Adeo Ressi and Elon Musk drove the Long Island Expressway in late 2000, trying to figure out what to do next in life.
The tech bubble had burst. Ressi was stepping down as CEO of a struggling Internet firm.
Musk, co-founder of online payment firm PayPal, planned to hand the company to someone more experienced.
The friends — former college roommates — looked into the darkness of the night. ”There was a moment of silence,” Ressi says. ”I don’t remember who said it, but someone said, ‘Space.’ ” They both laughed, then discounted the idea.
Three years later, Musk is building a rocket to carry cargo. Ressi is helping create what he hopes will be the first spaceship for tourists. If all goes well, both could blast off next year.
They might be joined by other tech-savvy entrepreneurs who — at an unusual rate — are hurling themselves into space ventures.
Amazon.com CEO Jeff Bezos is backing a space venture, as is John Carmack, the man behind the best-selling video games Doom and Quake. Billionaire Microsoft co-founder Paul Allen is believed to be funding a rocket company, industry insiders say. Eric Klien, CEO of Web-hosting firm Colossus, is raising funds to build a ”space ark” to protect the human race should Earth become uninhabitable.
Many of these spaced-out entrepreneurs say they’re living a childhood dream. And why not? They’ve got the money, thanks to huge wins during the tech boom. They hope to go down in history as extraterrestrial pioneers — much more exciting than, say, e-commerce pioneers. And they could even make money. Getting people and cargo into space cheaply is an untapped market.
”The first trillionaires will be made there,” says Peter Diamandis, creator of the X Prize, a $10 million purse extended in 1995 for the first private-sector team to build a rocket for tourists.
Skeptics abound. Henry Hertzfeld, senior scientist with the Space Policy Institute, calls private space flights a ”rich man’s hobby.” Neta Bahcall, astrophysics professor at Princeton University, calls launching ”a very difficult and expensive endeavor. . . . To get out of the strong gravity of Earth, you need a very powerful rocket — essentially, a bomb.”
Even simple rockets that launch satellites today cost about $30 million. Danger also abounds. About 400 people have made it to space, but about 20 have died in the process. The explosion of space shuttle Columbia this year shows how something can go wrong, even with NASA’s resources.
Regulatory hurdles, too, could tie up flights for years, says Hertzfeld. The Federal Aviation Administration is in charge of licensing U.S.-based space flights. Some X Prize competitors have started seeking licenses, but getting one could take years, Hertzfeld says. Rocket entrepreneurs testified before Congress this summer in hopes of clarifying and loosening restrictions against rocket launches.
Finally, money is short. Most of the space buffs don’t even seek venture capital, which is typically tapped for new tech ventures. Space ”is too risky,” says Brian Chase, executive director of the National Space Society.
Even so, the entrepreneurs press ahead, as have other CEO-types.
Howard Hughes, founder of Hughes Aircraft, in 1938 flew one of the first round-the-world trips, a journey that took three days, 19 hours and 17 minutes. Today, Oracle CEO Larry Ellison pilots yachts in the America’s Cup and other races. He was almost killed, at least once. In 1997, Virgin Group CEO Richard Branson, in an attempt to fly the first balloon non-stop around the world, thudded to the ground at 25 miles an hour in an Algerian desert, short of his goal. He also failed in an attempt to cross the Atlantic in a speedboat.
But tech types and space have a special connection, observers say. Tech is about the future, discovery, breaking barriers. So is space. Technologists push the edge. Space has no edge. Even oceans have floors. The entrepreneurs matured post-Star Trek amid the rapidly enveloping electronic age. They got rich on a new idea — the Internet — and grew up ”devouring science-fiction novels under their bedsheets,” says Tony Perkins, editor of tech Web site AlwaysOn.
Space ”is the next big leap,” the final frontier, says longtime Silicon Valley marketer Fred Hoar, now professor at Santa Clara University. The drive to conquer space stems from the Silicon Valley . . . belief that progress continues unabated,” he says.
