What Is the Idiot Index?

David Senra, reading Max Olson, says the Idiot Index is the ratio of a part's actual cost to the cost of its raw materials. Olson is quoting Elon Musk: if the ratio is high, you are an idiot. The move is to rebuild from physics and ask what rockets should cost, not what they already cost.

A vendor quoted $120,000 and 18 months of development for the Falcon 1 actuator. SpaceX engineers built it for $3,900. Founding engineer Tom Mueller's team asked about a critical engine valve. The supplier smirked and left after hearing the timeline and budget, and the team made the valve themselves. The pattern repeated across the vehicle. Dragon's capsule docking mechanism was reinvented from off-the-shelf bike shocks and catalog parts instead of adopting NASA's existing design.