Rocket Billionaires

by Tim Fernholz

  This kind of protest was characteristic of Musk’s approach to business: a mixture of principle and opportunism, a man astride a high horse asking for a dollar. “Sound merger enforcement is an essential component of our free enterprise system benefiting the competitiveness of American firms and the welfare of American consumers,” the letter concluded, in high dudgeon. “Competition will lead to more innovation and superior products, and ultimately is the best method of protecting national security.”

  The FTC wasn’t impressed, or perhaps it missed the point. It noted that since Boeing and Lockheed “are not cost-competitive with the market leaders . . . it therefore appears that there is no potential for consumer harm in the commercial launch services market,” without dwelling on the implications of handing an uncompetitive venture a monopoly. The regulators declined to take up any of the fledgling space company’s ideas for a fairer deal. Indeed, it had largely written off SpaceX, as the company was popularly known, and anyone else trying to build new rockets in the United States. “Successful new entry into the relevant markets is unlikely to occur in the foreseeable future,” the FTC concluded.

  A government-mandated study of the launch market published by the RAND Corporation a year later was similarly skeptical: “The evaluation of Falcon 9 at this time presents an unclear picture . . . The lack of launch experience raises questions about the validity of the available launch prices . . . [and] makes an objective evaluation of the actual costs of this new vehicle extremely difficult.”

  Now, these evaluators weren’t necessarily being unfair. For starters, no new company had ever broken into the orbital launch market. Every previous rocket had been in some sense designed by governments, for governments. They had just watched two of the most successful aerospace companies in the world struggle for a decade to create new rockets—with government backing—and still they did not have a viable business. And by the end of 2006, SpaceX had tried to fly only one small rocket, which had exploded almost immediately due to a fuel leak. The new company’s charge against the union of the two behemoth contractors was a mouse squeaking at an elephant.

  Still, the aerospace industry is a small world, and word was creeping out that SpaceX was attracting the kind of top engineers who got bored at the major aerospace firms, “integrating other people’s technologies,” as one early employee put it to me. The Defense Advanced Research Projects Agency (DARPA), the military’s venture fund for breakthrough technology, which had invested in the early internet, was intrigued by the company’s plans and mulling a contract offer. And Musk, enveloped in the mystique of Silicon Valley, had put $100 million of his own money on the line.

  “I was sounding the alarm on SpaceX long before it was really anybody in the C-suites that was listening,” Sowers told me. One day, Sowers strolled into a board meeting sporting a SpaceX hat picked up at a trade conference. “There was a lot of snickers and skepticism and ‘Yeah, yeah, yeah, we’ve seen this before. Who’s this Elon Musk guy? He can never do what we do.’”

  4

  The Internet Guy

  Life needs to be more than just solving problems every day. You need to wake up and be excited about the future and be inspired.

  —Elon Musk

  The crowds waiting to get into the speech pushed against the doors: groups of students and their chaperones milling through the tumult, young engineers ready to sit in the front row and witness their hero, older scientists prepared to shake their heads. There’s no conference of engineers, astrophysicists, or technologists that doesn’t want a keynote from Elon Musk, the rock star of dorks, whose ambition knows no bounds. At an international space conference in 2016, thousands of attendees literally stampeded into a room to hear Musk describe his plans for multiplanetary civilization.

  The attraction is rooted in his tendency to speak of things that most self-respecting empiricists believe but feel ashamed to say aloud. You can ask any NASA engineer if humans have the technical capacity to go to Mars and she’ll tell you that much of the work underlying that massive challenge has been ongoing for years. The challenge is convincing anyone to pay the massive costs of such a trip, versus any of a dozen terrestrial priorities.

  Ask Musk and he’ll say, in his faint South African accent, that he can do it in a couple of years, as though the question reveals a certain amount of ignorance. For his part, he’s examined the issue, and he can get the cost down low enough that it will be easy to convince someone to send a colonization mission within a decade; heck, he’s working out a way to finance the scheme himself. Check out his PowerPoint deck.

