Star-gazing tech titans put money where dreams are
By Michelle Kessler, USA TODAY
Adeo Ressi and Elon Musk drove the Long Island
Expressway in late 2000, trying to figure out what to do next in life.
The tech bubble had burst.
Ressi was stepping down as CEO of a struggling Internet firm.
Musk, co-founder of online payment firm PayPal, planned to hand the company to someone more experienced.
The friends — former college roommates — looked
into the darkness of the night. "There was a moment of silence," Ressi
says. "I don't remember who said it, but someone said, 'Space.' " They
both laughed, then discounted the idea.
Three years later, Musk is building a rocket to
carry cargo. Ressi is helping create what he hopes will be the first
spaceship for tourists. If all goes well, both could blast off next
They might be joined by other tech-savvy entrepreneurs who — at an unusual rate — are hurling themselves into space ventures.
Amazon.com CEO Jeff Bezos is backing a space
venture, as is John Carmack, the man behind the best-selling video
games Doom and Quake. Billionaire Microsoft co-founder Paul Allen is
believed to be funding a rocket company, industry insiders say. Eric
Klien, CEO of Web-hosting firm Colossus, is raising funds to build a
"space ark" to protect the human race should Earth become
uninhabitable. (More: The
companies and their tech connections)
Many of these spaced-out entrepreneurs say
they're living a childhood dream. And why not? They've got the money,
thanks to huge wins during the tech boom. They hope to go down in
history as extraterrestrial pioneers — much more exciting than, say,
e-commerce pioneers. And they could even make money. Getting people and
cargo into space cheaply is an untapped market.
"The first trillionaires will be made there,"
says Peter Diamandis, creator of the X Prize, a $10 million purse
extended in 1995 for the first private-sector team to build a rocket
Skeptics abound. Henry Hertzfeld, senior
scientist with the Space Policy Institute, calls private space flights
a "rich man's hobby." Neta Bahcall, astrophysics professor at Princeton
University, calls launching "a very difficult and expensive endeavor.
... To get out of the strong gravity of Earth, you need a very powerful
rocket — essentially, a bomb."
Even simple rockets that launch satellites today
cost about $30 million. Danger also abounds. About 400 people have made
it to space, but about 20 have died in the process. The explosion of
space shuttle Columbia this year shows how something can go wrong, even
with NASA's resources.
Regulatory hurdles, too, could tie up flights
for years, says Hertzfeld. The Federal Aviation Administration is in
charge of licensing U.S.-based space flights. Some X Prize competitors
have started seeking licenses, but getting one could take years,
Hertzfeld says. Rocket entrepreneurs testified before Congress this
summer in hopes of clarifying and loosening restrictions against rocket
Finally, money is short. Most of the space buffs
don't even seek venture capital, which is typically tapped for new tech
ventures. Space "is too risky," says Brian Chase, executive director of
the National Space Society.
Even so, the entrepreneurs press ahead, as have other CEO-types.
Howard Hughes, founder of Hughes Aircraft, in
1938 flew one of the first round-the-world trips, a journey that took
three days, 19 hours and 17 minutes. Today, Oracle CEO Larry Ellison
pilots yachts in the America's Cup and other races. He was almost
killed, at least once. In 1997, Virgin Group CEO Richard Branson, in an
attempt to fly the first balloon non-stop around the world, thudded to
the ground at 25 miles an hour in an Algerian desert, short of his
goal. He also failed in an attempt to cross the Atlantic in a speedboat.
But tech types and space have a special
connection, observers say. Tech is about the future, discovery,
breaking barriers. So is space. Technologists push the edge. Space has
no edge. Even oceans have floors. The entrepreneurs matured post-Star Trek amid
the rapidly enveloping electronic age. They got rich on a new idea —
the Internet — and grew up "devouring science-fiction novels under
their bedsheets," says Tony Perkins, editor of tech Web site AlwaysOn.
Space "is the next big leap," the final
frontier, says longtime Silicon Valley marketer Fred Hoar, now
professor at Santa Clara University. The drive to conquer space stems
from the Silicon Valley ... belief that progress continues unabated,"
Struck by stars, fame, riches
Besides, some of the entrepreneurs say, they're
obligated. Leaders in business should be leaders in exploration.
