space versus doing it on Earth? I started looking much more closely at the idea of powering data centers. It was becoming clear that that was going to be the place where all the energy usage was going anyways. If you're on a rocket that's taking you to space, rather than just disposing of that rocket or trying to reuse it, what if you just used it basically as the heat sink cuz you got a bunch of metal there? And when you put these two ideas together, you arrive at the architecture that we have, which is that the upper stage of the rocket is itself the data center.
Welcome to Grit. I'm Jubin, partner at Kleiner Perkins, a show where we go beyond the highlight reel and explore the personal and professional challenges of building history-making companies. Today on Grit, I'm talking with Baiju Bhatt, co-founder of Robinhood and now founder and CEO of Cowboy Space. Baiju helped build Robinhood from a controversial idea into a public company worth tens of billions and then did the least obvious thing imaginable: he walked away from the executive seat and started a rocket company. We get into what it's actually like to start over from zero as a repeat founder, why he seeded it with his own money to beam power and AI compute down from orbit, and the pivot that turned a space solar startup into one of the fastest-growing unicorns in the space industry. Enjoy. Cheers. I'm so glad we're doing this. I've been looking forward to this one. I really genuinely have. I hate any contrived conversation; I just enjoy having a conversation. When you and Vlad started the company, what, 15 years ago?
Did you think—was it 15 now? A little less, but not that far off.
2012 was when you had the idea for it. Yeah.
Okay. So, 14 years. Yeah. Jeez.
14 years. You still have a great head of hair 14 years later.
That's good. Did you think it was your life's work until the very end, or I'm curious like your metamorphosis? 14 years is a really long time. I'm very curious how your relationship to Robinhood—I don't know, was that always your calling? I'm just really curious how that metamorphosized for you.
I'm not a finance guy. Just very candidly, my background is in physics and math, and going to Stanford studying physics and math, for a long time I thought I wanted to be an academic mathematician or an academic physicist. I wanted to study string theory. I wanted to understand the real nature of grand unification. Do you know what this is, by the way?
Not the nature of grand unification.
Do you know about the grand unified theory? Have you heard this before?
So it's this idea that there is one theory to rule them all, right? I think the love of this stuff, honestly, I have a lot of credit to give my dad too, who is also a physicist by training. But this idea that there's a grand theory to rule them all—there's a lot of breadcrumbs in our understanding of physics that would point to that being not just possible, but plausible or even likely to be the case. You have the standard model of particle physics that unifies electromagnetism, strong force, and weak force, and then there's the outlier, which is gravity. So the pursuit of a quantum theory of gravity, and what is the real nature of gravity when you get to the finest scale resolution—that's the kind of stuff I was interested in when I was in school.
I remember pretty early on in my professional career telling myself, if I ever hit it big with this finance thing, I'm going to start a space company someday.
Are you serious, or is this the retrospective?
No, no, no. I was very, very actively thinking about this.
While at Robinhood, yeah. I'm reminded of this sometimes when I hang out with early Robinhood people where I'm like, "Did I talk about space stuff back then?" And people are like, "Baiju, that was like either the second or the third thing you would say back in the day." Space and pure theoretical physics are not the same thing, but the love of pure theoretical physics, which is kind of what my academic background is, I couldn't keep it at bay.
Even in the companies before Robinhood, I remember Vlad and I would stay up into the wee hours of the night programming, and then at like 3:00 in the morning when we were just a little sleep-deprived, we'd be like, "You know what would be cool is if we could mine helium-3 on the Moon," and we would talk about this stuff all the time.
I remember in high school, my high school chemistry teacher gave me a copy of this book, *The Case for Mars*. Have you heard of this before?
Okay, you should. I have a stack of them in my office; I'll give one to you. I didn't read it right when my high school teacher gave it to me; I read it a little bit later on in life, but it left quite an impression on me. What this book is—I believe it's also the blueprint for what would become SpaceX—it's a path towards... The book was written by one of the scientists that worked with Papa Bush, President Papa Bush. When he first got elected, he had this thing, if I remember correctly, it was like the 100-day plan, right? 100 days to build a plan to go to Mars. As every president during that era was like, "We're going to do space. Get me the best scientists, get me a plan."
