Do space businesses pass the Good Technical Business Test?

[oldAtlas_Eguy]

A good tech business leader will leverage his assets, engineers, business managers and accountants, to get the result he is looking for. His actual commands:
1) to the accountants is "Find a way to make it pay"
2) to the engineers "Find a way to make it work"
3) to his business managers "Make the solution found by the accountants and engineers be the same."

The last command is the most crucial, if the solution can't be both an engineering one and accounting one the project will not work!

There are additional marketing goals which are:
1) that the space product is a global competitor in price and quality
2) that the space product can meet most buyer engineering requirements.

Examples of engineering requirements:
1) A satellite’s engineering requirements are primarily payload weight and dynamic launch loads. A primary solid rocket booster has higher dynamic loads and makes the satellite cost more to meet the launch loads, so a slightly more costly booster but with lower dynamic loads may be a better cost solution to the purchaser.
2) A suborbital tourist engineering requirement is that the acceleration and accommodations are such that a wide range of body sizes and other physiological concerns are met so that the potential base of customers is as large as possible.

Some private space companies have succeeded, some are on the verge of succeeding, and some have the potential of being a real commercial vender of space products.

Boeing have some space divisions that are successful commercial space venders such as its satellite production which has successfully made money selling to government and commercial, where as its premier launch system the Delta IV meets the engineering goal but is very marginal in its accounting goal making it have very lackluster sales if any in the commercial market. Boeing satellite business meets all three goals and is an active competitor in the commercial satellite market. Boeing Delta IV only meets the engineering goal and is not a real competitor in the commercial launch vehicle business. Its only saving grace is the Delta IV Heavy which has only one positive aspect and that being the highest LEO capability of 22.5MT, 1 MT higher than its closest competitor. Other Boeing projects have potential such as the CST-100 if it is managed correctly and is run with being a competitive HSF provider. With the current price for passenger transport to LEO set at $50 mil per passenger and an Atlas V HSF launch cost of $150 mil the remaining $150 mil for the other three passengers must cover profit and CST-100 costs per flight. With reusability the CST-100 could easily under bid the Russian price and certainly any totally NASA run project. Boeing is looking for NASA to make significant investment funding to develop the CST-100 so NASA can have a cheaper HSF transport solution to ISS.

Space X business model and its leadership embodies the closest to the ideal of the three commands and marketing considerations. Space X is not completely a commercial only business because it has received some funds from NASA to help it perform development which NASA hopes to get back by having cheaper costs for cargo deliveries to and from the ISS. This can be considered like an investment some companies make to develop suppliers to lower costs. Space X is a tier one competitor for worldwide commercial satellite launches, on a par with Russian space launch prices.

The closest US competitor to Space X is ULA and manufacturer Lockheed Martin’s Atlas V, which currently handles most of the US military and NASA satellite launches. Once Falcon 9 and Falcon 9 Heavy are proven the only thing that will keep Atlas V alive is demand being beyond which Space X can supply. Atlas V has at least 5 years more life because it has payload capability greater than that of a standard single core Falcon 9. But once Falcon 9 Heavy is on the scene its prices make it competitive for launching 15MT payloads as well as much larger ones of 32MT. This will put ULA out of business unless it can slash its costs.

This thread is to examine the space businesses that are expecting to participate in the NewSpace market.
Questions about a Space Business:
1) How does a space business fare when evaluated as a successful technical business?
2) Does it have potential to survive the future?
3) Does it have the leadership to overcome difficulty in engineering and financing?

 

[mr_mark]

This is one of the best thought out posts I have read on this board in a long time. That said, Success for Spacex at this early point depends on building a successful product to sell. They are well on their way with Falcon 1 (E) development and Falcon 9 is off to a good start. Only time will tell, I wish Spacex the best for it's products and services.

 

[Gravity_Ray]

Its difficult to evaluate a space business because its such a new Endeavour. Obviously there has been rockets and space ships for the last 60 years, but they have not be purely a commercial endeavours but have been military, or federal in make up. They could lose money all day long (and they do) but still they will go forward because they are achieving a goal that is desired by a country.
As a purely business model human space flight is new. But I feel that its potential is very good. Here is why.

