That “Kitty Hawk Moment” Revisited: NSG Covers the 2nd and 3rd Verticals
Make no mistake: the first powered SS1 launch was the catalyst that inspired hundreds of entrepreneurs throughout the world to follow their NewSpace dreams.
On June 21, 2004 I stood alongside thousands in the Mojave desert waiting in the early hours for the historic first powered launch of Scaled Composites’ SpaceShipOne (SS1). WhiteKnightOne, the carrier vehicle for SS1, circled above our heads for what felt like hours but was actually less than one. But the wait which began at an ungodly hour was well worth it; I was fortunate to experience one of the most beautiful things I’d ever seen. SS1 tore through the skies, leaving a white streak behind, and giving me my “Kitty Hawk Moment.”1
While witnessing the technological (or as we say at NSG: “4th Screen”) milestone of “Flight 15P” was awesome, what excited me most were the accomplishments in other screens. A hard-nosed entrepreneur (Burt Rutan; “1st Screen”) backed by private capital (Paul Allen; “3rd Screen”) to send a civilian (Mike Melville) into suborbital flight. At the time, the customer (i.e. the “2nd Screen”) was not part of the equation, but I didn’t mind; I believed the market demand existed, and would be met by this capable team. Shortly thereafter, in fact, Richard Branson struck the deal with Allen and Rutan, and Virgin Galactic was no longer just a legal entity without a product.The 2nd and 3rd Verticals: Launch Vehicle Providers and Human Spaceflight
Kelly Hall, a lifelong friend of both Burt and Dick Rutan and founder of Hall Star Speakers & Talent (the talent agency that books the Rutans for lectures and appearances), also attended that launch. Hall, who even has a bottle of champagne signed by the entire SS1 team, told NSG: “Because I knew Burt since 1982 and worked on Voyager, he never ceased to amaze me... and as with the Voyager, SpaceShipOne proved that non-government spaceflight was possible.” Hall’s experience alongside the Rutans inspired her to say that watching their innovations take to the skies “never gets old. it’s always an incredible magic and incredible feeling to be able to witness these things.”
The champagne bottle signed by the entire SS1 team.
On April 29 of this year, I stood just a few hundred feet from the same place as I had nearly a decade prior. This time the crowd was an order of magnitude smaller than on that fateful day in 2004. And this time SpaceShipTwo + WhiteKnightTwo (the older sisters of the original vehicles) stood on the main stage. The launch went off without a hitch, but no one reached space. On a scale of 1-10 (with 10 being head-to-toe “gooseys”) it was about a six. Not bad, but not the 10 I experienced in 2004. As I hopped into my car to drive from Mojave to Hawthorne for a SpaceX site visit, I had an internal dialogue with myself 10 years younger.
I considered that if somebody had told the younger me that, nearly 10 years later, we’d still be waiting to see a paying customer go to space on a Virgin Galactic vehicle, I would have responded by saying you had been denied far too many Happy Meals as a child, and that your cynicism would be your demise.
You would have been right though. And I would’ve been wrong.
I decided to turn to Hall for some perspective: “It’s not unusual for things to take a little bit longer than we dream of or we desire. The Voyager was going to take 18 months on paper but took nearly six years to reach fruition and success. I didn’t think it would take another decade [for VG to become operational], and I’m sure many of the investors didn’t think it would take another decade but things are falling into place. The technology is not yet there and has to be designed, built and tested so sometimes those stepping stones are a tiny bit further away than we desire. However, I know when Burt says this is what we’re going to do it gets done.”
In the spirit of Hall’s inspiring words, this month’s Thruster focuses on the 2nd and 3rd Verticals of the “8-Verticals of NewSpace:” Launch Vehicle Providers and Human Spaceflight. In these pages you will find a silver lining around the dark cloud that still hangs 62 miles overhead: that the democratization of space travel is more than just a dream (to paraphrase Fitz and the Tantrums). The good news is that over the course of that same decade or so, NewSpace has produced a diversification of companies, markets, and technologies that push us ever closer to that inevitable event in human evolution: thousands going to space and returning with vivid descriptions of the wonders they’ve seen. (Please see “Exit Strategy / Escape Velocity” in the May 2012 issue of Thruster.)
