🚀 My chat (+transcript) with economist Matt Weinzierl on the growing business of space

The space business landscape is changing. Companies like SpaceX and Blue Origin are moving at breakneck speed toward goals Americans have dreamed of since the 1960s. At the same time, a whole host of smaller startups are arriving on the scene, ready to tackle everything from asteroid mining to next-gen satellites to improved lunar missions.

Today on Faster, Please — The Podcast, I’m talking with Matt Weinzierl about what research developments and market breakthroughs are allowing these companies to thrive.

Weinzierl is the senior associate dean and chair of the MBA program at Harvard Business School. He is also a research associate at the National Bureau of Economic Research. Weinzierl is the co-author of a new book with Brendan Rosseau, Space to Grow: Unlocking the Final Economic Frontier.

In This Episode

* Decentralizing space (1:54)

* Blue Origin vs. SpaceX (4:50)

* Lowering launch costs (9:24)

* Expanding space entrepreneurship (14:42)

* Space sector sustainability (20:06)

* The role of Artemis (22:45)

* Challenges to success (25:28)

Below is a lightly edited transcript of our conversation.

Decentralizing space (1:54)

. . . we had this amazing success in the ’60s with the Apollo mission . . but it was obviously a very government-led, centralized program and that got us in the mode of thinking that's how you did space.

You’re telling a story about space transitioning from government-led to market-driven, but I wonder if you could just explain that point because it's not a story about privatization, it's a story about decentralization, correct?

It really is, I think the most important thing for listeners to grab onto. In fact, I teach a course at Harvard Business School on this topic, and I've been teaching it now for a few years, and I say to my students, “What's the reason we're here? Why are we talking about space at HBS?” and it's precisely about what you just asked.

So maybe the catchiest way to phrase this for folks, there was one of the early folks at SpaceX, Jim Cantrell, he was one of the earliest employees. He has this amazing quote from the early 2000s where he says, “The Great American Space Enterprise, which defeated Communism in defense of Capitalism, was and is operating on a Soviet economic model.” And he was basically speaking to the fact that we had this amazing success in the ’60s with the Apollo mission and going to the moon and it truly was an amazing achievement, but it was obviously a very government-led, centralized program and that got us in the mode of thinking that's how you did space. And so for the next 50 years, basically we did space in that way run from the center, not really using market forces.

What changed in various ways was that in the early 2000s we decided that model had kind of run its course and the weaknesses were too big and so it was time to bring market forces in. And that doesn't mean that we were getting rid of the government role in space. Just like you said, the government will always play a vital role in space for various reasons, national security among them, but it is decentralizing it in a way to bring the power of the market to bear.

Maybe the low point — and that low point, that crisis, maybe created an opportunity — was the end of the Space Shuttle program. Was that an important inflection point?

It's definitely one that I think most people in the sector look to as being . . . there's the expression “never waste a crisis,” and I think that that's essentially what happened. The Shuttle was an amazing engineering achievement, nobody really doubts that, and what NASA was trying to do with it and with their contractors was incredibly hard. So it's easy to kind of get too negative on that era, but it is also true that the Shuttle never really performed the way people hoped, it never flew as often, it was much more costly, and then in 2003 there was the second Shuttle tragedy.

When that happened, I think everybody felt like, "This just isn't the future." So we need something else, and the Shuttle program was put on a cancellation path by the end of that decade. That really did force this reckoning with the fact that the American space sector, which had put men on the moon and brought them back safely in 1969, launching all sorts of dreams about space colonies and hotels, now, 40 years later, it was going to be unable to even put a person into orbit on its own rockets. We were going to be renting rockets from the Russians. That was really a moment of soul searching, I guess is one way you think about it in the sector.

Blue Origin vs. SpaceX (4:50)

I guess the big lesson . . . is that competition really does matter in space just like in any other business.

I think naturally we would lead into talking about SpaceX, which we certainly will do, but the main competitor, Blue Origin, the<a target="