Bigelow is the best funded and it has as a leader Mr. Bigelow who is not a newbie when it comes to making money. He understands how people think and is driven by his own personal desire to reach space. That’s a strong combination.

Musk is the second best in this field in my opinion because he also has the drive, although he sometimes struggles with the funding. He has done one thing very well, and that is ignited the desire for human space flight in people that are not engineers like myself. For the first time in over 40 years I feel that we are going someplace with human space flight. Once his Falcon heavy is going he will be a formidable force in this new industry.

Third is Boeing and the CST-100 program. This is further along than SpaceX because of Boeing’s track record and will do well as it secures the ISS contracts. I think they will beat out (or mostly beat out) SpaceX because of all their previous connections with NASA. However, that is a good thing. That will push SpaceX to create business outside of the NASA umbrella.

Last is ULA and Lock Mart even though technically they are the most advanced. The reason why I rate them last is because they are “possibly” hopelessly enmeshed with the old way of doing things. Cost Plus contracts to me are somewhat like a powerful drug. I am not sure if Lock Mart can break this mold and move forward with all the various investor issues.

I wont include Virgin Galactic because as a sub-orbital provider they are not in the same league as these guys. Although I feel that they will contribute to the general space business model by getting people excited.

In general I believe very strongly that SpaceX and Bigelow are the way forward. They have the leadership, the funding, and the business know how to succeed in advancing human space flight.

 

[oldAtlas_Eguy]

I feel that the best way to determine what and when things in our Space future will happen is to look at the strength of private space business. If it is strong and growing then our space future possibilities will expand rapidly. What I see now is better than what it was in the 1990’s when EELV’s started but it is a long way off from a completely functioning free market that drives its own pace based on created demand because of low prices. I believe we have started. How fast we progress is something to watch and hope for.

 

[SteveCNC]

I have to agree with Gravity_Ray on all counts . SpaceX may have some funding issues but from what I've read so far it would appear they plan to go public soon with an IPO so that should provide plenty of money to go far . Plus their launch manifest looks fairly aggressive which should begin the money flow that will seed further developments .

 

[oldAtlas_Eguy]

I have to agree with Gravity_Ray on all counts . SpaceX may have some funding issues but from what I've read so far it would appear they plan to go public soon with an IPO so that should provide plenty of money to go far . Plus their launch manifest looks fairly aggressive which should begin the money flow that will seed further developments .

Yes, Space X’s observed aggressive business behavior makes them look more like an electronics company than a space company. Elon Musk cut his teeth running an Internet company (PayPal) so his learning of how to operate and be successful is to be aggressive. They are aggressively pursuing gaining significant market share to obtain even better economies of scale that will increase profits that can then be reinvested to gain even more market share…that will then make even more profit for even more reinvestment…ad infinitum! Now if only other space companies would be this way. They would quickly replace all the government supported manufactures because they would be underbid and outperformed.

 

[oldAtlas_Eguy]

I looked up information about Ad Astra from a business standpoint and although they sound aggressive they really are not. They are listed as a Noncommercial Research Organization. This does not sound like an aggressive business model when the business world sees you as being similar to an out shoot of a University campus. A space business to get real outside funding and investors must present themselves as a real and aggressive commercial viable business. A research organization private company has potential but without an aggressive internal and external business focus their growth will remain very slow and the timelines for any real space missions will be a long time coming.

SpaceDev now the Sierra Nevada Corporation Space Systems (SS) Group has the cash and customers to expand and continues to pursue its Dream Chaser HSF design which could be launched off an Atlas V or Falcon 9. Their balanced set of customers both private and government makes their revenue streams fairly stable. They have vital technologies that many other small companies and even the government uses in space systems development projects. Though their growth rate is slow they continue to grow even in this current very slow economic climate. They have potential to be a much bigger player in HSF both suborbital through SS2 and orbital through Dream Chaser. They currently have a sufficiently deep pocketed investor, Sierra Nevada Corporation, to keep them advancing and attracting new customers and business. SpaceDev though a smaller player though not by much than SpaceX is an up and comer, to be watched closely in next few years as NASA issues additional Commercial Manned Spaceflight contracts. Their standing in the commercial HSF provider race can be measured by how well they do in securing NASA Commercial Manned Spaceflight contracts. Although not currently No. 1 they are a serious contender.

