Watching the Internet evolve — and I’ve been writing about it since it was mostly the ARPAnet, a project of the Defense Advanced Research Projects Agency — I’m always astonished at how early government-supplied seed money turned into today’s global commercial network. Even more astonishing is how the energy of the Internet entrepreneurs that was unlocked by the Net is spinning off businesses in some of our most cutting-edge technology sectors.
The obvious case in point is South African engineer and entrepreneur Elon Musk, whose Space Exploration Technologies (SpaceX) just launched a resupply ship to the International Space Station. Ponder how SpaceX came about. Musk, who dropped out of grad school at Stanford back in 1995 to begin his own business, came up with an online publishing program that Compaq acquired in 1999, netting over $300 million and $34 million in stock options. Out of that money came an investment in an email payment company initially called X.com, but more familiarly known today as PayPal, which Musk sold to eBay for a cool $1.5 billion U.S. in stock.
You get the picture: This is a man who knows how to make money, but he also has the golden touch at pushing technology. SpaceX was founded in 2002 and is now one of the prime candidates for taking over NASA’s former role at launching payloads into Earth orbit. NASA liked the company enough to award it $1.6 billion in 2008, locking in 12 missions with the SpaceX Falcon 9 rocket to do many of the things the Space Shuttle used to do. Musk made SpaceX happen with $100 million of his holdings, and he has always been adamant about his purpose, which is to reduce the cost of human spaceflight by a factor of 100.
My admiration for a man who can, in ten brief years, begin the commercialization of the launch business here in the United States is immense. But the story doesn’t stop with SpaceX. Musk is also a co-founder of Tesla Motors, a Silicon Valley-based company that manufactures electric cars and components. The Tesla Roadster, a fully electric sports car, has caught the public eye but the big automakers have homed in on Tesla’s ability to supply powertrain components for their own use in electric vehicles. Tesla’s four-door Model S sedan will begin to be delivered to customers on June 22, with top range for the all-electric vehicle somewhere between 250 and 300 miles. The company is said to have a waiting list of over 10,000 names.
Is Musk right that the Model S, which costs between $57,000 and $105,000 depending on which version you choose, will sell another 20,000 units in 2013? Much will depend on whether the vehicle can really eclipse the performance of electric cars like the Chevy Volt and the Nissan Leaf, and the early adopters will soon be weighing in with their own thoughts on that. But the reinvestment model we’re looking at here is productive no matter how the Model S fares. It takes money fueled originally by a hot industry, the Internet, and refocuses it into emerging high technology, and it’s a model that can produce surprises and change how we do things.
Don’t get the idea that Musk is alone in spreading Internet wealth into the technology realm. Amazon’s Jeff Bezos has funded his own aerospace company, Blue Origin, which received $3.7 million in funding from NASA in 2009 to develop technologies supporting human spaceflight. Its suborbital New Shepard vehicle has been undergoing testing in Texas, where an unmanned test vehicle crashed last summer, a reminder that launch failures are inevitable when you’re pushing the technology envelope. A larger orbital spacecraft has also won NASA funding, the agency being particularly interested in Blue Origins’ launch abort systems to enhance crew safety.
Maybe the classic case of Internet money turning toward space is Paul Allen, a Microsoft co-founder who took an idea first conceived by Frank Drake, a pioneer in the Search for Extraterrestrial Intelligence (SETI) and turned it into the Allen Telescope Array, now under construction at Hat Creek Radio Observatory northeast of San Francisco, Calif. The ATA is designed to operate with 350 antennas, but at present only 42 are in operation, with the goal of scanning the skies for what could be our first detection of an extraterrestrial civilization.
It’s a powerful concept, but the ATA is running into the same roadblocks that have afflicted so many young ventures, an economy that keeps looking like it might plunge back into recession. While the SETI Institute and the University of California at Berkeley try to keep it afloat (a recent online fundraiser brought some needed breathing room), the powers that be are talking to the U.S. Air Force about farming out some of the Array’s telescopes for studies of low-orbit debris. The ATA’s saga features the ups and downs of philanthropy mixing with commercial and government interests as technology looks for the best funding source. But it’s also a demonstration that carefully placed seed money can start something that can literally reach for the stars.