(FORTUNE Magazine) – There is no use having a universe if there is no one to see it. That is our job. --Ray Bradbury, Space Frontier Foundation Conference, 1999

A rocket is a fairly simple, if highly volatile, piece of machinery, designed to pack the maximum amount of fuel and payload into the thinnest, lightest structure possible. Yet conventional rocketry has not advanced in any major way for 30 years. Rockets are still built by hand--at exorbitant cost--and once you roll one out and light its wick, it shoots into space, sheds its stages, delivers its payload, then dives back to earth in a suicide flare. Time to make a new one.

It doesn't take a rocket scientist to see how this system could be improved upon, and today a small and embattled class of entrepreneurs is attempting to create nothing less than an alternative space program. To their way of thinking, the space shuttle is not sacred; it's a dinosaur. Government scientists are not inherently smarter; they're inherently harder to fire. Even though more than half of the $100 billion space industry addresses commercial markets such as communications satellites and the rockets that put them up, the entire industry is still overshadowed by NASA and the military. And judging by the fact that the U.S. has ceded about a quarter of the commercial launch market to France's Arianespace, that may not be such a good thing.

The Holy Grail for these entrepreneurs is a supercheap rocket--a reusable launch vehicle (RLV)--that would slash launch costs from about $10,000 per pound of payload to $1,000 or $2,000, and operate as reliably and regularly as an airplane. The cheaper leaving Earth becomes, the more there will be to do in space, and an RLV would serve as the backbone of first-generation space businesses: revolutionizing the satellite industry, for example, by making satellite-repair services possible, or supporting other new markets such as fast package delivery or resupply of the International Space Station. Sci-fi staples such as orbiting zero-gravity factories, space hotels, Mars gliders, and toxic-waste disposal to the Sun would, presumably, come later. As for architect Terry Waters' "hyperboloidal" asteroid-moving contraption, let's just say it's in the earliest stages of development.

For now, though, all eyes are on the rocketeers--and most will fail miserably. This isn't Silicon Valley: Space startups generally require hundreds of millions of dollars to get their first product out the door; their potential for profitability would make even an Internet CEO blush; and most investors won't touch them with a ten-foot pole. But as George Mueller, who ran the Gemini and Apollo programs in NASA's heyday and who now heads up RLV company Kistler Aerospace, points out, "Today the challenges are financial, not technical." Astonishing as it may seem, most of the RLV crowd consider exploiting space a business problem, not a scientific one. And whoever puts all the pieces together--whether now or 20 years from now--will change life as we know it. As one veteran puts it, "We are going to have to keep hitting the barbed wire until one of us gets over."

In fact, the seeds of New Space--privatization and commercialization--have already been planted. The shuttle fleet, for instance, is owned and operated by a joint venture between Boeing and Lockheed Martin. And Lockheed's X-33 is a prototype for a fleet of RLVs called VentureStar, which the company is supposed to finance on its own at an estimated cost of about $7 billion. NASA chief Dan Goldin says, "It would be healthy for Lockheed, Boeing, and others to have red-hot competition"; he is under orders to foster entrepreneurialism wherever possible and says he wants to set aside at least a third of the new International Space Station for commercial uses.

Meanwhile, civilians such as Shelley Harrison (who founded bar-code scanner company Symbol Technologies in the 1970s) and telecommunications mogul Walt Anderson are already colonizing niches for themselves. Harrison is now the CEO of SpaceHab, a company that built pressurized storage and research containers for the space shuttle on its own dime--then persuaded NASA to use them. SpaceHab pulls down annual revenues of about $100 million. Harrison hopes to expand on his success by renting out parts of the space station set aside for commercialization to companies looking to experiment with manufacturing new materials or drugs, or even growing human organs in zero gravity. He has already cut a deal with the Canadian Space Agency to operate part of its section of the station on a commercial basis, and recently formed a joint venture with Energia, Russia's privatized space company, to build a commercially owned destination on the station--a research laboratory and broadcast facility to be called the Enterprise. Anderson is also teaming up with Energia in a separate joint venture. He and the Russians have raised $50 million so far to save the rickety Mir space station, and the group is already offering a ride to anyone willing to pony up $20 million for a stay of up to two weeks.

Which brings us to tourism, the real killer app for a private space industry. Space is less than 100 miles away, but apart from Neil Armstrong, Buzz Aldrin, and a few hundred others, almost no one has been there. And until recently it was unthinkable that rank-and-file civilians would ever make it. "In the technical community," explains Mike Kelly, another of those struggling to build an RLV, "anyone who thought space tourism was a good idea feared that if he brought it up he would be considered an oddball--or a Trekkie, which is the worst thing you can be. As it turns out, almost everyone thinks it is viable and wants to be the first to go."

