I find myself in high agreement with Bill's analyses.
10 years way too long. If there is a business here, it is within 5 years.
There is a credible solid booster activity not on your list. Prices promise to
be very attractive to LEOish.
As a computer an communications guy - I think building a transportation
business on 3U cubesats is challenging. Size of payloads will go down -
particularly in LEO. Lots can be done with 1U.
K
Ken Biba
Novarum, Inc.
415-577-5496
On Sep 27, 2016, at 8:45 AM, William Claybaugh <wclaybaugh2@xxxxxxxxx> wrote:
Max:
This is a much better fantasy....
Your competitor list seems--to me--overly comprehensive. I am *certain* that
several of the larger companies you list have no interest in this business,
which it far too small to meet their minimum investment criteria; likewise,
some of those on this list are no-kidding fantasies and do not merit further
consideration.
I would be careful about your "seriousness" criteria: Ventions and Vector
Space have both received US government funding which has in past been the
sine qua non defining the subset from which the eventual winner emerges. I
would also keep a very careful eye on Masten, which could pivot to a
partially reusable smallsat launcher upon receipt of funding; indeed, if I
though it possible to generate a long run profit in this industry, I would
fund Dave to so do: that is the quickest route to a low cost system that
offers at least some barrier to entry.
Your optimism regarding the market is characteristic of all the folks I have
advised to run screaming from this industry; none listened--of course--and
all subsequently lost their own and a lot of other people's money. In my
previous experience, "this time is different" are the most dangerous words in
investment....
You need to understand the orbital debris problem: that is (from your point
of view) foremost a lobbying issue and you will need someone on your team who
knows the key players in that eventual decision. Based on my current
understanding, I suspect that so long as all cubesats stay in less than 25
year lifetime orbits those who are reluctant will eventually agree to go
along. A not trivial derivative issue is the tracking of these thousands of
tiny spacecraft and the issuance of warnings when a collision is possible;
that job is arguably not an Air Force responsibility (they so argue) and if
it is moved to some other agency or, possibly, commercialized, then you will
need someone who can track and influence those actions...we can also note, in
passing, that if commercialization is the choice, that will be an opportunity
for someone to pick up a nice revenue stream, albeit with some possible
liability in the event of an unforseen collision.
One technology, consider the following thought experiment: The Falcon 9 FT
offers internet pricing and payload that works out to a bit over $1200 per
pound to LEO as an expendable. The principals at SpaceX have made various
public statements from which it is possible to deduce that the first stage of
that vehicle has a hardware specific cost of $600-700 per lbm. (This is good
for a liquid rocket but not the best that has ever been achieved.) We know
from proprietary sources that solid rockets can be built for hardware
specific costs as low as $300 per lbm.; thus a solid rocket stage of the same
dry mass as the Falcon 9 FT first stage could cost about half as much.
Making some appropriate adjustments for the two order of magnitude higher
cost of solid propellant and assuming that operations costs would be similar,
this suggests that an expendable solid might price (not cost) at about 2/3 as
much as the Falcon 9 FT, say about $800 per pound to LEO. This is similar to
SpaceX's public estimate of the benefit of reusing the first stage (about 30%
less than the pricing of the expendable Falcon 9). We might thus conclude
that solid rockets that are designed for low cost may be competitive with
partially reusable liquid systems...this in turn suggests that only a fully
reusable vehicle will offer a significant barrier to entry against the lowest
cost expendable rockets.
If you are going to go with liquids, I would look hard at Ursa Major...they
know what they are doing, in my view.
There are knowable macro-economic reasons for understanding that space
transportation--like the airline industry--cannot generate a long run profit.
That does not mean that one company can't make a little money briefly during
an industry transition; it does mean that timing matters and you will need to
know when to bail out...keep the orphans and old ladies handy. The way out of
the "no-profit industry" problem is to own the upstream: VG's purchase of a
piece of One-Web is not just about securing some launches; they will also
participate in any upside from that project. Since the money in space is
made by the spacecraft owners--and not by launch vehicle owners--that is a
strategy that offers a continuing upside, assuming continuing investment in
one's customers.
Lastly, taking ten years is taking too long. This is a three-four year
effort; taking any longer only assures that you will spend more than it
should have cost...which in turn assures you will lose more money than you
would have done....
Bill
On Tue, Sep 27, 2016 at 12:41 AM, Max Haot <max@xxxxxxxx> wrote:
Hi Daniel, John, Bill, Lars, Andrew, Henry S, Henry V, David, Jonathan,
Randall, Craig, Norman, Ben, Great to meet you all and thank you for taking
the time to respond and debate. Thank you also to everyone who contacted me
off-list to share some insight. And thanks to Ray for providing this
incredible resource. Over time, I hope to make Bill a supporter!
To avoid spamming the list, I wanted to answer some re-occurring questions
and add some value by making a list small launcher companies for our
reference.
