How Elon Musk Started SpaceX
Big ideas are never too big to pursue. Take Elon Musk, for instance. When he was looking for another business idea to sink his riches into, he stumbled on the idea of doing something space-related. Travel to Mars, perhaps?
Most people would laugh off the idea, but, as his vision unfurled, he decided to try and start a commercial space flight service to pioneer Mars and eventually transport humans to other planets. Think intergalactic airline service.
Musk is the perfect example of how someone should approach starting a business in an industry they know little about — GO FIGURE IT OUT! It’s as simple as that. He is the ultimate entrepreneur with extraordinary visions and a can-do attitude. He makes you believe anything is possible if you put your mind and energy to it.
2002: SpaceX is born, and the vision begins in a Hawthorne, California factory that was previously used to build Boeing aircraft.
Surround Yourself With Experts
Musk set out on his research by contacting a friend, Robert Zubrin, who coincidentally, was an aerospace engineer. Mr. Zubrin introduced him to Jim Cantrell, who introduced him to Tom Mueller. Both are accomplished aerospace engineers and founding team members of SpaceX.
Jim Cantrell tells the story that Musk learned rocket science by reading college textbooks and talking to heavyweights in the industry. According to Jim, “Elon is the smartest guy I know.”
At first, Musk did not plan to build rockets but to buy them, instead. He traveled the world to meet and learn from others on the international scene, and to shop around for rockets to buy.
With $100 million of his own money to start a space-related business, he (and his team) landed in Russia to meet engineers in the Russian Space Program who had rockets for sale. But, they didn’t take Musk seriously and tried to swindle hordes of money from him. He fled the scene and, at that point, decided he would rather build his own rockets; that’s when SpaceX was born. In his mind, obstacles are just problems that need to be solved.
Create Partnerships and Lobby, Lobby, Lobby
Permission to launch rockets into space takes approval by The Department of State and a license from the Federal Aviation Administration. And then, there’s NASA.
Musk spent almost $1.5 million on Washington lobbyists to get everyone on board with his grand vision. You can only imagine what must have been going through the minds of those government officials when they heard his pitch.
In 2006, Funding for the space exploration program was critically slashed by the Obama administration, and NASA decided to approach private companies to build rockets and send astronauts into space. It was Musk’s lucky day — he seized the moment and promised NASA he could build a spacecraft faster, cheaper, and more efficiently. He was awarded a $278 million agreement and now needed to demonstrate he could build and launch a rocket into space. That’s where the Falcon 9 rocket comes in…
The Falcon Rockets
RETURNABLE and REUSABLE rocket boosters are at the core of the SpaceX business model. You can’t start a commercial space transport company with disposable rocket boosters; it’s not economically feasible.
2006–2009: At the SpaceX factory in Hawthorne, California, the engineers begin to build the first rockets. They start small. They build, launch, test, then build bigger, launch, and test again. Finally, they build even bigger until they get to the Falcon 9 rocket.
There were many disasters and explosions along the way that made the future of SpaceX look bleak. But, they overcame the challenges and went on to secure a $1.6 billion NASA contract to haul cargo to the International Space Station, and yet another $118 billion after that.
A study by NASA and the Air Force found the cost for SpaceX to build Falcon 1 & 9 Rockets from concept to flight was about $400 million. They claim the same rocket would cost NASA three-times that amount because of it’s bureaucratic structure. Musk marched on.
A Few of The Rockets Stand-out Features:
- SpaceX developed technology for its first-stage booster rocket to reverse direction under a controlled ground landing, making them reusable. To get to Mars, they will need to have their 1st & 2nd-stage booster rockets return to Earth. This has proven to be very challenging for them.
- SpaceX builds modular rockets that are interchangeable with other models to make them cost-effective to manufacture.
- A majority of the rocket’s components are manufactured in their factory keeping costs down and quality control in check.
- The escape rocket used to push the capsule away from the booster — in case of a malfunction — is built into the rocket booster, as opposed to sitting above the capsule. It’s in a better position to quickly thrust the capsule out of danger by pushing instead of pulling it. This design also makes the rocket reusable since all of its parts remain attached after the capsule separates from the rocket.
