Rocket Billionaires

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by Tim Fernholz


  “The explosion of space commerce could be like the explosion of international trade or effective intergovernmental entities,” one former defense official told me. “They have power, they have usefulness; they also can cause disruption and disenchantment and dissatisfaction for people who feel like they are not part of that story.”

  If you take one thing away from this book, remember that the technologies to enable a space revolution are being built right now, at breakneck speed. They may not arrive as fast as their architects promise, but I am convinced that they will be here sooner than their critics say. It’s high time for humans to start thinking about the consequences of becoming a spacefaring civilization, because someday we will be.

  Acknowledgments

  This book originated in my decision to flee political reporting in Washington, DC, and move to Los Angeles to write about business. The most interesting company I found was SpaceX, so of course telling its story required a deep dive into the US government space program. Society runs on public-private partnerships.

  There wouldn’t be a story at all without Elon Musk and Jeff Bezos, whose passion for space and entrepreneurial savvy are transforming the world in ways it will take decades to understand. Nor would this book exist without NASA: both the historic pioneers who inspire us and the thousands of contemporary scientists and engineers who explore space every single day.

  Jim Cantrell, James French, John Garvey, James Maser, George Sowers, and Tomas Svitek provided invaluable insight into the work of aerospace engineers and the evolution of the private space business.

  Tabatha Thompson, at the NASA Office of Public Affairs, provided vital help connecting me with the people who manage the space agency’s public-private partnerships; I’m particularly grateful to Bill Gerstenmaier and Kathy Lueders for their time. NASA economist Alexander MacDonald’s original research on the history of private space investment was an unexpected gift that helped ground my narrative.

  Former NASA administrators Sean O’Keefe and Michael Griffin were generous with their time. Thanks especially to Lori Garver, Alan Lindenmoyer, Douglas Cook, Pete Worden, and George Whitesides for their insight about the space agency. Speaking to current and former members of the US Astronaut Corps—Robert Behnken, Robert Cabana, Chris Ferguson, and Donald Pettit—was a thrill.

  I owe a large debt to NASA’s History Office, and particularly the Oral History Project at Johnson Space Center. Interviews conducted by Rebecca Hackler and Rebecca Wright provide a revealing look at NASA’s public-private partnerships.

  Mark Albrecht, Tory Bruno, Dan Hart, Clay Mowry, Carissa Christensen, and Gwynne Shotwell kindly shared their extensive experience in the fascinating business of selling rockets.

  The US Air Force, particularly the public affairs teams at the 45th Space Wing and the 30th Space Wing, gave me an inside look at the operational reality of securing US access to space. General John “Jay” Raymond helped me understand the national security implications of space.

  I am grateful for the deeply overworked PR teams at both companies—particularly John Taylor, James Gleeson, and Phil Larson at SpaceX and Caitlin Dietrich at Blue Origin—for their patient tolerance of my queries.

  Christine Choi at the Virgin Group and Rebecca Regan at Boeing provided valuable assistance in meeting their teams and visiting their facilities.

  And I’m especially thankful for the many people whose insight and experience proved invaluable to this project but who cannot be named publicly; I am privileged to be trusted with their stories.

  Several other books were invaluable resources as I wrote, particularly Michael Belfiore’s Rocketeers, Julian Guthrie’s How to Make a Spaceship, Ashlee Vance’s biography Elon Musk, and Brad Stone’s The Everything Store. My agent, Peter Steinberg, gave me the confidence to undertake this project, convinced me it was possible, and guided me through the hard work of conceiving my proposal.

  My editor at Houghton Mifflin Harcourt, Rick Wolff, took a flier on a first-time author and has worked tirelessly to make this book a reality. Also at HMH, I owe thanks to Rosemary McGuinness for her assistance and Alex Littlefield for his advice. Managing editor Rebecca Springer gracefully shepherded the book through its many iterations, and my copy editor, Will Palmer, worked wonders on the manuscript under a tight deadline. Thanks to publicist Michelle Triant and marketing director Michael Dudding for promoting this book to readers.

  I’ve been privileged to make my professional home at Quartz, where editors Kevin Delaney, Gideon Litchfield, and Heather Landy helped me grow as a reporter and generously provided time to write this book. I’m lucky that many colleagues at Quartz have helped me with the ideas and research for this book. I particularly appreciate the help of David Yanofsky and Chris Groskopf in assembling and parsing historical data about satellites and launch vehicles.

  I also owe a deep debt to Ann Friedman for her mentorship, and the Tomorrow magazine crew, whose incredible work inspires me to raise my game.