They make this plan, and the plan is basically like: step one, build Battlestar Galactica; step two, build a Moon base; step three, fly Battlestar Galactica to the Moon base; step four, go to Mars. I'm adding some color here, but the whole thing was going to cost like a hundred zillion dollars to do. Just making up some numbers here. But the book was born of one of the scientists that worked on this and was basically like, "Look, if you actually want to go to Mars, this is not how you would do it. If you actually wanted to go to Mars, you would take an engineering approach to it, where you would look for reusable components, you would look to down-cost stuff, you would look to find ways to build the stuff closer to what it actually costs versus what the government spends on these things." That's the core thesis of this book, *The Case for Mars*.
To come full circle, I remember reading that and being like, "Man, if this is possible, I really want to see if I can do that at some point in my professional career." And then obviously, the backdrop as I was building Robinhood of seeing SpaceX land the reusable rocket for the first time—I was like, "Oh my goodness, if this is happening in my lifetime and I'm not a part of this, this is one of the few things that as an old man I'm going to look back and fundamentally regret." So I had actually been thinking about building a space company for a long time. Didn't know if I was actually going to do it or not, but the idea had been pulling on my heartstrings for a very long time.
Well, this might sound like a weird question, but the way you said, "I'm not a finance guy," talking about your work at Robinhood gives me the impression that I don't know if it's hollow about the mission. Did you feel any type of way that the mission wasn't the core thing that you ultimately wanted to connect with, but you were having crazy success doing it?
Actually quite the opposite. The mission was around changing the status quo. The whole point of the company was and continues to be to democratize finance for all. It's a challenger mission in many ways. It's like saying that the system when we started was not what we thought it should be, and we thought it should be one that includes more people, one that lowers the barriers to entry so that it isn't just institutional investors or extraordinarily high net worth people that are using the stock market. So the mission very much resonated with me, but the mission was one of changing the status quo. Does that make sense?
Yeah, it does make sense. Is your dad still—
I hung out with him yesterday, actually.
And you're now building a company that—you'll describe it better than me, but maybe more simply put, like data centers in space.
What does he think? You said his background is in physics.
Is he going around to dinner parties proud of his son type thing? Because he's—
He's not much of a dinner party guy at this age, but I think—if you're watching, Dad, I hope you're proud of me.
Like that you're going for it.
Yeah, he's very excited about it. He likes to chime in on the science side of it, too. Every time I hang out with him, he's like, "Have you thought about this? Have you thought about doing this kind of thing or that kind of thing?" It's kind of a two-pronged thought for me. One, it's like, "Dad, I don't need advice. Come on, I'm like a grown man here." And on the other side, I'm like, "You're probably right." You know what I mean?
Totally. Did you, leaving Robinhood, know you wanted to start this company, or did it take time for you to sit on the beach and go crazy and then realize you needed to go do something else?
No, I started working on this pretty much immediately afterwards. Pretty much immediately, yep.
How long did it take before you were like, "Man, building Robinhood was pretty easy relative to this"?
I don't know if building Robinhood was easy relative to this. Robinhood was very challenging to build for a bunch of different reasons. One, because I was a first-time entrepreneur. People actively thought that we were not going to succeed at it. It's a step further than people having disbelief in our ability to do it. The technology side of Robinhood was very challenging as well. But what made it, for me at least, the most profound part of that business was always building something that resonated with people. If you unpack that idea, it's intellectually super challenging.
What do I mean by that? A couple of things. The first one is coming up with an idea for a thing to build that fits into people's lives—not a person that I've met, not a person that I will ever meet, but somebody that's just in this world—and having the foresight or seeing an opportunity in the way that a really broad group of people interact with the world, people that you've never met, and building a product that slots into their lives and that is something useful and meaningful. I'm using grandiose terms to talk about what consumer products in general do, but building a consumer product that has mass-market product-market fit, in my opinion, is extraordinarily difficult to do.
