SpaceX drives Hawthorne’s space industry
Space Entrepreneurship Center: Hawthorne
Earlier this year, Tim Berry, who was still an engineer at SpaceX, started looking for a new job. Eventually, he landed a job less than a mile from his old employer’s front door.
Berry lives in Hawthorne, California. The city of 88,000, mostly working class, is about a 10-minute drive from Los Angeles Airport. He is part of a small group of aerospace professionals who have flocked to Hawthorne in recent years. Attracted by SpaceX, America’s most valuable startup, many highly skilled engineers have stayed here, as Hawthorne’s rent is cheap and aerospace startups thrive.
His new employer is Launcher, a company that helps put satellites into orbit at low cost. Berry said he wouldn’t take the job if it required a long journey. “Sorry, I’m not a huge East Coast or New York fan,” said Berry, instead keeping his commute completely the same. “I’m very happy to still be working in Hawthorne.”
SpaceX Hawthorne headquarters
Local officials were delighted, even a little surprised, that the city had become a hub for startups. “Hawthorne has a lot of advantages,” said Hawthorne City Councilman David Patterson. It’s close to Los Angeles’ vibrant aviation industry, which has many of its own startups, but the cost of living isn’t as high. A few years ago, there was an attempt to set up a VC accelerator in Hawthorne, but the idea had remained in the discussion stage, Patterson said.
As it turns out, the city doesn’t need a VC accelerator at all. In seven of the past 10 years, Musk’s SpaceX and tunnel-digging company Boring are the only startups in the city that have been able to attract venture capital. But in 2020, Hawthorne startups outside Musk’s company attracted a respectable $105.2 million in venture capital. These startups attracted $356.7 million in investment last year, and are on track to double this year, according to research firm PitchBook.
SpaceX’s success drives high-tech manufacturing
Many cities are trying to create their own versions of Silicon Valley, but some are more successful than others. High-profile destinations like Austin, Texas (Musk’s most recent new home) and Miami have attracted legions of software developers during a surge in remote work sparked by the Covid-19 pandemic. Twitter, which Musk is about to acquire, is still in San Francisco. Hawthorne, though, is a different kind of boomtown. The convenience of Zoom virtual meetings has boosted startups in the city far less than the availability of physical space and the glut of talent who know how to use mills, lathes and 3-D printers.
Now is a good time to create a high-tech manufacturing hub. With the stock market plummeting and less tangible inventions like cryptocurrencies facing reckoning, many engineers and programmers increasingly don’t want to just manipulate 1s and 0s code or sell targeted ads, they want to create physical objects. Just as the rise of software-based companies like Google and Facebook in the early 2000s created an era of roughly 20 years in which software companies became the dominant type of startup, the success of SpaceX and other hardware companies is helping to change the entrepreneurial landscape. ambition.
Well-known venture capitalist Marc Andreessen summed up industry’s enthusiasm with his 2020 rhetoric: “It’s time to build.” In recent years, venture capitalists and engineers have focused on physical inventions , especially aviation inventions.
Launcher’s E-2 3D printed liquid rocket engine
Of course, like any success story, Hawthorne has a disturbing side. Familiar themes of gentrification and inequality are eroding the city’s fringes, just as the city prepares for massive growth.
The city, named after the novelist Nathaniel Hawthorne, has long been known as the childhood home of the band group Beach Boys. It was also the residence of Jim Thorpe and Marilyn Monroe, the first Indians to win Olympic gold medals. The Greater Los Angeles area has a storied history of aviation innovation. Hawthorne first became an aviation star in 1939, when aviation pioneer Jack Northrop founded his company there. In 2008, Musk’s SpaceX moved into the former Northrop site as a scrappy startup.
SpaceX quickly became a veteran of the space industry complex, with facilities across the country and a key role in America’s space ambitions. In 2016, some engineers left the company, but stayed in neighboring El Segundo, Calif., to start the consulting firm Second Order Effects to help other startups and larger companies. Shaun Arora of MiLA Capital Advisors LLC, who has been funding companies in the region for years, said the creation of Second Order Effects helped spark the startup boom in the region .
Arora said he has seen an increase in the number of startups in Hawthorne over the past few years. He said Musk runs companies that tend to burn out employees, even if it motivates them at the same time. “SpaceX taught people that hard work and optimism can make the impossible possible,” Arora said. “At the same time, many former SpaceX employees I spoke with said that while the company’s goals were compelling, they felt Your career is undervalued.”
