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Book recounts how billionaires Paul Allen and Jeff Bezos helped start a space race

Binnie, Allen and Rutan in 2004
Binnie, Allen and Rutan in 2004

Commercial spaceflight seems to be hitting its stride right about now, thanks in part to the launch programs funded by billionaires such as SpaceX’s Elon Musk, Blue Origin’s Jeff Bezos and Vulcan Aerospace’s Paul Allen.

But the spark for that entrepreneurial space was lit two decades ago, and a newly published book reveals how Musk, Bezos and Allen were striking some the matches way back when.

“How to Make a Spaceship,” written by Julian Guthrie, focuses on XPRIZE co-founder Peter Diamandis and his years-long quest to create a $10 million competition for private-sector spaceflight.

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That quest reached its climax in 2004, when the Allen-backed SpaceShipOne rocket plane made multiple flights into outer space and won the prize. But the seeds were sown in the 1990s when Diamandis made the rounds looking for XPRIZE sponsors.

 

Bezos, Musk and Allen were all among the prospects. Allen, one of Microsoft’s co-founders, owned a controlling interest in Charter Communications at the time – and in 1998 he was talking with aerospace guru Burt Rutan about using a high-flying plane called the Proteus to provide broadband data services.

Rutan suggested that the Proteus, or something like it, might be used to launch a spaceship from the air. That got Allen’s attention. Eventually, the promise of a $10 million prize led Allen and Rutan to forge a secret agreement to create SpaceShipOne.

Peter Diamandis
Peter Diamandis

One little problem: Diamandis hadn’t yet secured all of the $10 million. And when Allen’s point person for the project, Dave Moore, met with Diamandis to discuss sponsorship of the prize, Moore didn’t let on that his boss was already working with a team that aimed to win it.

The book recounts Diamandis’ 1999 trip to Seattle to meet with Bezos, who had already achieved billionaire status thanks to his success with Amazon. Bezos seemed like the perfect fit for an XPRIZE title sponsorship: During his college days at Princeton, Bezos headed the university’s chapter of the Students for the Exploration and Development of Space – which Diamandis had co-founded.

But at their breakfast meeting, it dawned on Diamandis that Bezos was saving up money for his own space venture, which came to be known as Blue Origin.

“Bezos told Peter that Amazon was his means to make money to get to space,” Guthrie writes. “The more money Amazon made, the better his chances were of opening space.”

How to Make a Spaceship
How to Make a Spaceship

Elon Musk was courted in 2001, at a time when the dot-com entrepreneur was thinking about starting up a space venture. Diamandis pitched his own startup, called Blastoff, which he hoped would bring in enough money for the XPRIZE (and put a lander on the moon in the process).

Once again, Diamandis was turned down. Instead of backing the XPRIZE, or trying to send a space capsule full of mice to Martian orbit, or putting a greenhouse on the Martian surface, Musk founded the Space Exploration Technologies Corp. – SpaceX.

Ultimately, Diamandis closed the gap for the $10 million XPRIZE in 2002 by arranging for the purchase of an unorthodox insurance policy: For a $1.3 million balloon payment, plus $50,000 a month, XL Specialty Insurance agreed to pay the $10 million if any team was able to win the prize before the end of 2004.

The policy was modeled after “hole-in-one” insurance deals that are typically provided for golf tournaments and free-throw contests. In the nick of time, a family of Iranian-American entrepreneurs – led by Anousheh and Hamid Ansari, and Hamid’s brother Amir – pledged $1.75 million, which was enough to cover the balloon payment and some of the related expenses.

SpaceShipOne won the prize less than three months before the policy was to expire, and XL Specialty Insurance paid the money as promised to the joint venture created by Allen and Rutan.

 

Today, British billionaire Richard Branson and his Virgin Galactic team are parlaying the technologies pioneered by SpaceShipOne to get SpaceShipTwo ready for commercial operation. Musk is moving ahead with plans to send a million people to Mars. Allen is having the world’s biggest airplane built for his Stratolaunch satellite launch system. And Bezos’ Blue Origin venture is testing a reusable suborbital spaceship that essentially competes with SpaceShipTwo.

The XPRIZE operation has gone on to award a total of more than $34 million in purses for technologies ranging from private spaceflight to oil-spill cleanup to super-efficient automobiles. Another $82 million in prize money is currently up for grabs, and programs in development amount to more than $100 million.

Diamandis went on to become a co-founder of Planetary Resources, a venture based in Redmond, Wash., that’s focusing on Earth observation and asteroid mining. One of the NASA engineers whom Diamandis recruited for the now-defunct Blastoff venture, Chris Lewicki, is Planetary Resources’ president, CEO and “chief asteroid miner.”

Would all this have happened without Peter Diamandis and the XPRIZE vision? That question is sure to come up tonight at Seattle’s Museum of Flight, when XPRIZE luminaries reflect on “How to Make a Spaceship.”

The panelists for tonight’s discussion include Diamandis; Guthrie, the book’s author; Morse, who was Allen’s project manager for SpaceShipOne; and Erik Lindbergh, who’s a member of the XPRIZE Foundation’s Board of Trustees, the grandson of aviation pioneer Charles Lindbergh and a Seattle-area resident.

I’ve been appointed panel moderator, by virtue of the fact that I covered the XPRIZE saga starting in 1998 and running all the way through SpaceShipOne’s triumph and beyond. Don’t be surprised if Doug King, who played a role in the XPRIZE as the head of the St. Louis Science Center and now serves as the Museum of Flight’s president and CEO, joins our trip down memory lane.

“The Road to SpaceShipOne” gets under way at the museum with a reception at 5:30 p.m. PT today. Admission is $10, and books will be available for signing.

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