Jeff Bezos: Day One in the Space Industry

It is not every day you get to interview one of the world’s most celebrated entrepreneurs and businessmen but I got the opportunity last March during the SATELLITE 2018 Conference & Exhibition in Washington, D.C. Even though I have done many interviews with CEOs all over the world, I still feel the buzz going to interview someone like Jeff Bezos.

As I sit in the taxi about to head the interview, I recall some of my first SATELLITE shows in 2002-2003 (was it really 16 years ago?!). It was an industry that wasn’t sure what its long-term future was going to be and how relevant it would be going forward. With the likes of Elon Musk, Jeff Bezos, Richard Branson, as well as companies like Facebook involved, the industry has undergone a dramatic metamorphosis over the last few years.

Nowhere has this been more apparent than in the launch market where SpaceX effected a revolution. Now, others are getting in on the act. Jeff Bezos has had a lifelong fascination with space. This is not a surprise, but nevertheless considering the success of Amazon, it still remains fascinating to go from that business to launching rockets.

The interview itself was a really interesting experience. Bezos gives concise answers to the questions; you never feel as though he is wasting a word. What actually struck me was that, at the end of interview, he said we are on “Day One” for the industry. While the space/satellite industry is not in its infancy, Bezos clearly thinks we really are at a new age. With his success in business, you take his words seriously. I can tell from his tone of voice that these are no empty soundbites. He genuinely believes the industry is ready to undergo one of its most exciting transformations.

So, here we are with a major exclusive for Via Satellite: we have Jeff Bezos talking about his plans for Blue Origin as well as his vision for the space industry.

Bezos: I started Blue Origin in 2000. We spent the first three years looking for basically every unconventional launch technology and trying to see if there was something that would be superior to chemical rockets. At the end of the three years, we concluded that chemical rockets were actually an excellent technology for launching off of the Earth’s surface and getting into space. The problem was that they needed to be reusable. So, starting in about 2003, we dedicated ourselves to making highly operable, highly reusable rocket vehicles. That is the founding of Blue Origin. We need the infrastructure to be much less expensive. Right now, the price of admission to get into space is just too high.

Bezos: That is certainly true of me. You don’t choose your passions; your passions choose you. I have been fascinated with space and rocket propulsion since I was a five-year-old boy and watched the Apollo program. I watched Neil and Buzz step on the moon. There is no looking back. I love it. I pay a lot of attention to it, and I have for my entire life.

My high school girlfriend is on record as saying that she is convinced I started Amazon just to get enough money to be able to start Blue Origin. But, it is a fact that I always had in mind this idea of getting into the space business. And of course, the financial success that I had as a result of Amazon is what allowed me to start Blue Origin.

Bezos: It is totally different, in some ways. In terms of the fundamentals, I suppose it is very similar. If you look at Amazon versus Blue Origin, with Blue Origin, we are building the infrastructure. With Amazon, we were building on top of pre-existing infrastructure. So, when I started Amazon in 1995 and opened our doors and shipped our first packages, we did not need to build a transportation network; it already existed — it was called Royal Mail and USPS, Deutsche Post, UPS, etc. — and we could rely on that infrastructure. We didn’t have to build a network, it existed. At that time, people were using dial-up modems, but it was the long-distance telephone network that provided that infrastructure. We didn’t need to build a payment system; it already existed — it was called the credit card. There was a lot of heavy lifting infrastructure already in place; I could build Amazon on top of that infrastructure.

That is why you have seen so much dynamism and entrepreneurialism on the internet, because the price of admission has been very low. The heavy lifting was already done. So, two kids in a dorm room could start Facebook and so on. That is not possible today in space because the infrastructure is either non-existent or too expensive.

Blue Origin is a very different kind of business in that sense because what we’re trying to do is build that infrastructure. Affordable, reliable, highly available access to space. That is heavy lifting. If we can do that, then in a next phase, there can be a dynamic, entrepreneurial environment in space. Then, if I am successful with Blue Origin, then maybe two kids in a dorm room will be able to start a really important space company.

Bezos: From my point of view, the real thing is that it takes a lot of financial resources and a lot of patience. We need three things for Blue Origin to accomplish its mission, which is to lower the cost of access to space. The three things we need are: financial resources, talent and patience — and we have all three. Taking a long-term approach has always been one of Amazon’s strengths. And I think it is one of Blue Origin’s strengths as well. I think to do anything interesting or important in the world, you need a certain amount of willingness to think long-term — to be patient, to defer gratification. It takes a long time. All overnight successes, so far as I can see, take about 10 years.

Bezos: I put a lot of energy and attention into Blue Origin. Amazon is still my primary day job, and I dance into work at Amazon. I love that I get to live and work in the future. We are doing so many interesting things with machine learning, natural language understanding, computer vision, etc. I am interested in so many things that we are doing. But, my five-year-old boy passion is Blue Origin.

Bezos: I think if you look at certain things, there has been a lot of innovation. If you look at, for example, throughput, you see that the industry has made fantastic progress over the last 20 years. But I think, in general, when people say that (lack of innovation) what they are really observing is that when something has a lifecycle of 15 years, you don’t get to do that many iterations per generation.