 

[aaron38]

Ad Astra's likely being as aggressive as they need to be, given that they're neither a systems integrator or a transportation company. They're an R&D house developing an engine for anyone who wants to use it. They've got the ISS re-boost demo coming up, and after that they can keep working on larger designs. But flight qualifying a large multi-megawatt drive requires funding that comes from a Mars or Lunar mission being a real project. That's pretty much out of their hands. Their best bet is to work on high risk areas to be certain that a paper rocket design with a VASIMR can actually be built.

 

[oldAtlas_Eguy]

Ad Astra's likely being as aggressive as they need to be, given that they're neither a systems integrator or a transportation company. They're an R&D house developing an engine for anyone who wants to use it. They've got the ISS re-boost demo coming up, and after that they can keep working on larger designs. But flight qualifying a large multi-megawatt drive requires funding that comes from a Mars or Lunar mission being a real project. That's pretty much out of their hands. Their best bet is to work on high risk areas to be certain that a paper rocket design with a VASIMR can actually be built.

It seems like Ad Astra’s goal is to be a technology tinkerer, not a production of space hardware company. They are aggressive in their tinkering but until their focus shifts to being more of a provider of space component systems to more than just the NASA technology development program they will have a very difficult time securing funding. They have the government connections to be able to continue to be funded through this method but only at a slow pace and insufficient for producing actual production articles. Bigalow does research too but is focused on being a provider of space habitats that governments and commercial would turn to solve astronaut on orbit future housing requirements. You don’t have to be a R&D only company to do R&D. If the goal is to do R&D and not in being a viable commercial provider your business will be only so big as the research contracts from government that you are awarded.

 

[EarthlingX]

Ad Astra has a company in Costa Rica and USA, AFAIK. I think i heard something about UK too, but can't find it atm. They just got more funding in Costa Rica by going public.
I don't think they consider only NASA as their customer. I also think they are ITAR free.

When they have a product they can sell, it will not be a problem, and that is going to be soon, couple of years maybe, then we can talk about business

 

[oldAtlas_Eguy]

To wait until you produce a production component before you sell it when the costs of its production is high is a rookie business mistake. Space components are small quantity high cost items that if you wait until you have a product manufactured before selling, it will result in several years of it sitting on the shelf before someone buys it to use in their complete space system. Your right about ITAR as far as Ad Astra is concerned and that may indeed save their neck because they may be able to sell the VASIMR globally without restrictions. But don’t count on it. The US has a great deal of influence where international trade is concerned. They could get Costa Rica to restrict its sales.

Space X has nearly sold out its Falcon 9 production and end product launch services before it even gotten the first full functional test flight off. Space X actually does not sell the Falcon 9 but a ride into orbit on it. The successfulness of selling the product adds momentum to the demand for the product in itself: a product being a physical item or a service. The more it’s demonstrated that it’s wanted the more it will be wanted. One of the business fallacies that inventers/entrepreneurs fall into is believing they have to have a working item in order to market it. Marketing should start aggressively before there is a finish product on the shelf. Toy manufactures even do this. In space system where long lead times of several years are the norm, ignoring marketing is a fatal business mistake. This is not to say that Ad Astra has ignored marketing the VASIMR, their commercial plans for VASIMR seems to be aimed at developing a LEO/GEO/LUNAR tug and selling its services. In order to do that they will need alliances with other established LV and spacecraft companies since Ad Astra does not have the capabilities in-house at this time to do the engineering for the tug or the several $100 million to develop it and launch it. They do have some alliances that could do the initial feasibility work though, but would need additional help with detailed design. Their first production item has been sold sort of (to NASA for use and testing on the ISS) scheduled delivery in 2013. The future after that point is very cloudy and they need to clear it up before 2013 rolls around or Ad Astra’s gains and pace could stall.

The impression from reading the Ad Astra Executive summary
http://www.adastrarocket.com/EXECUTIVE SUMMARY240110.pdf
is Ad Astra would not sell its VASIMR engines out right but lease their use. This could very well enable them to create a continuous revenue stream, though smaller annually than product sales. These services contracts have higher potential and more possible customers to deliver more total revenue per engine. For them this might be the better business model than what is assumed by most that they are a component developer. Some very large corporations develop their own components but primarily sell services that use these components. IBM is one that made a virtuoso performance of this technique in the business world. So if Ad Astra and a consortium could create a LEO/GEO/LUNAR Tug Services company I’m sure they would have more business than they could handle from governments and commercial customers.

