Mir Corp - Background

Background

The company was formed as an idea by telecommunications and space investor Walt Anderson and space advocate Rick Tumlinson. Russia lacked the funds to upgrade and save the space station, and had concluded it had no choice but to deorbit the station. Several ideas were floated, including one to hand over the Mir to the United Nations. The idea proposed by Anderson and Tumlinson was to save the Mir space station by raising it to a higher orbit to gain time and developing a “space tether” to supply power to keep the space station in orbit while further funds were raised. This plan was never implemented by the MirCorp team, as the United States government barred the export of the space tether technology until after the deorbit of the space station was announced.

The founders recruited space entrepreneur Jeffrey Manber, who had helped negotiate the first contract between the Soviet Union and NASA on space interests, and had also represented the huge Russian space company RSC Energia in its American dealings during the 1990s. Manber created the business model for the venture which involved proving that space could be a platform for media and entertainment, as well as serious space research.

In February 2000, the agreement between the Russian space company RSC Energia, which had the commercial rights to the space station, and MirCorp, was announced in London. Present at the press conference was MirCorp CEO Jeffrey Manber and RSC Energia General Director Yuri P. Semenov. Also present at the press conference was co-investor Dr. Chirinjeev Kathuria, and Andrew Eddy, recruited from the Canadian Space Agency.

The news took senior NASA officials by surprise, and thus began the roller-coaster ride of the MirCorp efforts. Their efforts were criticized by many as a private interference with international space policies. Their desire to sell ticket to space as part of a “citizen explorers” program was ridiculed by NASA and its supporters.

As a result of the company’s backing, the RSC Energia officials boosted the Mir into a higher orbit, thus postponing the deorbit that had been agreed to by the Russian Space Agency in discussions with NASA. Manber later explained that the business model for the venture was fashioned after that of air travel, where Boeing may build the planes but commercial agents such as United or British Airways sells the tickets. The intent was to have marketing experts sell the space program, and let the space manufacturer, RSC Energia, focus on the safe operations of the station. Manber explained that in the aviation world, it was not the manufacturers who sold the tickets; it was the marketing companies. MirCorp and RSC Energia were the first to use this strategy for space exploration, which has emerged again more recently with Sir Richard Branson’s announcement to market Scaled Composites StarShip suborbital flights.

It was also unusual as an international venture with Russia in the 1990s in that the Russians were given the operating control of the venture, reflecting the political realities of the importance of the Mir to the Russian society. RSC Energia owned 60% of MirCorp, whereas the financial investors controlled 40%. Investor Anderson explained that he was comfortable letting the Russians run the space component, and his team would run the business. Anderson said, “A lot of this venture is based on trust, pure and simple.” Anderson was not so sanguine regarding NASA and he used the media interest in the venture to launch many critical comments towards NASA, the planned International Space Station and even the foreign policies of the American government. Anderson selected Holland as the headquarters for the company since he believed the country was far more ethical than that of his own.

Regardless of the controversy, a new era in space exploration was inaugurated on April 4, 2000, when the Soyuz TM-30, known as the MirCorp mission, carried two crew members, Sergei Zalyotin and Alexandr Kaleri, to the Mir space station.

The two man crew returned the dormant Mir space station to life, located the source of the leak, repaired the leak, and carried on commercial and basic research. Zalyotin admitted to being nervous when the hatch door was opened, not sure what exactly would be found in the station. While the mission was being undertaken, the management of MirCorp was able to announce a number of commercial contracts, including that of the agreement with NBC and Mark Burnett. NBC even began running commercials promoting its upcoming “Destination Mir” reality show.

On June 16, on schedule, the mission came to an end. It had lasted 73 days and the crew returned in good health. Behind the scenes, the MirCorp management and Energia space officials were both surprised at the technical and commercial success, but worried that the Mir would soon have to be shut for good. On June 19, 2000, a press conference was held at the Russian Mission Control Center TSUP, at which the MirCorp president, along with RSC Energia head of International Development Alexander Derechin, announced that Dennis Tito, a former US space program engineer, who founded Wilshire, Associated—the Santa Monica, California-based company that revolutionized the field of investment management consulting, was MirCorp’s first “Citizen Explorer.”

Tito would subsequently withstand intense pressure brought on him and on Russian space officials by NASA not to undertake his mission. The NASA administrator publicly rebuked MirCorp for their efforts during Congressional hearings. Tito went forward with his training and eventually, with the deorbit of the Mir, he transferred his efforts to fly on the International Space Station. With the help of RSC Energia, MirCorp and later Space Adventures, he became the first space tourist to visit the International Space Station.