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Space Cowboys

High-profile entrepreneurs pursue the final frontier.
Magazine Contributor
3 min read

This story appears in the April 2005 issue of Entrepreneur. Subscribe »

When several of the world's most notable entrepreneurs all seem to agree where the next big business opportunity lies, you have to pay attention. But what if they're all starting companies to provide space transportation to tourists?

The question is highly relevant today, as a gaggle of marquee business creators line up to invest sizeable fortunes in going where no profit-making business has gone before. The list includes Microsoft co-founder Paul Allen, founder Jeff Bezos, Virgin founder Richard Branson and Elon Musk, who co-founded PayPal and sold it to eBay for $1.5 billion.

Space isn't as unlikely a source of profits as it may seem according to Musk, whose Space Exploration Technologies in El Segundo, California, plans to launch its first space vehicle this year. The development costs--as much as $100 million--will be recouped by launching satellites for communication companies and government agencies at first, Musk says. SpaceX, as the company is known, will charge $5.9 million per shot of the smaller of the two rockets it plans to develop, and $15.8 million for the larger one. Both figures are substantially less than going launch rates. SpaceX's first customer is the Department of Defense, for which it plans to send a $30 million satellite into orbit.

"We'll very quickly get to seven or eight launches a year," Musk says. "That brings us to about $100 million in annual revenues, and we'll grow from there." After refining SpaceX's satellite-launching capabilities, Musk hopes to offer human transportation to NASA and other space agencies as well as tourists. "Long term, that probably is the biggest growth market, provided you can get the safety and cost to acceptable levels," he says.

Branson's Virgin Galactic is going straight to tourism. The London company is investing $100 million to develop a fleet of ships offering space rides for $190,000 per person. Government agencies have charged $15 million and up to the handful of private individuals determined to fly into space, the company says. At lower rates, Virgin envisions 3,000 people lining up within five years of the first commercial launch in 2007. "We've had huge amounts of interest worldwide," reports Alex Tai, a Virgin Galactic director.

Virgin is now securing regulatory approval for the U.S.-based launches and is finalizing designs based on technology developed by aviation entrepreneur Burt Rutan for his SpaceShipOne, winner of the $10 million Ansari X Prize in 2004 as the first private enterprise to safely put a human in space.

Other leading entrepreneurs are also involved. Allen owns Rutan's Mojave Aerospace Ventures. Little is known about Bezos' Seattle-based startup, Blue Origin, except that it plans to develop a human-piloted launch system. With this crew of entrepreneurs at the controls, the new space race promises to fascinate.

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