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Bezos wins a round in the billionaire space race

Dan Weissmann Sep 18, 2014
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Bezos wins a round in the billionaire space race

Dan Weissmann Sep 18, 2014
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Elon Musk of Tesla Motors Inc. has been jockeying to get his Space Exploration Technologies Corporation (SpaceX for short) some work helping NASA build new launch systems. Now he’s been one-upped by Amazon’s Jeff Bezos, who has his own spaceship enterprise: Blue Origin.

NASA’s existing supplier has announced that it will use Blue Origin’s technology in its next generation of launchers.

All of which raises a question: Is there money to be made here? Or is this just billionaires with unlimited funds for new toys?

First, there are a couple of big reasons to take on these kinds of projects. To start with, the launch technology we use now is 40 years old, says  Jim Bell, a professor at the School of Earth and Space Exploration at Arizona State. It’s like the Atari 2600 of rockets.

“The existing generation of traditional engines are the Ataris of their time,” he says, “and there’s a whole bunch of start-ups out there — Blue Origin being one and SpaceX being another — that are building our modern XBoxes.”

Also, the rocket engines we’ve been using since the 1990s is Russian. Ever since tensions flared over Ukraine, that dependency on Russia has been making policy-makers pretty nervous.

There is money in space, but it’s mostly in selling satellite services like TV and GPS, less so in the launch technology that Bezos and Musk are competing over.

“If you were looking for the very best money-making machine, I would probably not advise you to invest in starting your own launch company,” says Carissa Christensen managing partner at the Tauri Group, a consultancy that specializes in space technology.

“Space is a little like the movie business. Nobody is in it by accident,” she says. “Everyone desperately wants to be doing it. There are three people behind everybody who is making money at it, who would like to be involved the industry— and part of it is the allure of it. It’s fascinating.”

As for startups looking to do next-generation space tech, Christensen says she’s seen generations of them. This one, which also includes Virgin Group founder Richard Branson, is different.

“The people who are starting these companies are not simply doing it to build the coolest rocket that they can,” she says. “They are doing it to prove that you can make money in space. They are doing it with very deep pockets, they are doing it with business expertise from outside the space industry, and they are actually succeeding.”

Both companies are private, but the SpaceX website describes the company as “profitable and cash-flow positive.”

Blue Origin’s “about” page does not mention profits, but refers to the company’s mission as “a long-term effort, which we’re pursuing incrementally, step-by-step.”

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