Vandenberg Air Base, Calif., to Launch SpaceX Reusable Rocket in January
Santa Barbara News-Press
October 5, 2003
By Nora K. Wallace

Billionaire entrepreneur Elon Musk was never one of those youngsters who yearned to be an astronaut or dreamed of hopping around the moon in a silver spacesuit.

He's always had his eyes a bit to the stars: He reads science fiction, admits to watching "Star Trek" but laughs about never attending a "Trek" convention.

Now the 32-year-old is seeking to get into space in his own way -- as founder and chief financial backer of El Segundo-based Space Exploration Technologies, or SpaceX. He and the little company are building a new breed of rocket, the Falcon, designed to ferry small satellites into orbit for about $ 6 million a shot, about half of what it now costs to deliver payloads commercially.

In late January, the South Africa native plans to watch from Vandenberg Air Force Base as his dream rocket takes to the skies.

"I think space is a very important arena, and it's high time we made progress," said Mr. Musk, who looks more like a college student than a high-powered businessman. "The cost and reliability of launch have almost been unchanged over three decades. There's something wrong with that picture."

His 68-foot-tall rocket, named after the Millennium Falcon spaceship piloted by Han Solo in the "Star Wars" films, is geared to launch from Space Launch Complex 3-West on Jan. 22, 2004, carrying a Defense Department payload.

The Falcon's lower cost is expected to attract small academic, government and civilian payloads, which have often been stymied by the lofty cost of placing their experiments into orbit.

SpaceX is unlike any aerospace company to set up shop at Vandenberg since the military began allowing commercial launches. Although private entrepreneurs have attempted launches in the past, they've usually had widespread backing. Mr. Musk is financing Falcon with his own money. He won't say how much, other than to admit to spending "tens of millions" of dollars. In various interviews, he's shrugged off charges that it's a "kooky" idea, or that he's wasting his money.

"I think this has some powerful historic elements," Mr. Musk said. "It would be the first mostly reusable launch vehicle since the shuttle flew two decades ago. It's the fastest launch vehicle developed . . . So far, things have gone really well for rocket development. I sure hope it'll continue. We may see setbacks. The history of rocket development is not a smooth one."

The rocket executive is not a business novice and is using some of his profits from past ventures to complete his space dream. After earning degrees in business and physics from the University of Pennsylvania, Mr. Musk began studying physics at Stanford. Two days into that, he got caught in the burgeoning Internet world, becoming the co-founder of Zip2, a Web software maker. That company sold to Compaq for $ 307 million in cash in 1999.

He then founded PayPal, an electronic payment system. He was the largest shareholder when eBay bought the company for $ 1.5 billion in 2002.

Mr. Musk has applied some of the logic from the frenetic Internet world to his space company, refusing to do things the way of those who built Titans and Atlases before him.

Other launch giants, such as Lockheed Martin and Boeing, have hundreds of employees and extensive corporate facilities. SpaceX has just 30 employees in a small Southern California plant. It will hire about the same number in contract staff at Vandenberg during its peak launch times.

Those aerospace firms have long-standing traditions in aviation and aerospace; SpaceX is just a year old.

Mr. Musk is part of a new breed of entrepreneurs who've looked to space with their vision and bank accounts. His is likely to get off the ground first, but others include Amazon.com's Jeff Bezos, who aspires to human spaceflight; "Doom" and "Quake" creator John Carmack; and pioneering pilot Burt Rutan's SpaceShipOne.

"He represents the second generation of private space launch practitioners," explained Bob Davis, past executive director of the Santa Maria-based California Space Authority. "There have been a first round of pioneers. Pioneering is always a delicate outcome, one oftentimes fraught with a lack of success. There are a couple folks in round two. Elon is certainly one of them . . . He's a genuine player."

Mr. Musk is at the forefront, Mr. Davis noted, primarily because he's financing the venture privately.

"The others who had money in the first round were simply investors," Mr. Davis explained. "They became emotionally infatuated and didn't play as close attention as they should have as to how the money was spent. He has the skills and training to literally participate, as opposed to just mediate or watch from afar."

To meet its project payload costs, SpaceX is reducing expenses throughout the entire company and in construction of the rocket, including being more streamlined financially with propulsion, avionics and launch operations.

