Flying back from the International Astronautical Congress (IAC) in Jerusalem, I passed some time watching a television documentary on the business life of Cornelius Vanderbilt. The producers concluded that “the commodore,” as Vanderbilt was known from his days plying New York Harbor on his father’s wind-powered Staten Island ferry, was able to “see around corners” in predicting the next market for investing.
Born toward the end of the 18th century, Vanderbilt was a ruthless monopolist, completely unsentimental, who made his fortune by investing in the latest technology to advance his interests. His fortune was built on steam, first in a fleet of coal-powered ships and then in railroads when he realized their value in linking the U.S. coasts.
Vanderbilt’s ability to realize what his customers needed, and to fill that need before anyone else, foreshadowed the billionaire entrepreneurs of Silicon Valley and other high-tech hotbeds. Paul Allen, Jeff Bezos, Elon Musk and their ilk all are cast in the commodore’s mold, with an exception. They’re nuts about spaceflight, and they’re putting their money where their enthusiasm is.
Whether they are indeed peering “around corners” to a profitable future remains to be seen, of course. One of the most interesting panels at this year’s IAC posed the question: “New space economy—the dawn of a new era or the next economic bubble?” And one of the most interesting answers came from Simon P. “Pete” Worden, former director of NASA’s Ames Research Center and a seminal backer of the push to move the terrestrial economy off the planet.
“I think it’s not a bubble,” says Worden, a retired U.S. Air Force one-star military-space general who pushed Ames into a new role as an incubator for private-spaceflight innovation by tapping the consumer-electronics industry around its Mountain View, California, campus. “We’re seeing companies make profits that were founded just for that, but many of the efforts today have both philanthropic and profit-making motives.”
Worden, who is the only Air Force general I have ever heard volunteer publicly for a one-way trip to Mars, should know. He has moved into the philanthropy field as chairman of the Breakthrough Prize Foundation, which is organizing a $100 million effort to revitalize the Search for Extraterrestrial Intelligence (SETI) by “bringing the Silicon Valley approach to the search for intelligent life in the universe,” in the words of Russian-born billionaire Yuri Milner, who is bankrolling the project.
There is a lot of common ground between the Silicon Valley entrepreneurs’ approach and that followed by the robber barons of Vanderbilt’s day. Both cashed in on game-changing “disruptive” innovation, to use the description favored by Steve Jurvetson, a highly successful venture capitalist who invested early in Elon Musk’s SpaceX. But unlike Vanderbilt, who was relatively stingy when it came to giving away money, today’s tycoons are willing to invest heavily in activities that have little prospect for quick profits, as long as they are personally interested in the field. That is good news for private spaceflight.
“Elon Musk and the other more interesting space entrepreneurs in the U.S. are examples of the middle ground,” says Worden. “They have both financial interests and philanthropic interests. Elon has talked about settling Mars. Paul Allen has funded a lot of science, and he is also funding rockets. Jeff Bezos once told me a few years ago that he sells books so he can build rockets.”
In a sense Musk’s SpaceX, Microsoft cofounder Paul Allen’s Stratolaunch Systems and Bezos’s Blue Origin are their own customers, because all are working to make access to low Earth orbit less expensive and more routine for their own objectives off the planet. That is a precondition for a space economy that governments have not been able to meet with the traditional approach to space launch, which grew out of military procurement and its structural inefficiencies.
To be sure, profits lie at the base of the new private launch companies. Bezos is selling his innovative BE-4 rocket engine to United Launch Alliance (ULA) for its planned Atlas V replacement, the Vulcan. But the Amazon founder also plans to compete with ULA with his as-yet-unnamed orbital launch vehicle, and he has taken over a surplus launch complex at Cape Canaveral to that end.
Musk is going all out to push his Falcon 9 vehicle (see photo) into the government-launch monopoly previously enjoyed by ULA. His efforts to turn the Falcon 9 first stage into a reusable tail-down flyback have pushed ULA in the same direction, with long-term plans to recover the Vulcan engines and avionics for reuse. That kind of competitive innovation could enable a lot of the commercial in-space applications—broadband communications, real-time Earth observation, tourism—that will be essential for a true in-space economy to work.
“There has been about $1.5 trillion made in the past decade by these people, and we’re seeing an increased interest in space exploration, space development, even space sciences,” says Worden. “So I think one has to look at motivations more broadly than just, ‘I want to sell a rocket.’ A lot of these people have real desires to do something magnificent.”