Jeff Bezos Is Not My AstronautJuly 23, 2021
Ever since the first tribe walked out of the Great Rift Valley and crossed the Sinai into Asia, humans have been explorers. We’ve crossed continents, then oceans, and in the 20th century, left Earth itself. There’s glory in our species’ expansive nature, and as the TV show says, space is the final frontier. However, Jeff Bezos is not my astronaut.
I felt more disdain than wonder watching Richard Branson’s joyride and Jeff Bezos’s soulless flight to the Kármán Line.
Everybody Gets a “For All Mankind” Trophy
There was no ground broken here. In 1903, the Wright Brothers completed the first powered flight. In 1961, Yuri Gagarin was the first human in space. In 1969, Neil Armstrong was the first human on the moon. Those are milestones worthy of celebration. In 2004, Burt Rutan’s Scaled Composites carried the first people into space on a privately built spacecraft — a milestone of sorts.
What was accomplished on July 11 (Branson) and 20 (Bezos)? Well, one of Bezos’ passengers, Wally Funk (great name), became the oldest person ever in space. After the flight, she reminded us that when you’re 82 you have zero fucks to give. She was disappointed in both the view and the length of the flight, and she found the cabin insufficiently spacious for the “rolls and twists and so forth” she wanted to do.
Another of Bezos’ passengers became the youngest person ever in space. This sounds like something, except that he bought his way onto the flight — actually, his father, a private equity billionaire, paid for the recent high school graduate’s estimated $28 million ticket. My youngest has been acting up (if “acting up” is terrorizing all of us — he constantly assesses the household for weaknesses and then makes brazen attacks on his older brother and anything resembling domestic harmony). I don’t have any idea how to deal with this, so I bought him a $1,000 iPad. His mother told me I was sending the wrong message. I reminded her that the message could have been 28,000 times worse. So, there’s that.
Blue Origin’s reusable rocket is a real technological achievement, but that was news … back in 2015. None of the July “astronauts” were even the first space tourists. That empty-calories honor belongs to Dennis Tito, who paid $20 million for a ride on a Russian rocket in 2001. And Tito spent a week in space, living on the International Space Station — the equivalent of nearly a thousand 11-minute trips on Blue Origin.
Astronauts, my ass. Apollo 11 and Columbus travelled 240,000 and 3,000 miles to reach the moon and Caribbean, respectively. New Shepard 4 traveled 0.026% of the way to the moon. Put another way, on Tuesday we watched a man plant a flag three feet up from base camp at Mt. Everest and expect to be knighted. This weekend, I’ll be in Montauk. I plan to swim a half-mile from shore (I can do this) and declare I’ve discovered Spain.
It’s his money, and he has the right to spend it on what he wants. But if Mr. Bezos was genuine about doing something more than crashing a canary yellow T-top Corvette into a Bosley for Men franchise, he could raise the minimum wage at his firm to $20/hour.
In addition to vanity projects for billionaires, these pseudo-events were advertisements, promotions for the brands prominently displayed throughout the breathless television coverage.
But advertisements for what? Human exploration is about the future, and space exploration is a long bet on a very distant tomorrow. What kind of future will the billionaire space race promote? One clue: After his flight, Bezos said, “I want to thank every Amazon employee, and every Amazon customer, because you guys paid for all this.”
He’s right. We did pay for it. Eighty-two percent of American households are Prime members, and the company has 1,298,000 employees. We also paid for the Apollo program, of course, only there’s a difference. To put Neil Armstrong on the moon, we paid taxes, and elected representatives to decide how to spend them.
In the 52 years between Armstrong’s July accomplishment and the Branson/Bezos “accomplishments,” the United States has radically restructured its economy. Specifically, we’ve handed it over to billionaires. Now, rather than paying taxes, we pay for our Prime memberships. Instead of NASA, we fund Blue Origin. We’ve elected people who defund NASA so businessmen can lead us to new frontiers instead of test pilots and physics PhDs.
Historically, astronauts were the best and the brightest. The pioneers of the 1960s were war heroes and accomplished pilots who combined physical skill and courage with crisp engineering minds. Neil Armstrong, a legend among test pilots, flew more than 900 different types of planes before leaving the Earth in July 1969. When the Lunar Module’s computer conked out on final approach, he manually piloted the craft to the moon’s surface. Those that followed, in the Space Shuttle and aboard the International Space Station, were scientists and engineers of distinction.
“Astronaut” used to connote something noble, something that cemented the best of what it meant to be American: Men and women of exceptional capabilities and unremarkable origins. Armstrong was the second person in his family to attend college, and his father was a state government bureaucrat. John Glenn’s parents were a plumber and a teacher. Sally Ride, the first American woman in space, was a PhD physicist; her father was a community college professor, and her mother volunteered as a prison counselor. Former NASA Chief Astronaut Peggy Whitson, a PhD biochemist who spent more time in space than any other American (665 days), grew up on a farm in Iowa. (Kudos to the FAA, which, just before Bezos took off, issued a new policy requiring that a space crew member actually contribute to the mission before receiving astronaut “wings.”)