For Launcher founder Max Haot, SpaceX’s seeded talent pool of rocket engineers is a major draw. After visiting places like Austin, New Orleans and Pasadena, Calif., he decided to locate the company in Hawthorne. Hout’s Hawthorne team of about 55 people includes at least 14 former SpaceX employees.
cheap rent
Another advantage of Hawthorne: The rent is cheap. Hout said Launcher’s leased 24,000-square-foot facility was “much cheaper” than rents in slightly better nearby towns like El Segundo. Also, while these neighboring cities may have large warehouses, landlords there are busy renovating warehouses to accommodate higher-rent facilities that are better suited for software companies. Hout looked at warehouses that used to deliver 1,000 or 2,000 amps of power but were retrofitted to handle only a few hundred amps. That’s fine for most businesses, but not so much for the orbital startup, whose engineers are working on power-intensive projects like how to power rockets and how to run multiple 3D printers at the same time.
Joel Ifill, founder of precision airdrop company Dash Systems, also took advantage of Hawthorne’s low rents, paying well under $2 a square foot. Phil’s company is just north of SpaceX, outside a hangar at Hawthorne Municipal Airport.
Phil
“The hangar floor area here is usually one of the cheapest in a big city,” he said. In Dash’s cavernous hangar, there’s room for a Cessna 208B Grand Triumph turboprop, as well as desks, a small machine shop and a carpeted,coffeeThe table and sofa area is perfect for watching small planes take off and land smoothly, including the occasional glimpse of Musk’s plane.
Phil isn’t currently hiring a former SpaceX employee, but he’s found plenty of other big players in the space to choose from. Those companies include Lockheed Martin, Boeing and Northrop Grumman, all of which have offices in El Segundo. “We have people from Tesla, Virgin Galactic and WET Design,” he said, referring to a water engineering company based in Sun Valley, 30 miles north.
Some of Hawthorne’s startups have little to do with rockets or satellites. Ring, Amazon’s next-generation doorbell company, is based in the city. So does Stellar Pizza, an automated pie company run by a former SpaceX engineer.
However, most companies are targeting the space sector. Another example is Venturi Astrolab, which is headquartered in a former bus bench factory south of SpaceX. Venturi founder Jaret Matthews wants the company’s rover to be selected for NASA’s future Artemis mission to the moon.
“We’re building large robots,” Matthews said, “and we need a lot of space to test them.” This includes indoors, as well as the covered area behind the building with scattered basalt to better simulate lunar conditions. In addition to himself, Matthews’ team includes several former SpaceX employees.
Urban development drives up the cost of living
Downtown Hawthorne doesn’t look like a thriving commercial center yet. Its main street is lined with car dealerships, dilapidated storefronts and a 24-hour laundromat. Luis Castaneda, a part-time handyman, sat there on a recent afternoon. He said he noticed more high-end workers in the city and blamed them for rising prices. He said he rented a room for $700 a month, compared with $400 a month for a similar room when he first came to the city 10 years ago.
Downtown Hawthorne
Alejandra Alarcon, 29, grew up in Hawthorne. She shares a house with her mother, brother and grandmother. Almost every house in this neighborhood has a similar demographic. Now, she said, the newcomer’s family is usually a couple with a dog and no children. She admits she has mixed feelings about SpaceX, its derivatives and the urban boom that comes with it.
“SpaceX has brought jobs to Hawthorne,” she said, “but I don’t think SpaceX will bring jobs to Hawthorne residents.” Arakan works at a university in the Westchester area of Los Angeles, where he works every day. Commute 7 miles north. She loves the opening of a new homebrew bar or two in the Hawthorne neighborhood, but also finds it disturbing.
“When I walk into these places, I don’t feel like I’m at home anymore because everyone is different from the people I grew up with,” she said. People are working class.”
Last year, Arakan was shocked when she saw the opening of a fancy new apartment complex. It’s on Crenshaw Avenue, a seven-lane road two miles east of the town’s largely abandoned mall.
In the building, called Millennium South Bay, two-bedroom rents are as high as $3,725, well above the city’s median price of $2,285, according to real estate website Zillow. The new building’s website promises that tenants will have easy access to the beach and other local eateries, but the biggest attraction in Millennium South Bay is, of course, the SpaceX headquarters a block away.
