The next big thing in space business is tiny rockets

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Back in June, NASA tested a booster for the most powerful rocket it has ever tried to build, the Space Launch System (SLS). The booster alone was more than 150 feet long, producing 3.6 million pounds of force, and reaching temperatures of nearly 6,000°F during a ground test in Promontory, Utah. The whole rocket is so expensive it will probably only fly twice in the next four years, if at all.

A month later, in the Mojave Desert, a very different test took place, involving a prototype rocket just 12 feet long. Built by a small company called Vector Space, it flew just a few thousand feet in the air, successfully demonstrating 3-D printed engine parts that will plug into a full-scale version just 42 feet long, not even a third of the size of one of SLS booster.

If its designers are right, the Vector 1, as the small rocket is called, will fly hundreds of times before the SLS becomes operational, making the company a bundle along the way.

The buzz in the space business isn’t always about bigger rockets and farther journeys. Today, it’s about downright small rockets, practically bespoke, and designed to go just a few hundred or thousand miles.

Just a little lift

Entrepreneurs are excited about small satellites for the same reason you may be excited about Pokemon Go: Engineers can now cram a huge amount of processing and sensing ability into an electronics component that barely weighs anything, letting you do fun things (catch Pokemon, snap satellite pictures) very cheaply in places you could not before (sidewalks across America, low-Earth orbit).

Advances like these make it possible to do more with smaller satellites, a key savings in a business where installing your infrastructure costs—at a minimum—thousands of dollars per kilogram. Numerous companies already have sprung up, among them Spire, Planet, Urthecast, Planetary Resources, and BlackSky Global, promising a brisk business for launching small satellites, which could be used for purposes ranging from photography to communications to tracking.

Instead of dozens of small satellites launched annually, analysts are now forecasting hundreds of small satellites heading to orbit each year. The next question is how to get them up there. Most of the time, small satellites are launched in groups by the big space-access providers, like Arianespace or ULA, but it’s tough finding room on one of their launches, especially when each company may fly just a dozen missions in a year.

It’s also a logistical hassle. Booking a launch requires wait times that are often longer than a year, as well as customizing your satellite to the rocket you’re riding on, and often ends with your mission taking a backseat to whatever the primary cargo is. There’s no real way to conceive of a small satellite, build it, and launch it in just a few months, which makes rapid testing and deployment in the spirit of Silicon Valley nearly impossible.

“We are already seeing traffic jams for a launch at the national ranges,” Virgin Galactic executive Will Pomerantz says. “You want to fly on date X, so does NASA, and so does the Air Force; you can imagine where a small entrepreneurial company would fall on the pecking order.”

You can see where this is going: What if small satellites had commensurately small rockets to take them quickly into orbit, the space equivalent of sending a UPS truck across town instead of an enormous container ship?

Necessity is the mother

“Nobody is paying attention to those guys—they’re still treated like toys, like second-class citizens, they don’t have a reliable way to get to orbit,” Jim Cantrell says of small satellite companies.

Cantrell is a founder of Vector Space, the company behind the Mojave Desert test. He and co-founder John Garvey are both veterans of the space business; they played a role in helping Elon Musk set up SpaceX when the company’s early staff was being recruited in those same Mojave test grounds.

Vector Space Systems testing their prototype in the Mojave.
Vector Space Systems testing their prototype in the Mojave.
Image: Vector Space

Musk’s vision for disrupting space is slightly different: SpaceX is beating established rocketry firms at the lucrative work of launching enormous satellites into orbit, especially geo-stationary orbits 37,000 kilometers up, where satellites can hang over one spot on Earth. SpaceX’s next rocket, the Falcon Heavy, will be enormous (though not quite as big as SLS) and designed to take big cargo into space very efficiently.

“Geo-stationary orbit is actually real estate—you can only put so many satellites up there,” Cantrell says. “It’s like waterfront property at the beach. Everyone builds the biggest thing they can put up there. Chasing that market, putting everybody out of that business, that’s how Elon is going to fund his way to Mars. It’s kind of a brilliant strategy.”

But that’s not Cantrell’s business. He and Garvey are focused on the opportunity they see in a world where companies are building businesses around satellites that weigh less than 100 lbs.