  None of this would be possible without my parents, Rick and Jayne, who taught me early on to love both reading and rockets, and my sister, Diana. I’ve been so blessed to have their support and love throughout my life, and their encouragement as I wrote this book.

  Finally, my wife, Renée, kept me sane throughout this process and inspired my work. Her patience and love are inexhaustible, and I will be forever grateful.

  Notes

  All interviews by the author were conducted between April 2014 and December 2017.

  Introduction

  no money to continue: NASA History Office, “The Delta Clipper Experimental Flight Testing Archive,” accessed November 5, 2017, https://www.hq.nasa.gov/office/pao/History/x-33/dc-xa.htm.

  across roads: Stephen Clark, “In an Eerie Scene, Chinese Villagers Visit Rocket Crash Site,” Spaceflight Now, January 4, 2015, accessed November 10, 2017, https://spaceflightnow.com/2015/01/04/photos-long-march-rocket-stage-falls-in-rural-china.

  1. Adventure Capitalism

  a company called Teledesic: Andrew Kupfer and Erin Davies, “Craig McCaw Sees an Internet in the Sky,” Fortune, May 27, 1996.

  building a spaceport: Michael Graczyk, “County Abuzz as Bezos Plans Spaceport,” Associated Press, March 12, 2005.

  made an annual profit: Nick Wingfield, “Amazon Reports Annual Net Profit for the First Time,” Wall Street Journal, January, 28, 2004.

  “can look easy”: Jeff Bezos (@JeffBezos), “The rarest of beasts,” Twitter, November 24, 2015, 3:14 a.m., https://twitter.com/JeffBezos/status/669111829205938177.

  2. The Rocket-Industrial Complex

  announced just weeks before: Brian Knowlton, “Boeing to Buy McDonnell Douglas,” International Herald Tribune, December 16, 1996.

  $3 billion acquisition: Jeff Cole and Steven Lipin, “Boeing Agrees to Acquire Two Rockwell Businesses,” Wall Street Journal, August 2, 1996.

  offered civilian airliners the use: “Statement by Deputy Press Secretary Speakes on the Soviet Attack on a Korean Civilian Airliner,” September 16, 1983, Reagan Library, accessed November 30, 2017, https://reaganlibrary.archives.gov/archives/speeches/1983/91683c.htm.

  consumer GPS receiver was on the market: “Magellan ‘NAV 1000’ Hand-Held GPS Receiver,” National Museum of American History, accessed November 11, 2017, http://americanhistory.si.edu/collections/search/object/nmah_1405613.

  entrepreneurs to build around: “Vice President Gore Announces Enhancements to the Global Positioning System That Will Benefit Civilian Users Worldwide,” White House, Office of the Vice President, March 30, 1998, accessed November 30, 2017, https://clintonwhitehouse6.archives.gov/1998/03/1998-03-30-vp-announces-second-civilian-signal.html.

  by GPS timing signals: Tim Fernholz, “The Entire Global Financial System Depends on GPS, and It’s Shockingly Vulnerable to Attack,” Quartz, October 22, 2017, accessed November 30, 2017, https://qz.com/1106064.

  networks in 1945: Arthur C. Clarke, “Extra-Terrestrial Relays,” Wireless World, October 1945.


  Brian Mosdell’s job: Interview with Brian Mosdell, August 30, 2017.

  “We have an anomaly: Kennedy Space Center Visitor Complex, “Untold Stories from the Rocket Ranch: A Blast from Above” YouTube, accessed November 30, 2017, https://www.youtube.com/watch?v=yatz0WnDxHU.

  more than $400,000: James Lloyd, “A Tale of Two Failures: The Difference Between a ‘Bad Day’ and a ‘Nightmare,’” presentation, NASA Office of Safety and Mission Assurance, December 5, 2005.

  $60 billion monopoly: Government Accountability Office, “Defense Acquisitions: Assessments of Selected Weapon Programs,” March 2014, GAO-14-340SP.

  27 months late: Rebecca Wright, “Interview with Alan Lindenmoyer,” NASA Oral History Project, November 7, 2012.

  even sixty times a year: T. A. Heppenheimer, “The Space Shuttle Decision” (NASA SP-4221) (Washington, DC: NASA History Office, 1999), accessed November 30, 2017, https://history.nasa.gov/SP-4221/ch8.htm.

