ROCKET SCIENCE Computer visionary launches new venture

Entrepreneur tries his Midas touch in space.
LOS ANGELES TIMES
In his native South Africa, science whiz Elon Musk struck his first business deal when he made $500 selling the code for a Space Invaders-style video game he invented.
He was 12. It took only another decade or so for him to make some real money: Musk banked $22 million in 1999 when Compaq Computer bought his first significant company, Web software maker Zip2. And in 2002, he pocketed about $150 million in eBay shares when the Internet auction giant acquired PayPal, the online payment company he had co-founded three years earlier in Silicon Valley.
Stargazing
Now, the tall, soft-spoken Musk is on to his third major venture, risking much of his fortune -- along with his reputation as an entrepreneur with a golden touch -- by setting his sights once again on space. But this time it's no game.
Musk, who last year left Northern California for the aerospace hub of Southern California, is bankrolling an upstart rocket maker in El Segundo called Space Exploration Technologies Corp., or SpaceX for short, with a commitment of $50 million.
The boyish-looking 31-year-old vows to revolutionize the space industry with a low-cost, reliable satellite launcher that charges $6 million a flight -- less than half the going rate for small payloads.
SpaceX's Falcon rocket could take off as early as December if the customer, a government agency he won't identify, has its satellite ready and SpaceX clears regulatory hurdles, said Musk, the company's chairman and chief executive. He wants the maiden launch to coincide with the 100th anniversary of the Wright brothers' flight at Kitty Hawk on Dec. 17.
Lowering costs
Ultimately, Musk said, he hopes to help make human space travel more affordable through new launchers and exploration vehicles.
"I like to be involved in things that change the world," he said. "The Internet did, and space will probably be more responsible for changing the world than anything else. If humanity can expand beyond Earth, obviously that's where the future is."
Besides, he added, "Rockets are cool. There's no getting around that."
Whether Musk becomes a space industry visionary -- or the latest in a string of delusional Don Quixotes -- remains to be seen.
Doubters call Musk's vision pie in the sky, a gross underestimation of the technological and commercial challenges SpaceX will face.
"He's a young, smart guy who has made a ton of money, but we have a saying in the launch business: The way to become a millionaire is to start with $1 billion," said Marshall Kaplan, a former rocket engineer who is director of space programs for consulting company Strategic Insight Ltd. in Arlington, Va.
What's more, with the collapse of the telecommunications industry, few contracts are available even for small commercial satellites, noted Charles Vick, senior fellow at GlobalSecurity.org, a defense and aerospace think tank in Alexandria, Va. For the moment, the market is primarily driven by government contracts, particularly for military and National Aeronautics and Space Administration payloads.
Musk is undeterred by the odds. He figures he has beaten them before.
"Elon thinks bigger than just about anyone else I've ever met," said David Sacks, former chief operating officer at PayPal and now head of an independent film company in Los Angeles. "He sets lofty goals and sets out to achieve them with great speed."
PayPal
In 1999, after Compaq bought Zip2, Musk formed X.com, which morphed into PayPal after acquiring the competitor that originated the brand name.
The original business plan focused on allowing people to transfer money electronically via the Palm hand-held computer. But Musk quickly saw that the "killer" application would be a system that allowed the secure e-mailing of payments using any type of PC, according to Sacks, the former PayPal COO.
As soon as PayPal saw that so-called early adopters were using the system by the thousands to pay for purchases on eBay, Musk developed a "viral marketing campaign," Sacks said: The company paid $10 to every new PayPal customer as well as anyone who referred a new user to the system. The campaign fueled exponential growth.
Despite the tech-sector implosion, PayPal went public in February 2002 with a market capitalization of $1.2 billion. Just five months later, eBay snapped it up for $1.5 billion. Musk's eBay shares now are worth about $200 million, thanks to the growth of the stock, which hit a three-year high on Monday.