Think about it: by no means is Robinhood the first financial company in this world, at all. There were banks and brokerages all around the US when Robinhood showed up. People used the stock market; people invested. There was a financial system that existed before we got there. But we were able to, through insights that we had about the way that people would use technology, but also through pretty systematic ways of talking to customers and understanding what their needs are and flowing those into the product development, build something that millions of people use. I think that's an extraordinarily difficult intellectual challenge because while it doesn't involve weird material science or giant combustion of some kind or using laser lithography to etch out a piece of silicon, the opportunity there is very difficult to break through because, like I said, there were plenty of financial institutions that existed. There were plenty of incredibly talented and successful and resourceful, insightful people that were working at those financial institutions. So how the heck, as you look at the problem that we were able to break through on, how the heck are two scraggly-haired Stanford kids going to find some need in the market that the big brokerages didn't find? Come on, that's implausible. How is that going to happen? Lo and behold, that was the challenge that we overcame. So, long way of saying that was very difficult to do.
Yeah, it's really fair. You and Vlad started a company before Robinhood?
Even if you look just from the outside looking in, if you look at your Twitter and stuff, you guys are still boys. Which is rare. It's rare to go through a company of the magnitude and length that you did. It's rare to go through more than one of them, and then it's rare to get the band and go off and do different things and still be this close. Do you think that's dumb luck, meaning you are just inherently very compatible people, or are there things that you intentionally did that made you so successful as a duo?
Yeah. Or is it dumb luck? Like maybe your DNA sequencing is perfectly compatible with his and that's just how it went.
It's kind of interesting because I think we're very different people. Our brains work in very different ways, and it was very complementary during all the ups and the downs and the years of doing this together. What a lot of people don't necessarily know is when we met—we met in college, first of all. We were doing this summer research program in the physics department at Stanford, and we had all these interesting parallels in our lives. We're both only children. Our families both came to the US because our dads were pursuing higher education here. We both grew up in Virginia. We met when we were studying physics at Stanford.
And this is the color commentary I'll add: we both thought we were kind of the two cool kids in the physics department. We would go out to parties, we were interested in meeting girls, and we both had some variation of this haircut. I say that because the physics department, while filled with very brilliant people, a lot of these people are like freaking nerds. You know what I mean?
And just to be clear, we were also nerds, but we fancied ourselves as—
Cool nerds, yeah. We've been like brothers through the years. He spent countless holidays at my house with my parents before I had a family. I would spend countless holidays at his house with his family well before he had kids. We were like brothers, and we're both only children. We went through a lot of really hard times together, and that creates a bond. There's a real depth to it. We're off doing our own things right now, but there's a shared experience there that is unlike anything I'll probably experience in my life.
Yeah. And you are solo-founding your current company?
I don't know if I've thought about why there. I don't know that I consciously thought about looking for a co-founder with this one. I really wanted to do it. As I was saying a couple of minutes ago, I felt a very strong force pushing me to want to build a space company. I don't know if I really thought about having a co-founder in the same way. It's harder at this stage: older, used to operating businesses. I think I also wanted to try it myself. It's a lot lonelier, that's for sure.
And you seeded the company. You wrote the first check in?
I'm putting my time into it, right? I think about the balance of time versus resources. I think my time is extraordinarily valuable, so you might as well put in 10 million bucks or whatever. The idea of putting my time in and not putting my money in it doesn't compute. At this point in life, knock on wood, I probably have less time than money.
Yeah, I think that's safe to say. Do you have a family?
I do. A little tribe of young boys at home.
How long of Robinhood did your partner see?
Come on. So the whole ride.
She fell in love with me when I was a DJ and a math grad student.
That's how you know she's a real one.
Yeah, she didn't really give a crap about the finance stuff.
Okay, but in some ways that's actually helpful because the only version of you that she's really known is the entrepreneur.
Yeah, I guess the mathematician and DJ version.
Yeah, but that didn't last long before you guys went for it. So there wasn't much haggling or negotiating. Maybe the real question that I'm trying to get at is 15 years and all the money in the world later, did you not want to look her and the kids in the eye and be like, "Let's go to, I don't know, France for a year," or like, "Why don't I just chill for a little while?" Did that not—
It definitely crossed my mind. I would not be saying it straight if it wasn't the case. I think about this sometimes: why didn't I do that? Why am I doing this again? At the end of the day, it's just a feeling inside of me where I really, really wanted to prove that I could do this. I felt a very overwhelming drive to want to try to do this.