  1.2 million different procedures: Allen Li, “Space Shuttle Safety: Update on NASA’s Progress in Revitalizing the Shuttle Workforce and Making Safety Upgrades,” Government Accountability Office, September 6, 2001, GAO-01-1122T.

  “launching private satellites”: Columbia Accident Investigation Board report (Washington, DC: Government Printing Office, 2003), 100.

  failures and delays: “Space Launch Modernization Plan,” US Department of Defense report to Congress, April 1994, 26.

  more than $5 billion: “Space Launch Modernization Plan,” 17–18.

  “expand the space launch market”: “Space Launch Modernization Plan,” 6.

  enormous waste: Warren E. Leary, “String of Rocket Mishaps Worries Industry,” New York Times, May 12, 1999.

  “punched in the belly”: “Boeing Rocket Explodes in Florida Launch,” CNN, August 27, 1998, accessed July 16, 2017, http://www.cnn.com/TECH/space/9808/27/rocket.blast2.

  worst times in the launch history: Kathy Sawyer, “Rocket Failures Shake Space Industry,” Washington Post, May 11, 1999.

  3. The Rocket Monopoly

  more than $3.5 billion: Warren E. Leary, “String of Rocket Mishaps Worries Industry,” New York Times, May 12, 1999.

  “dominance in launch”: Rebecca Wright, “Interview with Gwynne Shotwell,” NASA Oral History Project, January 15, 2013.

  add nearly $8 billion: Raymond J. Decker, General Accounting Office, letter to Senate Subcommittee on Strategic Forces (“Defense Space Activities: Continuation of Evolved Expendable Launch Vehicle Program’s Progress to Date Subject to Some Uncertainty”), GAO-04-778R, June 4, 2004.

  “statements or projections”: Decker, “Defense Space Activities.”

  “or face extinction”: Decker, “Defense Space Activities.”

  “supplier readiness, and transportation”: Forrest McCartney et al., National Security Space Launch Report (Santa Monica, CA: Rand Corporation, 2006), 30.

  whole fracas to rest: David Bowermaster, “Boeing Probe Intensifies over Secret Lockheed Papers,” Seattle Times, January 9, 2005.

  “support the loss of competition”: Kenneth Krieg, Letter to Federal Trade Commission Chairman Deborah Majoras, August 15, 2006.

  surpass $1 billion in 2018: Department of Defense Fiscal Year (FY) 2018 Budget Estimates, Space Procurement, Air Force, May 2017.

  $32 billion in public spending: McCartney et al., National Security Space Launch Report.

  “Nebulous claims regarding national security”: Space Exploration Technologies Corp., “Responding to the Federal Trade Commissions Proposed Agreement Containing Consent Order in the Matter of Lockheed Martin Corporation, the Boeing Company, and United Launch Alliance,” Federal Trade Commission File No. 051-0165, October 31, 2006.

  “no potential for consumer harm”: Letter to Space Explorations Technology Corp., “Re: Lockheed Martin Corporation, the Boeing Company and United Launch Alliance, L.L.C., File No. 051-0165,” Federal Trade Commission, May 1, 2007.

  “extremely difficult”: McCartney et al., National Security Space Launch Report.

  4. The Internet Guy

  “to be inspired”: Elon Musk, IAC keynote 2016, Guadalajara, Mexico, September 27, 2016.

  more than $150 billion: Bent Flyvbjerg, “What You Should Know About Megaprojects, and Why: An Overview,” Project Management Journal 45, no. 2 (April–May 2014): 6–19.

  check for $5,000: Ashlee Vance, Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future (New York: HarperCollins, 2015), 99.

  “men have this characteristic”: Alexander MacDonald, The Long Space Age: The Economic Origins of Space Exploration from Colonial America to the Cold War (New Haven, CT: Yale University Press, 2017), 10.

  “wilder schemes”: MacDonald, The Long Space Age, 128.

  landing engines too soon: Jet Propulsion Laboratory, “Report on the Loss of the Mars Polar Lander and Deep Space 2 Missions,” March 22, 2000.

  Tokyo in just two hours: John Noble Wilford, “America’s Future in Space after the Challenger,” New York Times, March 16, 1986.

  technically infeasible: Kenneth Chang, “25 Years Ago, NASA Envisioned Its Own ‘Orient Express,’” New York Times, October 20, 2014.

  moon landing the next summer: Julian Guthrie, How to Make a Spaceship: A Band of Renegades, an Epic Race, and the Birth of Private Spaceflight (New York: Penguin Press, 2016), 209–17.