“I’m going to dominate the small side,” Cantrell promises. He expects to orbital tests to start next year, and operations to commence in 2018.

A crowded field

Vector Space is hardly the only company to aim for this market. There at least a half-dozen hoping to be the first to provide regular service to small satellite operators.

Rocket Labs, a San Francisco/New Zealand effort, has developed a new kind of electronic rocket motor and is already signing on clients to fly as soon as 2017, though it has yet to fully flight-test its rocket. Firefly also is developing a rocket, and expects by 2018 to launch satellites weighing less than 1,000 kg.

Then there are the companies developing plans to launch small rockets from planes, like Paul Allen’s Vulcan Aerospace. Vulcan is in the early stages of figuring out how to use an aircraft called the Stratolaunch, with the largest wingspan ever built, for the job.

And Richard Branson’s Virgin Galactic is in the process of hardware-testing a rocket system it hopes is two years away from launching satellites on a 60-foot (18-meter) rocket slung under the belly of a 747.

A rendering of what it might look like to drop a rocket off a 747.
A rendering of what it might look like to drop a rocket off a 747.
Image: Virgin Galactic

“Even if you are only at an altitude of 35,000 feet, you’re already above 90% of the atmosphere, not swimming your way through a thick soup of atmosphere at the start of a mission,” Pomerantz says.

Another answer for the smallest satellites is the company NanoRacks, which in 2014 installed a special port on the International Space Station to launch cubesats carried aloft during regular cargo delivery missions to the station, where astronauts can then deploy the satellites. So far, they have launched more than 100.

There’s one big threat to the small-rocket business

The incumbent rocket companies flying the big cargo missions aren’t ignoring the market trends. And they all have operational rockets in an industry where bringing a functioning product to market rarely happens on schedule.

SpaceX’s obsession with reusability has it convinced it will drive competitors with smaller rockets out of business. It has also forced its competitors to think more about lowering launch costs and using every inch of their rockets efficiently. United Launch Alliance, the joint venture of Boeing and Lockheed Martin that performs most US space launches, has developed a “cubesat” carrier (designed for small, cube-shaped satellites) that can attach to its Atlas rocket; and it plans to deploy it widely.

“Every Atlas launch vehicle would have one of these carriers on the back end and provide the total current equivalent of the world’s cubesat rides to space, in one to three years,” ULA CEO Tory Bruno told Quartz.

“I think there is going to be greater and greater utility in smaller and smaller satellites,” Bruno added, describing a scenario in which low-Earth orbit “becomes the app store of space, [offering] all sorts of economic activities there, things we haven’t even thought about today.”

Bet on the little guy

If the large rocket companies think their quest for lower pricing will eventually crowd out smaller competitors, the new companies are equally bullish that the incumbents can’t match their service and flexibility in a world of cheap access to space.

“In many ways, the market for satellites has been so constrained by launch costs for so long, if that diminishes, it’s going to increase our demand,” Virgin Galactic’s Pomerantz says, forecasting an expanded array of rocket needs.

If cheap access to space is really going to bring about a surge of new economic activity there, it will likely take multiple, easy-to-use platforms for commercial access—because the industry will be serving a range of customers, and because individual customers will have a range of needs.

A key client for Virgin, OneWeb, the space internet company, has an ambitious efforts underway to launch hundreds of satellites weighing 125 kilograms apiece to deliver broadband internet to Earth. OneWeb can launch perhaps 35 or 40 of its satellites on a large rocket, whereas Virgin Galactic could only launch two at a time. But even if most satellites are launched in bulk, small rockets can be used for a lot of other purposes—replacing individual satellites if they fail, testing new generations of satellites, or putting a few satellites in a unique orbit to eliminate empty coverage areas, for example.

“We’ve designed our capability to be able to go into space for any rocket that will provide it,” says Chris Lewicki, the CEO of Planetary Resources, a company developing the technology to mine asteroids and a likely customer for the small-scale players. “In the normal shipping market, FedEx or UPS or DHL, they all have their different advantages.”

And it will take that kind of ease of use to make Earth-orbit the kind of entrepreneurial playground that these starry-eyed Silicon Valley voyagers are looking for.