But by the mid-1990s, he was restless. Gionta recalls working with him on designs for a new high-altitude aircraft called Proteus. Rutan showed Gionta several sketches, and one in particular caught Gionta's eye: It showed the large aircraft with a smaller, rocket-powered craft latched to its belly. Says Gionta: "I just kind of thought, 'Hmmmm..."
Gionta had little idea at the time that Rutan was thinking about the ultimate in high-altitude aviation: manned space flight. Specifically, Rutan was spending more and more time pondering the question of how to get human beings into space in a less costly and less complex manner than that employed by NASA. He had been sharing some of his ideas with potential investors, with no takers. Then, in 1996, Rutan's friend Vern Raburn, who at the time worked for Paul Allen, convinced his boss to fly out to Mojave. A longtime aviation and space fanatic, Allen was fascinated by Rutan's ideas. "I hadn't really done anything in aerospace before," Allen says. "Burt spent a half-hour talking about different concepts in design, and it was clear he had approaches that seemed workable and that nobody else could have thought of."
Several months after that meeting, Peter Diamandis, a space-travel fanatic in St. Louis, announced a new competition, the X-Prize (later named the Ansari X-Prize), for the first manned, non-government-funded flight to reach an altitude of 100 kilometers, or 62 miles, and then repeat the feat with the same vehicle within two weeks. The winner would receive $10 million. It was inspired by the $25,000 prize offered by French businessman Raymond Orteig in 1919 for the first nonstop flight between New York and Paris, the inspiration for Lindbergh's flight. Says Diamandis: "A good prize creates a hero." The competition did its job, eventually attracting 24 teams from seven different countries.
Like everyone in the aviation business, Rutan noted the prize, and soon dropped in on Allen in Seattle for another chat. Afterward, Allen shot an e-mail to David Moore, who evaluated venture deals on his behalf. "We should do something with Burt," read the note, Moore recalls. Rutan and Allen were frankly skeptical that the X-Prize would materialize. And Allen, for his part, was skeptical that they'd actually get someone into space. "We knew it was going to be difficult to achieve," he says. Nonetheless, he agreed to invest $25 million in the project. Allen created a new company, Mojave Aerospace Ventures, which would own the spaceship technology developed by Rutan, structuring the deal under the assumption that there would be no payoff. (Neither Rutan nor Allen would discuss the specific financial terms of the arrangement.)
Scaled's management committee was stunned when Rutan announced the contract with Allen. "It was overwhelming, hard to believe," says Gionta. "It didn't seem credible. We had done low-speed subsonic flight for 17 years. What did we know about going to space? I thought for maybe the first time Burt had gotten in over his head." Nevertheless, excitement ran so high over the prospect of a space project that Rutan felt obligated to promise that every single employee in the company would have a chance to contribute.
Uncharacteristically, Rutan had some doubts himself. "It was extremely risky technology," he says. "We were a company that had never built a supersonic aircraft, and here we had to go straight up into space at Mach 3" -- three times the speed of sound. There would be any number of other firsts to tackle: Scaled Composites had never launched one aircraft from another, never built the sort of flight simulator that would be necessary for training and testing, never designed a thruster system needed to turn a spacecraft in space, and never put together from scratch an electronic navigation system. Most daunting of all, Rutan and Scaled had never built a rocket motor -- the source of fully half of all space-launch failures -- and had never had to deal with the nightmarish heat and extreme forces generated from reentering the atmosphere at high speeds. Each of those challenges had been the cause of a Space Shuttle disaster.
But the breakthroughs came quickly. Rutan thought up a simplified design for a rocket motor and contracted its manufacturing out to SpaceDev, a company in Poway, Calif., that had developed rocket motors that burn a relatively easy-to-control mixture of liquid laughing gas and rubber, producing a full ton of thrust. And in a middle-of-the-night inspiration, Rutan came up with a way to avoid a hot, ultra-high-speed, difficult-to-control reentry: Add rotating wings that would tilt back during reentry, effectively configuring the entire aircraft as one big air brake. It was a typically out-of-the-box innovation that stunned many of his engineers. "People, especially the pilots, came to me later and said, 'Burt, we thought you were really smoking something there for a while," Rutan recalls.
Not that it was all smooth sailing. In one early test, SpaceShipOne lurched out of control and was barely rescued by its pilot from crashing; it turned out the tail was too small to provide adequate stability. To fix the problem Rutan used one of his tricks from the old days of RAF: He lashed the tail to a truck and drove it up and down the runway to study the airflow around it. Meanwhile, the aircraft's rocket motor incinerated itself in its first test, and then kept falling just short of the needed power. The Federal Aviation Administration even weighed the possibility of forbidding the launch. Back in Allen's office, Moore was concerned. He had researched the 1919 Orteig Prize and learned that famed polar explorer Adm. Richard Byrd had also entered the transatlantic race, spending an astonishing $100,000, only to ditch his plane in the ocean. "I sent an e-mail note to Paul saying, 'We could be funding Byrd. Is someone going to come in from their garage and do this for half or a third the price, like Lindbergh did?"