** Too crowded market
I found 32 companies with stated ambitions of a small launch vehicle.
See the full list with links in this Google spreadsheet (please comment in
the document any error or missing companies)
https://docs.google.com/spreadsheets/d/1Dw2BB2u_8EUTW2JM7RjabilSKxUNDB4bgA4bAx22wjw/edit?usp=sharing
Upon reviewing the online information for all of them, I find that
RocketLab, Firefly and Virgin Galactic are the only 3 which are (a) fully
funded for their ambition, (b) fully teamed up (100+) (c) have demonstrated
hardware in line with their timeline and product. All pre-flight.
With only 3 globally in that advanced development stage and given that it
likely takes 10 years to get to stable/volume/reliable commercial operation,
It seems to me to be a wildly a under-invested industry segment.
See the market demand assumption response below.
** Market Demand Assumption
I come at it from the other side, the SpaceWorks report says there were
about 120 1-10Kg sat launches in 2015 (Not sure how accurate but let’s
assume it’s the correct order of magnitude). Average price of about $50,000
per kg. If one believes that big constellations of 3U CubeSat type form
factor can provide breakthrough business and consumer services in imaging,
research and communication - then why so few? If tech entrepreneurs and
their investors could rely on let's say 1,000 3U CubeSat launches a year at
$30,000/Kg – I believe that the market will buy every slots. It would
neither be a race to the bottom price for the launch providers, nor will
vehicle be grounded empty - at that price innovators will seize the
opportunity and build companies and services. As Peter Beck@RocketLab says
it, right now “space is closed for business, it first needs to be open and
an industry of innovators will build service on this platform and absorb all
capacity as it comes.
Based on the above, I don’t see it as a race.
Steady, surely and reliably is a better approach to this opportunity in my
opinion.
A key business threat would be the large launchers sending an all CubeSat
payload a few times a year - but it seems that the risk of carrying so many
small sats and the lack of flexible schedule/orbit/integration services
makes this a low probability threat. Another threat could be sat launch
limitations or new high fees by governmental and international bodies like
the ITU - concerns of space junk etc.. I have not yet researched this threat
yet. Interested in anyone's thought here on the topic.
In summary, let’s say in 2026, only private 10 companies around the world
can do affordable orbital launches for Nano/Microsatellites. That’s kind of
a boring future. We need more.
** Choice of technology (liquid vs solid), analyzing before building
Companies are communities of teams, customers and fans – products come and
go.
You have to have a general technology choice direction to build the team,
but usually a lot changes in the first year since more time and brain power
is invested on the problem at hand. Some of the assumptions in my original
email will need to be revised – I agree.
Having said that – I believe that the right approach is one of reliability
and cadence, given the market view above, I don’t believe that a
technological edge (a patent, a new design never attempted) is the winning
approach. Using proven stacks chosen by other smart teams working right now
on the same problem/product with 10 year head start is probably a good idea
in most cases. Of course using the latest method such as additive
manufacturing, carbon composites, electric/battery pumps, etc … should be
considered. I’m sure many innovations will come along the way, but they will
be in the sub-systems and each time risk-reward measured, not the macro
architecture.
** Outsourcing an engine
Interesting, gut says your team is everything and we are building a fully
integrated system when outsourcing the key component might not make sense
for such a small startup. But what Ursa appears to have done seems very
interesting given their Blue Origin background/capabilities. I will be in
touch with David.
** What do you mean by ‘qualified for flight’
The 3 year goal is to test the full flight time and performance for the
stage 1 cluster vehicle design. ie the key components such as the nozzle,
chamber and maybe turbo-pump and mounting have to be flight ready for the
high level vehicle architecture. As opposed to trying to get to an
un-flyable block of metal/development engine in 3 years.
** LOE vs LEO - typo.
** mm - means thousand x thousand or million - a British abbreviation from
my time there (I’m from Belgium, lived in NYC 12 years and about two weeks
away from taking my US Citizenship Oath of Allegiance to proudly become a
citizen – an important pre-requisite for this project)
Thanks
Max
On Mon, Sep 26, 2016 at 10:57 PM, Ben Brockert <wikkit@xxxxxxxxx> wrote:
On Mon, Sep 26, 2016 at 11:46 AM, Randall Clague <rclague@xxxxxxxxx> wrote:
If Armadillo never made money, it was never supposed to.
Armadillo was in the black for an extended period and probably still
could be running in that mode. But John has repeatedly stated that he
didn't want Armadillo to be just another aerospace contractor, so they
made the decision to pull back from doing work like Morpheus.
As Masten has demonstrated, there's plenty of work out there for small
innovative companies with VTVL experience and hardware available for
rent. But we got closer to the original goal of suborbital (space)
reusable at Armadillo than we did at Masten, and only got passed years
later by a couple companies who spent roughly one billion dollars
more.
Ben