SpaceX Gets Into The Satellite Business
In May of 2019, the FCC authorized SpaceX to deploy satellites into Earth’s lower orbit to create a satellite network business called Starlink. The broadband internet service will be available to the world by the end of 2020. Its possible Musk is building the infrastructure needed for interplanetary travel and life on Mars.
At this point, he learns there is a need in the market for satellite launching services, so SpaceX expands its business model to include a small satellite launch service. The cost? $62 million for a basic flight; more if you require cargo transported to the space station. According to the research firm Frost & Sullivan, the small satellite launch market will exceed $70 billion in revenue by 2030.
The Crew Dragon Spacecraft
2010–2013: According to the SpaceX website:
The Dragon spacecraft is capable of carrying up to 7 passengers to and from Earth orbit, and beyond. It is the only spacecraft currently flying that is capable of returning significant amounts of cargo to Earth, and will soon become the first private spacecraft to take humans to the space station.
By now, Elon Musk has proven he can make and fly rocket ships. He caught up to his competitors, Boeing and Sierra Nevada, to compete for a NASA contract to fly astronauts to the International Space Station (ISS). Ultimately, SpaceX wins the contract, beating out two seasoned contenders.
The Dragon spacecraft is scheduled for takeoff on May 27, 2020. It’s the first manned flight in almost a decade. Previously, NASA paid Russia to get its astronauts to the space station, until now.
The astronauts are tasked to perform tests on the Dragon as part of NASA’s certification process. If all goes well, Dragon’s reusable rocket will be used to haul cargo to and from the space station. This accomplishment will put SpaceX one step closer to Mars as part of NASA’s Artemis Program.
To virtually view the takeoff on May 30th you can register here with NASA.
What Does It Cost To Build A Rocket Company?
The Motley Fool crunched numbers to find out the cost to build and launch a rocket into space. They came up with $50 million to build and a $62 million price tag; the remaining $12 million goes to overhead costs and profit. Since they are not a publicly-traded company, we can only guess on the cost for them to do business; you can read more about their financial guesstimate here.
The Ultimate Goal: The Starship
2013: According to the SpaceX website:
SpaceX’s Starship spacecraft and Super Heavy rocket (collectively referred to as Starship) represent a fully reusable transportation system designed to carry both crew and cargo to Earth orbit, the Moon, Mars and beyond. Starship will be the world’s most powerful launch vehicle ever developed, with the ability to carry in excess of 100 metric tonnes to Earth orbit.
In 2014 Elon Musks’ big vision to create a commercial spacecraft powerful enough to reach Mars is in motion.
The SpaceX team was in need of a new factory, test site, and launchpad to begin production on the long-awaited Starship. They set out to build the next “Cape Canaveral” in Boca Chica, a small town on the gulf coast of Texas, which is also equipped with a shipyard to accommodate mass production when the time is right.
But, Musk is challenged when the residents of this tiny seaside village react negatively to the imminent danger of rockets exploding in their backyards. He responded by buying out many of the homeowners at 3x the value of their homes.
Next, Musk needed state and local officials on board. He invited them to SpaceX headquarters in California to dazzle them with his rockets and to promise them he will boost the job market in their sleepy town. He hired Texas lobbyists to get Governor Rick Perry’s support. It worked. The Federal Aviation Administration approved the development of the “spaceport,” and the governor passed a bill in the Texas legislature to allow Boca Chica officials to shut down beaches and roads in the area when space flight activities were scheduled. SpaceX was also given an incentive package to bring their business to Texas.
The Federal Aviation Administration must believe there is a potential risk to the residents in the area since they required SpaceX to increase its insurance, from $3 million to $100 million.
As SpaceX prepares to launch two astronauts into space aboard the Crew Falcon in just a few days of this writing, Elon Musk pushes on in Texas, making his dream come true to build an Interplanetary Transport System. Watch a replay of the liftoff here.
Dream big and shoot for the stars!
To Mars and beyond!