"We haven't scrimped," Mr. Musk explained. "The quality of our components is very high. We're keeping a low-overhead operation. We have innovative engine designs, innovative tank and structure designs rather than retrograde. That's where we've saved the money."

He's also making sure a major portion of the system is reusable -- about 80 percent, which he says makes it the only semi-reusable launch vehicle in the world besides the space shuttle, which is 90 percent reusable. The first stage of the Falcon is designed to drop by parachute approximately 490 nautical miles downrange from Vandenberg, into the Pacific Ocean. It will be recovered by a salvage ship.

"It stands to reason, if you can really figure out reusability, that's key to lowering prices," Mr. Musk said. "Our long-term goal is to improve launch (costs) by a factor of 10. If we can make both stages reusable, and if we can really do the first-stage recovery right, that's an order of magnitude cheaper."

The $ 6 million payload cost should remain fairly constant at first, Mr. Musk said. A key factor, he admitted, will be seeing how well the recovery and refurbishment of the first stage works after the maiden launch.

"It may take a few years to get that process right," he said. "When you factor in inflation, we're going to try to keep that price constant for a few years, and if we can, try to make it lower."

The company plans to launch two or three Falcons a year from Vandenberg, said Wynne Gurevich, vice president of business development. None will be test flights -- they'll all have payloads.

"We'll wait and see what the market looks like based on the low price," Ms. Gurevich said. "Right now, the market is one or two a year. We're not sure about the market elasticity. There's substantial interest. I do think the existence of Falcon will increase the demand."

Government and aerospace industry experts "want to see Falcon work," Mr. Musk believes. "We sold our first one to the U.S. government. We sold our second one to a foreign government customer. There's a lot of interest for three, four, five. It would be safe to say we could manage four to six a year worldwide," between Vandenberg and Cape Canaveral, Fla.

Mr. Musk is awaiting completion and final approval of an environmental impact report. Space Launch Complex 3-West was used previously by Lockheed Martin, which stopped using the Atlas rocket site in 1998.

"All the plans are drawn up, everything's ready to go," he said. "The fact the vehicle is small, nontoxic, liquid oxygen, it's much more benign than anything that's been there before. We're all raring to go."

SpaceX approached Vandenberg in August 2002. The Falcon, which eventually will become a "family" of vehicles, wasn't anything unusual for the base to deal with, said Paul Klock, chief of plans and programs for the 30th Space Wing.

"They're keeping it streamlined to keep their costs down," Mr. Klock observed. "There are no fancy bells or whistles. It's a good business mentality."

Commercial businesses are allowed to use launch facilities at Vandenberg if they are not needed for military reasons. But the Air Force, Mr. Klock explained, cannot commit any property for use until a program's environmental process is completed.

In time, Falcon will likely have a five-year license for the site. Under the U.S. Commercial Space Act, the company will only pay direct costs for use of the launch pad, such as utilities.

"This is the right answer," Mr. Klock said. "We're starting to see very slow growth but positive growth in smaller markets. Space X is the first one coming out down the line. We've been through some good and low times, so it's nice to see business pick up."

The Falcon itself will be finished around mid-December, and Mr. Musk is planning to unveil the vehicle in Washington, D.C. He believes it's important to take space to Washington because "a lot of our key customers and regulators are in D.C. That's a very important set of people."

He is frequently in the nation's center of power and just a few months ago testified before a joint Senate and House of Representatives hearing on commercial human spaceflight.

"We are at a crucial turning point today," testified Mr. Musk, who also started the Musk Foundation, which is dedicated to space exploration and clean energy. "The recent entrepreneurial activity in space (my company perhaps included) shows promise but is still embryonic and fragile. It is very important that our government in all its forms proactively adopt a nurturing and supportive approach to new launch vehicle developments, whether orbital or suborbital, manned or unmanned."

He continued: "If we believe humanity should one day expand to the stars, then people must have some way to see for themselves what space is all about. They must share in its wonders and experience firsthand its meaning. And, in so doing, open the doorway to space for all. That is what true access to space is about: creating affordable ways for people, payloads, satellites and experiments to develop the space frontier."

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