08/01/2012 04:31 pm ET Updated Dec 06, 2017

The SpaceX Dragon: Industrial Innovation's Sputnik Moment

2012-08-01-RussConser.jpg By Russ Conser
Russ is the leader of Shell's global GameChanger team and is based in Houston, Texas. GameChanger is a Shell-created innovation program that invests in people in or outside of Shell to help mature their breakthrough energy ideas to proof-of-concept.

In 1957, Russia launched the unmanned satellite named 'Sputnik' into orbit.  Today, we refer to it as America's 'Sputnik moment' - an acute realization that something was changing in the competitive landscape that put a country's future at risk.  The USA responded, and although the next 12 years of the US space program were not a smooth ride, the US space program not only achieved success but inspired a generation.  As a child in the 60's, I remember getting up well before dawn to watch the launch of each new Apollo mission.

Recently, there was a new kind of launch.  This time something was very different.  This time, it was a small California startup company called SpaceX launching an unmanned capsule called "The Dragon" into orbit.  So I got up before dawn again to watch another truly epic moment, as the Dragon capsule successfully docked with the International Space Station.

In my view, the docking of the SpaceX Dragon with the International Space Station is a new Sputnik moment - signaling a major shift in the balance of power between small and large institutions.    Governments no longer have to be the only ones who can do really big things on their own, and neither do large companies like my own.

When the US space program got to the moon 12 years after Sputnik, the US had spent nearly $35 billion - or over $250 billion in today's dollars.  Over a period of 10 years, from founding to Friday's successful docking , SpaceX has spent around $1 billion.  Although that's a sum still too large for backyard astronauts, it is nonetheless a sum within reach of many of today's startups.  Until Friday, spaceflight was the last field of human achievement which was still a government only monopoly.  That monopoly wasn't broken by a traditional aerospace company, but a startup.

In 2004, another small company called Scaled Composites sent their 'SpaceShip One' into the upper atmosphere.  This was achieved for a total investment of roughly $20 million in pursuit of winning the $10 million Ansari X PRIZE.  This accomplishment led directly to the creation of the world's first commercial space plane passenger service by Virgin Galactic - on course for its own first commercial mission with a goal of first flights in 2013.  Today, 26 teams from around the world are competing to be the first to land a private unmanned mission on the moon in pursuit of the Google Lunar X PRIZE - something that could happen as early as 2014.  Thus the Dragon launch is not an isolated event, but part of an accelerating trend in the development of commercial enterprise in space.

With the SpaceX Dragon achievement, the cycle time and cost of creating very large breakthrough innovation has just been redefined.  This 'Dragon Moment' should remind us that big innovation is no longer the monopolistic playground of big institutions - whether governments or large companies.

Still, SpaceX didn't do this on their own.  They not only stood on the shoulders of the NASA giants who went before them, but they partnered with them.  For NASA's part, it would appear that they have realized that partnering with a small startup can be a highly productive way to achieve its own objectives.  So perhaps the real story of the day is that both the small Davids and big Goliaths can win by working together.  Businesses that ignore (or resist) this new reality put their own futures in peril.  Businesses that figure out how to tap into this new innovation dynamic stand to yield great rewards.

So let's call this achievement big industry's 'Dragon Moment,' and mark it as an important milestone in the changing landscape of institutional innovation.  The accomplishment points the way to a changing world where anyone, anywhere, anytime can do a lot with a little very fast.  Institutions who do not figure out how to work in these radically different ways are likely to become non-competitive.

In the old days, big things had to be done by kings and countries.  In the 20th century, big things were accomplished by big companies.  In the 21st century, big achievements can be pursued by startups founded by people like you.

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This blog post is brought to you by Shell, our Exploration Prize Group sponsor.