For the record, Beal is not blameless in his failure. His attempt to go after the heavy-lift geosynchronous market was a mistake. While Gary and I watched Beal, and tore our what remains of our hair, Beal went down the same roads we had discarded years ago and blew $200 million.

The most lucrative existing and proven launch market is geosynchronous communications satellites. The simplest launch system, in theory, is an expendable, pressure-fed staged vehicle. To an MBA, or someone without hard-earned experience in private launch systems, the conclusion to combine these would be obvious, and this is the path Beal chose.

What the hard-earned private launch system experience has taught me is that building a launch system and running it profitably requires looking at a much larger picture than just the basic technology and the basic market. Many of the factors are far from obvious.

The geosynchronous market, precisely because it IS so lucrative, is actually relatively insensitive to launch costs. We discovered--the hard way--that many comsat customers would gladly pay huge premiums in launch costs to use a tried, reliable launch vehicle. Should a newcomer build a track record of successful launches, or should a newcomer be able to VERY seriously undercut their competitors costs, they would stand a chance. But it is far from a sure thing.

And the geosynchronous mission needs a BIG rocket.

Very large launch systems carry a lot of baggage in development, simply because of the scale of manufacturing and testing. Although there are real benefits to scaling up (a 200,000 lb. thrust rocket engine costs much less than 10 times the price of a 20,000 lb. rocket engine to develop and manufacture, and this is true of many other components as well), this is often outweighed by the initial high costs of facilities, tooling, materials, and large test stands.

A pressure-fed rocket is the simplest possible design, but its poor performance must be compensated for by making the geosynchronous vehicle even larger. Then Beal decided to go for composites, which although improving performance, require even larger investments in manufacturing and testing.

Add to this the decision to go with hydrogen peroxide as an oxidizer. Again, it seems at first glance to be a good idea, as it is not cryogenic and does not have the handling problems of liquid oxygen. However, the vehicle again takes a major performance hit (make it even bigger!) and peroxide has its own handling problems.

Another problem is that peroxide is much more expensive than liquid oxygen, even if you make it yourself (more capital investment!). Every time you run a static test of a 3-million-pound engine, there goes a BIG load of money.

All these things have to be factored into a very complex cost-benefit analysis, which I don't think Beal did.

* * *

The way someone is going to make money in space is by making some kind of "end run" around the existing space markets and doing something brand new. The personal computer business got started by someone who decided that they would come up with something completely different than the room-filling machines that were the big market at the time.

If I had $200 million to burn, I could walk off blindfolded with the suborbital space tourist market, and would have a pretty good shot at the orbital market. The technology is out there, and it's probably not the technology you are thinking about.

Naturally, the Catch-22 is that standard sources of investment are interested in proven markets for the most part, and not in something completely off-the-wall.

Which is why I'm still working in my garage.

For now. I'm still plugging!