Al Root

It's a new era for space technology, thanks mainly to Elon Musk's SpaceX and those chasing him -- including Jeff Bezos' Blue Origin. It's an exciting time, but requires a paradigm shift.

In the space business, the saying used to be "failure is not an option." But that approach has held back the likes of NASA. Failure is OK. What's more, it needs to be embraced.

In that spirit, two commercial space launches from Blue Origin and SpaceX both failed on Thursday.

Bezos' Blue Origin tested its New Glenn rocket for the first time. It reached orbit for the first time, but the rocket booster that was supposed to land on a ship for recovery and reuse was lost.

Later in the day, SpaceX tested its Starship launch vehicle -- the largest rocket ever made by humans -- for the seventh time. The launch tower caught the rocket booster for the second time -- an amazing feat. But the upper-stage ship exploded spectacularly over Turks and Caicos. Another failure.

Catching the rocket will help SpaceX relaunch faster. It's also designed to help when SpaceX reaches Mars. There aren't a lot of roads and infrastructure around to transport huge rockets.

Musk took to X to explain the Starship problem, saying a likely fuel leak led to the explosion. "Apart from obviously double-checking for leaks, we will add fire suppression...and probably increase vent area," he wrote. He doesn't expect the explosion to slow down Starship's development.

Fail-and-fix quickly is the new mode of operating. Of course, all of Starship's tests have been uncrewed. No one is minimizing the importance of life.

Fail-and-fix has its benefits. SpaceX has raised an estimated $10 billion, according to funding research firm PitchBook. What the company has been able to accomplish with that cash is almost impossible to overstate.

SpaceX launched some 140 rockets into orbit in 2024, more than half of the world's total. It also has roughly five million subscribers for its profitable space-based Wi-Fi business, Starlink, which relies on some 7,000 communications satellites orbiting the planet. It also has its own town and launch facilities in Boca Chica, Texas, where some of the company's 14,000-plus employees work.

NASA's Artemis program is expected to cost roughly 10 times as much as SpaceX's total capital-raising. Artemis includes the SLS rocket -- which isn't reusable -- and Orion spacecraft. SLS has launched once so far.

NASA's working paradigm harks back to Apollo 13's flight director Gene Kranz, who famously uttered the phrase, " Failure is not an option." He, of course, was referring to bringing the Apollo astronauts home after a ship malfunction, which NASA did. (Those interested can watch Ron Howard's Apollo 13 movie for entertaining details.)

On the surface, refusing to fail feels like the best and boldest path forward. But it took SpaceX to demonstrate another way to develop space tech.

Accepting failure for SpaceX meant faster development, lower costs, better engineers, and a seemingly insurmountable head start in the commercial space business.

Like SpaceX's achievements, it's almost impossible to overstate the importance of lower costs. NASA's SLS will cost an estimated $4 billion per launch, according to government estimates. It's impossible to build a commercial space business with a cost structure like that.

Lower costs are an accelerant in any industry. Elon Musk's car company Tesla sold 1.7 million Model 3 and Y vehicles around the globe in 2024. Those cost in the range of $40,000. It sold about 85,000 Model S, X, and Cybertrucks in 2024. Those can all run north of $100,000.

Lower costs in space have enabled SpaceX's Wi-Fi business, new earth observation businesses such as Planet Labs and BlackSky Technology, and mobile communications businesses such as AST Spacemobile. They have also enabled launch services competitors looking to duplicate SpaceX's rocket reusability, such as publicly traded Rocket Lab USA and privately held Blue Origin.

Lower costs create a flywheel effect, making it possible for tangential businesses to emerge -- such as component maker Redwire or moon exploration company Intuitive Machines.

No one likes to fail, but the benefits of embracing failure are tough to deny.

Of course, it's still early days for investors. SpaceX is the most valuable aerospace company on Earth, valued at some $350 billion. Blue Origin's valuation is harder to come by. It appears to be almost wholly funded by Bezos. Blue Origin declined to comment. SpaceX didn't immediately respond to a request for comment.

While SpaceX has said the Starlink business is profitable, it's unknown whether the company as a whole is.

None of the publicly traded commercial space start-ups are profitable yet. The group is expected to generate sales of about $1.8 billion in 2025 and have a combined market value of about $22 billion.

None approach what SpaceX has accomplished, but it's a start.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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January 17, 2025 12:51 ET (17:51 GMT)

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