Every 20 years, how many iterations do you get to do? If you’re talking about mobile phones, you basically get new versions of mobile phones every year or two with substantive upgrades, better processing speed, better displays, etc. So, the iteration cycle is very rapid. One of my hopes is that if we can be successful with Blue Origin in dramatically reducing the cost of access to space, improving availability and reliability, that there will be a new equilibrium found where satellite manufacturers and operators will replace the satellites more frequently with faster upgrades, giving them more opportunities to innovate.

Bezos: I don’t know. It really depends on how quickly we can lower the costs of launch. If you could launch more frequently, and at lower cost, there would be more incentive to launch more satellites more frequently with more upgrades.

Bezos: Two years to build a satellite does not seem unreasonable to me. The price points drive a lot of conservatism. Is this thing space qualified? Should we really put it on the satellite? What happens if it fails? That is what I was talking about before. If you can’t replace the satellite at reasonable cost fairly quickly it drives you to being pretty conservative. I hope that we, as a civilization, find a new equilibrium there where you can replace them more quickly at lower cost, including very importantly, lowering the launch cost.

Bezos: I think there’s a logical, reasonable, sensible conservatism. If you’re paying several hundred million dollars to build a satellite and more tens of millions of dollars to launch it, that drives a sensible conservatism — we need to change that equilibrium.

Launch is part of what sets the equilibrium. Is it fundamental? Yes, it is, but it is not the only piece. Together with driving down launch costs, people will end up using more standardized satellites, buses, power systems, etc., and changing the payload and customizing that.

Bezos: It is the things you would expect. The three big ideas for Blue Origin and New Glenn are reducing cost, improving reliability and improving availability. The way you reduce cost is by reusability. It is the only good way to reduce cost in a very significant manner.

New Glenn’s booster is designed for 25 flights, and the BE-4 engine is designed for 100 missions. We have done a lot to work on reliability: the entire architecture is one fault operative. We have done a lot of work on the availability: for example, there is a requirement for one sensor out not delaying launch, so we can go ahead and launch even with one sensor out. If you look at the recovery ship where the booster is going to land, it is going to be underway, so that it can use stabilizing fins so that we can operate the recovery platform even in heavy sea states. These are the kind of things that help with availability.

Those are the three big ideas and that’s what we’re working on. We have ironed out how we want to build the booster using our New Shepard program. We learned so much building New Shepard that we are able to incorporate all of those learnings into New Glenn.

Bezos: We are really focused on launch right now and what the future holds is hard to say. I don’t know for sure. But really, I think the big problem that is holding everything up is the cost of launch, the reliability of launch and the availability of launch. You shouldn’t have to plan these missions out so many years in advance, and then when you get there, actually you still are delayed nine months, a year or two years. We can make tremendous progress nailing those three basics: cost, reliability, availability.

Bezos: It seems like you should be able to do that very quickly. What the ultimate timeframe is, I have no idea. But, I don’t see any laws of physics that need violating to have that be very rapid. It should be possible to work on your operations and your systems to get that cycle time to be very low. It is premature to know how low that ultimately could be. But, there is no reason it can’t be fast.

Bezos: I do over time. I think it will take time but, the LNG fuel costs and the liquid oxygen costs are very low. The real cost in launching is throwing the hardware away. So, there will be a next phase where we have to work on reusability of the upper stage, because that will be the next big opportunity. That’s a different problem, it’s an interesting problem. But, the biggest cost is actually with the booster so that is the right place to start.

Bezos: It is always going to be hybrid and it should be hybrid. That is what makes sense. It will be hybrid GEO/LEO, ground systems, fiber optics — everything. It is all going to be part of the mix.

I think the industry will grow to the extent that it is able to reduce its costs. If Blue Origin is successful at lowering launch costs, and if satellite manufacturers are successful at mass-producing satellites and lowering those costs and using more standardized components, then you’re going to see satellites become more competitive with terrestrial alternatives. And you’ll see more of it.

Bezos: It is very hard to know. With a fully reusable vehicle they should be able to become very low, but we will have to wait and see. I think it is very difficult to know today how low the prices can get, but they can get much lower than they are that’s for sure.

Bezos: Our part of this mission is very clear. It is our job to get out there and hurry up and lower the cost of launch. Make it more reliable. Make it more available. That is our part of this mission. That’s heavy lifting infrastructure. I am investing about $2.5 billion in New Glenn. Then we will make that capability available for the world to use. Improving that piece of things will drive improvements everywhere.

Bezos: I would be super optimistic about the future. The message would be that I think this is “Day One” for the space industry. It is a big industry, it is already a significant industry and I think it is going to get much larger. I think we will find new uses for space that people haven’t even figured out yet, in addition to communications. I don’t know what they are, but, I want to see that entrepreneurial explosion in space. I want to see dynamism. I want to see the same thing in space, that I have witnessed on the internet over the last 20 years where a thousand experiments are done and lots of start-up companies. Great industries are not built by single participants. They’re not built by one company. Great industries are built by a multitude of companies and that is what’s going to happen in space.

Day One is a phrase I use all the time. The Amazon building that I work in is called Day One. To me, it is important to maintain a “day one” mentality. I think with what we have seen in space, why would this not be day one? Space is so big. I want to see millions of people living and working in space. The current maximum number of people who have ever simultaneously been in space is 13. We are still toddlers as a civilization when it comes to utilizing space, exploring space. That is just going to continue to grow. VS