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Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

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Stratolaunch

Launching rockets into space from airplanes

General Information
Category
Transportation
Country
United States
Started
In 2010
Business Failure
Business Outcome
Shut Down
Closed
By 2019
Cause of Failure
Lack of Focus
Founders & Employees
Number of Founders
One
Name of Founders
Paul Allen
Number of Employees
Between 501 And 1000
Funding
Number of Funding Rounds
Nothing
Total Funding Amount
-
Number of Investors
Nothing
Description

Stratolaunch was started as an ambitious project by Microsoft co-founder Paul Allen and Burt Rutan (Founder of Scaled Composites) in 2010. The idea was to utilize the strategy of using a carrier aircraft to launch orbital rockets from the stratosphere. This would give rockets an altitude and speed boost, and supposedly reduce costs in the process.

Following on the footsteps of what SpaceX achieved by privatizing space travel, Stratolaunch wanted to repeat that success with orbital rockets. They first successfully took off on April 13, 2019. However, barely 2 months after that first successful flight, the Seattle based startup that had the brains and capital from the best of Silicon Valley behind it, ceased operations and was put up for sale in June 2019.

Cause of Failure

Despite everything looking great on paper and the best of minds working together on this project, nothing could have predicted Paul Allen’s passing away in October of 2018, which would soon spell out the same fate for Stratolaunch. It became clear that Stratolaunch had been powered only by the vision of its founder, which wasn't necessarily shared by those left in power after him.

In January 2019, rather than scaling back their proposed set of booster-rockets, Stratolaunch scrapped them all. There was to be no space plane, no boosters and no PGA booster (which were proposals of Paul Allen). Instead, the company declared that the giant plane (the Stratolaunch) would be used to launch the much smaller Pegasus XL rocket, a bizarre proposal for a rocket that could already be launched from a much more conventional aircraft. I guess they just wanted to put up a final spectacular show for the viewers by sending the plane with the longest wingspan (the 117m Stratolaunch) towards its successful maiden (and last) flight before completely shutting down.

With a lack of vision and no clear direction, the company became a profligate project that soon burnt the billions that it had received from Vulcan Inc, which was Paul Allen’s investment arm. What can ultimately be said about Stratolaunch is that the company was never the same without its key founder, Paul Allen. Think of Apple if Steve Jobs never returned after being fired.

The lack of enthusiasm for Stratolaunch from the rest of the company's employees killed the project before it could even really take off seriously and the Pegasus XL flight test for their carrier was all that the company could do in tribute of its late founder. The proverbial “Tim Cook” of Stratolaunch (Vulcan Inc. CEO Bill Hilf) did not prove to be much of a success either. It was one thing to manage investments of the likes that Vulcan Inc. dealt with, but an entirely different story when you do not have the same passion for tech as the person that mentored you. In June 2019 the Stratolaunch Systems company and assets were put up for sale by Vulcan Inc. for $400 million, (the hefty price tag includes the plane as well as the intellectual property and other facilities). The company successfully transitioned ownership in October of 2019 but hasn’t named the owner so far.

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