How does SpaceX get money by sending falcon into space?


I heard a speech by Elon Musk talking about the launch and how SpaceX would run out of money if this failed, but how does the company get money by doing that?

In: Economics

Investment. They are proving that the money they spent was worth it and thus they should get more money.

If it does not work then they show that they shouldn’t get more money and they wont.

Companies and government agencies pay SpaceX to send their satellites and soon astronauts into space. SpaceX is like FedEx for delivering things into space.

They can get money for proving that the system is capable of launching satellites or people into orbit. The government and other companies pay millions to launch equipment to orbit. SpaceX has been using their dragon capsules to resupply the ISS for a long time now.

NASA and other government contracts often pay in installments upfront, with further partial payments becoming available once a certain development stages are reached/capabilities are demonstrated. Early on SpaceX was short on money and had to prove orbital capability to get the next cash installment so if the launch went well they would get enough money to continue operating and if not they were basically bankrupt.

Today SpaceX has no money problems anymore as they have enough contracts with the US government/NASA/DoD and private companies to deliver satellites into orbit or supplies to the ISS.

You will need to link the speech, but I think you may be confusing the recent Falcon Heavy rocket launch with SpaceX’s first successful launch of a Falcon 1. Musk talks about this fairly regularly, here’s an [article]( Basically, in the early days SpaceX was a new company and didn’t really have everything figured out yet. They tried launching three Falcon 1’s (the smaller predecessor to the current Falcon 9). But the first three launches failed! They had some starter money to run on, but they were running out. Their last reserve of funds went into building the fourth rocket: if it didn’t work they wouldn’t be able to build another one. And without a successful rocket, not only would they not be able to get any private investors, they wouldn’t be able to get any government investment and contracts (the govt puts a lot of stuff into space relative to the private sector, so this is important). If it had failed, they would have been out of money and out of time.

But it didn’t fail, it was successful! And this was critically important because this was the point where the US was proposing to start putting money into new private spaceflight operators like SpaceX. Since they had a successful launch, they were seen as a much better bet for the govt. That landed them a huge contract to deliver cargo to the ISS and that helped give them the boost they needed to develop the F9 and wind up in the dominant position in the US launch market (they launch more than half of all US rockets these days).

At this point, SpaceX is much more solidly established. They make money launching rockets with satellites that customers pay them to launch. For example, the most recent launch (a Falcon Heavy) contained a [variety of payloads]( mostly from the government. Other launches have been communications satellites, etc. They also get investment and contracts.

It would have been bad if this launch had failed…it always is…but SpaceX wouldn’t run out of money from losing one launch like they nearly did back in the early days (and even then, they made it through three failures before they almost ran out). SpaceX has lost a couple of rockets since then and it has been a big problem but not a company-ending problem. One reason this launch _was_ particularly important for SpaceX, though, is that it’s helping them get [certified for Air Force launch contracts](