Rocket Billionaires

by Tim Fernholz

  Courtesy of Blue Origin and the US Patent and Trademark Office

  Blue Origin’s reusable New Shepard suborbital rocket lifts off in 2016, during an uncrewed test of its space capsule.

  Courtesy of Blue Origin

  Blue Origin’s New Shepard space capsule, which will carry six passengers, returns from space.

  Courtesy of Blue Origin

  The New Shepard booster rocket lands after a 2016 flight.

  Courtesy of Blue Origin

  Blue Origin founder Jeff Bezos and team celebrate the first successful launch and landing of the New Shepard rocket.

  Courtesy of Blue Origin

  Bezos in the control room ahead of the first successful landing of the New Shepard booster.

  Courtesy of Blue Origin

  Inside the space tourism capsule designed by Blue Origin.

  Courtesy of Blue Origin

  After each successful reuse, the Blue Origin team stenciled a tortoise on their booster, a reminder of their “slow and steady” approach.

  Courtesy of Blue Origin

  A rendering of Blue Origin’s proposed lunar lander, which could carry five tons to the surface of the moon.

  Courtesy of Blue Origin

  The enormous New Glenn rocket Blue Origin is building to reach orbit.

  Courtesy of Blue Origin

  9

  Test as We Fly

  SpaceX was built on “test, test, test, test, test.” We test as we fly. We always say that every day here, “Test as you fly.”

  —David Giger, SpaceX engineer

  In 2004, Tomas Svitek had a final breakfast with Jeff Bezos in Seattle. It was his last chance to plead with the billionaire entrepreneur to change course.

  Svitek was a Czechoslovak space engineer who had escaped the Iron Curtain by hiking over the Austrian border in the 1980s. He earned his PhD at Caltech and then worked on planetary probes like Voyager and Galileo at the Jet Propulsion Lab. The slow pace of governmental exploration of space pushed him to try the commercial side, first working on small satellites. Then he became the technical cofounder and CTO of the early, venture-financed space start-up BlastOff. After it failed in 2002, he, like so many others, became one of the space experts consulting with Elon Musk and Jeff Bezos as they developed their own space companies.

  Svitek is a self-described cynic about the revolutionary power of space business. “I worked for Elon at the beginning, when he started, I worked for Jeff, and I left both guys thinking this will never go anywhere,” he told me. This is largely because he is in the camp that sees the philosophy of “If we build it, they will come”—“it” being cheap access to orbit—as “total nonsense . . . It would improve the business case by 20 percent, but it won’t make a stupid business be a great business.” In his view, the ideal role for someone with a lot of money and the inclination to explore space should be figuring out productive activities in space and funding those applications.

  This was, in a way, how Blue Origin had begun. While SpaceX spent the first decade of its existence building rockets, blowing them up, and then finding a business plan to pay for all of it, Blue Origin was . . . quiet. Besides Brad Stone’s 2003 scoop about the company, very, very little was heard from it for several years, which was just as Jeff Bezos wanted it.

  “They [Blue Origin] were crazy for a number of years,” Svitek says. He describes an organization without managers, like a think tank. The thinkers examined the feasibility of building colonies in orbit or on the moon to house millions of people, the possibilities of launching vehicles into space using a massive chain hanging down in the atmosphere from earth, or using lasers to propel spacecraft across the vacuum. Bezos “spent three years looking at it and he realized it doesn’t go anywhere.” Most start-ups are driven by a big idea, and Blue, with its vision of colonies and industry in space, was no different. But that was a vision of a world that was many decades in the future; the question was: What to do now? This was when he, like Musk, began to focus in on the narrow problem of the cost of getting into space. And, just like SpaceX, he realized that the only way to build such a vehicle cost-effectively was to do it entirely in-house, without relying on outside suppliers—“his own engines and his own avionics and his own range and his own tanks.”

  “I tried to convince him to become a customer, to focus on developing these applications and space colonies and space habitats and let people kill themselves to build you the launch vehicles,” Svitek says. He invited experts in the launch business to Bezos’s informal space seminars to deliver lectures on the realities of the business—the capital- and time-intensive nature of rocket development, how the EELV program had stumbled, how demand was sketchy at best, how any private company would be competing with state-subsidized giants on a global playing field. That did not deter Bezos. “If you’re a billionaire, there is no way you can change anybody’s mind,” Svitek says. “He used to have these business axioms: ‘Find the best experts you can in that field . . . and then ignore their advice.’”

  But the emphasis that both Musk and Bezos put on building in-house was not simply arrogance. It was a recognition of the failures that came before, when entrepreneurs from other sectors—notably the telecom entrepreneurs behind satellite constellations—tried to use the same contractors as the government, without commensurately deep pockets. Mark Albrecht, the former Lockheed executive, says, “If you ask Elon and Bezos, ‘Why are you so fanatical about vertical integration? Why do you build every single nut and bolt on your rockets?’ the answer is: ‘We learned from the nineties, when guys just like us went out to the defense contractors and they destroyed our business.’”

