SpaceX: The Top Dog

SpaceX: The Top Dog
SpaceX HQ in Hawthorne, CA. March 26, 2024. Photo by David Sprague

When it comes to space launch companies in Los Angeles County, none is bigger than Space Exploration Technologies Corp.

Better known as SpaceX, the Hawthorne-based rocket builder is on track to launch 148 missions this year, an increase over its 96 flights launched last year. In total, it has carried out 324 missions.

And it is tough to compete against the company.

In comparison, Rocket Lab USA Inc., the only other Los Angeles County-based company that is launching on a regular basis, had 10 launches last year of its Electron rocket and is expected to do about 24 this year between the Electron and its suborbital variant called Haste. 

Recent SpaceX launches include those on March 15, 18, 23 and 25 for the Starlink system, a constellation of satellites built by SpaceX to provide internet service in 65 countries, including the United States.

On March 14, the company conducted the third test flight of its heavy Starship rocket, the largest one ever built, from its Starbase near Brownsville, Texas. While SpaceX categorized the flight as a success, the rocket broke up during re-entry.

The Federal Aviation Administration is overseeing the SpaceX-led investigation to ensure the company complies with its FAA-approved mishap investigation plan and other regulatory requirements, according to the agency’s website.

This follows by four months the second test flight of Starship that ended in similar circumstances. The first test flight of Starship from last April also ended with the rocket being lost.

On April 20, during the ascent over the Gulf of Mexico, the vehicle sustained fires from leaking propellant in the aft – or rear – end of the so-called Super Heavy booster, which severed connection with its primary flight computer, SpaceX said. 

“This led to a loss of communications to the majority of booster engines and, ultimately, control of the vehicle,” the company added. “SpaceX has since implemented leak mitigations and improved testing on both engine and booster hardware.”

Attempts to reach a representative at SpaceX were unsuccessful. 

‘Hard to compete with Elon Musk’

David Strobel is the co-founder and former chief executive of Space Micro, a San Diego-based provider of electro-optics and digital systems for use in commercial, civil, and military space applications. He sold the company two years ago to Voyager Space. 

“I just think it is going to be hard to compete with Elon Musk and Jeff Bezos because they have unlimited resources,” said Strobel, who now works as a consultant and sits on the boards of several space startups. 

Bezos, the founder of Inc., is also the brains behind Blue Origin Enterprises L.P., the Kent, Washington-based aerospace company that is building and flying the New Shepard and developing the New Glenn, which are both launch vehicles.

As an observer of the aerospace industry, Strobel is in a position to comment on developing trends. 

One of those is the difficulty that companies will have in attracting new talent. The number of engineering students in U.S. colleges has decreased by 100,000 in the past five years, Strobel said. 

“I think the good news is that a lot of them want to go into space,” Strobel added.

When he was running Space Micro, he said, he never had any trouble hiring employees.

One reason is that the company offered internships and those interns would want to stay on at Space Micro. Another reason was that interns who were from Southern California didn’t want to leave the region. 

If you are a startup you can pick up someone who works at SpaceX who is tired of working 70 hours a week, he said. 

“Elon has 100 people for every job opening,” Strobel added. “He can work them 70 hours a week for two to three years and they are going to learn a lot and then they can go work somewhere else. I saw that all the time.”

And a number of former SpaceXers have launched their own companies.

According to a blog post by Jeff Burke, a consultant who writes about startups at Jeff’s Newsletter on Substack, there were 69 aerospace companies as of November 2022 that had been founded by SpaceX alumni.

Jordan Noone, for example, a co-founder with Tim Ellis of Relativity Space in 2016 in Long Beach, worked as a propulsion development engineer at Musk’s company for just over a year. Then there’s Tom Mueller, who founded Redondo Beach-based Impulse Space in 2021, who was at SpaceX for more than 16 years in charge of the drive systems as chief technology officer of propulsion. Also, Santa Monica-based Flightwave Aerospace Systems Corp., was launched in 2015 by Michael Colonno, an early SpaceX chief aerodynamic engineer.

“Due to the SpaceX Effect, we expect to see many more companies founded by SpaceX alumni, which will have its own compounding effects,” Burke wrote.

Another trend that Strobel is seeing is the space industry going international as countries like India, China, Japan and Germany receive investments.

“As long as you see money flowing into the market you will see startups,” Strobel added.

Elon Musk (Photo by Mike Windle/Getty Images for Vanity Fair)

Getting its start

SpaceX was founded in 2002 by eccentric billionaire Elon Musk. 

“According to Musk’s calculations, he could undercut existing launch companies by building a modest-size rocket that specialized in carrying smaller satellites and research payloads to space,” wrote Ashlee Vance in “Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future.”

In his 2015 book about Musk, Vance detailed the rise of SpaceX.

Along with Musk, Vance interviewed some current and former employees of SpaceX and asked them how they designed and built the Falcon 1 rocket and, later, the Falcon 9.

“There’s nothing particularly flashy-looking about the Falcon 9,” Vance wrote. “It’s an elegant, purposeful machine.”

The Falcon 1 first flew in September 2008; the Falcon 9 followed in June 2010. 

SpaceX has garnered quite a number of firsts: The first privately funded fully liquid-fueled rocket to reach orbit; the first private company to send a spacecraft to the International Space Station; the first private company to send humans into orbit and to send humans to the Space Station; and the first orbital launch of an all-private crew, among of host of others.

Revenue from the privately held company is expected to reach $15 billion this year, according to Bloomberg.

Meanwhile, Payload, a website that tracks the space business, pegged SpaceX’s revenues at just more than $13 billion for this year. 

“This is an educated best guess, not based on access to any SpaceX internal data or proprietary info,” Payload authors wrote in the introduction to the article, which was published in January.

Payload estimated that revenue from Starlink, the company’s internet service, would reach $6.8 billion this year, a 62% increase over its revenue from last year. 

This would also represent Starlink revenue coming in higher than SpaceX’s launch business revenue, which Payload has at $5.5 billion, or a 56% increase over the prior year.

The Starlink revenue as projected by Payload also fits with the company’s projections, according to Bloomberg.

“Sales for Starlink, in particular, are expected to outpace and exceed the launch business next year as the product becomes available in more regions around the world, according to the people, who asked not to be identified as the information is private. Starlink will then represent the majority of SpaceX revenue, the people said,” Bloomberg reported.

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