The other part of this also is the realization that life is finite. A byproduct of having been working on a company for 15 years is that I'm not the youngest founder in the world anymore. My time of being able to devote my time and energy in a very unencumbered way is not infinite. There's definitely people out there that are great founders that do it at a later stage in life, but I remember what Robinhood was like, and it was physically and mentally grueling. Being successful as an entrepreneur zaps every bit of energy you can give into it. It just does.
I wanted to take a real swing at this while I felt I was still young enough to be able to grind really hard. It's kind of all these competing forces, and a part of me is like, "Well, I'll take a year off and live in France at the next stage of life," and good health permitting, I'll get a chance to do that. Or maybe I'll just jump back into another company, or maybe I'll just be grinding on this until I'm too old to want to enjoy a year in France. Who knows?
Do you think you still have the same dog in you that you did? Is it even possible to want it as bad as you wanted it back then, when you're just in a very different place in your life?
Are you a basketball fan?
So you've watched *The Last Dance* and stuff like that. You know Michael Jordan would just look for things to fuel him.
Yeah, like he would make up people that were trash-talking him before the game.
You saw those interviews where it's like this person saying this, that, and the other thing, and then they cut to the interview with the guy and it's like, "I didn't do any of that." I'm a little bit like that in that I look for things to motivate me to push me along that little bit more. As an entrepreneur, you have to exert unnatural force to bring an idea to life. You can't clock in a 9-to-5 and expect to be successful as an entrepreneur. It's not to say that you have to be grind-maxing every night and every weekend, but my view on it is you have to find the right points and the right times to really push hard and give it your all.
So yeah, I was looking for reasons to really motivate myself to bring out that dog in me. A big part of this, and you can kind of hear in the things that I'm saying, is I've wanted to build a space company. I've wanted to get back to my love of science and math for a really long time, and I use that as fuel to be like, "Come on, you've got to make something really successful here." For what it's worth, I'm very excited about the direction that we're taking the company. I think what Cowboy is working on has the potential to build something really, really impactful here.
Can you talk about the thesis for your company? Because of all the founders and companies that I have the joy of getting to know, this is one of the most "go for it" companies I've seen in a long time.
I love that. You've got to dream big if you want big stuff to happen, right?
And for what it's worth, I think the worst thing that can happen is you just won't succeed at it. You just have to try.
What are we doing? Cowboy Space Corporation is on a mission to power humanity from the high frontier. What does that mean? I'll tell you a little bit about why I got to this thesis and what we're doing now and in the not-too-distant future. Like I said, I started the company about two years ago, or rather I started working on it full-time about two years ago. The thesis behind this was looking at low Earth orbit as a platform. Some of these things will rhyme with the thesis of Robinhood. The thesis behind Robinhood was actually that mobile is this emerging platform. You rewind the clock to 2012, right? It was kind of the beginning of mobile. My view on it was, if you look at the industries that exist on mobile at the time—internet technologies, maps, photo sharing, and stuff like that—I thought that there were going to be native finance companies, not just finance companies that were building apps for mobile. In more zoomed-out terms, if you think of mobile as a platform, there were going to be verticals of the economy that natively existed on this platform. The thesis behind Robinhood was that investing services and, more broadly, financial services was going to be natively on the platform of mobile. Lo and behold, that thesis has borne out.
My thesis behind this, when I was first starting it, was that low Earth orbit is a platform for commercial activity, and that there will be distinct verticals of the economy that exist on this platform that is low Earth orbit beyond the ones that exist today. The ones that exist—rewind the clock a couple of years—were, and I'm paraphrasing here, Earth imaging, defense, military stuff, government stuff. My thesis was that energy is going to be one of the next industries that natively exist on this platform that's low Earth orbit for a bunch of reasons. One, you can generate a lot of electrical power in low Earth orbit because if you put satellites in the right orbit, they're not going to eclipse behind the Earth but for a fraction of the time. You can take what is effectively one of the lowest-cost, if not the lowest-cost way of generating power on Earth, which is cheapo Home Depot solar panels—you put those panels in low Earth orbit and they're illuminated continuously, they'll generate multiples of the power output they would as if you bolt them on the ground. So you get more power output from what is already one of the cheapest forms of energy. It's a natural environment for generating electrical power.