In the nearly 10 years since my “Kitty Hawk Moment,” we have seen SpaceX experience hypergrowth, from a NewSpace baby in diapers, to a “rocket factory” with 3500 employees and counting. With Grasshopper, we’ve also seen it move along the path to prove reusability can and should be done. We’ve seen Spaceport America funded, built and turned operational, with UP Aerospace, Armadillo Aerospace and others launching from its site. We’ve seen the revitalization of Cape Canaveral with numerous launches by SET and ULA and the emergence of Wallops as the current home of Orbital Sciences. We’ve seen NSG-tracked companies gain valuable “space heritage” with payloads from Nanoracksto Orbcomm. We’ve seen a “coral reef” of small sat companies like Skybox, Clyde Space, ISIS, Spaceflight Services, Cosmogia, and Nanosatisfi emerge to provide necessary and novel streams of revenue for LVPs of all shapes, sizes and destinations. And perhaps most importantly, we’ve seen investor dollars follow not far behind.
And amid all of these developments and even within the delays of suborbital progress, the global demand to burst through the invisible ceiling 100km above us has never waned.
NSG’s Richard David and Franklin Moore in Mojave on April 27
Make no mistake: the first powered SS1 launch was the catalyst that inspired hundreds of entrepreneurs throughout the world to follow their NewSpace dreams. Yes, there is still much work to be done. Yes, management is still struggling with mastery over the propulsion system. (Please see “Special Feature” in this issue of Thruster.) But, our desire to see VG and its competitors – like XCOR, Swiss Space Systems, and zero2infinity – succeed has not faltered.
To understand this demand, I spoke recently with Per Wimmer. Per is a remarkable person with far too many accomplishments to list. Most relevant for this discussion is that Per, who was recently awarded companion status membership for services to the space and aviation industry by the Royal Aeronautical Society (RAS), is a founding member of VG, the first passenger to be sent off by XCOR, and even has a ticket purchased through Space Adventures for an ARMA launch. Asked why he bought tickets for three competing 3rd Vertical companies, he replied: “the motivation for that is to hedge my bets to get up there as quickly as possible, in other words, whoever has the rocket ready first... Virgin Galactic and XCOR seem to be pretty neck-and-neck at the moment.”
Over the years, I’ve spoken with several industry insiders who have expressed an almost overt disdain toward suborbital. These are NSG 100, NSG OTB or NSG PTC engineers, executives, and investors who collectively grumble: “if it ain’t orbital, it ain’t worth doing.”
Per has a different take: “First, I think if we take it philosophically, as humankind moved in two dimensions – other than those 500 or so who passed 62 miles – there has not been much action in the 3rd dimension...however, now we’re standing in front of a new era...and as price comes down, that’s a real game changer.” Per, in contrast to the anonymous skeptical collective, believes staunchly that suborbital human spaceflight will impact the direction of the industry; in his words “we haven’t even scratched the surface of how much excitement mass media will have towards space.”
The founders of Mars One agree with Wimmer. While at the SpaceTech Expo event in Long Beach this month, I had the chance to sit down with Bas Lansdorp, founder of the non-profit organization Mars One. I may have some “space cynicism” toward a non-profit organization that seeks to award two people one-way tickets to Mars. But Mars One has already received “over 100,000 applicants at an average fee of $25 per application,” according to Nina Aziz, the Chief Commercial Officer at the 10-person Interplanetary Media Group, which is the for-profit entity associated with Mars One. Aziz told NSG that “about 20 percent” of the applicants have paid, which equals roughly $500,000 USD.