A 1997 NASA study showed that about one-third of Americans are interested in taking a trip to space. According to the Space Tourism Society, every year nearly 100 million people attend science and space museums, the Kennedy Space Center, and other galactic attractions. And thousands of adventure tourists happily pay a year's salary to climb Everest, dive to the Titanic, or go to Antarctica. With numbers like those feeding into the industry, it's little wonder that a company called Space Adventures has already taken 144 reservations--at more than $90,000 a pop--for suborbital joyrides it can't even deliver yet. One starstruck designer has even taken the process a step further by inventing a crucial space accessory: a sex sock that will keep lovers coupled as they bounce around weightless in their honeymoon suite.

Think of it this way: Until 1903, powered human flight was impossible; today more than 600 million people fly commercially each year. The 20th century was commonly referred to as the Space Age, but our extraterrestrial ambitions have proven far grander than our actual accomplishments. As Buzz Aldrin complains, "It only took 66 years to get from Kitty Hawk to the moon, but for the last 30 years all we've done is go round and round and round." The notion of a reusable rocket--or of taking trips to space as easily as we would go to Denver--seems as absurd to us as air travel did in 1903. But if Buzz, Kelly, or just one of the people on the following pages manages to build an orbital Model T, the real Space Age may be just getting off the ground.

A BUZZ WITH POSSIBILITIES DR. RENDEZVOUS

Buzz Aldrin is sitting in his Los Angeles condo, awash in space memorabilia. On the surrounding shelves, a Buzz Lightyear action figure (inscribed "to the real Buzz") sits across from the new limited-edition Buzz G.I. Joe and a Buzz Beanie Baby. There are enough busts, plaques, and medals here to fill a small museum.

Most people associate Buzz with the first landing on the moon, the Cold War, and the most audacious government program ever contemplated. That is, with Old Space. What many don't realize is that Buzz isn't some fossil. More than anyone, he connects the original Apollo missions to the vague but tantalizing geography of New Space.

Helping us return to space would be a redemption of sorts for Buzz. By 1977, eight years after returning from the moon and after battling alcoholism and depression, he was trading on his renown--as a Cadillac salesman. When his present wife, Lois, met him in 1985, he was an incorrigible bachelor: "Donald Trump would have been envious," she reports, "but Buzz was lost. He didn't have a place to perform." Lois began coaxing Buzz to make speeches and commercials, which he did reluctantly at first, then came to enjoy. Now he commands up to $50,000 for a single appearance. You may have seen him floating through a recent Fidelity commercial.

Through his undeniable expertise--and his close if contentious relationship with NASA--the revitalized Buzz is forcing the space establishment to consider the possibility of private enterprise's opening the solar system to human exploration, commerce, and even tourism. But he's also trying to build an RLV through his own rocket company, Starcraft Boosters. The StarBooster, as he calls it, would be a winged vehicle wrapped around the first stage of an existing Atlas or Zenit rocket that could take a smaller rocket a third of the way to space before detaching, gliding back to earth, and landing like a remotely piloted airplane. Since it would be built around existing rockets, the StarBooster would offer the government and the large aerospace companies a way to wean themselves gradually from taxpayer funds. It could also lay the groundwork for a whole family of vehicles capable of lofting satellites, supplies for the International Space Station, reusable people carriers called Starbirds, and even large pieces of orbiting habitats or interplanetary craft called "cyclers" for a future mission to Mars.

Mars is Buzz's obsession, and if he tolerates his new role as half-pitchman, half-scientist, it's because he hopes to leverage his iconic status to send people there in our lifetime. One of the first astronauts with a doctorate--his thesis was on orbital mechanics--Buzz was dubbed Dr. Rendezvous by his NASA colleagues. Even now, according to Lois, "to him, figuring out trajectories to Mars is the most interesting thing he could do." On his dining-room table, Buzz sketches what looks like a Rube Goldberg diagram for an interstellar conveyor belt. It shows three space stations--his cyclers--going off on a six-month journey to Mars, spiraling around the Red planet for about 20 months, then shooting back to orbit Earth before returning to Mars again. The cyclers would need a limited amount of fuel to correct their orbits, but Buzz has basically invented a giant perpetual motion machine that would use the gravity of the planets and the sun as a means of free propulsion: "You would always have one cycler going, one coming, and one circling in the vicinity of the Earth for a year," he explains. "So adventure travelers could get on the cycler for a yearlong trip near the Earth and occupy the same cycler that the first explorers did. It would be like saying you got to sail on the Santa Maria."

