When several of the world's most notable entrepreneurs all
seem to agree where the next big business opportunity lies, you
have to pay attention. But what if they're all starting
companies to provide space transportation to tourists?
The question is highly relevant today, as a gaggle of marquee
business creators line up to invest sizeable fortunes in going
where no profit-making business has gone before. The list includes
Microsoft co-founder Paul Allen, Amazon.com founder Jeff Bezos, Virgin founder
Richard Branson and Elon Musk, who co-founded PayPal and sold it to
eBay for $1.5 billion.
Space isn't as unlikely a source of profits as it may seem
according to Musk, whose Space Exploration Technologies in El Segundo,
California, plans to launch its first space vehicle this year. The
development costs--as much as $100 million--will be recouped by
launching satellites for communication companies and government
agencies at first, Musk says. SpaceX, as the company is known, will
charge $5.9 million per shot of the smaller of the two rockets it
plans to develop, and $15.8 million for the larger one. Both
figures are substantially less than going launch rates.
SpaceX's first customer is the Department of Defense, for which
it plans to send a $30 million satellite into orbit.
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"We'll very quickly get to seven or eight launches a
year," Musk says. "That brings us to about $100 million
in annual revenues, and we'll grow from there." After
refining SpaceX's satellite-launching capabilities, Musk hopes
to offer human transportation to NASA and other space agencies as
well as tourists. "Long term, that probably is the biggest
growth market, provided you can get the safety and cost to
acceptable levels," he says.
Branson's Virgin Galactic is going straight to tourism. The
London company is investing $100 million to develop a fleet of
ships offering space rides for $190,000 per person. Government
agencies have charged $15 million and up to the handful of private
individuals determined to fly into space, the company says. At
lower rates, Virgin envisions 3,000 people lining up within five
years of the first commercial launch in 2007. "We've had
huge amounts of interest worldwide," reports Alex Tai, a
Virgin Galactic director.
Virgin is now securing regulatory approval for the U.S.-based
launches and is finalizing designs based on technology developed by
aviation entrepreneur Burt Rutan for his SpaceShipOne, winner of
the $10 million Ansari X Prize in 2004 as the first private
enterprise to safely put a human in space.
Other leading entrepreneurs are also involved. Allen owns
Rutan's Mojave Aerospace Ventures. Little is known about
Bezos' Seattle-based startup, Blue Origin, except that it plans
to develop a human-piloted launch system. With this crew of
entrepreneurs at the controls, the new space race promises to
fascinate.