What does the Year 2000 mean to you?
You probably remember 2000 primarily as the year "Y2K" fears finally blew over. 1999 ended, the calendar flipped to triple-zero and...nothing happened. Crisis averted. (Well, crisis averted except for the fact that the Internet Bubble was about to burst, crashing the stock market and devastating investment portfolios far and wide).
Space investors though, might better remember 2000 as the year that Jeff Bezos, then CEO of Amazon.com (AMZN +9.77%), began a side project called "Blue Operations LLC" -- the company that we know today as Blue Origin. Established to explore the potential for building a "road to space," enabling other companies to build businesses off-planet -- much like creating the Internet allowed Amazon to be born -- Blue Origin came into being two full years before Elon Musk created SpaceX.
Many space investors don't remember 2000 as the year Blue Origin began, though. And the reason for that is because Blue Origin spent the first 15 years of its existence doing basically nothing.
The hare and the tortoise
SpaceX wasted no time making up for starting two years after Blue Origin, beginning test flights of its small Falcon 1 rocket in 2006, and getting the rocket to orbit on its fourth try in 2008. In contrast, Blue Origin didn't conduct its first test flight until 2015, and the rocket it ended up flying was the New Shepard -- similar in size to Falcon 1 and reusable, but incapable of orbital flight. Moreover, by the time Blue Origin did finally launch New Shepard, SpaceX had already upgraded its original design to create Falcon 9 -- bigger than New Shepard or Falcon 1, capable of orbital speeds, and just as reusable.
It would take Blue Origin another decade to fly its own orbital rocket, New Glenn, which took off just earlier this year.
First New Glenn rocket launch. Image source: Blue Origin.
Elon Musk's secret weapon: U.S. government money
How did SpaceX go so far, and grow its business so much faster than Blue Origin has? In his new book Rocket Dreams: Musk, Bezos, and the Inside Story of the New, Trillion-Dollar Space Race, Washington Post space reporter Christian Davenport quotes Bezos explaining to his executives that "Elon's real superpower is getting government money."
When NASA needed to find a commercial supplier willing to develop a rocket and a space capsule, capable of ferrying supplies to the International Space Station (ISS), SpaceX stepped up and bid against NASA's (then) primary space contractor, the Boeing (BA +0.47%) and Lockheed Martin (LMT +0.44%) joint venture United Launch Alliance. SpaceX won what would become a contract worth billions of dollars to send supplies up on the Falcon 9 -- money it could then use to develop Falcon 9 into the world's first reusable space rocket.
When NASA later sought out contractors who could launch not just supplies, but actual astronauts to ISS as well, aboard "American rockets [launching] from American soil," SpaceX again raised its hand -- and won a $2.6 billion Commercial Crew contract as well. That money helped SpaceX develop the Crew Dragon spacecraft, and provided seed capital to start work on Starbase and the Starship megarocket as well.
Blue Origin makes a beeline for federal cash
In contrast, Blue Origin declined to bid on either NASA's Commercial Resupply or its Commercial Crew contracts. In the process, it deprived itself both of a source of funds from the government, and valuable time it could have spent using that money to develop an orbital-class rocket (i.e. a rocket capable of reaching speeds that would allow it to remain in orbit), in order to perform the contracts it (might have) won.
Long story short, Blue Origin made a mistake -- but it's a mistake Jeff Bezos now intends to fix. Going forward, Blue Origin intends to imitate that same strategy. And Davenport quotes the Blue CEO taking a vow: "From now on, we go after everything that SpaceX bids on."
What does this include?
Well, national security space launch (NSSL) contracts for one thing. SpaceX has been winning increasingly large proportions of these Space Force defense contracts since 2014, when it sued the U.S. Air Force (at the time, there was no "Space Force") to permit SpaceX to bid on these contracts. Now that Blue Origin has an orbital-class rocket of its own, it can bid for this work as well, and earlier this year it did bid for the third round of NSSL "Lane 2" contracts on offer -- and won $2.4 billion!
Blue's also bid on, and won, in 2023, at least one contract to build lunar landers for NASA, putting another $3.4 billion in Jeff Bezos's pocket.
For a multi-multi-billionaire like Jeff Bezos, it's all pocket change of course. But it's the kind of pocket change that helped turn SpaceX from a startup challenging incumbent rocket-maker United Launch Alliance, into the undisputed No. 1 rocket company in America.
With any luck, Bezos will be able to use similar billions to make Blue Origin at least No. 2.
