Max,
I don't always agree with everything Bill says... but I do this time. What
Bill said.
~Jon
On Tue, Sep 27, 2016 at 9:45 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_8EUTW2JM7Rja
bilSKxUNDB4bgA4bAx22wjw/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