Now, the main idea for space energy prior to the emergence of data centers in space as this concept was this old idea of space solar power. So that's kind of where I started the company.
Original intent was space solar power.
Different name to the company, too.
That's what you seeded the company to go do.
Same company, original intent.
Original intent. And the thesis evolved from there. From the very beginning—and a few parts of this are going to rhyme with the thinking behind Robinhood, because the same person contemplated both these things—was this focus on unit economics, basically asking the question: how do you make something that is commercially competitive in its output service from space versus doing it on Earth? If you build a service that does, let's pick another industry for example, telecommunications, like provides internet service from space, how do you get that to be cost-competitive with doing it on the ground versus fiber optics? In this case, energy: how do you make the energy economics produced in space cost-competitive with doing it on Earth?
How do you do that? Is there a path to doing this? That had been the central question as I was contemplating this idea of space solar power. It was now probably a little bit over a year ago that I started looking through all the different possibilities of how to do this and doing bottom-up economic analyses. If you build a satellite that does these things, what are the parts costs, what do the manufacturing costs add up to, and in turn, what does that tell you about what the service's output economics are going to be? I started looking much more closely at the idea of powering data centers because it was becoming clear that that was going to be the place where all the energy usage was going anyways. If you're doing a space solar power company, you probably should be thinking about its application to AI.
The light bulb went off at some point that actually, rather than contemplating beaming the power from space to Earth—where the hindrance to the economics is going to be that you lose a lot of energy in transmission and conversion from electrical to optical and back from optical to electrical—if you could just harness the power in space and use it in space, then you don't have all these transmission losses, and so you have more energy to work with. Therefore, from a first-principles standpoint, you should be able to produce better economics there than by beaming it down to the ground. Does that make sense?
Another way of thinking about it is also realizing that if you take a truly commoditized service like energy and you layer stuff on top of it, meaning compute for example, inherently there's going to be more margin to work with there to get to these break-even numbers. Asking the question: can you do space solar power plus something else to get more competitive economics? The answer here was space solar power plus compute—i.e., data centers in space—minus the power beaming part of space solar power. That's kind of where the idea evolved from this core idea of where the company started. Does that make sense so far?
Towards the end of last year, beginning of this year, the realization happened of exactly the way that we're planning on doing it: if we looked at this idea of the unit economics of compute from space, and you try to figure out what it's going to cost to produce a GPU hour from space, and you boil it down to how much the solar panels cost and how many of them you need, how much the radiator costs and how much of it you need, etc., and trying to ask the question: how the heck do you get this to be competitive with doing it on the ground?
The realization that we had, which is the core idea behind the architecture we're pursuing, is if you look at the data center, the satellite, and the rocket program as one integrated thing, how would you design it? If you don't think about it just as a satellite constellation, but you think about the rocket that takes it there as an integral part of the overall thing, the realization happened twofold.
The first one was, if you think about two racks of GPUs, you have one rack in this room and you have another rack in the building across the street. That's strictly worse from a utility perspective versus having them right next to each other. By extension, if you think about building a GPU rack as a satellite, if you have two racks, you'd rather have one big satellite than two smaller ones.
The second one being, if you think about what a data center in space satellite does—and this is broad strokes—it uses solar panels to generate power, it has GPUs on it for compute, it has a bunch of supporting electronics, and it's got a big heat sink to absorb the heat and then radiate it away. The thorniest part of this in many ways is the way in which it dissipates heat, because you end up carting a bunch of mass and volume to space to basically roll out as large sheets of radiator.
The second big breakthrough here was: if you're on a rocket that's taking you to space, rather than just disposing of that rocket or trying to reuse it, what if you were able to use the rocket itself basically as the heat sink, because you got a bunch of metal there? When you put these two ideas together, you arrive at the architecture that we have, which is that the upper stage of the rocket is itself the data center. There's no satellite; the rocket becomes the data center satellite when it's in orbit.
