SUCCESS!!! Using Economic Engines to open the space frontier

The last 24 hours have been incredibly important in the history of space. With the first public flight of the Rocket Racing League "X-Racer" and the rollout of White Knight 2. So why so critical?

So long as we are dependent on the ups and downs and political whims of government funding to drive space exploration we are fundamentally stuck on this rock. Governments have two fundamental failures that prohibit them from doing what it takes. First, they are risk adverse... They can't drive breakthroughs because such breakthroughs require risk and the significant possibility of failure. Fail in the government and a congressional investigation will follow, you'll get investigated, demoted, transferred, or black-listed. Second, government agencies can not make the long-term commitment to funding required for space. How can you plan on a 5 - 10 year program when congressional elections every two years, and Presidential elections every 4 years result in start-stop-start-stop-cancel programs... we've seen this over and over again over the past two decades.

What is needed is the development of what i call an "exothermic-economic-reaction" (smile)... a profitable industry whose profits are re-invested into technology R&D and continually improve the product, the reliability, the price-performance equation. Why is it that the major Pharmaceutical companies privately out-spend NASA's entire annual budget on new drugs every year, and the major aerospace primes spend NO money internally on new launch vehicle developments? Because the Pharma companies are VERY VERY profitable, and the launch industry hardly breaks even.

We need profitable, human-related, space companies with large and robust markets that will drive down the cost of spaceflight, in the same fashion that the large and vibrant PC market took us from room-size systems to a laptop on every desk!

OK, now back to Rocket Racing and Virgin Galactic. Both of these are critical steps in creating new markets. Rocket Racing is tapping into the multi-billion dollar entertainment marketplace. If we're successful (disclosure: I serve as Founder & Chairman of RRL), this company could develop into a multi-billion dollar enterprise... a company which is exciting the public about space and driving the development of low-cost and reliable engines. Also important, RRL is teaching us how to operate rocket engines safely with less people... And we also should remember that the cost of spaceflight currently is all about standing armies of people (the cost of fuel is <5%).

In the same fashion, Galactic and my other companies Space Adventures and Zero-G (the only two *operating* space-tourism companies) are all tapping into the private spaceflight market. The goal here is two-fold. (1) Make spaceflight relevant to people because THEY GET A CHANCE TO GO AS WELL; and (2) create a consistent, large and reliable marketplace (self-loading carbon payloads) that drive a demand for 4 flights per day (versus the four flights per year that we currently experience).

The next few years will be critical for our nascent industry. If we do our job well, and we have a few commercial successes and one or two IPOs (e.g. a "netscape moment") then we'll see a flood of private investment capital and intelligence capital that may help us bring about a true renaissance of space.

-Peter H. Diamandis, MD
Chairman/CEO, X PRIZE Foundation
Chairman, Rocket Racing League
Managing Director, Space Adventures

Robin said...

Peter, do you really mean risk adverse (acting against or in a contrary direction: hostile ) or was that a typo and you meant to say risk averse (having an active feeling of repugnance or distaste)

And do you really think earthbound rocket racing could be a billion dollar enterprise, or is this just a cover story for developing cheap reusable rockets that could get low budget entrepreneurs off the planet?

Natalie said...

The computer analogy is a good one! I had not thought about that before. It's also like cell phones! Technology has to be personal in order to be profitable!

Anonymous said...

Hey Peter,

Good to see you posting here!

As far as the private sector goes, the White Knight is a good start, although hopefully the price will come down once Virgin begins doing lunar tours. ;-)


Frank Taylor said...

Hi Peter, congrats on a successful public flight!

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