  Still, that morning in 2004, Svitek did his best to lobby the billionaire entrepreneur against investing in rocket development. “I did this very top-level schedule,” Svitek says, telling Bezos that “if you want to do your range, your avionics, and all your production . . . it will take you about ten years to get to orbit.” Bezos pushed the schedule away. “That’s ridiculous,” his boss told him. “I will never allow that to happen.”

  “And that was thirteen years ago, and are they in orbit yet?” Svitek says. “But he can afford it. Anyone else would have probably folded by now.”

  Svitek parted ways with the Blue team, going on to develop small satellites and to build a spacecraft powered by a solar sail with a group at Planetary Society that included Jim Cantrell. Meanwhile, Bezos assembled a team based on his vision and leveraging his deep pockets. In 2003, Rob Meyerson, who had been an engineer at NASA and later Kistler Aerospace, then among the leading lights of commercial rocket companies, joined Blue Origin. The vanity think tank was about to turn into an actual aerospace company.

  Another figure shepherding that transition was James French, a space engineer who’d had a hand in almost every rocket engine used during the Apollo program before working on several commercial launch efforts. He had played an important role on the DC-X program, which inspired his contribution to Bezos’s informal space symposium.

  Under his influence, Bezos and other members of the nascent Blue team would become enamored—“very emotional, very passionate,” as Svitek says—of the vertical-takeoff-and-landing vehicle. It had been flown out in the New Mexico desert by a small band at McDonnell Douglas engineers in the nineties, as a prototype for a rapid satellite launcher for the Strategic Defense Initiative—a means for getting those brilliant pebbles into orbit. The promising design had been passed on to NASA. “We turned it over to NASA, which is always a mistake,” Pete Worden, who ran the SDI at the time, told me. “NASA always falls in love with some new technology, and the next step was to do something more pompous.” The space agency rechristened the vehicle DC-XA, for “advanced,” but scrapped it a year later in favor of a more expensive alternative that used an aerospike engine, like the one Garvey would fly for the first time, and ultra-low-temperature fuels. “The damn thing had to have slush hydrogen, semifrozen,” Worden says. “It’s kind of like, Really?” That program, too
, was eventually canceled.

  Not unexpectedly, it was a failure that had convinced French that his was the right way to approach the problem of safe, reliable spacecraft. During one test of the DC-X prototype, an explosion blew a hole in the side of the pyramidal vehicle as it ascended. The force of the blast, however, didn’t push the rocket out of control. It landed safely, despite “a hole you could have walked through” in the vehicle. “That, as much as anything, sold me on vertical takeoff and landing,” French says. “If that had been an aerodynamic vehicle . . . we would have been out of luck.” Horizontal landing, as represented by the space shuttle, was a safety risk.

  The DC-X had been designed to get to orbit with just a single stage, but that had proven to be the most impractical part of the plan. French simplified the design for Blue Origin’s purposes by turning it into a basic, reusable booster stage that could launch a higher-performing second stage. “It looked quite practical,” French told me. “What was not practical was buying the engines, because of the prices that they wanted for them. So Blue Origin started out down that road but wound up doing its own engine development, which I think in the long run was a good idea.”

  That ability to withstand a disaster jibed with Bezos’s conviction that flying humans to space was more important, at least initially, than flying cargo. The New Shepard rocket that emerged from French’s proposal was even simpler than the original design: it would be a suborbital rocket, which meant it would not need to be as powerful as even the Falcon 1, but at the same time it would be easier to build. It was designed to reliably shoot six people up into space inside a capsule and let them spend three minutes enjoying the view and bobbing around in microgravity—a grander realization of the X Prize’s goals. The booster would then return to earth and land vertically like the DC-X, on its own rocket thrusters. The capsule would float back to earth on parachutes, cushioning its landing with tiny thrusters. Rinse, repeat. Anyone who had witnessed the DC-X bobbing around a few miles above the desert floor in the nineties could believe in this vision.

  The business plan was driven by another analogy to the early days of aviation, this time to the barnstormers. In the interwar years, pilots would fly their scrappy wood-framed planes from town to town, charging people for a ride in the newfangled machines. It created comfort with the fledgling vehicles that contravened everything that appeared to be safe, natural, and appropriate for humans. Similar acclimatization will be required before people believe in the transformative economic possibilities of space.

  “Here’s why space tourism is the first killer app,” Joel Sercel, a space engineer who has worked with Musk and Bezos, told me. “Recreational flying was the killer app in aviation. That gave crazy people rides in airplanes, which was just an outlandish thing to do. It normalized the airplane. There’s a market for tens of thousands of people a year for space tourism. That will normalize space so that it will no longer seem exotic, and then when people say, ‘Hey, we oughta build a robotic factory that eats asteroids and turns them into cars,’ people won’t snicker.”

  The first step to Bezos’s space colonies, then, was to stop the laughter. This would not be easy, especially as space tourism was associated at that time only with people paying $20 million to the Russian space-industrial complex for a lift up to the International Space Station. And they would have to compete for mind space with the boisterous marketing of Richard Branson’s Virgin Galactic. At first, this bolstered the concept’s credibility, but as years passed without any of Galactic’s ticket holders actually getting into space, the idea of cheap space tourism returned to the same category as flying cars and fusion power. That may be one reason for Blue’s dedication to silence.

