One Giant Leap for Entrepreneurs

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The Legacy of Lucky Lindy

Getting to the moon won't be cheap. X Prize founder and organizer of the soon-to-launch Rocket Racing League (BusinessWeek, 9/24/07), Peter Diamandis, admits that the high cost and relatively short timeframe of the moon challenge are daunting, but he believes that placing the bar so high is necessary to get great innovation. "The day before something is considered a breakthrough, it's considered a crazy idea, and the traditional industry will react against it," he says.

Diamandis draws inspiration from Raymond Orteig, the hotelier who in 1919 offered a $25,000 reward for anyone who could fly a nonstop flight across the Atlantic. After eight teams spent some $400,000 trying and failing at the challenge, Charles Lindbergh succeeded in 1927, and his accomplishment breathed life into the then-infant commercial aviation industry.

While Lindbergh is believed to have spent less than the prize amount building the Spirit of St. Louis, that may be harder to do for Google Lunar X Prize challengers. The grand prize is $20 million for whichever team lands and performs the required tasks first, dropping to $15 million if everything's not completed until 2013 or 2014. A second-place team will earn $5 million, and either can earn an additional $5 million for performing extra tasks such as roving longer distances and surviving a lunar night.

Looking for Corporate Sponsors

Diamandis believes most potential challengers will have to spend that amount or more developing and launching their vehicles. "I think the ultimate cost will be $20 to $40 million," he says.

A profitable lunar mission, then, will be one that finds funding from a variety of sources. First, there are sponsorships. "There are companies that will have a great interest in flying their computers, sensors, their communications, and their cameras with us," says Carnegie Mellon's Whittaker, who has in the past tapped such big-name sponsors as Caterpillar (CAT), Google, and General Motors (GM) to fund and equip his DARPA Grand Challenge teams. "As in any enterprise, the trick is not to spend your own money," he says.

The Carnegie Mellon Moon Prize Team will also look for opportunities to sell the novelty of having a robot on the moon. For this, Whittaker has reunited with David Gump, his former colleague at LunaCorp—a company formed in 1989 with the goal of landing a rover on the moon and selling it as entertainment to Earthbound spectators. A visitor to an amusement park, for example, might take a turn driving the rover around the lunar surface like a remote-controlled car. But LunaCorp fizzled out in 2003 because, according to Gump, it lacked credibility in the eyes of potential backers.

Bidding War Among Nations

That, he believes, has changed overnight. "With Google's announcement, you now have a credibility factor and an interest factor that didn't exist," says Gump, who now heads Reston (Va.) Transformational Space, a company which contracts vehicles for NASA.

An impressive Google Lunar X Prize contender may even find itself in a bidding war among nations: Japan, China, India, and Russia have all announced plans to fly to the moon and, according to Foust, any one of them "might see this as a shortcut to lunar exploration."

Flip through a slide show detailing more big-buck competitions that could create new industries or change existing ones.

MacMillan is a reporter at BusinessWeek.com in New York.