On the flight home, Musk realized that he could start a company that could build the affordable rockets he needed.[1] According to early Tesla and SpaceX investor Steve Jurvetson,[27] Musk calculated that the raw materials for building a rocket were only 3% of the sales price of a rocket at the time. By applying vertical integration,[3] producing around 85% of launch hardware in-house,[28][29] and the modular approach of modern software engineering, Musk believed SpaceX could cut launch price by a factor of ten and still enjoy a 70% gross margin.[30]