  The New Shepard would take shape over time at the test site in Van Horn, Texas, that Bezos had bought in 2005. That year, Blue had strapped four jet engines vertically to a frame, called it Charon, and used it to test vertical takeoff and landing. In 2006, Bezos’s team flew a small rocket called the Goddard, a kind of miniature DC-X that soared more than 250 feet into the air before returning to land calmly under its own power. This initial experiment fit with the phrase Bezos chose as the company’s motto: gradatim ferociter—“step by step, ferociously.” The first part was certainly apt; the second remained to be proven. As Blue’s engineers began their first experiments with proper rocket engines, they began learning some of the same lessons that SpaceX did. Smith, Blue’s CEO, told me that one of the most impressive practices he found at the company was the “idea of being hardware rich going into test,” that is, having lots of components on hand so that engineers could replicate the “fast, iterative approach” used by software companies, but in mechanical systems.

  The next move was opening a large headquarters in Kent, Washington, just down the street from an enormous Amazon fulfillment center. Blue’s facility combined rocket science and manufacturing facilities with a museum for Bezos’s space collectibles. These included a real cosmonaut space suit, Star Trek memorabilia (Bezos would make a cameo as an alien in the 2016 film Star Trek Beyond), even a mock-up of a Jules Verne–esque spaceship that stretches between two floors and doubles as a conference room. Decorated down to the last detail, from period books to a working periscope, the steampunk spaceship is a tribute to what a true obsessive can do with a large decorating budget. For all the flash, however, Blue Origin was still behind in making rockets; 2006 was the first year that SpaceX began testing fully operational Falcon 1 rockets out on the Kwajalein Atoll. Still, at the test stand behind the Kent facility, engine components began to move through their paces; soon the facility would be world-class, stuffed with high-end manufacturing tools and test facilities.

  At the time, Bezos was talking about spending $25 million a year on Blue Origin’s development program, a pittance in the world of space investment. This helps explain why the company’s progress was slower than that of SpaceX, which in 2004 had funding of $60 million, thanks to Musk. Bezos, though far wealthier than Musk, was also far more conservative when it came to his financial security. While the SpaceX founder plowed his money into new ventures and borrowed against their stock value for free cash, Bezos, according to a friend who spoke with me, “was not investing much of his money . . . He was only worth $7 billion; putting in a few million dollars was a big deal.”

  SpaceX was back on Omelek in the early months of 2007, preparing for its second attempt to fly the Falcon 1 over the Pacific. Everything looked good for launch on March 20, but less than a second before ignition, the computer in control of the rocket aborted takeoff. It turned out that the all-important engine pressure was too low, after liquid oxygen had been loaded into the rocket at too cold a temperature. Undeterred, the engineers cycled some of the fuel out of the rocket and back into it, which warmed it. The countdown resumed just over an hour later, and this time, to the delight of all present, the rocket soared into the sky, out of sight, and into space.

  That was where the fun stopped. A number of anomalies disrupted the test, testifying to the operational concerns that worried Worden. The wrong flight software had been loaded into the first-stage engine, so it flew slower and lower than planned. When the two stages, flying at more than ten thousand miles per hour, separated at a lower altitude than expected, they were deeper in the atmosphere than they should have been. According to an analysis produced by SpaceX, this buffeting atmosphere caused the two stages to begin rolling, so that the engine on the second stage bonked into the top of the first stage as they parted. Still, the second-stage engine ignited, and it continued to carry a demonstration satellite to orbit. The oscillation, however, kept increasing, which caused the propellant inside to centrifuge around and around inside its tanks, like water in a bucket swung around your head. Trapped against the walls of the tanks, the fuel stopped flowing to the engine, and it flamed out. The rocket never hit orbital velocity, and had it been anything other than a test mission, it would have been considered a failure.

  “The second time didn’t feel anywhere as hars
h as the first time,” Koenigsmann said later. “The vehicle actually flew very far, and then didn’t make orbit, but at least it flew out of sight. It’s a difference whether the rocket comes back and hits the launch site and you collect debris, or that it goes away and then disappears somewhere. It doesn’t make a difference in the end, but for you personally, it’s a different feeling.”

  SpaceX’s report argued that the Falcon 1 had demonstrated numerous virtues during the launch, including quickly flying after its first aborted attempt, reaching space, separating the second stage, and igniting its engine. The anomalies it cataloged were not fundamental design flaws but rather fixable problems, and in more than one case just sloppy execution. Despite the satisfaction within the company about what they had proven and learned during the test campaign, outside observers chalked this up as just another failure by amateurs. And now these amateurs were also supposed to be building a potential replacement for the space shuttle, which added extra pressure to their work. Musk’s original prediction of a launch in 2003 was now four years behind and counting. In addition, this was more than just a public relations problem: the company’s finances were being stretched to the limit.

  “I didn’t get to do as much engineering as I would have liked to, but continually convincing customers to invest in SpaceX, and to take the risk associated with buying launches from us,” Shotwell said of the time when the company was working on getting its vehicle off the ground. “I was focused on keeping the company alive, keeping people paid while we were struggling.”