TCS Daily

Intergalactic Space Virgins

By Dominic Basulto - December 20, 2005 12:00 AM

On December 14, a group of intergalactic space Virgins officially landed in the New Mexico desert, less than 150 miles away from the site of the famous Roswell UFO incident. In case you haven't heard by now, a 27-square-mile plot of land in New Mexico was recently selected as the official site of the first-ever commercial spaceport.

Backed by nearly $225 million in financing from local, state and government sources, Governor Bill Richardson welcomed British entrepreneur Richard Branson and the team of Virgin Galactic to the future site of the New Mexico Spaceport. Starting in 2008, Branson's Virgin Galactic, using technology developed by Burt Rutan for SpaceShipOne, will begin daily commercial space flights from the new spaceport facility. By the year 2010, the company expects to be making three 7-passenger spaceflights per day from the New Mexico launch destination.

The real story here, of course, is not the bravado of globe-trotting billionaire Richard Branson or the creation of a futuristic space tourism cluster in New Mexico. The real story is the ability of prize competitions - such as the Ansari X PRIZE competition - to spur not only breakthrough technologies but also the launch of entirely new industries within telescoped timeframes. Burt Rutan's SpaceShipOne, financed almost entirely by Microsoft billionaire Paul Allen, won the $10 million Ansari X PRIZE competition in October 2004, and nearly 12 months to the day, Virgin Galactic declared the full-scale launch of the commercial spaceflight industry. That was the dream of the competition's founders, who hoped to spur the development of private manned spaceflight by inspiring and rewarding innovation-minded entrepreneurs.

The X PRIZE competition galvanized a number of resources unique to the American context -- a fabulously wealthy financier who made his money the new-fashioned way (starting companies -- not inheriting wealth); a visionary entrepreneur like Burt Rutan unafraid to take risks; the incentives created by untapped multi-billion-dollar market opportunities; and the pioneering cowboy spirit eager to explore entirely new horizons. Along the way, the prize competition resulted in an elegant solution to the issue of manned spaceflight that would not have been possible otherwise. The solution devised by the team of SpaceShipOne was environmentally safe, efficient, and highly scalable. Instead of requiring months of preparation and training for spaceflight, Virgin Galactic is estimating that three days of training and pre-flight familiarization in the New Mexico desert will be sufficient.

After the announcement of the New Mexico Spaceport deal, the chairman and CEO of the X PRIZE competition likened the formation of the space tourism industry to the development of the automotive racing business in Indianapolis after the creation of the Indianapolis Motor Speedway in 1909. A whole ecosystem related to automotive racing developed in Indianapolis, ranging from engine manufacturers to merchandise companies. The same thing could happen in New Mexico. Virgin Galactic has already announced plans to move its headquarters and mission control to the New Mexico desert, and a long line of companies involved in fields ranging from aerospace design to tourism are expected to migrate to the New Mexico region, drawn by the profit potential of commercial spaceflight.

More likely, the development of the commercial spaceflight industry will lead to more than just a niche business of expensive space flights for celebrities and wealthy retirees. Just as the birth of the personal PC led to unimaginable ripple effects beyond just the computer industry, the impact of the spaceflight prize competition will likely go far beyond what we can imagine today. Suborbital flights are just the beginning. Once manned spaceflight becomes affordable for the masses, is it too much to expect the creation of orbital resorts and a new push toward manned space exploration?

Consider the fact that more than 100 people have already plunked down $200,000 apiece for a seat on a Virgin Galactic spaceflight and thousands more have already placed a total of $11 million in deposits for a chance at manned spaceflight. There has even been a bit of the celebrity buzz surrounding the announcement of the New Mexico Spaceport - former soap opera megastar Victoria Principal showed up at the event (perhaps envisioning herself as the Barbarella of the 21st century). Going forward, it's a near certainty that the vaunted Virgin marketing machine will kick into overdrive as the launch date of the first commercial spaceflight nears.

Without a doubt, this is an exciting time for the future of the space tourism industry. In China, there's talk of unmanned flights to the moon by 2007 and manned explorations by 2017. In Russia, there's already the opportunity to fly MiG-25 to the edge of outer space and to take trips to the International Space Station. The U.S. now has thrown its hat into the ring and the future looks bright. As Richard Branson pointed out, "We're going where no one has gone before. There's no model to follow, nothing to copy. That is what makes this so exciting..."

Dominic Basulto is a frequent contributor to TCS and the Editor of the FORTUNE Business Innovation blog.



New Mexico invests in X-Prize Cup (September 13, 2005) -- With ***ure X Prize Cup activities at the Southwest Regional Spaceport New Mexico, there is the potential to ''generate $500 million a year, with annual tax revenues reaching $20 million'' the press statement noted. The New Mexico State Legislature has already committed $9 million to begin work on the spaceport. Five million of which is for the planning and operations of the X Prize Cup -– to be STAGED AS AN ANNUAL EVENT to showcase personal spaceflight organizations and their hardware. Additionally, this year the LEGISLATURE CREATED THE SPACEPORT AUTHORITY to build and operate the facility, allocating an additional $1 million in capital outlay funds.

The only impressive thing is that government wasting money is unnoticed.
Burt Rutan was impressive in his launching to space with 20mil instead of 100bil. Virgin was impressive in that it signed up fares for space tourism.

This space port is not impressive. It is simply the latest example of an all knowing government stealing tax payer money to build something where the managers either can not or will not get private financing.

The impressive part of this is that no one seems to notice. No one notices government at any level jumping in on just about any scheme from stadiums to space ports and squandering billions of tax payer dollars on projects that the tax payers themselves refuse to fund. In other words the government stealing wealth and handing it to a billionaire like the owner of Virgin is so routine that it is assumed to be part of life. And that is impressively sad.

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