Aziz does not see Mars One as a direct competitor with VG and the other 3rd Vertical players because fundamentally Mars One’s “mission is not space travel per se.” Rather, Mars One seeks to “exploit the intellectual property assets” and find value in corporate and media partnerships a la Red Bull’s Stratos Project or Dassault Systèmes relationship with Swiss Space Systems. (Of course, Azis acknowledged that Mars One could be competing with those potential corporate sponsors who might consider lending their brands and opening their pocketbooks to competitors in the 3rd Vertical.)
Whether their legal entity of choice will produce the desired result remains to be seen. But the number of applicants clearly indicates there is a market for taking trips to the red planet or at least a market for contests where the promised prize is such a trip.
In the spirit of XCOR CEO Jeff Greason’s simple but profound statement “economics does not stop at the Earth’s atmosphere,” and in line with the “8-Verticals of NewSpace,” Wimmer (whose day job is as an investment banker in London) adds that “the biggest market opportunity is the lowering of CAPX2 to get to space.” Keeping his ibanker hat on, he believes with lowered launch costs, smaller satellites “might even be bigger than space tourism.” (Please see “Investor Watch” in the March 2013 issue of Thruster.)
In the inaugural issue of Thruster back in 2011, we took a critical look at the irony of European dominance in early rocketry compared to the relative lack of NewSpace activity today. (Please see “Point-to-Point: Europe” in the Premiere issue of Thruster.) Today, less than 20% of the NSG 100 companies are based in Europe. (Please see “Spaceland” in the March 2013 issue of Thruster.) With Per’s decision to buy tickets on three US-based NSG 100s – VG, XCOR, and ADVT/ARMA – we thought it important to get his take on the state of 3rd Vertical activities in Europe. “I’m following [zero2infinity and Swiss Space Systems] with good interest and in particular zero2infinity because it’s been around longest.” However, Per adds that it is his understand that both of these European-based NSG 100 and NSG OTB companies are still “finding themselves in a similar position as any passionate rocket builders” who face the obstacle of finding funds to capitalize their NewSpace dreams. (Please see “SmallCap Review” in the May 2013 issue of Thruster.)
“The race to space,” Wimmer says, “is partly about engineering, but certainly also a race in finance.” And with respect to European-based NSG-tracked companies, “the European players haven’t demonstrated the financing just yet.” (Please see “Point-to-Point: Europe” in the May 2013 issue of Thruster.) (For those who may wonder if Wimmer – who is willing to bet his life on 3rd Vertical companies and who recently became the first person to tandem skydive over Mt. Everest – would also bet his money on NewSpace, in fact, he is a “meaningful shareholder” in XCOR and says he might entertain investing in VG but the opportunity to do so is not today possible.)
Destruction – whether by the hands of humans or the power of nature – dominates the press’s coverage of our era. But all too often ignored is our desire to explore; a desire that only seems to increase with each new milestone surpassed in the NewSpace industry. 2013 has been a year filled with challenges – one look at the news indicates almost daily disruptions and eruptions. While the mainstream press generally avoids coverage of NewSpace (albeit the occasional tip of the hat to a SpaceX launch or a DiCaprio VG ticket auction), NSG covers “the other 400 companies” attempting to change the world and accelerate evolution just a bit. This month’s theme focuses on those companies in the 2nd and 3rd Verticals, which are doing just that.
Our dedicated top-notch writers focus on the human spaceflight and launch vehicle markets. With only a little more than 550 people having traveled a mere 62 miles from Earth, the discussion is an important one in the context of the greater NewSpace landscape. The rapid global growth of the NewSpace industry indicates that this will change. The question is: when? Other questions our writers consider: what will it take to see an order of magnitude increase in the total number of people to go to space? Which companies are currently seeking to change that paradigm? How are launch providers seeking to drive down the cost of spaceflight, and make it more regular/accessible to customers? What opportunities are there for private investors seeking to capitalize on this paradigm shift? What does it take to send a human to space?
1 Author Bob Clarebrough’s term used in the excellent article: That Kitty Hawk Moment (April 24, 2006; “The Space Review”).
2 Capital expenditures.
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