drastically. I want to see if taking people into space could become a working business proposition and also create a new technological platform for science, satellites and other human activity in space. There is no doubt though that tourists need to be the first stepping stone on our journey.
Our initial task has been to establish the likely demand for what we have in mind. In a new field, this can be hard. What questions should we ask, and how should we interpret the answers we get back?
Market consultancies are a mixed bag, on the whole. You should definitely see what they have to offer, but please, never neglect your own reading and thinking. Consultancies, like any group of experts, are best given something to chew on, and the more insight and detail you can provide about your needs and questions, the more useful the advice you will get back.
I can’t deny that, in our hunt for sound advice, our passage has been smoothed by the fact that space has such huge commercial potential. Apart from Virgin Galactic, there are others anxious to become involved in commercial space: there is Jeff Bezos, who made billions selling books and other goods in cyberspace with Amazon.com; the Las Vegas hotel magnate Robert Bigelow, who is now developing a large inflatable space-hotel; John Carmack, the computer-games creator behind hits such as Doom and Quake; Elon Musk, the founder of PayPal, who has set up SpaceX, a commercial orbital transportation service.
Such is the demand for high-quality research in this sector, consultancies have grown up dedicated to encouraging and shaping its emerging markets. In 2002, a survey performed by Zogby International for Futron, one of the leading space consultancies, began to look seriously at the market for space tourism. Their reports suggest that from 2011 there will be 2,000 tourist astronauts a year, and that by 2021 as the cost comes down, there will be around 15,000 a year, by which time the potential revenue from this business is $676 million per annum.
Zogby arrived at these figures by interviewing thousands of very wealthy individuals. My vision is to make the experience of suborbital flight open to many more people. Virgin Galactic only needs two flights per day at three different sites to break through the Futron survey barrier and, with all things going well, this is a highly conservative estimate. My own prediction is that by 2019 the price of a trip into suborbital space will drop to a level that will enable hundreds of thousands of people to experience and enjoy a flight into space. For someone in Europe or America it will be as simple as a decision of whether to go on holiday to Australia or up into space. A figure of under $100,000 is eventually achievable. But even if Futron’s survey is correct, Virgin Galactic will still be a successful business.
Virgin is ideally placed to move into the space industry. We have the expertise and experience of moving millions of people around the globe, safely and securely. What the Virgin brand will do — unlike any other in the commercial space market — is establish in the public mind that space tourism is for them: a service industry that’s going to be a lot of fun, while being as safe as people can make it. The brand also helps to give the team global credibility as they build out the business to include environmental science work in space, satellite payload launching and astronaut training.
In March 1999, Will Whitehorn registered Virgin Galactic as a company — and our hunt for technology to get us into space relatively cheaply began in earnest.
For years, however, I had been keeping tabs on anything and everything to do with the vexed business of getting off the ground and into space. I wanted us to be first in this sector, in the same way that I wanted us to be first in the biofuels market. And just as we’ve toyed with some very unlikely biofuels over the years, we’ve witnessed the launch of some pretty crazy prototype spacecraft!
This is the unseen part of business, the part that nobody ever discusses because, to be fair, there’s not a lot to discuss.
Our search for a way into space led us into a brave new world of exotic materials and untried designs, bristling with spin-offs and business opportunities; a thriving community of small companies and driven individuals, motivated by prizes, supported by engaged and well-informed philanthropy.
It was a strange experience. Having considered myself a small entrepreneur all my life — all evidence, airlines and the rest of it, to the contrary! — it was dizzying for me to find myself looking at business through the other end of the telescope. Yes, I was looking to set up my own business — a small commercial space company — but at the same time, I could see that the capital I had to hand could make a real difference in this sector, encouraging other small businesses to develop.
I was now not merely innovating in an existing market; I and people like me were actually helping to create the market. This posed the old question in a whole new light for me — how could we best make a difference?
The tipping point for commercial space travel came during the millennium with the announcement of the Ansari X Prize by space entrepreneur Peter Diamandis. The X Prize set a simple challenge to contestants: carry three people 100km above the Earth’s surface, twice within two weeks. Peter had come to England to pitch the idea to me several times since 1997, and we thought a Virgin X Prize was a good idea. However, rather than sponsor a prize, we wanted to take the technology forward ourselves and build a business.
We made the right decision. We were playing to our strengths by developing our own company. That said, I don’t think we’d be sitting here preparing for the launch of our first spaceship if it had not been for Peter’s idea, his determination, and the huge generosity of Anousheh and Amir Ansari, who were the ones who ultimately donated the $10 million prize.
The Ansari X Prize had twenty-nine entrants, but only three serious contenders. Of these, just one had managed to acquire serious funding —
Burt Rutan’s company, Scaled Composites — based in Mojave, California — unveiled the existence of its space programme on 18 April 2003. Burt’s
On 17 December 2003, we finally got confirmation of what had become an open secret in aviation circles — Paul Allen, a reclusive billionaire with a passion for science fiction, was Burt’s financial backer for the
I calculated that Paul had spent about $26 million to achieve winning the $10 million X Prize. So I wrote to him in January 2004 proposing a fifty-fifty joint venture.
Dear Paul,
May I congratulate you on the latest flight. From the footage I saw it looked magnificent. I should be delighted to work with you on taking the project forward and helping turn it into a serious space-tourism project. I’m hopeful that with the strength of the Virgin brand and our team’s marketing skill and your technological skills we can not only get your investment back but earn enough to take the project forward into even greater heights. Our suggestions are these: 1) that initially we together spend the necessary funds to create a three-man craft (along similar lines to the test craft) but with large windows. We spend these funds to make it safe but don’t apply (at this stage at least) for FAA certification. This craft should be ready to take passengers in 18 months. We put aside $100 million each over three years to achieve this. 2) We start marketing in a major way to coincide with the last flight before the X Prize flight. We offer 1,000 trips at $200,000 per trip. This would result in $200,000,000 and should be sufficient to get our total investments back plus have a fund left over to take the project to the next stage (possibly a six-seat craft at more affordable fares).
I suggested the name Virgin Galactic Airways and thought we could start taking deposits in the summer. I said: ‘We have a team which I believe can manage this well.’
While running an actual airline in space didn’t appeal to Paul, he loved the idea of developing a six-seater commercial space plane. Will Whitehorn and Alex Tai, a former Virgin Atlantic captain, flew to Seattle to meet Paul’s advisers. Jon Peachey, Virgin’s investment director and a Galactic board member, went with them. Peachey was the moneyman, with strict instructions to keep Will’s and Alex’s enthusiasm under control!
The first deal didn’t work for Paul’s company, but we resumed discussions a little while later and this time
