Investing in space stocks might be exciting, but it’s equally as risky.

Orbital Sciences’ (ORB) televised launch of a resupply mission to the International Space Station was a reminder that investing commercial space transport is no longer the “final frontier.” But even with the recent surge in launches, commercial space is still a nascent market — and investors who want to “go where no one has gone before” might want to pack a parachute.

Defense/aerospace giants are staking a claim in commercial space, particularly as defense revenues decline. United Launch Alliance, a Lockheed Martin (LMT) and Boeing (BA) joint venture, launched a Delta II rocket carrying the Orbiting Carbon Observatory-2 (OCO-2) payload for NASA last week. ORB recently announced plans to merge with Alliant Techsystems (ATK) to boost its commercial space play.

One of the most interesting approaches to commercial space is Elon Musk’s Space Exploration Technologies (SpaceX), which develops and manufactures Falcon launch vehicles and the Dragon spacecraft. Musk’s dream of transporting humans to Mars within the next two decades might seem pretty far out there, but his company has proved its sound footing in early business successes. While SpaceX is private for now, an IPO could eventually be in its future, as InvestorPlace’s Tom Taulli writes. So how should investors play commercial space? That depends on your risk tolerance and investment horizon.

The truth is, commercial space is an exciting market that is probably not ready for prime time. Myriad issues ranging from safety and insurance to oversight and regulation must be ironed out before the really big money gets made. But this isn’t the first time that wildly new industries represent more risk than reward. Companies that move into a hot but embryonic market often wilt under the competitive heat — particularly true when large cap companies put a lot more resources into game-changing technologies

Here are three examples of first-to-market companies that seemed to be on the cutting edge of innovation, but wound up bleeding instead:

Timing Is Everything — Webvan.com

Some great business ideas are simply not ready for prime time. Such is the case of online grocer Webvan.com, which in November 1999 raised $375 million in its IPO.

If there were awards given for the infamous e-commerce “burn rate,” Webvan’s three-year $800 million spending spree would rank near the top. Webvan staked a claim in the Internet grocery space, announcing plans to sink $1 billion into warehouses and expand its rollout to 26 cities — committing the fatal error of expanding operations too far and too fast. Alas, the dotcom boom went bust, and Webvan’s bid to rule the e-grocery market fizzled, followed by a bankruptcy filing in July 2001.

But Internet grocery wasn’t dead — as niche and geographically focused companies like FreshDirect and Netgrocer could attest. Amazon (AMZN) CEO Jeff Bezos also saw a fundamental value proposition despite Webvan’s failure: In June 2013, AMZN invested in Webvan’s robotic technology and hired some of its leadership. AMZN revived the Webvan website and its AmazonFresh same-day, online grocery likely will benefit — particularly since Google’s (GOOG) Shopping Express is nipping at the e-commerce giant’s heels.

Cheaper Often Trumps “Better” — Solyndra

In the wake of President Obama’s move last week to allocate $4 billion to resurrect a federal clean-energy loan program, it makes sense to reflect on solar-panel manufacturer Solyndra.

The Obama administration loved the solar-panel company, which was focusing on revolutionary copper-indium-gallium-selenide (CIGS) technology that would use far less of the then expensive polysilicon. The federal government gave Solyndra $535 million in federal loan guarantees to build a CIGS solar panel factory.

All appeared to be going well for Solyndra until two things happened: First, aggressive global production triggered a supply glut, driving polysilicon prices down to a fraction of their previous cost. Then. China began dumping cheap solar panels on the market, dealing a crushing blow to Solyndra.

By August 2011, Solyndra closed its factory, laid off 1,100 employees and filed for bankruptcy. Within weeks, the Treasury Department opened a criminal probe against the company to determine whether Solyndra executives had fraudulently misled the government to get government loans. Solyndra’s failure illustrates just how exposed first-to-market companies are to commodity prices and standards battles.

Too Much Riding on a Single Product — Ariad Pharmaceuticals

Thinly traded microcaps in bleeding-edge markets like biotech are never for the faint of heart. While the potential rewards of getting in on the ground floor of the Next Big Thing are seductive, the risk of losing your shirt balances out some of the exuberance.

But even the most risk-tolerant investors didn’t count on Ariad Pharmaceuticals’ (ARIA) stock to plummet nearly 70% overnight — as it did between October 8 and October 9, 2013. The company, which was betting big on its leukemia drug Iclusig, took a nosedive after the unexpected news that patients who had been on the drug for up to two years experienced serious blood clots and vein blockages.

Last month, ARIA appointed three pharmaceutical executives with deep experience in drug safety, global quality and medical affairs. ARIA is working with the FDA to re-launch Iclusig the company certainly is not down for the count. However, ARIA’s case clearly illustrates the pitfalls of overreliance on a single product. It doesn’t help matters that the FDA has given Amgen (AMGN) a breakthrough therapy designation to its competing leukemia drug, blinatumomab.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.