A view inside a SpaceX facility. (credit: Ken Gosier, Space Frontier Foundation)

Backgrounder: SpaceX making history

by Sam Dinkin
Monday, February 27, 2006

Q: Who founded SpaceX, when, and why?

A: SpaceX was founded in June 2002 by Elon Musk, co-founder of PayPal, the world’s leading electronic payment system. He created SpaceX to help make humanity a space faring civilization.

– SpaceX.com FAQ

To make humanity a spacefaring civilization is more a matter of economics than rocket science. Just as Elon Musk’s PayPal product took Internet payments that cost $0.40 or more per transaction via credit cards and made them free, his SpaceX products are going to remake space travel with new lower prices.

While humanity becoming spacefaring may be inevitable in the long term (See “Human spaceflight is inevitable”, The Space Review, August 2, 2004), if personal income keeps growing, applying modern manufacturing, testing, control, and management techniques to spaceflight may allow us to see substantial strides this decade.

SpaceX is applying modern manufacturing techniques such as friction stir welding and modern CAD and production data management techniques to building its rockets. It is also developing its Falcon 1, 9, and other rockets in quick succession, reusing many components and design and manufacturing strategies.

Not satisfied with business as usual, Musk’s SpaceX does not rely on decades-old space proven products or even the veteran aerospace testing firms, instead building new components and testing them in house. SpaceX’s control systems are based on modern technologies that are off the shelf such as an ethernet network to run its avionics systems.

The most radical innovation is running SpaceX not like a bureaucratic aerospace firm or even like a skunkworks. SpaceX is run more like an Internet technology startup like Musk’s Zip2 or PayPal. Flat hierarchy, stock options, and a fun-loving holistic culture that makes free snacks available to the workers are three of the most visible elements of this business strategy.

None of these innovations is particularly novel except perhaps for the sleepy launch industry, mired in risk aversion and cost-plus thinking. Putting together a boring (perhaps too boring) set of technologies dropping the cost to orbit to less than $3,000/kg vs. $11,000/kg for an Atlas 5 401 just shows how moribund the cost-cutting energy of SpaceX’s competitors is. Launching once a day, as might be required to produce a snap-together Mars mission, might reduce costs another factor of ten from development amortization, lower insurance costs, reuse, higher capital utilization, and mass production techniques that could reduce Falcon to a little more than the cost of the aluminum and the fuel.

If SpaceX’s Falcon series flies and keeps its innovative price list, Elon Musk may generate his “Netscape Moment”. We may see a stock market boom, space IPOs, and the 3rd nine-figure dollar payout to Elon’s investors.

Sam Dinkin is a frequent contributor to The Space Review and CEO of SpaceShot, Inc. He can be reached at (888) 434-6546 and thespacereview@dinkin.com.

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