The Space Barons

by Christian Davenport

  FALCON, if it could be achieved, would join the pantheon of “breakthrough technologies” fostered by the agency. The program came in two parts. The first was to develop the hypersonic vehicle that eventually would be able to take off and land from a military runway and then hit anywhere in the world within a couple of hours.

  In the near term, though, the hypersonic spacecraft would be launched from a rocket. And that presented a problem, as the FALCON solicitation pointed out: “Existing booster systems are costly and in limited supply.”

  So, the second part of the program sought a new kind of rocket, one that was inexpensive and could launch quickly—“after authorization from an alert status within 24 hours.” It would have to be able to carry not only the hypersonic weapon, but also small satellites that could be used for spying. And it would have to be cheap—less than $5 million a launch.

  ONE OF THE proposals that DARPA, and its partners in the US Air Force, received was intriguing, not just because the name of the rocket, Falcon, mimicked the name of the program, but because it was already well under development. Walker, the program manager, had never heard of the company SpaceX, or its founder, Elon Musk. But once he saw Musk’s plan to develop a rocket that could launch extremely inexpensively, he wanted to know more about this Internet tycoon turned space entrepreneur.

  “We were interested in bringing him into the program because his development was obviously in the early stages, but it looked like he was going down a path that would enable affordable launch,” recalled Walker, who would go on to be the acting director of the agency. “Our goal was five million dollars. He was saying six million, which was much lower than anyone was doing it.”

  When Walker visited SpaceX’s headquarters, he liked what he saw: a dedicated and passionate band of rocketeers that “had basically developed the first American-made engine in a long time,” he said. “I was impressed with what they had done technically, and with Elon’s business model and plan. I was really impressed with his ability to bring in key people on his team and give them the resources early on to go make this thing happen.”

  He was also struck by how they were building the rocket almost entirely on their own, without subcontractors. “Elon cared so much about the quality of rocket,” that he’d pay for it to be made in-house, Walker said.

  Walker was convinced. In 2004, DARPA agreed to invest a few million dollars into SpaceX, helping fund its first launch attempt. After years of relying on Musk’s fortune, the company finally had some outside backing, if a minimal amount.

  Now all it had to do was fly.

  THE LAUNCH WAS supposed to happen at Vandenberg Air Force Base. SpaceX had spent $7 million on a pad there, adapting it for its Falcon 1 rocket. But in 2005, some of the traditional contractors, including Lockheed Martin, complained about SpaceX’s presence at Vandenberg. Lockheed was worried that if SpaceX’s rocket exploded, it could damage the facilities at a time when Lockheed was working to launch sensitive military satellites worth millions.

  The air force had promised to help SpaceX find another suitable accommodation, but it became clear to Musk that the offer was mere lip service. The US military had a long cozy relationship with Lockheed and was comfortable with the defense contractor’s Atlas V rocket. SpaceX was new to the neighborhood, an outsider with an unproven rocket built in what was essentially a garage in El Segundo.

  Instead of staying on the range, SpaceX moved to an outpost in the Marshall Islands in the middle of the Pacific Ocean, thousands of miles away. DARPA helped with the transition, but Musk was fuming once again at the large contractors—and the air force, which he felt was screwing him.

  “It’s like you build your house.… somebody else builds a house next to you and tells you to get out of your house,” he said at the time. “Like, what the hell… after we’ve just made that big investment and everything. We’re going to fight that issue because it is just fundamentally unfair.”

  Just because the Atlas V was needed for national security launches, “that doesn’t mean they can completely shaft us,” he said.

  The distance wasn’t the only problem with the site in the Marshall Islands. Musk worried about the conditions wreaking havoc on his new rocket. “I don’t think there’s a place in the world with more corrosion,” he said. “It’s the perfect environment of right temperature, humidity, and salt spray.”

  There were, however, some upsides. While the range, known as the Ronald Reagan Ballistic Missile Test Site, was a government facility, SpaceX and DARPA had almost free rein with limited interference. Surrounded by turquoise water, sandy beaches, and palm trees on an island known as Kwajalein Atoll, or Kwaj, the setting felt like an island vacation spot.

  “It was fun; we had the run of the place,” Walker said. It was a location where the young company “could learn and practice” the precise art of the launch.

  The teams slept in army-style barracks, often two to a room. There was outstanding snorkeling. Fishing boats were available to rent for ten dollars an hour. And there was lots of grilling out on the beach at sunset. “They say the only things to do on Kwaj are: work, sleep, work out, fish, drink, and screw,” said an air force official who was there. “One friend who worked there for two years told me that he knew every square inch of every available woman on the island under sixty.”

  Musk’s team worked to get the site ready as if they were on a mission. With little else to do on Kwaj, they kept extraordinarily long hours that both impressed and worried the small band of government officials along with them, who wondered whether the staff would burn out before the rocket fired.

  “That was a big question in my mind—how could they keep that pace?” said Dave Weeks, a NASA official on loan to DARPA to help oversee the launch.

  There was a cordial but uneasy relationship with Musk and the government team, especially at first. Controlling and detail-oriented, Musk wasn’t particularly interested in their insights or suggestions. It was his rocket—not theirs—and he was suspicious of outsiders.