  5. Friday Afternoon Space Club

  hanging out at Los Angeles bars: Ashlee Vance, Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future (New York: HarperCollins, 2015), 98.

  construction bays without harnesses: Mark Albrecht, Falling Back to Earth: A First Hand Account of the Great Space Race and the End of the Cold War (Lexington, KY: New Media Books, 2011), 143–44.

  tell Congress in 2003: “The Future of Human Space Flight,” hearing before Committee on Science, U.S. House of Representatives, 108th Cong., October 16, 2003 (statement by Mike Griffin).

  “Russian kitchen appliances”: Elon Musk, remarks at Stanford University Entrepreneurial Thought Leaders, October 8, 2003.

  “shuts the thing down”: Vance, Elon Musk, 109

  year after SpaceX’s inception: Musk, remarks at Stanford University Entrepreneurial Thought Leaders.

  “enormous nature preserve”: Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon (New York: Little, Brown, 2014), 153.

  “lottery winning for me”: Jeff Bezos, remarks at Satellite 2017 conference, March 8, 2017.

  6. The Tyranny of the Rocket

  200,000 feet above the earth: Columbia Accident Investigation Board report (Washington, DC: Government Printing Office, 2003), 38.

  “dumbest thing I’d ever seen”: Rebecca Wright, “Interview with Michael Griffin,” NASA Oral History Project, September 10, 2007.

  94 percent propellant by mass: Don Pettit, “The Tyranny of the Rocket Equation,” NASA, May 1, 2012, accessed August 22, 2017, https://www.nasa.gov/mission_pages/station/expeditions/expedition30/tryanny.html.

  “more progress since Apollo”: Elon Musk, remarks at Stanford University Entrepreneurial Thought Leaders, October 8, 2003.

  “we did new stuff”: Rebecca Hackler, “Interview with Hans Koenigsmann,” NASA Oral History Project, January 15, 2003.

  “made of magic”: Musk, remarks at Stanford University Entrepreneurial Thought Leaders.

  “doesn’t feel good”: Ashlee Vance, Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future (New York: HarperCollins, 2015), 132.

  “the cost of a part”: Rebecca Hackler, “Interview with Mike Horkachuck,” NASA Oral History Project, November 6, 2012.

  fifteen hundred tons of thrust: Elon Musk, “June 2005–December 2005,” SpaceX blog, December 9, 2005, accessed September 12, 2017, http://www.spacex.com/news/2005/12/19/june-2005-december-2005.

  between the two facilities: Vance, Elon Musk, 124.

  “ran full duration”: Michael Belfiore, “Behind the Scenes with the World’s Most Ambitious Rocket Makers,” Popular Mechanics, September 1, 2009, ac
cessed October 1, 2014, http://www.popularmechanics.com/space/rockets/a5073/4328638.

  “great deal about rockets”: Peter Huck, “Stargazer,” Australian Financial Review, November 8, 2003, 10.

  “and underestimating costs”: Dana Rohrabacher, “NASA misses the mark; A private-sector vision for space,” Washington Times, December 1, 2003.

  “Amazon.com’s Blue Horizons”: “The Future of NASA,” hearing before Commerce, Science and Transportation Committee, United States Senate, 108th Cong., October 29, 2003 (statement by Rick Tumlinson).

  7. Never a Straight Answer

  his account of the X Prize: Julian Guthrie, How to Make a Spaceship (New York: Penguin Press, 2016), 323–32.

  “who believe in something”: Guthrie, How to Make a Spaceship, 371.

  $2 million to stencil Virgin’s logo: Guthrie, How to Make a Spaceship, 376.

  “winning the X Prize”: Irene Klotz, “Space Race 2: Half-price Rockets,” UPI, November 10, 2004.

  lack of risk-taking: Guthrie, How to Make a Spaceship, 164.

  “difficulty of human spaceflight”: “Nominations to the National Aeronautics and Space Administration, Federal Railroad Administration, Consumer Product Safety Commission, and the Metropolitan Washington Airports Authority,” hearing before Committee on Commerce, Science, and Transportation, United States Senate, 109th Cong., April 12, 2005 (statement by Michael Griffin).

  “out to the private sector”: Rebecca Hackler, “Interview with Bretton Alexander,” NASA Oral History Project, March 18, 2013.

  “throwing money down?”: Rebecca Hackler, “Interview with Michael C. Wholley,” NASA Oral History Project, March 18, 2013.

  “‘no way this would ever happen’”: Rebecca Wright, “Interview with William Gerstenmaier,” NASA Oral History Project, June 12, 2013.

 

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