Amazon Unbound

by Brad Stone

  Competing in this crucial phase would require Bezos to radically depart from some of the principles of the Welcome Letter—his desire for the company to stay lean, for example, and operate “step by step.” Blue was still largely focused on New Shepard, and so decided to pass. SpaceX won the contract, along with Boeing, and earned an initial haul of $440 million. Years later, after the Office of Inspector General published an audit of the program that revealed SpaceX had ended up receiving a total of $7.7 billion for the project, Bezos would forget those early conversations and wonder aloud, according to a colleague’s recollection, “Why did we decide not to bid on that?” Asked about the comment, Blue said Bezos never questioned the decision not to bid.

  As a result of these divergent approaches, SpaceX quickly grew much larger and faster. By the time Blue hired its 250th employee in 2013, SpaceX had 2,750 workers and was already sending unmanned spacecraft to the International Space Station. Blue was consumed with New Shepard, but SpaceX had entirely skipped the intermediate stage of building suborbital rockets to take tourists to space, which Bezos felt was necessary in part to acclimate people to the idea of space travel, to achieve his ultimate goal of creating a future where millions of humans are living and working in space.

  While Bezos and Musk seemed like-minded in their respective space ambitions, they had philosophical differences driving their companies. Musk’s oft-stated goal was to colonize Mars and make humans a “multi-planetary species” as an insurance policy against calamity on Earth. Bezos believed “that of all the planets in the solar system, Earth is by far the best one,” and that lowering the cost of access to space was the path to putting large, vibrant populations onto space stations, where they could harvest solar energy and mine the abundant metals and other resources from the surface of the moon. Bezos hypothesized that at the current rate of population growth and energy use, humanity would have to start rationing resources within several generations, leading to a society of stasis. “We go to space to save the Earth,” he declared on Twitter.

  Nevertheless, Blue Origin and SpaceX were, inevitably, headed for conflict. They would end up competing not just for government contracts, talent, and resources but for the adulation and attention of the space-enthusiast public and press. By 2013, the amiability of the early meetings between Musk and Bezos was gone, and in its place was a budding rivalry between two successful, strong-willed, and egotistical entrepreneurs.

  That September, in a transparent attempt to slow down its rival, Blue Origin protested SpaceX’s plan to lease NASA’s historic 39A launch complex at Kennedy Space Center in Cape Canaveral, the original home of the Apollo program. Responding to Blue’s legal challenge in an email to SpaceNews, Musk wrote, “We are more likely to discover unicorns dancing in the flame duct” than see Blue Origin produce a rocket qualified to dock with the ISS over the next five years. Blue’s protest failed, and it later secured the smaller Launch Complex 36, which required a more expensive rehabilitation. In 2014, the companies also dueled over a flimsy Blue Origin patent for landing a rocket on a sea barge. SpaceX challenged the patent in court and prevailed.

  But Bezos was studying SpaceX and the reasons for its mounting success. Musk’s company was funding its rapid growth by selling its launch services; perhaps Blue could do something similar, while remaining focused on its “step by step” path to getting to space. After Russia invaded Crimea in 2014, an opportunity presented itself: the United Launch Alliance (ULA)—a partnership between the aerospace divisions of Lockheed Martin and Boeing, and the premier launch provider for the U.S. military at the time—announced it would search for a U.S. engine supplier in case it was forced not to buy any more rocket engines from Russia. Blue executives offered to sell ULA its new BE-4 liquefied natural gas engine it was developing for the New Glenn orbital booster.

  ULA’s parent organizations wanted to be sure they weren’t helping a future rival, like SpaceX, that would end up competing for lucrative satellite launches. Bezos got on the phone with executives from both companies and was apparently persuasive. Competing against ULA’s main engine vendor, Aerojet Rocketdyne, Blue won the deal, which was announced on September 17, 2014. But Blue Origin would prove itself to be an inconsistent partner.