  Weeks could understand why. Weeks had met Musk in 2002 or early 2003, when he and Gwynne Shotwell, who would later become the president of SpaceX, visited NASA’s Marshall Space Flight Center. They weren’t long into their meeting when a fire alarm sounded and they had to evacuate the building. Outside, a security guard approached as they waited to go back in, and said that he’d been informed that Musk, a green card holder born in South Africa, hadn’t gone through the required background check the center required of foreign nationals.

  The spaceflight center sat on the US Army’s Redstone Arsenal, and, escorted by security, they went to the officers’ club there.

  “I thought this was not a great start,” Weeks recalled. Musk was polite and gracious, but “miffed a bit,” said Weeks.

  Essentially, Musk had been kicked off the Marshall Space Flight Center. Then, he was kicked off Vandenberg Air Force Base. And here was the government, working with them side by side on Kwaj. Musk remained polite and calm. But he kept a distance. To the greatest extent possible, SpaceX was going to do this on its own.

  He “wasn’t high on government help,” Weeks said.

  ON MARCH 24, 2006, just four years after Musk had founded SpaceX, the seven-story-tall Falcon 1 rocket stood on the pad on Omelek Island, a couple miles north of Kwaj, ready at long last to launch. The flight had been delayed repeatedly over a period of months, and frustration was mounting, as were doubts about whether the rocket would ever get off the ground. But Musk was determined. He had fought so hard to get here, invested so much of his money. He had battled with the government, the entrenched contractors, and had pulled off stunts to get noticed by NASA, hoping they’d see that his company was for real.

  Nothing would prove that, and quiet his critics, like a successful launch. Now there was something else on the line. In early 2006, NASA announced that it was starting a program to help commercial companies like SpaceX build rockets and spacecraft that would eventually be able to fly cargo and s
upplies to the International Space Station.

  With the space shuttle set to retire in the coming years, NASA, under the administration of George W. Bush, was making a bold bet—that the private sector would be able to provide a taxi-like delivery service to the station, an orbiting laboratory, some 250 miles high. If the commercial sector could take over the relatively routine operations in what is known as low Earth orbit, that would allow NASA to do the hard stuff, to explore in deep space.

  Michael Griffin, the NASA administrator at the time, believed that by investing in a few companies to help them develop their rockets and spacecraft, NASA could touch off an industry of viable commercial rocket companies. NASA, then, would become a customer, buying a service to launch supplies to the space station.

  “Commercial enterprises historically, if they can succeed at all, they’re cheaper than government enterprises, more dynamic,” he said.

  Griffin wanted just to provide “seed money,” and was concerned that if “you have a lot of government money into the enterprise, then it becomes a government enterprise. And that’s what I wanted to avoid.”

  He carved out a $500 million proposal in his budget, called the Commercial Orbital Transportation Services program, or COTS, that would be divided by two or three companies. How did he come up with that amount? “Truthfully, I just made it up,” he said. It was enough to be significant for a startup. But in the space business, a couple hundred million dollars can burn up quickly, so the companies would have to come up with funding of their own.

  For SpaceX, winning a spot in the COTS program wouldn’t just be a much needed stamp of endorsement from NASA, but the investment would provide a measure of stability. SpaceX had to be considered a long shot. First, it had to convince NASA officials that the business was going to be around in a few years. NASA didn’t want to invest in a company that would evaporate overnight.

  NASA wanted to know “who would our potential investors be, how much money did Elon have to invest?” Shotwell recalled.

  Then there was another question about the capabilities of a company that had never launched anything, yet was talking about one day going to Mars. “Can this very young, brash company do what they say they were going to do?” she said.

  While it was preparing to launch the Falcon 1 from Kwaj, SpaceX crews in California were working on the next rocket, the much more powerful Falcon 9, which could be used in the COTS program.

  Virtually everyone who wasn’t at Kwaj was assigned to the Falcon 9 program. It was all hands on deck. Starting as soon as it received the request for proposals, the company was “largely shutting down and everybody working on this particular effort,” Shotwell recalled. “At the time, it was that critical to the company and to our future.”

  The competition put even more pressure on the crews in Kwaj, who had delayed the launch again and again through 2005 for various technical issues. But now they were finally ready to go.

  To launch a rocket successfully on the very first try would be an enormous coup. The history of rocket development is filled with blooper reels of rockets blowing up every way possible, on the pad, just above the pad, or going way off course, spinning wildly like a balloon losing air until they come crashing down in a fireball.

  “A million things have to go right in order to have a successful launch, literally, and only one thing has to go wrong to have a really particularly bad day,” Shotwell would later say.

  Leading up to the launch, Musk acknowledged the possibility of failure, telling a reporter that the company could withstand a failed launch or two. “If we have three consecutive failures… it’s not clear to me that we know what we’re doing and maybe we should go out of business.”

  Sitting in the control room, Walker, the DARPA program manager, had another goal for the launch: “I was hoping no one was going to get hurt.”