 

[oldAtlas_Eguy]

Armadillo Aerospace is an interesting company with 7 full time employees it is a development company that does both commercial product work and NASA R&D work. They are Tinkerers in the real sense because they try to do everything as cheaply as possible. Their primary goal is to produce items, test them, make improvements, and make new ones. For such a small company they have a big impact in the robotic spacecraft world. Their complete system work and demonstration has earned them notoriety far larger than the size of their company. Their goal is to change how space systems are developed and to reach suborbital and orbital space on the cheap through innovation.

 

[oldAtlas_Eguy]

Bigelow Aerospace is probably the template from which Elon Musk got his inspiration to form Space X. It does a very aggressive R&D, Production and Marketing of its niche space human habitats company. This complete focus and driving goal to dramatically reduce the cost of Space Habitats and the aggressive International marketing to governments and commercial entities alike is the template that space entrepreneurs have taken notice of. The turnkey leasing option would be a boon to most governments and commercial customers because funding for operations is easier to maintain than continuous funding for development of 5 to 10 years before operations could start. Bigelow Aerospace offers a completely new way of doing HSF for cash strapped governments or private companies wanting to be able to pursue their own agendas in on-orbit experiments and operations. They would not have to put up with being low on the priority list on board the ISS continually preempted by NASA and Russian space projects. Bigelow Aerospace business model offers two major components, purchase of a Bigelow module and leasing space on a Bigelow space station up to the entire station.

Existing COTS suppliers could perform supply to the Bigelow stations like they do for ISS at their reduced cost levels. As more cargo supply activity increases these supply cargo missions should drop in price due to economies of scale. The lynchpin in this business model is CCDev. Without a low cost HSF access to space Bigelow’s habitats would not be usable. Bigelow Aerospace may have to fund at least one of the more promising CCDev providers if the US government’s CCDev program folds. This at the moment seems to be the Boeing CST-100. Once CCDev looked like it was going to happen, Bigelow Aerospace put its Sundancer module on the Space X Falcon 9 schedule for a Launch in 2014 with the hope that its commercial HSF demand would make possible commercial HSF providers be willing to put up some of their own money to keep CCDev work proceeding. With the placement in orbit in 2014 of the Sundancer module alone the yearly demand for HSF would increase by 50%, and would rapidly increase in two years, 2016, by a total increase of 200%. Soyuz cannot handle this demand. Bigelow’s firm plans may be the spark needed to accelerate CCDev beyond what the government could ever do. Bigelow is telling the possible commercial HSF providers that the demand will be there in a rapid ever increasing amount if they just provide the commercial HSF capability at a reasonable cost (less than government HSF programs).

If everything goes as planned then Bigelow could be earning a PROFIT of over $1 billion a year in ten years from now. That’s profit not revenue, revenue would be about $4 billion, giving Bigelow a 25% profit margin which is about right for a high risk tech company. The interesting thing about this is that Bigelow would be purchasing $2.5 billion in launch services from Space X or others that does not include HSF crew rotation. That’s putting up modules but mostly resupply missions, so many in fact that a Falcon 9 Heavy would have to be used instead of a Falcon 9 just to keep up with the cargo demand. A triple sized Dragon cargo module holding three times the cargo of a regular Dragon on top of a Falcon 9 Heavy. In ten years there would not be just one or two Falcon 9 Heavy flights needed for this support but 12! There would be at least 12 regular Falcon flights a year too for support.

If you think $4 billion in revenue for 4 BA330 modules and 2 Sundancer modules with a total occupancy capacity of 30 is a lot the ISS US budget is more than that to support just a crew of 6. There are nations out there that would be willing to spend $900 million a year for crew and experiment space for 6. There are commercial bio firms that could easily lease a 2 crew space for $300 million.