In the Prime Space future, we won’t have astronauts, we’ll have egonauts.
The problems of the Prime Space future go deeper than who gets to ride Jeff’s cocket to the Kármán Line. An ever-expanding array of technological innovations, businesses, and services fall under the rubric of “space.”
One of the earliest and still most important benefits of space exploration was the Global Positioning System. It’s hard to overstate the importance of GPS, which is foundational to our mobile economy. GPS was born of a U.S. Department of Defense project in 1973; it continues to be run by the DoD, which makes it freely available to all users.
Bezos and Elon Musk are launching thousands of satellites over the next several years to enable their Kuiper and Starlink systems. There’s a lot to celebrate about these projects, which promise broadband internet for remote and underserved regions. But do we want Bezos and Musk — or shareholders in their companies — to control that access? With the number of satellites projected to grow from 3,000 to 50,000, space hauling will be an enormous business.
Bezos dreams of moving pollutive manufacturing to space, which seems both insane and amazing. Musk wants to build a colony on Mars, which seems more like space execution than exploration. But as humanity expands to become a space-faring species, who should control who gets to go and what we do up there? To whom do the benefits of all this technological innovation flow?
I know two things about Blue Origin. One, Amazon’s customers and employees paid for it, just like Bezos said. Two, the commonwealth may register progress, but there will be less public spillover from the technology and an increase in private capture. Imagine the tax avoidance that will occur in space, where nobody can hear the IRS scream.
The counterweight to market externalities is democracy. And a democracy that cedes ownership of its future to a winner-take-all market will lose control of that future. Democracy acts through governments (and taxes), whether we like it or not.
The Right Stuff
While Bezos was high-fiving his employees after his jaunt into space, NASA scientists were working on projects for all mankind. The Perseverance rover on Mars has its own drone, which is sending back amazing pictures. In November, NASA, along with the European and Canadian space agencies, will launch the James Webb Space Telescope, the successor to the Hubble; under development since 1996, it promises to advance human knowledge about the formation of the universe and the origins of life.
It’s unlikely these projects will attract any venture capital money or support a SPAC. Private space projects might be dressed up as achievements for humanity, but their aim is to return capital to shareholders. And when that’s the criteria, the astronauts and their efforts become limited in scope.
Mach-3 Train Wreck or Galactic ATM
Whatever you think of space travel as a human endeavor, space tourism is an awful business. Even assuming all goes well, it makes no sense. These are vanity projects, and the only people that will make money from them will be the early investors … who bail out before impact.
Most businesses are either demand constrained (the market for its product is limited) or supply constrained (it can’t make enough of its product). Virgin manages to be both. To meet its profit targets, it has to sell about 3,100 tickets per year at a whopping $400,000 each, a 60% increase from the current price. After an ad the entire world saw, the product has a waiting list of … 600 people. My Brand Strategy class at Section4 has 1,500 people, and there’s dramatically lower odds you’re going to blow up in your chair.
But even if there were an annual demand from 3,100 people willing to pay that fee, to supply the spaceflights, Virgin would have to make two flights per day, every day, without mishap. So far in all of 2021, it has flown … twice. The true addressable market for space tourism is zero. It’s the mother of all product-market mismatches. By comparison, Google Glass and Cheetos-Flavored Lip Balm (an actual thing) were on point. Virgin Galactic may achieve great things, but the stock (Nasdaq: SPCE) is a Mach 3 train wreck.
The worst-case, and most likely, scenario? Death. Rockets to space are controlled explosions of thousands of gallons of flammable material. Re-entry is a high-speed fall into the searing heat of friction. Virgin Galactic has already lost one pilot, Michael Alsbury, who died when his SpaceShipTwo craft broke apart in the atmosphere. Five hundred and ninety people have headed into space, and 19 have not returned, meaning space travel is more dangerous than base jumping. A space tourism fatality is a question of when, not if. Exploration and innovation are worth risks, even to human life. Floating weightless for 300 seconds is not.
Richard Branson understands these risks. Last May he sold $500 million of his Virgin Galactic stock, and this April he sold another $150 million, trimming his holding to less than 25% of the company. He was able to make both sales because he took the company public in 2019 via a SPAC controlled by former Facebook employee Chamath Palihapitiya. Who also shed his entire personal stake in the company back in March. Billionaires vote with their wallets, and the two largest shareholders believe their capital will achieve greater returns elsewhere.
One of 35 people selected from 8,000 applications, after receiving a PhD in Physics, Ms. Ride spent 843 hours in space aboard the Space Shuttle Challenger, where she was charged with operating the robotics arm (“Canadarm”). I wonder if, when peering down at Earth 300 miles below, she registered satisfaction from her hard work, or the reward of pursuing greatness in the agency of others. Was it freeing to be in space, on a craft judged only by her skills and character? I don’t know. What I am certain of is that Mission Specialist Sally Kristen Ride is a United States Astronaut and went to space for all mankind.
Life is so rich,
P.S. I’ve done OK investing. Join me on July 29 for a live lecture and Q&A session on how I navigate public and private investments both as an individual and as a citizen of good old planet Earth. Sign up here.