Would-be launch giant Blue Origin just can’t catch a break lately.
Despite a two-year head start on arch-rival SpaceX and the deep pockets of founder Jeff Bezos, Blue Origin has only made only suborbital launches like last summer’s tourism flight with Bezos himself. The company has yet to launch a single gram of mass into orbit.
Last week it was leaked that the semi-launch company is suffering a serious brain drain. Sources inside Blue Origin told CNBC that the company was suffering “an elevated turnover rate,” reaching as high as 20%. While some left because of CEO Bob Smith’s insistence that employees return to the office, others are undoubtedly frustrated by Blue Origin’s… failure to launch.
Today, two new reports detail the company’s struggles to right itself as it falls further and further behind SpaceX.
In the first, Eric Berger — my go-to guy for any space-related news — was shown secret screenshots of a secret internal memo detailing Blue Origins troubles.
Smith hired management consulting firm, Avascent, in 2018 to “assess SpaceX’s strengths and weaknesses in order to see how BO could improve. The clock was ticking loudly because, as Berger noted, by then SpaceX was regularly reusing its Falcon 9 rockets for highly profitable satellite launches while BO was still bleeding money on demo liftoffs to nowhere.
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Many of Blue Origins troubles can be traced back to Smith’s decision to run it like an “OldSpace” firm, concentrating on big payloads using expensive rockets:
“SpaceX shifted the market to their payload capabilities and risk profile with their low-cost launches,” one person wrote. “Blue has pushed to exceed the market’s current capabilities for size and mass. While this enables us to give our potential customers more design freedom, will they really try to design to a size or mass that makes our vehicle the only vehicle that can launch their payload? How confident are we that the market will design to our capabilities?”
Meanwhile, SpaceX customers were happy to sacrifice a little flexibility for a much lower cost — about 50% less than competing French firm Ariane could offer.
Blue Origin, basically, was trying to do what OldSpace behemoth United Launch Alliance (ULA) was already doing — and failing.
That’s hardly the business model that’s going to appeal to young engineers hungry to get stuff into space:
The executives also grappled with SpaceX’s ability to hire young engineers, get them to work long hours, and be high performers. The Avascent presentation found that young engineers viewed SpaceX as the “Harvard of rocketry,” and that helped SpaceX attract the best and the brightest students.
High turnover and an inability to grab the best hires only add to Blue Origin’s ongoing delays, like the BE-4 engines it still hasn’t delivered to ULA.
Without those engines, ULA’s new Vulcan can’t fly — and neither can the vital military satellites ULA specializes in launching.
But wait. It gets worse.
There was last week’s public letter from a former employee, detailing a toxic corporate culture that “turns a blind eye to sexism, is not sufficiently attuned to safety concerns, and silences those who seek to correct wrongs.”
And now even more.
According to The Verge, at least some at Blue Origin think the problem is that their employees aren’t being worked hard enough.
From the parts of that 2018 memo seen by The Verge:
“Very long hours are expected,” the memo says of SpaceX’s culture. “People are expected to work on vacations or not take them. Burnout is part of their labor strategy. It’s one reason they [sic] workforce tends to be on the younger side. They hired new grads eager to learn and performance [sic] and purposely burn them out.”
While it wouldn’t surprise me if the burnout rate was high at SpaceX, it isn’t so high that it’s made for any big news stories.
Unlike Blue Origin, I probably don’t need to add.
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Do you know one reason why Elon Musk’s people are willing to work so hard? Because they see a payoff every time they launch another payload into space, which they’ve been doing for years at a record-setting — and increasing! — tempo. They see an even bigger payoff every time they accomplish the once-unthinkable and safely land a spent Falcon 9 and turn it around for another launch.
So now Blue Origin finds itself in a tough situation of its own making.
They chased the wrong market with the wrong product, yet somehow still haven’t managed to produce the product. They believe the way to get ahead is to push its employees harder at a time when attrition is already double the private sector average — employees who must feel like they’re working for a company without a mission.
Bezos has some tough decisions to make. The important one is: Does he really want Blue Origin to be a launch company?
Or should the company focus instead on building the O’Neil space habitats Bezos has dreamed of since high school — and hire SpaceX to do the launches?