Tim Urban relates the utterly awesome story of the SpaceX boost-phase:
This was a venture few sane investors would touch, and the ability for the company to exist rode largely on Elon Musk’s personal bank account. By the time 2006 rolled around, Musk had decided to revolutionize the automotive industry as a side project, and with $70 million of his PayPal fortune tied up in Tesla, that left about $100 million for SpaceX. Musk said this would be enough for “three or four launches.” SpaceX would have that many tries to prove it was worthy of paying customers. And since the thing paying customers would want is for SpaceX to deliver a payload of theirs into orbit, that’s what SpaceX needed to do — successfully launch something into orbit to show the world that they were for real. […] So the game was simple — launch a payload into orbit in three or possibly four tries, or the company was done. At the time, of the many private companies who had tried to put something into orbit (see the dearth of “operational” companies on this list), only one had ever succeeded (Orbital Sciences).
[…] … with such large forces in play — the weight of the rocket, the speeds, the thick atmosphere — even a tiny equipment malfunction can immediately destroy the mission. The problem is, you can’t reliably test exactly how the equipment will hold up until it actually launches.
SpaceX learned all of this the hard way.
2006: First launch — failure
2007: Second launch — failure
2008: Third launch — failure
The failures were caused by tiny things. Specifically, a corroded nut not holding up under the pressure, liquid in the rocket sloshing around more than expected, and the first stage engines shutting down a few seconds too late during stage separation. You can get everything 99.9% right, and the last .1% will explode the rocket in a catastrophic failure. Space is hard.
Every rocket-launching government or company — each and every one — has failures. It’s part of the gig. Normally, you take a deep breath, roll up your sleeves, figure out what went wrong, and move on to the next launch. But SpaceX had special circumstances — the company had money for “three or four launches,” and after three failures, the only launch they had left was the Or Four one. It was scheduled for less than two months after the third launch failed. And this was the last chance.
A friend of Musk, Adeo Ressi, describes it like this: “Everything hinged on that launch … If it works, epic success. If it fails — if one thing goes differently and it fails — epic failure. No in between. No partial credit. He’d had three failures already. It would have been over. We’re talking Harvard Business School case study — rich guy who goes into the rocket business and loses it all.”
But on September 28, 2008, SpaceX set off the fourth launch — and nailed it. They put a dummy payload into orbit without a hitch, becoming only the second privately-funded company ever to do so.
Falcon 1 was also the most cost-efficient rocket ever to launch — priced at $7.9 million, it cost less than a third of the best US alternative at the time.
NASA took notice. The successful fourth launch was enough evidence for them that SpaceX was worth trusting, and at the end of 2008, NASA called Musk and told him they wanted to offer SpaceX a $1.6 billion contract to make 12 deliveries for them to the ISS.
Musk’s money had done its job. SpaceX had customers now and a long future ahead.
(Cosmic-scale context, Mars project momentum, and footnotes, in the original.)
There’s much more.
Bonus: Musk talks Mars (and Bonus+ there’s the “summoning the demon” moment in the Q&A).