  The truth about humanity’s ability to travel among the planets lies somewhere in the middle of these two views, but exploiting the gap between know-how and aspiration is exactly what has made Musk so successful.

  In June 2017, he explored that gap in Washington, DC, at a conference dedicated to the scientific and commercial use of the International Space Station. The ISS, the football-field-size orbital laboratory that flies 249 miles above the equator, is the most expensive single object ever constructed by humans, at a cost of more than $150 billion. Humans have spent more money building out China’s entire high-speed rail system ($300 billion) and developing thousands of US Joint Strike Fighter aircraft ($400 million), but the ISS stands alone as humanity’s singular frontier outpost. Astronauts have maintained a continuous human presence in space there since 2000, performing valuable research in microgravity. Developing, building, and servicing the station was NASA’s primary human space exploration effort in the 1990s and 2000s.

  Today, servicing the station is the key business project of SpaceX. Musk was sporting his standard public relations uniform—dark suit, white shirt—in the basement auditorium to demonstrate solidarity between his private rocket company and the government space agency. “I don’t think the public realizes how cool the ISS is,” he proclaimed. “We have a gigantic space station, it’s huge!”

  The crowd, heavy with NASA employees, academics, and space entrepreneurs, was hungry to interrogate the rocket maker during a question-and-answer period. The queries ranged from the pertinent (“How are you managing the risk associated with your new heavy rocket?”) to the speculative (“Will there be a colonial war on Mars a century from now?”) to the adulatory—one woman brought her daughter and younger brother, “who think of you the way that I guess I thought about Madonna at the same age.”

  “You should see me dance,” Musk replied with a laugh.

  He wasn’t always this well received in the rocket world, however: “They used to call me ‘internet guy’ when I was just getting started off in space,” he said that day.

  After the event, I went backstage to speak with Musk. Waiting outside the green room where he was holed up in a meeting, I joked with Musk’s chief of staff about handmade signs that a six-year-old fan had brought to the event, though some of the wordplay—CAN’T WE ALL GET ELON?—suggested parental influence. When the door opened at last and Musk emerged, I held up one of the child’s signs, which read CAN I ASK YOU A QUESTION, MR. MUSK? He was not amused. Bill Gerstenmaier, the thickly mustached and perpetually harried NASA executive who controls the agency’s spaceflight operations, emerged through the door behind him. “Gerst,” as the widely respected executive is known in the space community, is effectively Musk’s boss when it comes to the company’s work for NASA. Cognizant of both the importance of SpaceX’s work and the need to hold the company to high standards, the veteran engineer walks a careful tightrope between backing Musk’s efforts in public and demanding performance in private.

  Minutes before, while onstage, Musk had been forced to concede that he was putting a plan to send a small spacecraft to Mars on hold. Kitting the spacecraft out for the demonstration mission would delay SpaceX’s obligation to build an astronaut-carrying spacecraft for NASA and the company had decided that it had to prioritize its most important customer. Moving ahead on a revenue-generating project was beneficial to SpaceX’s business aspirations, but dropping the
“Red Dragon” program, as the Mars mission is called, clearly pained Musk. SpaceX’s entire history is intimately tied to the idea of sending humans to the Red Planet. Sixteen years after it was founded, and now close to finally sending something into deep space, it was now putting the plan on hold.

  Musk said hello and shook my hand, then excused himself again. Three of his aides—tall men with tailored suits and modern haircuts—began murmuring among themselves about how to get Musk out of the building quickly and quietly. Through a side door or out the garage?

  Finally, I was waved into Musk’s inner sanctum. We sat down to talk, but it quickly became clear that the billionaire wasn’t in the mood to revisit the past. Speaking quietly, he gamely responded to my questions about the start of his company, but stopped after half an hour. “I have so many competing priorities,” he said, complaining of jet lag from his early-morning flight from California and telling me that he only takes meetings based on “what degree it will influence the cause of space.”