 

[kk434]

I think that the commercial space firms(comunication sattelite builders and launchers) pass the test but NASA fails. The commercial space buisness is actually a profitable and big buisness, telecom sattelites are launched to make money and most of the time they do. Just take a look at Sky Terra 1 sattelite, its huge and those com-sats are just getting larger, those guys have both the tech and the money. If thier buisness was inefficient most of them would be in Chapter 11 and not launch big sattelites like that.

http://www.space-travel.com/reports/Boe ... e_999.html

 

[oldAtlas_Eguy]

I think that the commercial space firms(comunication sattelite builders and launchers) pass the test but NASA fails. The commercial space buisness is actually a profitable and big buisness, telecom sattelites are launched to make money and most of the time they do. Just take a look at Sky Terra 1 sattelite, its huge and those com-sats are just getting larger, those guys have both the tech and the money. If thier buisness was inefficient most of them would be in Chapter 11 and not launch big sattelites like that.

http://www.space-travel.com/reports...rra_One_Mobile_ComSat_To_Launch_Site_999.html

Yes the entire current commercial industry which includes Launch Vehicles, Satellites construction and operation, and ground systems that use Satellites such as GPS, TV and high data rate comm, when combined this combined world industry is twice the size monetarily of all world government spending.

You are also correct about the commercial Satellite construction and operations almost all of the manufacturers use common buss design just like what the computer industry did, all of the common stuff, power, attitude control, thermal control, computer systems and command comm systems, are pre built and sitting on the shelf, but not for very long at most 6 months, waiting for an order which then will add the custom comm equipment for the buyer which usually takes less than two years to be ready for flight. Even the US DOD buys some of their satellites using these common buss designs to lower the satellite costs and lead time. These types of innovations to be able to mass produce satellites have made a significant effect on prices and time between ordering and being on orbit. One of the biggest killers of commercial business is time. If it takes to long for your investment to start making money then probably it will not work out. By shortening the amount of time investors have to wait before their satellite starts bringing in revenue to less than three years, more investors are willing to invest in new satellite ventures.

 

[rcsplinters]

This is an excellent question. I don't think that we can talk just in terms of space business. We have to be a bit more specific. For example, the cost plus business model is sound. Companies profit. The nation has accomplished incredible things though at impressive costs. What about emerging markets? Well, the same old financial metrics will apply, such as return on investment. If those metrics are not comparable to other businesses, the new company will not be able to attract capital long term and that company will fail due to starvation unless the company becomes a "ward of the state" like Amtrak. Another key consideration is long term product demand.

Let's take a look at 2 potential markets and one company, SpaceX, in this regard.

One market is LEO cargo delivery. SpaceX is in the enviable position of having a number of contracts in hand for satellite launch, ISS ferry, etc. We are poised to see whether they can make a go given this demand. Frankly, I think they have a good shot at a thriving business tossing mass into orbit, IF they can keep up. In fact, I think they are so uniquely positioned that if they fail, we see a lot of soul searching as to whether commercial practices outside "cost plus" are viable at this time.

The second market is human's to LEO in either the cab or rental car mode. This picture is murky, chaotic and very dangerous. While you'll find the occasional fan boi of human commercial flight in orbit stating otherwise, the only realistic potential contract for such is to the ISS from either NASA and perhaps ESA. There is a 500 pound federally subsided gorilla sitting on that limited market operating out of Baikonur Cosmodrome that will retain a large percentage of the available demand since they can undercut actual cost. For this reason, i think the only viable demand for a US based supplier for LEO cab or taxi is NASA since they can just give the business to whom they want with congressional authority. Given this, it seems the market is pretty much limited to 20 - 40 units within the next decade. That is not a market and for that reason, I think any commercial LEO taxi or rental business is doomed to failure and becoming a ward of the federal government. Again, SpaceX is probably best positioned to make a go of this market, however, we know from their actions that they are apprehensive. The key evidence here is the partly successful attempt to pass their market entry risk to the American tax payer. More subtle, but I think equally compelling is what seems like the delay to IPL. I wonder if the SpaceX taxi and rental business is seen as a drain on the potentially very profitable cargo ferry business. This seems to be quite the mystery as I'm sure SpaceX will need the resources from the IPL to meet those cargo contracts. The jury is still out, the demand is low and the business model is filled with risk for humans to LEO by commercial means.

In summary, I think the commercial cargo market is going to be exciting. I think the human to LEO market can best be labled as full of risk at best and words like boondoggle may be appropriate.

