Vector’s setback not seen as a broader industry problem

This article originally appeared in the August 19, 2019 issue of SpaceNews magazine.

When small launch vehicle developer Vector announced it was suspending operations Aug. 9, many in the industry wondered if this was the beginning of a long-anticipated shakeout of an overcrowded market. Instead, the problems may be specific to the company.

“In response to a significant change in financing, Vector Launch Inc. (Vector) announced today that it is undertaking a pause of operations,” the company said in a brief statement Aug. 9, several hours after announcing that chief executive Jim Cantrell was “no longer with the company.” John Garvey, the company’s chief technology officer, was named to replace him.

That “pause in operations” means that most of the company’s more than 150 employees are out of work. Prior to the statement, employees took to social media to report that the company’s three offices in Arizona and California were being closed. The company would only say that a “core team” remained to consider options for completing its Vector-R small launch vehicle.

Vector didn’t elaborate on the financial problems that caused the layoffs and change in leadership. Industry sources claim that one of Vector’s largest venture capital backers, Sequoia, withdrew its funding for the company, but the fund didn’t respond to a request for comment.

Vector had been one of the leaders in the growing pack of small launch vehicle companies. The company raised more than $100 million, including a $70 million Series B round last October. In June, the company said they were preparing for a suborbital test flight of the Vector-R later in this summer from Pacific Spaceport Complex-Alaska ahead of a first orbital launch of the rocket, capable of placing 60 kilograms into low Earth orbit.

The setback was all the more surprising because, two days earlier, the company won its first launch contract from the U.S. Air Force. The Space and Missile Systems Center announced Aug. 7 that it awarded Vector a $3.4 million contract for the Agile Small Launch Operational Normalizer (ASLON) 45 mission, launching several smallsats from Wallops Island, Virginia, in the third quarter of 2021.

Vector’s problems raised speculation that the small launch vehicle industry was heading for a shakeout. With far more companies developing vehicles than even the most optimistic expectations for demand, nearly everyone in the space industry expects most of those startups to fail, leaving behind only a few successful ones.

However, while such a winnowing may be inevitable, Vector’s problems may have little to do with the that. Instead, industry sources familiar with Vector, speaking on background, attribute the company’s problems not to running out of money, or running into technical problems, but instead how the company was run.

Those sources pointed to a high level of turnover among executives and infighting that one person described as “total chaos.” The company’s distributed structure exacerbated those issues: while Vector’s headquarters was in Tucson, Arizona, where it planned to manufacture its rockets, development work was done in Huntington Beach, California, while a third office in San Jose, California, was primarily devoted to a separate satellite project called GalacticSky.

Those management problems, sources said, made it difficult to make progress on the rocket. Cantrell, in a February 2018 speech, said he expected the first Vector-R orbital launch to take place that summer. “We’re really going to launch this year to orbit,” he said then. A year later, Cantrell said “the facts that we find on the ground plus the government shutdown,” a reference to the five-week partial government shutdown in early 2019, caused schedules to slip, but predicted a first orbital launch in August.

Cantrell took the brunt of the criticism for the company’s problems, being blamed for a combination of mismanagement and overzealousness. Cantrell did not respond to a request for comment about his departure, but broke his silence in a series of tweets Aug. 13, saying “a key investor withdrew support making it difficult for the company to continue on at its previously fast pace.”

“I wish Vector well and remain supportive of their efforts as they look to reboot to Vector 2.0,” he wrote, saying he was going to spend time with his family and pursue his long-running interests in auto racing, while promising to return to the space industry at some point.

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