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Chronicles of a Would-Be Space Entrepreneur

The Prequel was published in the March 2005 Odyssey.

Part 1: Taking the Plunge

By Steve Bartlett

After working for several years in the aerospace industry, I decided that it was time to head out into that vast, unknown sea of space entrepreneurship. I’d participated in a variety of programs for a few different companies, being involved in reusable and expendable launch vehicles, rocket engine development, composite materials, missile systems, space stations, space robotic operations, ground support equipment, and such. So I had some knowledge of what was being done, how, and by whom in the space arena. And, like many people before me, I said, “I can do that!”

If I just wanted to earn a living working on space projects, I could have kept on doing what I was doing: working for an established aerospace company. It was a known commodity and I’d been successful at it for some time. I’d done some pretty cool stuff over the years. I had the satisfaction of seeing things that I built fly on a tail of fire. And tens of thousands of people around the world do that every day. It’s a good living and the risks are usually limited. Your biggest concern is usually the possibility of a layoff.

For some of us, there’s always the lure of being your own boss and calling the shots. But what did being a space entrepreneur really mean?

The short answer is that a space entrepreneur is someone who identifies and fills a need in the space arena and makes a profit while doing it. There are a lot of needs in the space field and a lot of opportunities. Some of these have already attracted the interest of entrepreneurs: low cost launch vehicles, on-orbit repair and servicing, space tourism, launch support, communications and control, satellite imaging, high-speed package delivery, crew rescue, logistical support, waste disposal, payload processing, orbital debris mitigation—the list goes on. And for every one of these, there are a whole raft of components and services that have to be supplied for them to work successfully. If the president’s Lunar/Mars Initiative moves forward, these needs and opportunities will increase manifold.

But what form would such a space business take? How does one set it up?

There are a number of space-related companies that have come and gone over the years. These give us some examples of ways that startups have worked and ways they’ve failed. In general, we can lump the startup company forms into a few broad categories: the “go-it-alones,” the component and specialty service providers, the technology developers, and the consultants.

The “go-it-alones” are those new firms that have a major system or service that they wish to develop using all private, non-governmental capital. These companies rely on a sizable source of dollars to pay for research, testing, design, manufacturing, and operations. The source of money may be a single individual (e.g., SpaceX founder/owner Elon Musk or Andrew Beal of Beal Aerospace) or a pool of investors (e.g., Kistler Aerospace.) Historically, these firms’ success or failure has depended on how much money they had available to them, how committed their investors were to the project, how much they could tolerate the inevitable technical glitches and setbacks, and how realistic their expectations and business plans were. These companies tend to be very independent and don’t rely heavily on government program dollars for their survival.

The component and specialty service providers are firms that address specific needs of larger firms or the government. It might be a unique device or piece of software, a special way of building a piece of hardware, an analytical task that requires specific tools and expertise, or a way of doing something that requires a patented or proprietary process. These companies usually require much less capital than the “go-it-alones,” are much more plentiful, and their goals and expectations are much more modest.

The technology developers are, as the name implies, companies that take an idea and develop the technology to carry it to fruition. They are not themselves in the business of implementing the technology but simply develop it to the point where someone else can use it. These companies are excellent “idea houses” and support long-range ideas. Their capital requirements are usually less than the component and specialty service providers. Additionally, there are some important government programs devoted to innovative research and technology development that foster creative thinking. We’ll discuss these programs in a later installment.

Finally, there are the consultants. These are individuals or small groups with knowledge and experience collected from years working on space and space-related programs. They rely on their network of contacts and on their unique experience base to find clients and business. Consultants have the lowest need for initial funding but they are far more numerous than the other types of startups. The competition for consulting work can be fierce and their contracts may be quickly terminated if their clients' funding gets tight.

I’ve decided to take the consulting track. I don’t yet have the contact with millionaires or the startup capital for either the “go-it-alone” or the component and specialty provider tracks. And I don't yet have the network of researchers necessary for the technology developer track. But eventually I might. In the meantime, I’ll go with what and who I know and pursue consulting work. Wish me luck.