All of this in pursuit of realizing that by reusing the upper stage of the rocket itself as a functional part of the architecture, we can basically cut out a bunch of redundant components. In turn, based on our findings at least, this is what unlocks what we believe to be one of, if not the lowest-cost ways of doing compute from orbit. Enter the Cowboy Space Corporation.
All right, I'm going to ask a bunch of dumb questions.
Hit me. Did that make sense, by the way?
Makes sense. Let me clarify a few things. The wavelength that you and I are operating on are very different, so just indulge me here with some pretty simplistic questions. Number one, I have seen *The Martian*, so I feel quite well-educated on everything space-related.
Matt Damon, that's right.
Anyway, there is a scene where he's stuck on whatever planet—Mars, I don't know what planet he's on, stuck on a planet.
It's *The Martian*. He was on Mars.
He was on Mars, great. Okay, good, perfect. That makes sense. And to get out of Mars, they removed all the parts except for the plastic on top of the rocket.
Yes, so they just had a little sheet that was basically covering the top of the rocket.
Yeah, you know what I'm talking about.
I actually don't know that I've watched the movie, but I've read the book.
Oh my god, the movie is like—
I thought the book was incredible, though.
Anyway, yeah. Is it not going to burn up everything when you're trying to exit the Earth's atmosphere into low Earth orbit? Like, why is it not a bad idea to have all of your most precious gear at the tip of the rocket?
That's what I'm trying to figure out. Good question. Well, that's an interesting one. First of all, once you're out of the Earth's atmosphere—
There's not a lot of force that's being exerted on it. I mean, that's what the structure of the rocket does. That's what the fairing of the rocket does is it protects what's inside of it.
So, it's tucked under the point of the rocket.
And the interesting thing, if you go to our website and you look at the video that we have of it, the way that our system is designed is when it gets to space, the top little pointy bit of the rocket pops off.
The solar panels come out of there.
And then the actual cylinder of the rocket folds out and becomes a big heat dissipating radiator—sorry, not a big heat shield, a big heat dissipating radiator. So, we actually use the surface area from the fairing of the rocket to aid in dissipating of the heat.
Okay, crazy. Yeah. Okay, so that's question one.
That was a deep cut. I like that question. Question two: the thing that Elon seemingly showed everybody is that to get the unit economics to the place that made sense for SpaceX, he needed to vertically integrate every single component.
But that's probably because he was the first. And now there's a rocket that launches what, every 2 or 3 days that goes from Earth to space. Can you not borrow any of the existing work that's already being done from point A, land on Earth, to point B, hovering around orbit? Like do you have to really redo the entire stack for it to make economic sense for you?
I think we do. Not all of it, but a large chunk of it. And I'll tell you why. This is kind of one of the learnings from having built Robinhood is if you want to control the unit economics of your output service, it necessarily leads you to vertically integrating, right? To controlling the sort of components that drive it. And we did a lot of that over the history of Robinhood.
In this case, while the space industry is maturing and growing, at a base case, there is nowhere near enough launch capacity that's available for what everybody in the world wants to do. At least at this point in time, there is not enough mass to orbit. There aren't enough rideshares. There's not enough ways of getting stuff to space, right?
And SpaceX is—I mean, look at what they've done, right? Their accomplishments have been monumental, but they're going to end up using, as they've said, and I don't want to speak for them, a lot of their payload for what they're building, right? For us to be able to control our ability to build this data center-based company, we fundamentally realize that there's not enough launch capacity that's available. And if we want to control how we do it, the scale, the actual unit economics of it, like we need to actually look at the whole thing as vertically integrated.
Granted, that's very difficult to do.
But I think it gives us the best chance of building something that's going to be really useful here.
And there are, like a lot of the underlying component technology, places that you can buy that stuff from, and each one of those then becomes a build versus buy decision, right? Does it make sense to do that? Does it make sense to vertically integrate? And the answer is not dogma, right? You kind of look at it based on, again, the one true north star here is the unit economics. Is the output cost of what we're building competitive relative to the terrestrial option or is it more expensive? And the goal is to get it to be competitive with the terrestrial option because that's fundamentally what the business is about. It's kind of what it's entirely goaled on—not entirely, it's a big part of what the company's goaled on.
Within a reasonable amount of time.