  In April the following year, for the first time, Blue launched a prototype of the New Shepard crew capsule from Bezos’s ranch. The capsule, stuffed with employee memorabilia like toys, business cards, and jewelry as part of an internal program called “fly your stuff,” reached the Kármán line, the zero-gravity environment at a hundred kilometers above sea level, separated from the rocket, and floated down to Earth on its three parachutes. But instead of returning gently to the ground, the reusable booster suffered a hydraulic failure and another “rapid unscheduled disassembly” as it made a fiery landing.

  “We always learned more from failure than we did success,” said longtime Blue Origin executive Gary Lai. “In hindsight, with the proper ground testing, the failure that occurred during M1 could have been avoided.” Other colleagues recalled Bezos sounding frustrated. “Are we making sophisticated errors or embarrassingly stupid errors?” he asked during an analysis of the mishap.

  But that November, in perhaps its shining moment, Blue Origin finally pulled off the feat. The test vehicle reached into space, and the booster, its rockets pounding the desert floor, settled back to the launchpad amid a cloud of dust and remained upright. In the control center, everyone erupted in cheers and “all sense of decorum was lost,” Gary Lai said.

  After the capsule returned safely via parachute, an ebullient Bezos, wearing a cowboy hat, brought out what Lai described as “the largest bottle of champagne I have ever seen,” and then, instead of pulling out the cork, took out a large knife and sabered the bottle’s stem clean off. “I had tears in my eyes. It really was one of the most magnificent things I have ever seen,” Bezos said as employees toasted. “This is a huge milestone, but it isn’t the end, it is the beginning. This is the start of something amazing. This is truly a great day not just for Blue Origin, but for all of civilization. I think what we have done today is going to be remembered for thousands of years and you should be so proud of yourselves.”

  SpaceX, meanwhile, had started with an expendable low-tech system and backed into reusability. When it landed its own reusable booster for the first time a month later, Bezos tweeted a wry “Welcome to the club” at Musk.

  But the genetic difference between the two companies ensured that Blue’s advantage would be fleeting. At the time of the successful launch, Blue had about 400 employees with their attentions mainly focused on New Shepard, along with some long-term planning for the fledgling New Glenn program and the BE-4 engine.

  Meanwhile, SpaceX had 4,500 employees and was growing quickly, with a sole focus on orbital missions. Blue was reliant on funding from Bezos, while Uncle Sam, taxpayers, and other customers were paying most of SpaceX’s bills.

  In other words, this wasn’t a fable: the tortoise was racing an actual hare, and not surprisingly, the hare was winning.

  * * *

  Despite these battles, Blue Origin employees, like their counterparts at Amazon, were almost religiously indoctrinated to ignore the prospect of competition and stay focused on the task at hand. Working amid the resplendence of Bezos’s expanding wealth, it wasn’t difficult to do so. From the outside, their headquarters in an industrial neighborhood of Kent looked unremarkable: a sprawling, 300,000-square-foot former factory where Boeing once manufactured drill bits for the Chunnel. But on the inside, the offices had been converted into a space enthusiast’s playground, filled with artifacts and science fiction curios purchased over the years by Bezos himself.

  The personal collection spanned the arc of humanity’s journey into space. There was a Mercury-era NASA hard hat, a pressure suit worn by Soyuz astronauts, and a heat shield tile from a space shuttle. In a second-floor atrium was the model of the Starship Enterprise used in the original Star Trek films. Next to it was a two-story replic
a of the steampunk spacecraft depicted in the Jules Verne novel From the Earth to the Moon. A quote attributed to Leonardo da Vinci adorned a wall nearby: “Once you have tasted flight, you will forever walk the earth with your eyes turned skyward. For there you have been, and there you will always long to return.”

  For employees, respite could be found on the building’s northwest side, in an outdoor space dubbed “the secret garden,” after the Frances Hodgson Burnett novel. A koi pond, a walking path, an outdoor kitchen, and a smoker were nestled amid fruit trees and blueberry bushes that blocked out the concrete jungle beyond. A bench in the park had a memorial plaque on it that displayed the name Elizabeth Korrell—Bezos’s late business manager and personal attorney, who died of cancer in 2010 at the age of forty-two.

