What prompted all of those private launch companies to get into the business?

It seems that, somewhere around the turn of the century, a bunch of private companies started gearing up for launching things into space when nobody (at least not private entrepreneurs) seemed very interested before that. Did some specific thing happen that made it possible or made it attractive?

• Oh, "the turn of the century" is 2001, I keep thinking of the one in 1901. – uhoh Feb 24 '19 at 23:25
• This is a perfectly reasonable question seeking facts, and already has one fact based answer posted, no need to close for "primarily opinion based". – uhoh Feb 24 '19 at 23:27
• – uhoh Feb 24 '19 at 23:51
• @uhoh is correct. 2001 was "the millenium". – DrSheldon Feb 25 '19 at 2:24
• Wasn't the X-prize a major turning point? – SF. Mar 4 '19 at 0:52

The internet happened. Specifically, young engineers (Elon Musk and Jeff Bezos) made gigantic piles of money (more than they could ever use in their original companies), and with that money they decided to follow their interests.

I.e. they had lots of money to pour into the business, and no requirement to make money within a set amount of time. This is incredibly rare: almost all investment comes with strings attached. Rocket development is a high-risk business and was not seen as attractive to investors (which is why many earlier commercial rocket ventures failed).

• Internet millions made it work, but lots of commercial space companies tried, and failed, before -- rotak, otrak, reaction engines – user20636 Mar 3 '19 at 7:21
• While internet billionaires facilitated the creation of these space companies and development of their space technologies, the Ansari X Prize got a lot of people thinking about private efforts to go to space. I would speculate that it was very likely the X Prize that steered the thinking of folks like Musk and Bezos toward space ventures. – Anthony X Mar 23 '19 at 14:33

Just to supplement @Hobbes' correct answer:

The internet happened. Specifically, young engineers (Elon Musk and Jeff Bezos) made gigantic piles of money (more than they could ever use in their original companies), and with that money they decided to follow their interests.

Other zillionaires, seeing those two's successes, piled on as well (Richard Branson, Paul Allen, etc).

In fact, Paul Allen might belong in the list of internet engineer zillionaires. Another indicator of how driven some of these efforts are by the singular dreams of the engineer/zillionaire might be this recent u-turn: Stratolaunch is scaling back operations following the death of co-founder Paul Allen

Afterthoughts, aftertheories and opinions beyond the facts above and in @Hobbes' answer:

1. I really do think Hobbes nailed it; that it's the relatively "sudden self-made money" in the hands of individuals who learned that they can move mountains, liked it, and then looked for the next one to move.

2. It's been a half-century since spaceflight became an inspiration, those who watched the moon landings as kids had made their zillions and the seeds of inspiration planted a half-century ago could sprout.

3. Rockets are finicky and are wont to blow up, so developments in cylindrical rocket launch technology have been a bit slow and institutional, leaving the field of spaceflight ripe for new innovators who simply needed to borrow some books on the topic, devour them, and according to space lore not return them.

as opposed to shuttle launch technology, which was institutional but not slow

• The link that you provided up above does a lot to answer the question. I was looking for an event that fired the starting gun, like relaxing a legal restriction or something. But it looks more like an evolutionary explanation--launch business increasing, new technology bringing down costs, and some internet geeks with money showing 'em how it's done. – Greg Feb 25 '19 at 19:55
• @Greg your comment causes me to ponder further. That along with my morning coffee temporarily providing a rare condition of not one, not two, but three neurons firing at the same time, has lead me to add a few more points. – uhoh Feb 25 '19 at 23:25
• @NathanTuggy thanks for the corrections, didn't realize it was "wont" (blush). – uhoh Mar 3 '19 at 22:34
• @uhoh: It's not a common word, and unless you read archaic books for fun you're unlikely to see it much! – Nathan Tuggy Mar 3 '19 at 22:35

I admit, I wasn't comfortable with the "internet geeks" part of the answer. So I've been doing some reading. And, sigh, I suppose there's something to it.

I was wrong to suppose that someone fired a starting gun around the turn of the century. Interest in private space activities goes back a long ways. For instance, International MicroSpace, founded in 1989 by Peter Diamandis, to take small payloads to low-Earth orbit. They eventually got a $100 million contract from the Department of Defense, but no money up front, so they were unable to develop the technology, and the company, with contract, were sold to CTA in 1993. Recurring themes are development being more challenging than expected, costs running higher than expected, and difficulty in finding investors. It's the life cycle of companies like Armadillo, Rotary, and XCOR. The companies with staying power are the passions of billionaires who can afford to lose money on hobby businesses. Elon Musk, Jeff Bezos, the late Paul Allen, and Richard Branson. Branson isn't an internet geek, but he has, like, a hundred other companies that are keeping a roof over his head. I'm not sure what's going on with others, like Boeing. I don't know if they're going independent or still doing NASA contract stuff. Orbital Sciences merged with Alliant. Exos is still operating (and it looks suspiciously like Armadillo shed its creditors, changed its name, and just kept on working...) There is a lot more going on than I can catch up with in a short time. Edit (I'm still picking away at this, there's a lot to sort out.) In 2010 Obama killed the Bush-era Constellation program, calling it "over budget, behind schedule, and lacking in innovation", and reoriented NASA toward the private sector. In 2015 he signed the Commercial Space Launch Competitiveness Act of 2015, which gives private US companies the rights to resources they mine in space. (Also Davenport, 160, 249) The space economy has grown from \$175 billion in 2005 to almost \\$385 billion in 2017, a 7% per year increase. The Space Economy: An Industry Takes Off. That has been fueled in part by new technology shrinking the size and cost of satellites.

Investors had typically shied away from space, and quite a few companies ran out of cash and shut down as they ran over budget and couldn't convince investors to continue backing them. And the way that NASA, in previous decades, discouraged competition went something like: American Rocket Company spends years developing a hybrid engine only to have NASA fund a competitor to duplicate its work (Guthrie, 130). In other words, the company goes under because the private sector doesn't support it and it doesn't get the government money. Now NASA is spreading some sugar around to support the private industry, and private investors are wading in, pursuing an expanded market. And Elon Musk, and SpaceX, has a lot to do with making the private industry credible with technology development, and also prompting lawmakers with its lawsuit challenging the Air Force on anti-competitive contracting.

Space is hard. And expensive. More so than some people seem to think, even if they say they know that. But new technology is bringing down the costs of everything and simultaneously expanding the market, and there have been changes in some laws and political attitudes that are now specifically trying to encourage and to rely on the private sector. SpaceX has to be given a lot of credit for shifting the public and political attitude. That's about my best summary answer to the question so far.

Davenport, Christian. (2018). The Space Barons: Elon Musk, Jeff Bezos, and the quest to colonize the cosmos. New York:Hachette.

Guthrie, Julian. (2016). How to Make a Spaceship. Penguin.

• Commercial Space Act of 1998 was designed “to encourage the development of a commercial space industry" – user20636 Mar 3 '19 at 7:37

Further, the Commercial Space Act arose due to NASA's bad behavior during the Shuttle era discouraging competition from other players - including their own contractors. Totally-private players like Pacific American Launch Systems found themselves in a funding bind that went something like this:

LauncherCo: "Dear Angel Investor, we have this concept for a cheap reusable launcher..."

Angel: "Hmm, interesting. We'll do some due diligence and get back to you."

The angel investor, not knowing rockets from rocks, tries to find an 'expert' to vet the proposal, and calls NASA, or one of their contractors with incentives to not upset the gravy train...

NASA: "We've never done that." [insert other phrases creating Fear, Uncertainty, and Doubt]

Angel: "Sorry, LauncherCo, I can't take the risk."