Rocket Lab could follow SpaceX into the history books with reusable rocket technology

New York(CNN Business) This week, Rocket Lab CEO Peter Beck stood in front of a crowd of people — his peers, competitors, customers and journalists — and declared it was time he "ate his hat."

Beck had sworn that his $1.4 billion rocket startup would never go through the trouble that SpaceX does of trying to recapture and reuse rocket parts to save money. Then he made an unexpected about-face.

"Electron is going reusable," Beck said Tuesday at a conference about small satellites, or smallsats.

Rocket Lab is potentially the most transformative commercial rocket company since SpaceX. It plans to one day rescue its Electron rockets before they plunge into the ocean after launch, using a complicated technique that involves parachutes and a helicopter.

This put Beck on the flip side of an issue that has long divided the spaceflight community. In his industry, reusing rockets is not just about waste reduction or conservation; engineers and analysts argue over whether reusable rockets are the best way to bring down the price of launches and make space more accessible.

But Beck's change of heart ultimately had nothing to do with reducing the price of an Electron rocket. It was about speed.

"Our biggest problem is building rockets fast enough to support all our customers," Beck told CNN Business.

Rocket Lab wants to launch frequently — 50 times or more per year. Right now, the company is launching about once a month.

Scaling up production is still part of his plan, he added. But his team of engineers were also encouraged by data they collected from Rocket Lab's first seven launches. They suggested attempting to reuse their rockets could make sense, Beck said. And reusing rockets would mean less production workload.

Boats, helicopters and parachutes

When talk about "reusable rockets" comes up, SpaceX is the obvious touchstone. Elon Musk's venture forever altered the commercial launch business when it debuted its $60 million Falcon 9 rocket — which is far cheaper than competing rockets of similar size. Musk says SpaceX's breakthrough reusable rocket technology is the company's key to driving down prices.

SpaceX uses a technique called "propulsive landing," during which the rocket relights its engine to safely cut back through the Earth's atmosphere and steer itself to a pinpoint landing.

Rocket Lab's reusable rocket plans are entirely different. The Electron would slow its descent using a braking system that looks like a large red balloon. Then it will fan out a separate, larger parachute. A helicopter will take off from a nearby ship and use a hook-like gadget to snag the rocket mid-air by latching onto the string of its parachute.

On its next flight later this month, Rocket Lab plans to fly an Electron that will collect even more precise data to inform engineers how best to carry out a rescue mission. And an upgraded Electron with some of the needed recovery accouterments could fly later this year. Beck did not say when Rocket Lab might attempt the full show.

Similar concepts have been proposed before. But there are no guarantees this plan will work.

"Make no mistake this is an incredibly difficult thing to do. The corridor for success is very narrow," Beck told CNN. "But of course we think we have a good chance of succeeding. We do believe that we have solutions."

'The Starbucks of rocket companies'

Rocket Lab's Electron rocket is far smaller than SpaceX's Falcon 9. That's because, unlike SpaceX, the company is not looking to launch giant communications satellites or military payloads. Rocket Lab's Electron was designed to launch small satellites, which range in size from a smartphone to a refrigerator and can provide services such as Earth observation or telecommunications.

From the outset, Rocket Lab catered Electron to the blooming crop of companies that want to use advanced smallsat technology to provide services, such as Earth observation or communications.

Smallsat startups want to launch new devices — and lots of them. Those companies are concerned with prices; they can't afford to spend $100 million-plus on a launch vehicle like operators of giant telecom satellites can. But, Beck said, Rocket Lab's miniature Electron is already cheap at about $5 million. So his customers are more concerned with getting their devices into orbit quickly and efficiently, Beck added.

They want to be able to launch new satellites weekly or monthly so they can replace old satellites with new and improved versions, or replenish parts of a smallsat constellation.

The status quo in the rocket industry doesn't give them that option. They mostly sit through long wait lists to put their smallsats on large rockets with extra room on board.

There are hoards of new startups that want to solve that problem by building smallsat-sized rockets that can be built cheaply and fly often. Rocket Lab, however, is the only such startup to prove its technology and start flying customers.

The company is already speeding up its launch cadence. But getting to the point where it offers smallsat missions once a week would change the game, according to David Cowan, a partner at Bessemer Venture Partners and a member of Rocket Lab's board.

"We're not thinking about how to compete against other small payload rockets. They don't exist yet," Cowan said. "We are our own competitor. We are simply trying to fulfill Peter's vision and promise of reliable frequent safe launch."

The plan, Cowan added, is to make Rocket Lab the Starbucks of the launch industry.

"You'll always find different places to get a cup of coffee, but we're the Starbucks," Cowan said. "When you want a cup of coffee, you just know that there's a Starbucks nearby, and you know you can get a good cup of coffee."

Starbucks may not have every type of coffee in the world, he added, but it will be ready and available when the need strikes.