Will Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin Cross Paths?

Elon Musk recognized that space launches were far too expensive and therefore unfeasible for most. He wanted to correct this flaw by starting SpaceX and developing re-usable rockets. Back in 2015, SpaceX was still unsuccessfully trying to land its Falcon 9 rocket back to Earth after launching it into space. Out of nowhere came Blue Origin (the space flight company backed by Jeff Bezos) and announced that they had been successful at landing their rocket the ‘New Shepard’ back to Earth after its launch into orbit.

This came as a shock to a lot of people, and naturally the comparisons between SpaceX and Blue Origin ensued. Soon thereafter, SpaceX was also able to re-land their Falcon 9 back to Earth. That’s when Jeff Bezos threw some serious shade on Elon Musk and tweeted out:

Musk of course responded back with some tweets of his own:

This sparked talks of an intense rivalry between the two billionaires. We decided to do a comparison between the two companies and find out if these talks really have any merit between them.

Business Model

First things first, the fundamental purpose of the two companies is completely different from one another. SpaceX is basically in the freight haulage business. It caters towards corporate and government client. They have launched more than 20 commercial satellites, engaged in resupply missions for space stations and taken part in US government science and national security missions. Their customer base includes US government entities such as NASA and corporates such as Airbus, Thaicomm and Orbcomm. Due to this, they are already generating a revenue which was estimated to be around $1.8 billion in 2016 and said to have generated a profit of around $55 million from this revenue. The latest valuation was said to be $21.2 billion.

In contrast to this, Blue Origin is in the tourism market. Bezos seeks to take tourists into orbit for 10-11 minutes and popularize space travel. As far as business goes, so far they have not launched anything for the paying customer and therefore have not generated any revenues to date. The deadline for the first launch with customers inside is targeted to be in 2019. No valuation can be estimated at this point.

Trajectory

As you can see from the image, the New Shepard isn’t designed or supposed to go as far as the Falcon 9. As discussed earlier, Blue Origin just wants to take people to sub orbital space and it doesn’t need to go any further to accomplish this mission., SpaceX needs to launch further in space in order to complete its supply missions and satellite launches. Because of this, their rocket has to be thinner and longer as compared to Blue Origin in order to go further into space.

Funding

Even though, SpaceX was initially funded by Musk himself out of his own pockets, they have gone on to raise almost $1.5 billion of additional funding. They have raised capital through companies such as Google and Draper Fisher Jurvetson and can fund their operations from the money generated through the competitive contracts that they have secured. Due to having external investors and contracts to fulfil, SpaceX doesn’t have much flexibility and has to be smart at managing its costs and returns and remain on track with its deadlines.

Just like SpaceX, Blue Origin followed a similar path and was funded by Bezos himself. This was and continues to be his very own pet project. The project continues to be funded by Bezos himself, who has already sold $2.1 billion of Amazon stock this year to free up some funds. This past April, Bezos said that he sells about $1 billion of stock every year to help fund the Blue Origin project. Not having outside investors allows them to be more flexible than SpaceX and not particularly concerned about immediately generating revenues and making a profit.

Seeing these differences between the two, it doesn’t seem fair to compare them both as they are at completely different stages of development and have different purposes. Regardless of these comparisons, both these companies are doing great things and deserve all the plaudits that they get. They are thinking big and are really trying to revolutionize humanities access to space. By developing reusable rockets, they are going to drastically cut down the heavy expenses associated with space launches and make space more accessible for both commercial and non-commercial purposes. With the success of these two, there are some exciting times ahead!

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