"Southwest Airlines" of Space Suffers Setback--But Venture Capitalists Rush to Invest

SpaceX is on the verge of a huge commercial breakthrough. Dubbed "the Southwest Airlines of Space," the company founded by billionaire Elon Musk is just a launch or two away from putting itself in a position to profitably underbid all other space launch providers. The cause for SpaceX's third launch failure on 2 August 08 has been explained, and is said to be easily fixed. That is all venture capitalists wanted to hear.

Musk, who's invested more than $100 million in the company, was disappointed but not deterred. "On the plus side, the flight of our first stage, with the new Merlin 1C engine that will be used in Falcon 9, was picture perfect," he wrote in a message to employees. "Unfortunately, a problem occurred with stage separation, causing the stages to be held together. SpaceX will not skip a beat in execution going forward."

Indeed, just two days later, SpaceX announced that it had received a $20 million investment from the Founders Fund, a venture capital firm that is partially managed by other PayPal co-founders. Less than two months ago, one prominent VC partner insisted to PM that quick business reactions to the private space industry was "one of the big advantages" of investing in companies like SpaceX;

....the injection of cash comes at a crucial time for the company. SpaceX's original goal was to create the world's lowest cost space launcher..... SpaceX is developing more ambitious rockets such as the Falcon 9, a medium- to heavy-lift rocket whose mission will be to re-supply the International Space Station—if it beats out competitor Orbital Sciences for a NASA contract. _PopMech_via_Instapundit

Getting to heaven has never been particularly easy, but the potential profit up there is almost incalculable. A single asteroid could be worth trillions of dollars, at current mineral prices. And if you ever want to build large orbital structures, you have to get in a position where you can harness space resources and process them into building materials.

SpaceX's approach is not exactly frugal, but neither is it extravagant. The company has taken a methodical, step by step approach to developing and perfecting each component of its launch system. Neither Musk nore his backers appear to be deterred by the latest setback. In the long run, it may be better to be good than lucky.