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The best way to make a small fortune in the space business is to start with a large one.
This is a quote often attributed to Elon Musk. Given that Musk has indeed accumulated a large personal fortune from various entrepreneurial activities before
undertaking his SpaceX business venture, we need to take that quote seriously. It also suggests Musk has not (fully?) imbibed the Kool Aid so often ridiculed at the Space Cynics blog. It is also said that Musk openly acknowledges that he cannot currently present a plausible business case to justify accepting money from investors.
SpaceX is said to be cash flow positive for the current year however that obviously involves deposits taken for future flights. While positive cash flow certainly is a good thing, it is also not the same as being profitable. In addition, SpaceX has yet to make any financial return on the substantial commitment of time and money and personal energy contributed by Elon Musk himself.
Surely Musk could figure out how to make his large fortune even larger rather than smaller if he so desired. So, what motivates Elon Musk in his quest to lower the costs of reaching LEO?
Perhaps Robert Zubrin (of all people) has the answer to this question.
At ISDC2006, Robert Zubrin added a new facet to his usual MarsDirect stump speech. Zubrin said that for people who had a goal of making money, this was the wrong convention to attend and there were other conventions better suited for that objective. He said that when people finally settle space they will do it for "love, not money."
For love rather than profit also appears to describe Elon Musk's motivation and commitment to space exploration, although Musk is an excellent businessman and clearly understands that financial feasibility is a necessary component. Musk also has said repeatedly that the opportunity for a personal flight into space is not a high priority which would seem to exclude Elon from the definition of space tragic coined by the Space Cynics.
After a crowd warm-up from Mike Griffin, Musk took the stage at last weeks Mars Society convention and among his many points said this (as summarized by Clark Lindsey):
- Started SpaceX to do something about costs and reliability of space launch.
- We won't become a multi-planetary species if these problems aren't solved.
- Sees humanity become multi-planetary as one of the most fundamental steps in development of life since it first came into existence on Earth.
- He is primarily interested in Mars and not in the Moon, space tourism, asteroid mining, etc.
Insofar as Mars exploration and/or settlement will not produce much in the way of revenue (at least for a while) then the objective of making humanity a spacefaring species appears to be the prime motivator. And if we do that as a species without Musk going himself and profit merely being the enabler rather than the objective, the best word to describe Musk is "altruistic" - - he is doing what he is doing for the best interests of our species, with personal gain as a secondary objective.
Yet Elon's own fortune is far too meager to accomplish that objective and without a sustainable business model spaceflight will remain something done on government's dime. Until a sustainable business model is located, Uncle Sam remains the essential source of sugar for space ventures. As blog commenter Paul Dietz said in response to a discussion of "White Hat" NewSpace firms:
White hats could stay white hats if they actually found a significant sustainable market other than Uncle Sugar. I truly wish them luck at that, but am not investing any of my own money.
Fortunately Elon Musk is willing to invest his own money even if he hasn't yet identified a significant sustainable market outside of Uncle Sugar. From another report on Musk's Mars Society talk:
Becoming the greatest rocket builder in US seems more alluring than a Mars trip to Elon at this point. Cash is key, and the only way to get Wall Street interested in private space ventures is simply for them to make money, Elon concluded. But how?
How indeed? At least we can be grateful that Elon Musk's love of space exploration and the prospect of humanity becoming a spacefaring species is sufficiently great for him to continue his efforts at turning large fortunes into small ones while efforts continue to locate a viable, profitable business model.
That expression has been around at least since Elon was in grade school.
Posted by: Rand Simberg | August 23, 2007 at 04:53 AM