  Korrell had stayed out of the limelight aside from one brush with notoriety: on March 6, 2003, she and Bezos were scouting property near Cathedral Mountain in West Texas when their helicopter crashed into a shallow creek, trying to take off amid high winds. Korrell suffered a broken vertebra; Bezos walked away with minor scratches. The biggest lesson, he told an interviewer afterward, was to “avoid helicopters whenever possible.”

  Bezos and Korrell eventually found suitable land near the town of Van Horn and made a series of purchases through holding companies bearing names of famous explorers. Bezos wanted the same kind of Texas retreat that his grandfather had owned, where he spent so many formative summers. It would double as a Blue Origin facility and launchpad.

  A decade later, the ranch offered Blue engineers another escape of wealth and fun. The property included a pool and patio, an outdoor firepit, and a domed high-powered telescope where they could peer at the stars on cloudless Texas nights. During the day, they occasionally rode dune buggies on the property; at night, Bezos hosted dinners and served expensive liquor from an outdoor saloon that he ceremonially named Parpie’s Bar, after the nickname all the grandkids called his father, Mike Bezos. Whenever they finished a premium bottle of scotch, he’d have everyone sign it.

  After these interludes, they would return to reality and to an organization that felt vexingly bipolar. Bezos set increasingly lofty goals while allocating the minimum of resources to accomplish them. For long periods, he limited the time he spent with the company, coming in only on the occasional Saturday for deeply technical program reviews where he would impress employees by sparring with the company’s rocket scientists and aerodynamicists. He enjoyed interacting with engineers and wanted a visible role in the firm’s most important architectural and design decisions. But he preferred to manage many of the details of daily operations invisibly, via email with Rob Meyerson.

  This style of oversight put the company’s president in a difficult position. Meyerson was acting as a conduit for Bezos but had none of his imposing authority; he also struggled to follow Bezos’s inconsistent directives, embracing constraints while hiring rapidly to accommodate the company’s growing ambitions. He held confrontational Monday meetings with his direct reports, which he often used to criticize them for not moving fast enough, leaving them demoralized and unproductive. They viewed him skeptically, according to numerous accounts, believing that he took copious notes for the purpose of sending Bezos frequent reports and acted as a distorting filter between them and their real boss.

  All these frictions inside Blue Origin culminated in a series of acrimonious clashes in 2016. Morale was low, and Bezos, frustrated by the lack of progress, was allowing some of the edgier management habits and notorious outbursts that he had suppressed at Amazon to reemerge at Blue Origin. In a technology review meeting that February, he directed a withering stream of invective at New Shepard systems architect Greg Seymour, who had been with the company for twelve years. Seymour, who had already been unhappy, quit via text message at 3 a.m. the following morning.

  Later that summer, Bezos also castigated Meyerson and other senior executives when they surprised him with a proposed budget of well over $500 million, which far exceeded his expectations. They were trying to forecast the cost of capital projects like the rocket and engine factories for New Glenn. Bezos, worth some $45 billion at the time, had sticker shock. “I’m not spending that,” he complained. “If it was this big, you should have called me in the middle of the night to tell me about it!”

  In the Welcome Letter, Bezos had vowed that he wouldn’t be surprised or disappointed if the company didn’t immediately provide a return on his investment. But now it seemed like he was both. Employees said that after a long absence from visiting the Kent headquarters on Wednesdays, the usual day he spent at Blue Origin, Bezos started coming in for a few hours each week to talk to department heads to better understand the mounting expenses and incessant dysfunction. Believing that Blue was hindered by slow decision-making, he also began appearing at the company cafeteria at lunchtime. Anyone could approach him to get a rapid decision on a problem or idea, as long as they came prepared with a one-page document that outlined the challenge and potential solutions.