  THE MOMENT HAD been four years in the making, and it all came crashing down in less than one minute. The count from T-minus 10 seconds seemed to proceed smoothly. The engine ignited, and the rocket lifted up from its pad on Omelek. But 34 seconds into the flight, the engines stopped firing. The team was watching a live feed from a camera, and suddenly the island below the rocket wasn’t getting smaller anymore. Someone in the control center said, “That’s not good.”

  Fifty-nine seconds after it lifted off, the rocket crashed into the water just offshore.

  Musk had been boasting about this rocket for years, and had invested so much into it. He knew the chances of success were slim, but still, this hurt. All of those hopes vanished in an instant, as pieces of the rocket, once so sturdy and erect, now lay strewn across the reef, polluting the pristine waters like so much litter.

  “I remember how sad Elon was that day,” said Steve Davis, a young prodigy Musk had hired out of Stanford grad school. “Everyone was just super sad.” The rocket had been paid for almost exclusively by Musk, and at some point the money would run out “at which point we’re all done,” Davis said.

  Hans Koenigsmann, one of SpaceX’s first employees, was also devastated. “My wife told me that after the first Falcon 1 failed, I didn’t talk to her for a month. And I didn’t even know. I didn’t talk at home at all,” he said. “It was a little bit more heartbreaking because we actually collected the wreckage. We picked it up. It’s better when it goes out of sight.”

  SpaceX was trying to make spaceflight affordable, to open it up to the masses. To take humans further than even NASA had. That’s what drove them, even then. And if they couldn’t get the Falcon 1 to work, it wouldn’t just be the failure of a company, it would be as if “we have adversely affected where humanity could go. At least that’s how I felt,” Davis said. “We all felt that we were kind of the shot to do it.… Who else was doing it? There wasn’t anyone.”

  It also hurt because Musk and his team at SpaceX knew that their critics were undoubtedly preparing their I-told-you-so, tsk-tsking postmortems. Legitimate, on-the-level criticism Musk could take; it was the condescension he couldn’t stand.

  Still, any brooding would have to come later. In the moment, Musk tried to remain cool and professional—the whole team did—as they assessed the situation. The DARPA and air force team was impressed that the people from SpaceX, many of them young and relatively inexperienced, had remained so calm as they watched their rocket hit the water and explode, no matter how badly it hurt inside.

  Afterward, Musk tried to stay positive, saying in a statement that “we had a successful liftoff and Falcon made it well clear of the launchpad, but unfortunately the vehicle was lost later in the first stage burn.”

  They waited for low tide to start to recover the pieces of the rocket. As the SpaceX team pulled pieces of the wreckage out of the water, Weeks, the NASA official on loan to DARPA, tried to impose some order. The debris needed to be cataloged and marked, he said, collected as evidence for the investigation into the cause of the mishap. This needed to be an orderly process, not a free-for-all, yard-sale cleanup.

  But Musk, smarting from the sight of his rocket strewn in pieces throughout the reef, was annoyed and pulled Weeks aside. “He wanted to know why I was directing his people,” Weeks said. This was his rocket, his explosion, his mess.

  Except that it wasn’t, not entirely. Weeks reminded him that while it was his rocket, it had just exploded on a government facility on a mission that the government had invested in. There would be a government investigation, and the government would decide when and whether he’d be able to launch again.

  “Elon likes to be in control,” Weeks said. “And you couldn’t blame him. This was his money, and he had put $100 million into it.”

  DARPA’s Mishap Investigation Board, comprising Walker and Weeks and a couple of others working alongside SpaceX, completed its work by July 2006—in less than four months. The problem, it concluded, had been a fuel leak caused by the failure of a single nut of a fuel pump. The corrosive atmosphere of the islands, the salt air that Musk had worried about, had caused it to corrode
and then fail.

  With the cause found, DARPA cleared SpaceX to get back to flight. Despite the failure, DARPA was ready to stand by SpaceX and fund another try.

  The education of SpaceX was only just beginning. And it had learned a powerful lesson about the perils of spaceflight: an entire rocket could go up in flames because of the failure of a single piece of hardware no larger than a pebble.

  IN AUGUST 2004, Musk gathered the entire company, all eighty employees, in the cafeteria. He looked somber, or tried to. But he couldn’t keep the poker face for long. He was too excited.

  “We fucking won!” he said.

  SpaceX had won one of the COTS awards, a prize that could be worth as much as $278 million.

  The staff cheered wildly. “There was this eruption of joy, people jumping up and down,” Shotwell recalled. “This was a huge deal for us, obviously. That it was no longer just Elon pouring his own personal money into it. I think he felt very—I don’t think vindicated is the right word, but I think he probably felt a great sense of relief that what he had built up until then was worth something, and NASA had recognized it.”

  After the failure of the Falcon 1 launch, this was an enormous boost, one that gave them hope and motivation to carry on. The other winner was Rocketplane Kistler, an offshoot of the company that had won the sole source contract that Musk had sued over in 2004 and had recently emerged from bankruptcy.

  Musk was ebullient, proclaiming it a significant step toward achieving its goal of dramatically lowering the cost of spaceflight. “I think it could be some of the best money NASA’s ever spent,” he said.

  Others weren’t so sure they’d be able to drop the cost of space—something companies had been trying to do for decades.