Indie space ventures blast off

For a price, Up Aerospace will launch your stamp collection or other small payload into orbit.

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No amateur has matched Jerry Larson's feat of sending a rocket soaring 72 miles, 10 miles beyond the threshold of space.
Mojave's space race Mojave's space race Mojave's space race
Entrepreneurs in this desert rocket town aim at the stars - and at the millions tied up in projects like Virgin Galactic. Meet Mojave's space cowboys. Photographs by Brad Swonetz/Redux.

(Fortune Small Business) -- There's not much to see at the future home of Spaceport America, touted as ground zero for commercial rocket traffic. Deep in the New Mexico desert, you'll find shrubs, scorpions - and Jerry Larson. His company, Up Aerospace, has signed on as the first tenant of the $220 million spaceport, where construction will begin in 2009.

The private space industry pulsates with wannabes who have launched little more than press releases, but Larson is that rare entrepreneur who has actually sent a rocket into space - and figured out how to make it pay. In 2009, Larson expects to turn his first profit on revenues of nearly $1 million, a considerable increase from his hobbyist income of $300,000 in 2007.

"Beyond passion, beyond skill, beyond luck - this is just plain hard work," he says.

Larson, 48, grew up in Seattle during the 1960s, when the Apollo moon missions inspired him to join the space industry. After earning a degree in aerospace engineering from the University of Washington, he landed at Lockheed Martin (LMT, Fortune 500). There, Larson worked on missile systems and launch vehicles and helped redesign solid rocket boosters for the space shuttle in the wake of the 1986 Challenger disaster.

In 1998, he and Ky Michaelson, a Hollywood stuntman who liked to install rocket engines on bikes and snowmobiles, formed the Civilian Space Exploration Team, a group of 20 weekend rocket warriors. Six years and $100,000 later, the team launched its unmanned GoFast Rocket from the Black Rock Desert in Nevada. It soared 72 miles, 10 miles beyond the threshold of space. No amateur has managed to duplicate the feat since then.

Emboldened, Larson quit Lockheed Martin to go pro. He saw a potential profit in sending stuff - corporate R&D projects, university research, even memorabilia - on short trips into near space (between 12.3 and 62 miles above sea level). Larson founded Up Aerospace in 2004 with backing from several investors. He currently works out of a warehouse near his Denver home and will expand into New Mexico once Spaceport America is completed.

For Up Aerospace, Larson has built what you might call a freight rocket. The unmanned craft stands 20 feet tall, and half of its volume is reserved for commercial payloads. Several customers can purchase cargo space on each flight, akin to a time-share. Larson holds a patent on a freight-loading system that slides payload canisters - ranging in weight from 4.5 ounces (a $2,000 flight fee) to 10 pounds ($40,000) - directly into the rocket, filling it up in just a few hours.

"It's like dropping batteries into a flashlight," he says.

Larson also developed software that allows him to calibrate a rocket launcher's position from his laptop to within one-thousandth of a degree. Each launch requires three days' preparation and a ground staff of three. By contrast, the Air Force and NASA each require a month of preparation and 20 staff members to do the same job. And his service is much cheaper: Larson says he can launch a rocket for $200,000, about a tenth of what it costs the government.

Progress hasn't always been smooth. Up Aerospace's maiden flight in 2006 was a disaster. At 40,000 feet, the rocket shook off ground control and plummeted to earth at 700 mph, boring 12 feet into the desert sand on impact. Miraculously, the payloads remained intact. "I may have scared away some customers," Larson recalls ruefully. Not to mention that he attracted the attention of the FAA, which put Up Aerospace through an extensive "anomaly investigation."

The culprit: undersize tail fins. Six months later, Larson launched a new rocket with larger tail fins. It traveled to an altitude of 73 miles, floated in space for five minutes and parachuted safely to earth.

"Jerry is a very talented engineer," says Jeff Krukin, a space consultant based in Chapel Hill, N.C. "Crucially, he learns from his mistakes."

That flight carried payloads for 11 customers. A Houston company called Space Services sent up the cremated remains of 201 individuals, including James Doohan, the actor best known for playing Scotty on Star Trek, and Gordon Cooper, an astronaut in NASA's early Mercury program. Microgravity, another commercial-payload company in Albuquerque, sent up several pounds of beverage ingredients, including yeast that was later used in a microbrew called Comet's Tail Ale. The smallest, two-ounce payload canisters contained stamps and lapel pins for space-happy collectors.

"It's a curious thing," Larson says. "I guess there's fascination with anything that has flown into space. But there's no denying that it's been great for getting the message out about my company."

Indeed, Larson's former employer, Lockheed Martin, got the message and asked Up Aerospace to handle cut-price launches of its own experimental rocket at the spaceport site. More Lockheed launches are planned for 2009, along with another flight of Up Aerospace's rocket. This time the payloads will also contain scientific experiments from several New Mexico universities.

Meanwhile, workers recently broke ground on a new road to Spaceport America. While Mojave, Calif. might be the hotbed for rocket builders, Spaceport America is angling to become the place where the actual launches occur once the craft are ready for commercial flights.

In 2009 the site's developpers plan to start building hangars; a 15,000-foot runway; and an ultramodern, eco-friendly terminal for anchor tenant Virgin Galactic, Richard Branson's space tourism company, which claims to be on track for a first launch in 2010. The developers are also trying to lure a number of other companies to New Mexico. Armadillo Aerospace and Rocket Racing just announced the spaceport as the launch site for a vehicle they're developing together.

Spaceport's developers hope that all those new vehicles will launch from their facility. New Mexico offers several distinct advantages. Because of its proximity to the White Sands Missile Range, Holloman Air Force Base and several other sensitive government operations, Spaceport America lies in the middle of 9,000 square miles of restricted airspace. You can launch rockets around the clock without worrying about commercial aircraft.

Being 4,600 feet above sea level also helps. "We offer the first mile for free," laughs Steve Landeene, executive director of Spaceport America.

Larson sees a real advantage to being the first tenant. He expects Up Aerospace to grow alongside Spaceport America and to benefit from all the aeronautics talent pouring into New Mexico. In the future he hopes to build a larger, faster rocket capable of delivering small satellites into orbit. Larson has yet to issue a press release on this project. In an industry with more sizzle than steak, that's an encouraging sign. To top of page

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