  Musk is mercurial and doesn’t suffer fools patiently. He rarely speaks to the press outside of media events. In the past, he’s berated employees who don’t meet his high standards for dedication and effort. He’s clearly not comfortable revisiting the past. Yet he can light up if asked in detail about the thrust pressure of a new engine iteration or the physics of transitioning through the atmosphere at hypersonic speeds. (He’s practically gleeful when setting expectations that an experiment might go explosively wrong, talking about the “pucker factor” and promising an event that is “guaranteed to be exciting.”) Musk claims to spend 80 percent of his time focusing on engineering questions, a time-management choice that executive coaches question, but the approach appears to work for him.

  And yet—despite the hard-science, antisocial act—Musk is arguably one of the century’s great humanists. Once he realized his wealth after the dot-com boom, he put his money into three outlets: SpaceX; the electric-car maker Tesla; and SolarCity, a renewable energy company. All three were explicitly intended to further human civilization—the latter two because of Musk’s fear of the consequences of global warming, the first because that same fear emphasized how fragile the earth truly is. SpaceX exists because Musk wants humanity to be a multiplanetary civilization, one that has a robust backup planet if this planet goes wrong. This isn’t exactly the position of the environmental movement, which favors the slogan “There is no planet B.” But the logic is clear to Musk.

  “The main reason I’m personally accumulating assets is really to fund this,” he said during a 2016 presentation of an advanced rocket design. “I really don’t have any other motivation for personally accumulating assets except to be able to make the biggest contribution I can to making life multiplanetary.”

  People don’t seem to believe the serial entrepreneur when he says his companies are intended for the betterment of humanity. Despite investing his personal fortune into renewable energy products, he was pilloried by the left for joining a White House advisory council in an attempt to push President Donald Trump toward smarter climate policy, even after he resigned in protest of Trump’s decision to abandon an international climate accord. Meanwhile, he has suffered political attacks from the right because of his willingness to take advantage of government support for new technologies. Some investors see his companies as boondoggles; one hedge fund operator told me that Musk “has created some of the most brilliant schemes to destroy shareholder value in the history of American finance . . . The [2016 merger between Tesla and SolarCity] makes a farce out of corporate governance.”

  Many in NASA and the space community—especially among the older crowd that grew up with the Apollo program—see him as, at best, a dilettante. At worst, they consider him someone whose misguided ambitions divert precious funding from “real” space exploration, whose company puts the US space program one tragic accident away from a public relations disaster with every risk it takes.

  Before Musk jetted off to his next destination, I asked him why people don’t believe him when he talks about Mars, despite a decade of proving aerospace naysayers wrong. “Because it’s absurd,” he murmured.

  And how did he build the company that astonished the space world with reusable rockets? Musk was silent for a few seconds.

  “We went through hell,” he said. “Of course.”

  The road to hell is paved with good intentions. In 2001, Musk was at loose ends. He had sold his advertising start-up, Zip2, to Compaq two years earlier, for more than $300 million, earning a $22 million payout. PayPal, the online payment company that emerged from a merger between Musk’s next venture—an “online bank” called X.com—and Peter Thiel’s financial start-up Confinity, was now a booming success. But Musk had been forced out as CEO of the combined company after just a year, following clashes with other executives. Whatever the conflict, he remained a PayPal adviser, and the company’s biggest investor.

  And then, at age thirty, he reset his life. He got married. He moved to Los Angeles from the San Francisco Bay Area, where he had begun his career. Following a misdiagnosis, a bout of malaria incurred while vacationing in South Africa left him weak and nearly at death’s door. Though he shook off the blood parasites, Musk hadn’t shaken the entrepreneurial bug. His peers up in Silicon Valley were moving on to new ventures, and he had the same intention. His new companies, however, would embrace a much bigger vision for what corporations could achieve. Whereas his efforts to bring the advertising business and then the financial sector into the digital age had essentially been opportunistic, his new companies would also have a mission. With millions of dollars on hand after the sale of Zip2, Musk began exploring philanthropy.

