On the 27th of May, 2020, SpaceX was 17 minutes away from launching two American astronauts into space, on their way to the International Space Station, before it was called off due to bad weather. The private company, a brain-child of the serial entrepreneur Elon Musk, had a long and rocky road to follow before it reached this point, and its $30 billion valuation.
In 2001, after the sale of his online financial services company, X.com, known today as Paypal, Musk turned his attention to space, quite literally. His grand plan was to take payloads and humans to Mars, an ambition which he pursues to this day, a full 18 years later. An initial attempt to purchase refurbished Russian ballistic missiles proved difficult, as he found that the rockets were far too expensive and the Russian officials, who failed to take him seriously, were a serious cause of friction.
On the flight home from Russia, Musk realised that he could potentially start his own rocket-manufacturing company to cut the cost of space flight. According to early Tesla and SpaceX investor Steve Jurvetson, Musk calculated that the raw materials of constructing a rocket was only 3% of the sale price of a refurbished rocket at the time. By constructing 85% of the parts from the raw materials, SpaceX could cut the launch price by a factor of ten and still have a 70% gross profit margin.
SpaceX was thus formed in early 2002, and expanded rapidly. Their first rocket, the Falcon 1, failed to reach orbit three times but succeeded on the fourth, making it the first privately-developed rocket to go into orbit around the Earth. However, with these failures came high costs, and in late 2008 was weeks away from running out of cash, and with it, Musk’s Mars ambitions would have ended too.
Enter NASA, the world’s most famous space agency, and the most successful. Two days before Christmas 2008, NASA announced SpaceX had been awarded a $1.6 billion contract to fly supplies to the International Space Station, a program known today as Commercial Resupply Services. Since then, SpaceX have had no end of success, flying to the ISS 20 times with their newer Falcon 9 rockets since 2012. Yesterday, only Florida’s temperamental weather could put a halt on their first attempt at a manned mission to the ISS, with another attempt now slated to happen on Saturday.
SpaceX’s success is not simply down to their cutting-edge engineering or the large contract from NASA. That’s half the story. What sets SpaceX apart is the victories they have won in other spheres, relying on economics and deal-making. For example, they staged a major coup in 2007 through the rights which they secured to lease the Cape Canaveral Air Force Station’s Launch Complex 40, a key site to launch their rockets. SpaceX also generates revenue through launching satellites into low earth orbit, such as the Starlink satellite system which has been rolled out over the last few years with great success. Furthermore, they don’t just build rockets for every single mission, reusability is a key asset of its rocket designs, with over 50 SpaceX boosters having flown back to Earth and some were refurbished for future flights.
With Musk now funding his Mars ambitions through Starlink, a set of satellites used to beam internet connectivity to the world, it looks like SpaceX are here to stay. Drive, determination and ingenuity are responsible for its success, with Musk as their showman, and a highly successful team turning his dreams into a reality.
Festus Media 