I further think that humans beyond LEO is so low in demand and risk so great that only a cost-plus model will be successful when operated by an reasearch group like NASA. In fact, we can comfortably say that human operations beyond LEO is not a business at all, but rather a research and science effort on the part of the US government and any international consortium which may join NASA in that endeavor. I think commerical cargo delivery will be a key factor in cost management for human operations beyond LEO. Still, it will cost 100's of billions of dollars and its value will be measured in knowledge and technology spinoffs. Discussion of direct profit in the context of human operations beyond LEO, save cargo, is utter non-sense.

 

[oldAtlas_Eguy]

Let’s look at Soyuz HSF as if it is a private HSF entity. It certainly is acting like one. To meet the current demand through 2015 they will have to fly 6 missions a year, the complete rotation of 6 ISS crew twice a year. Each flight has a pilot and the two ISS passengers. For most flights the passengers are paying and for a few, two flights each year, the passengers are Russian, so a total of 10 paying passengers at $55 mil per is a total of $550 mil divided by 6 is $91 mil. We know that the Soyuz launch vehicle costs are less than $50 mil so that leaves $40 mil for all the HSF costs of the capsule and ground support. It is still possible for this program to make some money off of this model, but since there is rumblings of the per seat price going up maybe not. By increasing their paying flights to 7 or eight they spread their fixed costs, the Russian cosmonaut ISS passenger flights, across more flights. An 8 flight model gives $96 mil per launch, this increase of $5 mil average of revenue per flight maybe enough to keep the per seat price from rising.

Now in 2014/2015 add a Bigelow module that needs 4 to 6 crew rotation per year. The 8 flight Soyuz model can handle this by increasing again by one flight to 9 flights per year. If every 2 years Soyuz increases by one flight per year, they may be able to keep up with demand.

So in order for Commercial HSF program to produce successes the companies providing rides to the ISS has to beat the $55 mil per seat price. At $50 mil per seat with 6 seats being paying seats that are $300 mil per flight, with an upgraded human rated Atlas V 431 being 50% more that the current 431 price ~$165 mil that leaves $75 mil for HSF capsule and ground processing after 20% profit margin and launch vehicle costs are subtracted. So when looking at the numbers US Commercial HSF will have a struggle to be less than the Russian $55 mil per seat. With price and historical safety track record involved the US Commercial HSF would attract maybe only equivalent of 1 flight per year to outside US government seat purchases, the 6 seats being used to keep the US government usage flights full since 2 flights per year would be flown to carry 2 to 4 passengers each flight to the ISS leaving 2 to 4 seats that could be offered at a discount to keep the flight full. Soyuz would by flying 6 to 8 flights per year and US HSF would be doing 2. Without economies of scale this low flight rate would mean high prices and no significant cost savings over flying with the Russians. The only hope for US commercial HSF is Bigelow. If Bigelow puts up and leases space to the 6 nations that currently express interest filling the first Bigelow station at capacity (12) being completed in ~2018 that would give the commercial HSF market 24 more passenger flight demand per year over the ISS at 12 passenger a year demand. That equates to 4 additional commercial HSF flights bringing the total to 6 where economies of scale start to work, but only if there is only one additional HSF provider. If there are more the one booking more flights will survive the other will fold becoming a “ward of the state” to maintain a backup provider in the NASA HSF plans.

Analysis of the HSF market does indeed show that demand will be anemic especially for the large capacity (6 passengers) proposed capable systems through 2020. Only additional station capacity will increase demand. Without it HSF will stagnate and Commercial HSF as it is visioned will die. HSF demand for station support is 1/4 to ½ the flights that cargos support are. If a provider can defray some of the fixed HSF costs to the higher level frequency cargo flights then only doing one or even two flights per year would not be a struggle. Currently only Space X is in this position. All other HSF business models do not have shared technology and manufacturing economies of scale potential with cargo flights. This means that Space X has the only real chance of offering a significant price advantage. Their competition will be in the “ward of the state” or no business position.

 

[rcsplinters]

That would seem to be a reasonable analysis. Of course, in any business model you have to ask, what if demand is larger, what if its smaller and what happens in the midst of a failure.

The real killer in thsi market is the Russians. In that case, a government has inserted itself in marketplace. This changes the entire marketplace as ROI and other business statistics are no longer relevent to them. Essentially, they appear like a hobbist selling some aspect of their hobby to defray costs.