  Among his early moves was writing a check for $5,000 to make his way, uninvited, to a Los Angeles fund-raising dinner given by the Mars Society, a nonprofit founded in 1988 to advocate for human colonization of the Red Planet. The organization is led by a Lutheran bishop and a nuclear physicist, which gives you a clue about the exact mix of faith and reason needed to sustain an effort like this one. The nuclear physicist is chair Robert Zubrin, a former Lockheed engineer who runs a small aerospace consulting firm. Under his guidance, the group holds conventions, publishes a journal, and sponsors research missions where small groups of people are sent to remote habitats to study the psychological effects of isolation on an interplanetary colony.

  Musk and Zubrin talked about new ways they could draw attention to the feasibility of a human mission to Mars. A favorite book of both is Red Mars, a sweeping science fiction epic by Kim Stanley Robinson that was published in 1993. The book and its sequels portray a future Martian colony, beginning with an internationally funded mission made up of scientists and explorers who create a new society on Mars. The space-opera-by-way-of-Ayn-Rand tropes that drive the novel’s plot are straight out of Robert Heinlein, with the characters participating in debates about the fundamental nature of the human species and low-gravity lovemaking with equal enthusiasm, in equally turgid prose. But the story eschews aliens and other space fantasia. The book’s depiction of the technology needed to use Martian resources to support a colony, and its imaginings about the political implications of planetary colonization, have won it fans in the real-world space community.

  It’s the kind of literary work that makes the impossible seem just around the corner. Nearly every rocketeer has a literary Rosebud in his or her library, whether Heinlein, Isaac Asimov, or Arthur C. Clarke. Musk is also partial to Douglas Adams and his Hitchhiker’s Guide to the Galaxy. The American rocket pioneer Robert Goddard, as far back as 1898, was thrilled by Garrett Serviss’s Edison’s Conquest of Mars, a spiritual sequel to H. G. Wells’s War of the Worlds that depicted a coalition of Belle Époque scientists led by Thomas Edison, Lord Kelvin, and Wilhelm Röntgen leading an international space invasion force. Red Mars imagined interplanetary adventurers departing in 2026. That seemed like a reasonable goal to Musk and Zubrin. If that sounds crazy now, think of how it would have sounded before Musk had e
ver launched a rocket.

  The first obstacle to colonizing Mars is paying for the trip. Immediately after the Apollo program, NASA envisioned putting humans on Mars, but the expense proved too daunting for Richard Nixon to sign off on that vision. By the turn of the century, fixed budgets and a calcified bureaucracy prevented the US space agency from expanding its human space programs beyond building the ISS, a task begun in 1998 and largely completed in 2011. NASA scientists were naturally interested in Mars, but they saw robots as better suited to sounding out the scientific possibilities of the fourth planet from the sun. After all, researchers can learn about the solar system far more cheaply by launching computers armed with sensors instead of risking precious lives.

  That brings up the second question: Why send people to Mars at all?

  The possible benefits of Martian exploration—or any space venture—include the development of new technologies that will make life better on earth, but that money could be just as well spent solving terrestrial problems instead. Another answer is that space exploration is powerful propaganda: it demonstrates technological superiority and peaceful intentions by way of space cooperation. It inspires young people to pursue education in science, engineering, and math, which will benefit society even if they don’t all wind up as rocket scientists. (The argument for the inspirational power of space missions is most often delivered by people who are themselves inspired by such missions, which may reflect a self-selecting sample.) Admirers of these efforts compare them to the work of Magellan and Columbus, seeking new worlds that will give humanity access to new resources and cultural understanding. Critics note that the American continents contained entire civilizations and the full range of flora, fauna, and minerals to support them. So far as we know, Mars does not have anything that humans can’t get more cheaply elsewhere, at least for now.