"Things may not happen if people like me, or us, don't go out and do
it," says Carmack, who's invested $600,000 so far in Armadillo
Aerospace, a leading X Prize contender.
Why they're pressing:
•Business opportunities. "It's almost
impossible for someone who has worked in other areas of technology to
comprehend how fallow this field is," says Jeff Greason, CEO of XCOR
Aerospace, an X Prize competitor.
NASA dominates the space industry. Its launches
take years to plan and cost about $75 million each. Its big,
sophisticated equipment, such as the space shuttle and Delta rockets,
is designed for complicated missions.
But not every flight needs to be that complex,
the tech entrepreneurs say. A rocket that hits a "suborbital" state,
where weightlessness occurs, but quickly returns to Earth is much
easier to build and launch than one that can orbit the Earth for days,
the entrepreneurs say. Some of the X Prize competitors hope to land on
runways, as the space shuttle does. Others plan to fall to Earth while
a parachute slows their descent.
Already, travel companies are taking
reservations. The most prominent is Space Adventures, which is
advertising a flight for $98,000 on a yet-to-be finished short-flight
rocket. More than 100 people have signed up, says the Arlington, Va.,
firm. It helped Wilshire Associates CEO Dennis Tito in 2001 become the
first paying space tourist. He paid $20 million to join a Russian space
crew for a flight to the International Space Station.
For now, billionaires such as Tito have the best
chance of getting to space. But that might change. In 1936, nine
passengers paid $1,438 — worth about $18,700 in today's dollars — to
take one of the first long-distance flights, from San Francisco to the
Philippines. That was 33 years after the Wright brothers' first flight
and more than three decades before air travel became mainstream. Today,
that flight costs around $630. "It's taken awhile for this to be viewed
as a serious business," says XCOR's Greason. "Five years ago, I didn't
dare breathe the word 'tourism.' "
•Desire to leave a legacy. After hitting
it big with PayPal in 2000, Musk, worth about $200 million, says he
asked a friend, "What is the most important thing that we can and
should be doing?" He now has two rockets in the works to deliver cargo
to space. "Of all the great things humanity can do, experiencing the
stars is one of the greatest, if not the greatest."
Colossus CEO Klien says the human race runs the
risk of someday being wiped out by a catastrophe. As such, he's
invested $100,000 to start the Lifeboat Foundation, which aims to build
a self-sustaining space station to float around the Earth.
•It's a thrill. Carmack, of Doom and
Quake fame, used to buy a turbocharged Ferrari each year. In 2000, he
started Armadillo Aerospace. He hasn't bought a Ferrari since. "When
you're at the top of the field, it's a gem when you learn something
once a month," Carmack says. "Jumping to something completely different
is really fabulous."
Most of all, engaging in space allows entrepreneurs to fulfill childhood dreams.
Venture capitalist Anousheh Ansari, 36, grew up
in Iran. Her family slept outside when it was hot. "For hours and hours
and hours, I would watch the stars," she says.
Being an astronaut wasn't an option, so Ansari
directed her passion at her start-up, Telecom Technologies. She made
her fortune when she sold the company to Sonus Networks in 2000 for
about $735 million in stock.
Now, Ansari hopes to invest in a space-related
company via her venture capital firm, Prodea. "I feel like we're one
piece of a much bigger picture, and I'm trying to get a sense of what
that big picture is," she says. "Space travel will take me one step
Ken Winans, president of investment management
firm Winans International, used his personal wealth — much of it earned
during the stock market tech boom — to amass a $100,000 collection of
space memorabilia. He turned it into a traveling exhibit for schools
As a child, he remembers watching astronauts
walk on the moon. "These are my first heroes. The first thing I wanted
to do was be an astronaut," he says.
Space tourist Tito always wanted to go to space.
He got an aerospace degree and worked for NASA's Jet Propulsion
Laboratory. Frustrated by low pay, he quit after five years.
Eventually, he created a technical way of analyzing financial markets.
It made him a millionaire.
"But that dream of going into space never left me," he says. He often watches the videotapes he took from the space station.
The flight, he says, "was the most enjoyable and euphoric experience of my entire life," he says.