Interestingly enough, a capitalist market can play that game too, but it is teaming with risk to do that. Again, SpaceX is best positioned to do play the game but not, in my opinion for some years yet. In their position, I'd solidify a track record as a cargo hauler (which they are poised to do) and sometime after 2015 or so, start agressively pursuing the "B supplier" market for those entities that do not want to be single sourced. For some year you have to play at a loss but at some point you can start to make a play for more market share or make up what the Russians can't supply. For this reason, I really see the commercial human to LEO market more viable in the decade time frame, give or take a year or so.

This is also one reason why I so strongly oppose use of federal funds to explicitly transfer risk from the private or publicly held business to the american taxpayer. For a decade, we're talking a pathetically small market and harsh realities in business. Better to spend that money on development for capability beyond LEO and let the commercial guys gain operational experience with the cargo industry. If that proves successful, then they should have capital to divert to modifications of human transport systems, eliminating the need for public subsidy and timing them for market pretty well.

The other aspect of this I forgot to mention, in one incarnation of HEFT, the case was made to launch human assets for BEO operations aboard the HLV. They had some pretty sound rationale for that. If that indeed becomes the adopted path, BEO operations will definiately be cargo only and will not contribute to market forecasts for commercial human launch to LEO. Even if it did, that would only contribute a couple of missions a year during equipment shake down and probably 1 mission every 2 years after that. Frankly, it could be even worse than that as I understand there are only a couple of windows for viable asteroid targets between now and 2025. This leaves us with L targets and martian flybys.

Definitely an interesting discussion. To me the path forward is very clear. Human capabilty should reside with NASA and Russia through 2020. Until then commercial players should ramp up their cargo capabilty and capacity while NASA develops its HLV and depot strategys. Bigelow will have had time to work out station capability. The market for HSF in LEO should then be MUCH less risky based largely on somewhat more optimistic market forecast.

 

[oldAtlas_Eguy]

Yes the outline analysis was neither pessimistic nor optimistic but based on what is actually scheduled through 2015. After 2015 is where the guessing comes in. Bigelow module launch rate is an unknown but assuming a 1 module a year launch rate resulting in 4 years to complete their first station seems to be a middle of the road value. But this is where Soyuz only usage comes into trouble. By 2016/2017 Soyuz only can handle the demand with the stated capability that the Russians can add 1 extra flight every two years, 6 next year, 7 in 2012, 8 by 2014, and 9 by 2016. 9 flights support a crew swap surplus of 6. But a 2 Sundancer station if fully manned will need a surplus of 12 crew rotation capability. And the next year the BA330 addition would cause the deficit to get worse. If there is not sufficient HSF capability Bigelow station buildup would be delayed because there is no use putting up capability without being able to use it. If Commercial HSF is delayed to 2016 this would not hurt Bigelow’s plans however but if Bigelow slips and the HSF is early starting around 2014 then HSF would be hurt because of a lack of customers. Timing is everything in business. Too early you lose money, too late you lose money.

Which brings me to Orbital and their being behind the curve in their COTS contract. If they continue to perform like this then they may not get a second contract at the end of the first one. With all of the delays Space X had getting the Falcon X off the ground Orbital should have been ahead of them by now using technically less risky LV. But what seems less technical risky in the LV business may not be. Evidenced by all the problems Orbital has had with their Taurus LV.

 

[pathfinder_01]

Which brings me to Orbital and their being behind the curve in their COTS contract. If they continue to perform like this then they may not get a second contract at the end of the first one. With all of the delays Space X had getting the Falcon X off the ground Orbital should have been ahead of them by now using technically less risky LV. But what seems less technical risky in the LV business may not be. Evidenced by all the problems Orbital has had with their Taurus LV.

Orbital got the go ahead after Space X. They replaced Rocketplane Kistler and have only been at it since 2008. Space X has been at it longer(since at least 2006)

 

[oldAtlas_Eguy]

Which brings me to Orbital and their being behind the curve in their COTS contract. If they continue to perform like this then they may not get a second contract at the end of the first one. With all of the delays Space X had getting the Falcon X off the ground Orbital should have been ahead of them by now using technically less risky LV. But what seems less technical risky in the LV business may not be. Evidenced by all the problems Orbital has had with their Taurus LV.