Struck by stars, fame, riches
Besides, some of the entrepreneurs say, they’re obligated. Leaders in business should be leaders in exploration. ”Things may not happen if people like me, or us, don’t go out and do it,” says Carmack, who’s invested $600,000 so far in Armadillo Aerospace, a leading X Prize contender.
Why they’re pressing:
* Business opportunities. ”It’s almost impossible for someone who has worked in other areas of technology to comprehend how fallow this field is,” says Jeff Greason, CEO of XCOR Aerospace, an X Prize competitor.
NASA dominates the space industry. Its launches take years to plan and cost about $75 million each. Its big, sophisticated equipment, such as the space shuttle and Delta rockets, is designed for complicated missions.
But not every flight needs to be that complex, the tech entrepreneurs say. A rocket that hits a ”suborbital” state, where weightlessness occurs, but quickly returns to Earth is much easier to build and launch than one that can orbit the Earth for days, the entrepreneurs say. Some of the X Prize competitors hope to land on runways, as the space shuttle does. Others plan to fall to Earth while a parachute slows their descent.
Already, travel companies are taking reservations. The most prominent is Space Adventures, which is advertising a flight for $98,000 on a yet-to-be finished short-flight rocket. More than 100 people have signed up, says the Arlington, Va., firm. It helped Wilshire Associates CEO Dennis Tito in 2001 become the first paying space tourist. He paid $20 million to join a Russian space crew for a flight to the International Space Station.
For now, billionaires such as Tito have the best chance of getting to space. But that might change. In 1936, nine passengers paid $1,438 — worth about $18,700 in today’s dollars — to take one of the first long-distance flights, from San Francisco to the Philippines. That was 33 years after the Wright brothers’ first flight and more than three decades before air travel became mainstream. Today, that flight costs around $630. ”It’s taken awhile for this to be viewed as a serious business,” says XCOR’s Greason. ”Five years ago, I didn’t dare breathe the word ‘tourism.’ ”
* Desire to leave a legacy. After hitting it big with PayPal in 2000, Musk, worth about $200 million, says he asked a friend, ”What is the most important thing that we can and should be doing?” He now has two rockets in the works to deliver cargo to space. ”Of all the great things humanity can do, experiencing the stars is one of the greatest, if not the greatest.”
Colossus CEO Klien says the human race runs the risk of someday being wiped out by a catastrophe. As such, he’s invested $100,000 to start the Lifeboat Foundation, which aims to build a self-sustaining space station to float around the Earth.
* It’s a thrill. Carmack, of Doom and Quake fame, used to buy a turbocharged Ferrari each year. In 2000, he started Armadillo Aerospace. He hasn’t bought a Ferrari since. ”When you’re at the top of the field, it’s a gem when you learn something once a month,” Carmack says. ”Jumping to something completely different is really fabulous.”
Most of all, engaging in space allows entrepreneurs to fulfill childhood dreams.
Venture capitalist Anousheh Ansari, 36, grew up in Iran. Her family slept outside when it was hot. ”For hours and hours and hours, I would watch the stars,” she says.
Being an astronaut wasn’t an option, so Ansari directed her passion at her start-up, Telecom Technologies. She made her fortune when she sold the company to Sonus Networks in 2000 for about $735 million in stock.
Now, Ansari hopes to invest in a space-related company via her venture capital firm, Prodea. ”I feel like we’re one piece of a much bigger picture, and I’m trying to get a sense of what that big picture is,” she says. ”Space travel will take me one step closer.”
Ken Winans, president of investment management firm Winans International, used his personal wealth — much of it earned during the stock market tech boom — to amass a $100,000 collection of space memorabilia. He turned it into a traveling exhibit for schools and museums.
As a child, he remembers watching astronauts walk on the moon. ”These are my first heroes. The first thing I wanted to do was be an astronaut,” he says.
Space tourist Tito always wanted to go to space. He got an aerospace degree and worked for NASA’s Jet Propulsion Laboratory. Frustrated by low pay, he quit after five years. Eventually, he created a technical way of analyzing financial markets. It made him a millionaire.
”But that dream of going into space never left me,” he says. He often watches the videotapes he took from the space station.
The flight, he says, ”was the most enjoyable and euphoric experience of my entire life,” he says.