One of the most striking things about Buzz's Martian plan is that according to NASA's Jet Propulsion Laboratory, it could actually work. (Of course, JPL's recent track record of losing Mars probes isn't exactly a confidence builder.) As Buzz sees it, the only thing missing is commitment and some trial and error--and he thinks the prospect of orbital adventure travel will bring both: "Adventure travel will force us to improve the reliability of our launch vehicles, help to establish economic life-support systems for a large number of people, and give us experience with creating space habitats. All of these things are strong building blocks for exploration."

His reverie is broken by a video crew that has arrived to shoot a commercial for freeze-dried "space strawberries." Buzz rolls his eyes, but Lois enters the room and gives him a gentle prod: "Just use that million-dollar smile." He does.

NEW SPACE: THE LOST GENERATION THE ROCKET MEN

A new dawn in the Mojave Desert: The modified rocket-tipped helicopter blades atop Rotary Rocket's cone-shaped test vehicle begin to revolve, lifting it about 75 feet and propelling it down the length of a runway at the Mojave airport. For a split second the vehicle's silhouette eclipses the sun, like an advance scout for an alien invasion.

Rotary's long-suffering CEO, Gary Hudson, looks on with satisfaction as the pilots touch down safely at the other end of the runway. After three years, $33 million, and plenty of snickering at his expense, Hudson considers the three-minute, 47-second flight a vindication of sorts. But if the 65-foot-tall whirlybird is a testament to Rotary's ingenuity, it still lacks a rocket engine, heat shielding, payload bay, and other essential systems. Putting a rocket into space in a single stage is not theoretically impossible (conventional rockets have two or three stages that fall away once their fuel is spent), but it has never been done before. The only other company that's even trying is Lockheed Martin, and the $1 billion X-33 prototype is itself problematic. Hudson figures he needs another $150 million to complete his fully reusable, single-stage Roton rocket. In other words, despite the enormous machine at his back, he's a long way from space.

Half a desert away, Mike Kelly is having just as tough a time with his RLV. Kelly had built his first rocket at the age of 8 out of a cardboard tube and black gunpowder; he went on to hone his skills on the MX Peacekeeper missile at TRW, where Dan Goldin became his boss. In the early 1990s Kelly quit TRW and concocted his Astroliner, a reusable space plane that would be towed high into the air by a 747, then detach its rope, fire its rocket engines, and blast into space--after which the pilots would reenter the atmosphere to land on a runway. So far, about all he's got is the rope.

All space entrepreneurs can be categorized as either prophets or fools, the difference being that a prophet later happens to be proved correct by some coincidence of history. Most of the early private rocket companies were formed in the mid-1990s, when it looked as though a whole slew of planned low-earth-orbit (LEO) satellite constellations, such as Iridium, ICO, and Teledesic, would generate just the spark they'd need. At one point, analysts estimated that more than 1,500 LEO satellites would be launched by 2010.

By early 1998 things were looking rosy for several of the more established rocketeers. Kelly was preparing for a $525 million private bond and equity offering. Kistler was planning to go on the road with a $300 million high-yield debt offering. And Hudson was trying to raise $35 million in debt and even had aspirations for a mid-1999 IPO. They all thought they would be flying by now. Then, about a year and a half ago, the LEO satellite market started to swoon. Today, Iridium and ICO are in bankruptcy, and Teledesic is in disarray. Nearly all the new rocket companies, Kelly's and Hudson's included, have been forced to push out their development schedules indefinitely, pare back operations to a bare minimum, and hook up the life support. As Hudson says, "No bucks, no Buck Rogers."

Hudson has been working on private rocket projects for 25 years; Rotary is his fourth rocket company. Rotary's investors include Hudson's buddy Tom Clancy, the novelist, and Walt Anderson, who runs a private fund that is the company's largest shareholder. But Hudson is still waiting for his coincidence. "This is the worst it's ever been," he sighs.

