A century ago, the historian Jackson Turner made a persuasive case that what best distinguished the United States from Europe was its frontier. The frontier assured Americans not only a place for growth, but also a chance for differences to flourish. Turner predicted that the loss of the frontier would quickly result in a society far less free, with slower growth and more regimented attitudes.

We used to call it the Wild West. Today it’s pretty tame, and some pioneers are looking to places such as Cambodia as the Wild East. (Cambodia essentially has no central government since Vietnam stripped it of ALL assets in exchange for deposing the Khmer Rouge.)

Today, we live in an America where the Constitution is void where prohibited by law.

Apart from what may be done to restore America to a place where the Constitution is again hallowed — where law obeys the Constitution and men obey both — there is always the clarion cry of a new frontier. Let’s call this the “Wild Up.”

When SpaceShipOne won the Ansari X Prize in 2004, becoming the first private spacecraft to lift astronauts in orbit, I predicted that it would usher in the real space age.

Subsequently, two billionaires jumped in. Bigelow Aerospace announced a $50 million commitment to building the world’s first orbital hotel/space station. And Richard Branson’s Virgin group formed the Virgin Galactic subsidiary with $100 million seed capital and a plan to offer space tourism expeditions starting in 2007. (I doubt it’s a coincidence that there’s a nice synergy between these two ventures.)

Our Transformational Technologies Portfolio holding SpaceDev (OTC:SPDV) makes the engines that won the Ansari X prize and will power Virgin Galactic’s endeavor. Longer term, the company has a quietly understated aim of mining asteroids.

The mining of asteroids has been a passion of mine for over two decades. In 1983, I wrote a paper for my MBA strategy and policy class entitled, “Mining the Asteroids: A Diversification Opportunity for DeBeers.” In it, I argued that asteroid mining offered a perfect balance in that DeBeers faced, in apartheid, serious political risk with negligible technological risk, while asteroid mining was exactly the opposite.

Yes, there’s gold in “them thar asteroids” — and diamonds, and every other element and mineral to be found on Earth, apparently in similar ratios. The difference is that the asteroids could be the remnants of a planet many hundreds of times bigger than Earth.

Calculations have established that we could strip mine the entire Earth to a depth of ½ mile and not acquire nearly the volume of natural resources available free for the taking in asteroids. Such a resource literally dwarfs anything in human history or perspective, and when we finally do begin mining asteroids, the whole notion of resource shortages will rapidly diminish to a historical footnote.

SpaceDev is aware of this, and it’s part of their long-term plan. Meanwhile, they’re making great inroads into micro satellites and its amazing new “rubber and laughing gas” engine technology, both of which promise excellent profits in the next few years. This company and Legacy Portfolio holding Orbital Sciences (ORB: NYSE) are good reasons why space development will be one of the three Change Drivers of the 21st century.

Now comes yet another company with bold plans for private development of space. Though I personally think that the building of artificial space colonies (by all rights, they should be called “O’Neills” in honor of physicist Gerard O’Neill, who pioneered and evangelized the concept) is a lot more attractive than the settlement of other planets, I appreciate the romance and possibilities that beckon with Mars.

Humans will not only live on Mars in this century, they’ll be born there. 4Frontiers Corp. intends to help make that happen. Its business plan sounds wacky, but the people behind it are solid and proven.

According to the Associated Press, the company is seeking $25 million from investors with several million already raised. CEO Mark Homnick was formerly a manager for Intel Corp., arguably one of the best managed corporations in the world.

4Frontiers has a longer horizon that most startups, as well it must.  Its mission is the first human settlement on Mars within 20 years.

Of course, there’s no way investors are going to sit still for 20 years on such a — pardon the pun — long shot. The company has sensibly established some shorter-term profit center objectives, with a decidedly more terrestrial cast and considerably lower risk.

For starters, they’re planning on developing a 25,000-square-foot model of a Mars settlement and charging admission. They expect it to become a tourist spot.

Although President Bush has called for a manned mission to Mars (as did other presidents before him), the company is understandably skeptical of his ability to get the job done.

It’s clear there are serious investors willing to plop down the kind of money 4Frontiers seeks for space-related experiences. Dennis Tito made history when he paid $20 million to become the first private astronaut. The question is, where will they put this money?

Space Adventures, the company that arranged Tito’s journey, is now taking deposits for $100 million fly-bys of the far side of the moon — and they have serious interest. Put it this way, no one is betting against them.

However, Mars is even more extreme. It will mean living in enclosed quarters for years, never venturing outside except in suits. (Martian air makes terrestrial deserts seem equatorially humid by comparison, and temperatures can resemble those of Antarctica.)

In addition to tourism, 4Frontiers intends to proactively seek out enabling technologies for Martian colonies, then acquire them and either use them itself or license them to others. This is a shrewd move: A private concern such as this will be far more nimble, innovative and aggressive in acquiring such technologies than NASA or its Fortune 500 piggy-trough contractors.

A key focus will be on miniaturization technologies, including nanotechnology, enabling use of Martian resources such as iron ore deposits and frozen water.

Somewhat optimistically in my view, the company anticipates designing Mars sets for movies and Mars rides for amusement parks.

To sum up, this is a highly speculative venture and, notwithstanding its CEO’s modestly impressive background, not one Emerging Capital Report would choose to invest in it at this time, if ever. On the other hand, I’ll be watching its progress and, should the company go public in several years as planned, may revise this attitude if it shows ability to succeed in the theme park business.

To learn more, visit 4Frontiers.com.

Speaking of rockets, I’d get a lot more excited if a startup were formed to build nuclear-powered rockets. (We’ve known how to do this since Orion was on the drawing boards half a century ago.) That would really accelerate space development and enable easy access to asteroids. With the power of constant acceleration, people could traverse the solar system in weeks, not years.

The risk of nuclear contamination is trivial, especially when compared to nuclear North Korea, Pakistan and Iran, and the benefits far outweigh any risks.

As things look more politically unstable down here, the Wild Up may offer humanity the collective frontier it needs to release some of the pressure and restore hope.

Space-related ventures remain a favorite in the Transformational Technologies Portfolio, because the prospective returns are, well, astronomical.

To Your Profitable Future,

Jonathan Kolber
October 11, 2006

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