  Everything came to an awkward denouement in the fall of ’16. The American Astronomical Society named Meyerson a recipient of its Space Flight Award, given annually to “the person whose outstanding efforts and achievements have contributed most significantly to the advancement” of space exploration. When Bezos announced the accolade at a management meeting, no one applauded; almost in unison, Blue executives cast their eyes downward. “Okay, maybe I need to say this again, it’s a very prestigious award,” Bezos said. The room remained silent. Everyone was furious over their internal battles, the yawning gap between their resources and ambitions and the pummeling now being administered on a regular basis to their collective dignity by SpaceX.

  That’s when Bezos started inviting executives one by one to his Amazon office for lunch.

  * * *

  As Blue Origin initiated its search for a CEO who could introduce “Amazon-like operational excellence” to the company, Bezos appeared to change his mind about how he operated Blue, discarding some of the guiding principles that had constrained the firm’s growth. He backed away from the “metronome-like incrementalism” he had described in the Welcome Letter and committed Blue fully to a set of ambitious parallel programs. He also abandoned the notion that the company’s expenditures should be “flat to monotonically increasing,” and authorized a major budget expansion. When he announced at the April 2017 Space Symposium in Colorado Springs that he was selling $1 billion a year of Amazon stock to fund Blue Origin, employees were stunned—that was the first they had heard of it.

  As happened with so many of Bezos’s reversals at Amazon, like his demand later that year that the retail unit show profitability without advertising, Blue employees strained to understand his sudden change of mind. The only plausible answer was the one staring them in the face: the hare had outraced the tortoise. Bezos recognized the need to change strategies if Blue was ever going to start winning commercial and government contracts to fund its own growth and catch up with Elon Musk and SpaceX.

  For more than a decade, Blue’s attention had been fixed on giving paying customers an eleven-minute thrill ride to the edge of space. But after a fifth successful New Shepard test flight in October 2016, the suborbital spacecraft wouldn’t fly again for more than a year. Instead, focus and resources shifted to what Bezos dubbed New Shepard’s bigger brother.

  That fall, the company unveiled New Glenn to the public, pledging a maiden flight by the end of the decade—a goal it would fail to meet. Designs for New Glenn showed that it would have more boosting capacity than SpaceX’s Falcon 9 and its bulkier twin, the Falcon Heavy. It was also equipped to take payloads like commercial and military satellites into a high-altitude geosynchronous orbit—precisely the market United Launch Alliance officials had believed that Blue Origin was not interested in.

  “ULA executives felt like they were betrayed and lied to,” said George Sowers, the former chief scientist and vice president at ULA. Executives from the two companies stopped talking; tens
ions were so high that they walked past one another in the halls of the annual Space Symposium that year without acknowledging one another. Blue later disputed the notion that its execs stopped talking to counterparts at ULA. Nevertheless, the story ULA execs eventually heard from employees at Blue, Sowers said, was that Bezos was frustrated that the government was funding Elon Musk’s space dreams and wanted to get in on the action.

  To compete for those lucrative contracts and to “get paid to practice,” as Bezos put it to colleagues, Blue would eventually reach New Glenn launch contracts with satellite operators like France’s Eutelsat, Canada’s Telesat, and UK’s OneWeb. And when the U.S. Air Force announced the next phase of a competition to spur development of launch systems to put national security satellites into orbit, Bezos was clear: he wanted Blue Origin to be a prime competitor, not just an engine supplier to other participants. Blue ended up winning a $500 million launch service agreement, alongside Northrop Grumman and ULA.

  Blue Origin was now nakedly opportunistic. After Donald Trump won the presidency and announced the goal of returning Americans to the moon by 2024, Blue executives quickly put together a seven-page proposal outlining a lunar service to the Shackleton crater on the moon’s south pole, paving the way for human colonies there. “It is time for America to return to the Moon—this time to stay,” Bezos emailed the Washington Post, after it obtained a copy of the proposal. The idea would evolve into another massive undertaking, called Blue Moon.