Kelly, too, has weathered countless challenges in the years that he's been trying to make the Astroliner a reality. A walking encyclopedia of aviation and rocket history, he is staying afloat by participating in a NASA study to consider ideas that could be incorporated into a shuttle replacement, by licensing an earlier space plane concept to a company that wants to use it for microgravity research, and by designing a new suborbital vehicle for space tourism. Kelly thinks this new vehicle, which exists mostly on paper, can win the X-Prize, a $10 million payoff to whoever builds the first privately funded RLV that can take a pilot and two passengers up 100 kilometers, return them safely, and repeat the feat within two weeks. "The X-Prize will remove the psychological barrier that only the government can fly people into space," he says hopefully.

MONEY TO BURN THE BANKER

Andy Beal wants to be the Henry Ford of space. Instead of pursuing a reusable vehicle like Hudson and Kelly, he wants to break open the market by building a big dumb booster with as few moving parts as possible. He'll worry about making it reusable later.

On a recent morning, the long, pale Texan walks through his spanking new 160,000-square-foot facility north of Dallas, peppering his engineers with questions about ablative chambers, mass fractions, and stress loads. They're developing the largest rocket engines ever made, which will allow Beal to go after the existing, albeit crowded, $3 billion high-altitude satellite launch market and avoid the problems with the LEO market.

Beal throws himself into every level of rocket development. The 200 engineers he's hired over the past three years are refining a basic design he came up with himself after reading the leading texts on rocketry and visiting lots of experts. Not bad for a college dropout. Beal explains that he is pushing the limits of carbon-fiber technology, and points to a custom-built mandrel 20 feet in diameter that will be used to spin the rocket's hull from 218 million miles of carbon-fiber strands (enough for 436 round trips to the moon). In the center of the cavernous assembly floor, bunny-suited engineers are painting beige resinous goop onto a revolving steel drum to make a combustion chamber for one of the smaller engines. By fabricating the chambers out of carbon fiber (something never done before on this scale), Beal says he will be able to build simpler engines that eliminate cryogenic propellants, which add significantly to a rocket's cost.

At first glance, Beal looks every inch the stiff, joyless middle manager. But hang out with him for a few hours, and it's clear he loves what he is doing. It's also clear he doesn't have much patience for the whining of his fellow space entrepreneurs. "There is no lack of capital in the U.S., and there is an existing market for [taking] mass to orbit," he says. "I would suggest that people having trouble getting funding have problems other than those two. The reason they are not getting funding is that investors are skeptical about these paper rockets."

Of course, that's easy for him to say--he owns Beal Bank, the largest private bank in Dallas, and siphons off half its $100 million annual net income as dividends. He expects to spend many hundreds of millions of dollars on his rocket. "I am envious of Andy Beal and his people," admits Hudson, "because they just have to get on with building the vehicle." But building a rocket is one thing; when and if Beal makes a return on his investment, he will have truly delivered on the Einstein quote in his office: "Only those who attempt the absurd will achieve the impossible."

LEAVING LAS VEGAS MR. HOSPITALITY

"I look at the $500 million as the money I need to get in the game," says Robert Bigelow. "It's kind of my ante to get my cards and start playing." Bigelow may be the perfect person to attempt a space hotel: He's impervious to ridicule. He grew up in the Las Vegas of the 1950s thinking that aboveground nuclear bomb tests were an everyday part of life. "We went out into the schoolyard to watch the mushroom clouds," he remembers fondly. Stories of UFO sightings, such as the "red, glowing object" his grandparents saw in 1947, punctuated his childhood. Bigelow later rode the Las Vegas real estate boom of the 1980s and 1990s by building low-rent apartments and founding Budget Suites of America, the extended-stay hotel chain, to cater to the city's rootless population. Today, Budget Suites gives Bigelow the cash to do whatever he pleases. About $1 million of that annually goes to the National Institute for Discovery Science, which investigates UFO sightings and cattle mutilations. When the headquarters of Bigelow Aerospace is completed, its facade will resemble a flying saucer complete with landing gear.

Bigelow runs his real estate empire, with annual revenues of $135 million, out of a Tudor mansion guarded by two receptionists sitting side by side at matching oak desks. Up a grand staircase, "Mr. B" sits behind a leather-topped slab the size of a pool table, his graying mustache and bushy head of hair standing out from the shadows. A small, red safe--the kind you see bandits plotting to steal in Westerns--stands in the corner; ROBERT T. BIGELOW is printed across the top in gold.

Bigelow's willing to bet that space will be the vacation spot of the new century. He's looking to build orbiting space hotels that are large enough to carry 150 people and that generate artificial gravity by spinning around a half-mile axis. "These structures will be the largest things that man has ever built," he says immodestly, going on to describe the equivalent of an interplanetary cruise ship shuttling between the earth and the moon, just like one of Buzz's cyclers. (When it passes around the dark side of the moon, it will turn up all of its lights--to illuminate the rocky landscape below so that tourists can take better pictures.)

