The Swift Gamma-ray Burst (GRB) observatory responds to GRB triggers with optical observations in ~ 100 s, butcannot respond faster than ~ 60 s. While some rapid-response ground-based telescopes have responded quickly, thenumber of sub-60 s detections remains small. In 2013 June, the Ultra-Fast Flash Observatory-Pathfinder is expected tobe launched on the Lomonosov spacecraft to investigate early optical GRB emission. Though possessing uniquecapability for optical rapid-response, this pathfinder mission is necessarily limited in sensitivity and event rate; here wediscuss the next generation of rapid-response space observatory instruments. We list science topics motivating ourinstruments, those that require rapid optical-IR GRB response, including: A survey of GRB rise shapes/times,measurements of optical bulk Lorentz factors, investigation of magnetic dominated (vs. non-magnetic) jet models,internal vs. external shock origin of prompt optical emission, the use of GRBs for cosmology, and dust evaporation inthe GRB environment. We also address the impacts of the characteristics of GRB observing on our instrument andobservatory design. We describe our instrument designs and choices for a next generation space observatory as a secondinstrument on a low-earth orbit spacecraft, with a 120 kg instrument mass budget. Restricted to relatively modest mass,power, and launch resources, we find that a coded mask X-ray camera with 1024 cm2 of detector area could rapidlylocate about 64 GRB triggers/year. Responding to the locations from the X-ray camera, a 30 cm aperture telescope witha beam-steering system for rapid (~ 1 s) response and a near-IR camera should detect ~ 29 GRB, given Swift GRBproperties. The additional optical camera would permit the measurement of a broadband optical-IR slope, allowingbetter characterization of the emission, and dynamic measurement of dust extinction at the source, for the first time.