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Thinking Outside the Planet

When Eric Anderson started Space Adventures 10 years ago in order to take paying passengers into space, people laughed at him. No market existed, they told him. And even if there were a market, his critics sniped, there was no way he could serve it. Five passengers later, he has proved them wrong. Passionate about space since a childhood spent close to the United States Air Force Academy in Colorado, Anderson was forced to give up his dream of government-sponsored space travel due to poor eyesight. Undeterred, he studied aerospace engineering at the University of Virginia, and set about finding a commercial route into the heavens.

His address, co-sponsored by the Business, Industry and Government, and Travel and Hospitality Clubs, was heard by a solid audience of HBS students, most of whom had a pre-existing interest in space. Thus, when he asked who in the audience would like to visit space one day, almost all raised their hands; by contrast, the twelve polls conducted on the market for space travel found that between 10 and 40 percent of respondents declared themselves would-be astronauts. Thanks to Anderson’s efforts at making the fruits of hundreds of billions of dollars of investment by the Russian and US space agencies commercially available, anyone with good enough health, $20 million and 3 months (for training) to spare can now enter orbit.

So how did he make it happen? At first, he wanted to offer suborbital space travel. This, which Anderson called a “short joyride in space” requires only 1/40th of the energy of orbital travel, and could therefore be offered to passengers for a fraction of the price. The experience, however, is much lower quality than full orbital travel, which allows passengers the chance to visit the international space station, conduct experiments, fly around the world in 90 minutes, and experience weightlessness for up to two weeks. The high cost, high quality option was of more interest to his hyper-rich target clientele, so Anderson soon began investigating how to project tourists into full orbit.

Having generated enough interest among potential customers, the space entrepreneur’s next task was to find a supplier of space missions. Unlike other visionaries exploring this market, such as British billionaire Richard Branson, Anderson only had around $1m of seed funding, and was thus in no position to build his own spacecraft, much less one that could reach orbit. Given the special place that space occupies in the imagination, Anderson knew he was facing a challenge. Space, he noted, carries with it particularly strong associations: it is symbolic of the future and technological prowess; and, during the Cold War, it was synonymous with superpower conflict. How willing would a space agency be to allow non-nationals to use its spacecraft? How easy would he find it to wade through the bureaucracy of countless government organizations?

In the end, money talked. The Russian space agency, strapped by budget cuts, soon agreed to allow passengers on to its Soyuz spacecraft. For Anderson, this had an added marketing benefit: the Soyuz is the world’s most flown spacecraft, and it boasts a flawless safety record. So on Saturday 28th April 2001, Dennis Tito became the 415th person, and the first paying tourist, in space. The success of his mission quickly drove more interest – indeed before Tito had even returned, Anderson was contacted by Mark Shuttleworth, an entrepreneur who became Space Adventures’ second customer and the first South African in space. He in turn has been followed by Greg Also, Anush Ansari (the first paying woman in space) and Charles Simone.

What of the future? Anderson sees significant increases in orbital space tourism. He is exploring ways to bring the cost of space travel down to the $5 to $10m range, such as the use of capsules on the Soyuz designed to accommodate six paying passengers, and he sees a meaningful increase in his target market of people with a net worth of over $100m, which currently numbers 40,000-50,000. As for his own company, an expanded product line is on the agenda. The first idea: a “spacewalk” (which would require wearing the kind of iconic spacesuit popularized by Armstrong and Aldrin) for a mere extra $15m. And for those who are looking for the ultimate in exclusive holidays, Space Adventures is hoping to add a lap around the moon for an additional $100m. Somewhere between all this, the CEO is still hoping to make it into space.

October 9, 2007
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