"Bigelow has weird credentials," says Rick Tumlinson, president of the forward-thinking Space Frontier Foundation. "He's a UFO guy, a little bit nuts--but we will forgive him for that." (Mind you, this from someone who aims to colonize space.) But Mr. B is taken seriously in aerospace circles; $500 million buys a lot of respect. He plans to invest the money over the next 15 years on his orbiting space hotel and considers putting money into space to be "as close to philanthropy as you can get."

Unlikely as it sounds--and risky as it most certainly is--Bigelow could provide just the spark the rocketeers need to overcome the chicken-and-egg problem that bedevils them: He figures that working toward creating an end market will help the rocket companies attract investors and thus beget the RLVs that will ferry visitors to his space hotel. Of course, to actually build and launch a space hotel would cost billions of dollars, so Bigelow foresees being part of larger consortiums; he may join Boeing and other aerospace companies in a venture to build commercial habitats that could be assembled into a privately owned industrial space station. He would then gradually move on to experiments with rotating habitats that create artificial gravity, and finally to his fully functioning space hotel. Then, at last, humanity would get a chance to try out that sex sock.

UNPLUGGED MOON UNITS

In a galaxy far, far away (actually, at the Mojave airport, around the corner from Gary Hudson's) sits a low-slung blue hangar that houses the orbital fancies of Randa and Roderick Milliron. Inside, there is a certain Mad Max quality to the cylindrical hulls, steel-tipped fins, and combustion chambers strewn about the workshop. A practice space is set aside in one corner for the Millirons' German industrial cyberpunk band H-Bomb/White Noise (both husband and wife play synthesizer). On a long wooden bench, a 14-foot suborbital "sounding" rocket lies half assembled, its girth made up of eight slender aluminum propellant tanks welded together and capped by an orange nose cone. Wearing matching black Dickies-brand jumpsuits, Roderick machines the parts himself, and Randa sews the red-and-white-nylon reentry parachutes. Their fledgling startup, Interorbital Systems, boasts next to no revenues and a dozen employee-volunteers who pitch in on a "deferred-pay basis." But as the name of their outfit suggests, the Millirons have far grander ambitions.

Roderick has been a space maven all his life, doing stints as an electronic warfare systems engineer at a couple of aerospace defense contractors, where he worked on the F-14 fighter jet, the Navy's Hawkeye surveillance plane, and a "black program" he can't talk about. Randa got converted only a few years ago, at her first rocket-engine test-firing out in the desert. "When I witnessed up close that sort of power and those chaotic forces under control," she says, "I was hooked."

As twilight engulfs the hangar, the Millirons explain how they plan to build a whole family of rockets, each more powerful than the last. Their next step is to develop a reusable, two-stage orbital rocket called the Neptune that launches straight out of the sea. The Neptune could loft satellites into space far cheaper than anything today, but that possibility is, for the Millirons, beside the point. From their vantage here in the high desert, they see themselves as just the first explorers in the next great wave of human immigration, a wave that will last the rest of time. For the Millirons, you see, are going to the moon. And then some.

Sure, there are obstacles. ("We're just finishing the first draft of the business plans," admits Randa. "It's worse than building the rockets.") But the Millirons are nothing if not determined. "If the first $20 million comes in," declares Roderick, his skull gleaming and dark eyes defiant, "there's no stopping us."

Their first missions via the Neptune will be to search for subterranean lava tubes that can be sealed and pressurized. "So we will become cave dwellers on the moon," explains Randa softly. After that, there's no telling what might happen. As Roderick sees it, "You want to be on a colony for a while, then settle another outpost, then go to Mars, Europa, or Titan. And you keep going. And you don't stop until you die."

There is no point in asking the Millirons or any would-be space tycoon why they want to go to the moon or conquer the void. "Why should we be trapped in this gravity well?" sniffs Walt Anderson. "Was it worth it for people to travel across the ocean?" demands Bigelow. Or, as Tumlinson offers, "you cannot experience the universe from home, even if you do have cable."

If you keep pushing, inevitably they'll speak of man's migratory itch, our impulse to spread out and perpetuate ourselves. "The need to find someplace new," muses Kelly, "is wired into us.... When you become localized, you become an endangered species." So maybe the question isn't why, but why the hell not?

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