Orbital got the go ahead after Space X. They replaced Rocketplane Kistler and have only been at it since 2008. Space X has been at it longer(since at least 2006)

Yes you are correct. I did some looking up and read some more. It’s not the Cygnus spacecraft but the Taurus II LV that is delaying things however, Orbital’s milestones as related to Cygnus has been proceeding fine. The LV is the delay. It was projected to do first flight in 2010, but just like Falcon 9 who’s first flight was supposed to be in 2009, it didn’t happen. So instead of catching up to Space X the Orbital’s LV delay keeps them behind by the same 1 year that they were projected to be in December 2008 when the COTS/CRS contracts to both Space X and Orbital was issued. Orbital became the second place seat in February 2008 in the COTS development project. CRS was the contract for actual cargo delivery. Space X did indeed have a 2 year lead in advanced development support from COTS but the primary funding for development from 2006 to 2008 was still internal private funding which Orbital was still doing for the same period 2006 to 2008 which made them ready to take over from Rocketplane Kistler. So there was some development going on, mostly concept engineering required to support real contract proposals for NASA COTS contracts. Cygnus has definitely made excellent progress. If Space X comes up short, such as a lower than expected launch rate capability, Orbital will be there to capitalize. If Space X performs well then Orbital will definitely be second seat because of its higher payload rate costs and lower payload per flight, Dragon’s 6000 kg to Cygnus’s 2500 kg. If Boeing uses their CST-100 in a cargo configuration then Orbital may have a definite competitor as number two supplier in 2015.

Actually I am surprised that I have not seen a proposal from Boeing to use a cargo version of CST-100 to help increase launch rate and to defray costs of the manned system.

 

[pathfinder_01]

Actually I am surprised that I have not seen a proposal from Boeing to use a cargo version of CST-100 to help increase launch rate and to defray costs of the manned system.

Too early they might near 2015 or they might if Space X or Orbital fails. As for Cygnus, they might specilize in bulky items rather than heavy items. I suspect they are limited by the Taurus II and perhaps a bit reaction control system on Cygnus.

 

[oldAtlas_Eguy]

I was interested in looking at what kits and hardware was available for CubeSat. I found a wide range of COTS (Commercial of the Shelf) parts that can be used for the CubeSat. The CubeSat concept and specifications has created a complete small business industry around providing parts to CubeSat builders. The primary point here is that quantities are high enough that prices are significantly reduced, especially for parts that are adaptations of a regular available part like using industrial grade electronic parts because of their temperature operating range and incorporating them in an otherwise normal electronic assembly so that it can be used in space. I found companies that provide electronic parts and others that provided mechanical parts, some had significant complete kits.

http://www.cubesatkit.com/content/links.html

There are a lot more entrepreneur space small businesses out there than what is first believed, springing up around the small satellite common form factor designs. They are filling a need in a market that is steadily growing. There isn’t much marketing going on besides online sites and references made by satellite builders, but they are surviving in a hostile economic environment which means they are at least doing something right.

 

[Skyskimmer]

Quality thread, upon reading, I'm starting to think just like in the global economy everything is heavily interconnected. If spacex fails it's all round disaster. If bigelow/spacex can't get a reduction in costs down it's failure for vasmir.

That being said, I strongly believe that if spacex, gets through the next 24 months without and major busts, there's gonna be a major expansion in space industry. As was said there model is based on selling a product before it's done. I gaurentee if they get through the next two years smothly, there's gonna be a major major expansion globally, by 2015.

Add to the virgingalactic, are gonna create a whole lot of demand, there's building the market for tier 2 before the tech has been proven it's a very smart bussiness model I think.

 

[oldAtlas_Eguy]

Yes, currently we see these businesses surviving and growing in a hostile economic environment. I like you, believe if they can survive through this environment and not make any business or technical goofs then when the economy picks up so will they to a fast expansion. It is just like the smart phone manufacturers making profits and spending heavily for development of new phones and software. What will happen to the smart phone market when the economy improves? It will explode!

The current economy is projected to be out of its slump by 2012 or 2013. So by the time that CCDev and Bigelow’s Space Station and Space X’s Falcon 9 Heavy start their operations there will be increased demand for these products, because companies and governments will have more money to spend.