This looks hard, but it's even harder than it looks...Creating a privately financed startup that builds space rockets to compete will all the national space programs in the world (with their billions of dollars, tens of thousands of engineers and decades of experience) is probably a more impressive feat than building the Hyperloop would be. That's a terribly challenging combination of difficult engineering and regulatory nightmare. But not only did SpaceX succeed at winning more launch contracts than any space agency, including contracts to resupply the International Space Station (ISS), it's also rapidly improving the state of the art when it comes to space rockets. And they needed it...
Few things are more wasteful than space rockets; you build this marvel of engineering, you fly it once and then you throw it away. Imagine if you had to build a new Boeing 747 every time you flew... That's where the Grasshopper comes in. Less than a year ago, tests started and the thing could lift up by 2 meters and then land. Now look at what it can do:
Why is that important?
SpaceX believes a fully and rapidly reusable rocket is the pivotal breakthrough needed to substantially reduce the cost of space access. SpaceX’s Falcon 9 rocket currently carries a list price of about $54 million. However, the cost of fuel for each flight is only around $200,000—about 0.4% of the total. The majority of the launch cost comes from building the rocket, which flies only once. Compare that to a commercial airliner. Each new plane costs about the same as Falcon 9, but can fly multiple times per day, and conduct tens of thousands of flights over its lifetime. Following the commercial model, a rapidly reusable space launch vehicle could reduce the cost of reaching Earth orbit by a hundredfold.
Musk explains the philosophy behind fully reusable rockets on the SpaceX site.
Not only will this reduce waste tremendously in the space industry, but there are all kinds of useful things that we can do with satellites that would be too expensive now but that might not be in the future, including lots of scientific missions to study the Earth's atmosphere, oceans, biomass, etc. And it'll eventually allow us to better explore the solar system (Mars is an official goal of SpaceX). We'll also need much better space capabilities to defend Earth against asteroids (if a threat has a high enough chance of killing millions, if not billions, it should be taken very seriously even if it's unlikely. Think of it as insurance...)
Here's a previous test launch, going up 260 feet vertically and hovering there.
And as a bonus, in a recent interview (sorry, I don't remember which one, there were so many), Elon Musk said that he would eventually produce the rocket fuel to power the SpaceX rockets with renewable energy.