Until Yuri’s Night. It will also be the twenty-seventh anniversary of the first Shuttle launch.
Looking at the map, the only Florida party I see is up in Cocoa Beach. Between Palm Beach, Fort Lauderdale and Miami, you’d think that south Florida would be able to come up with something.
It’s not the space programs that are a fantasy, Mark. The fantasy is the ludicrous wishful thinking on your part that either of them are racing.
Jon Goff has the Powerpoints of Friday night’s propellant depot panel, including mine.
Jeff Foust has a story today on the current real space race (as opposed to the fantasy one between the US and China)–the new race for customers in the suborbital market. It’s basically a compilation of last week’s XCOR press conference announcement and this past weekend’s Space Access conference, both of which I attended. This to me is the key point:
“Quietly, this has turned into a horse race,” said conference organizer Henry Vanderbilt during a wrap-up panel at the conclusion of the Space Access conference. “There are a lot of people who could be the first to fly a passenger to suborbit at this point. Two years ago I’m sure the money would have been on Virgin Galactic. It isn’t necessarily so at this point.”
“What struck me about the events of this week was that we have finally, with all due respect, broken the mystique of Burt [Rutan],” Rand Simberg, an aerospace engineer and blogger, said. “He has had setbacks”–referring to the engine test accident last July that killed three Scaled Composites employees–“and, this week, now he has a competitor.” The growing awareness of companies other than Virgin “is going to be very good for the industry.”
“This perception of a horse race is probably a really, really good thing for investment,” said Joe Pistritto, an angel investor. “Ninety-nine percent of the people who could invest in this industry don’t know about this industry” but may start to learn about it as the find out about these competing companies.
If it is a horse race, who will win the ultimate prize: not just the first vehicle to enter the market, but the one that wins the market in the long run? The diversity of technical approaches, from the takeoff and landing techniques to the number of passengers, makes any predictions difficult. “If there’s four different operators flying people into space, their offerings are going to be a little different,” said Pistritto. “So you see an actual segmentation of the market around the experience you want, how much money you have, and where you are.”
What I meant about the “mystique of Burt” was the notion that the winning of the X-Prize was some kind of fluke, enabled only because the most brilliant aeronautical engineer in the world applied his genius to it. Many have used this as an excuse to denigrate the efforts of others building suborbital vehicles, which hasn’t made it any easier to raise money for such ventures.
Many seem to believe that it really takes the genius of a Rutan to build a suborbital vehicle. As evidence of this proposition, they point out that no other suborbital vehicles have been flown since 2004.
But in so doing, they display a fundamental ignorance of the nature of the technology and the requirements. There is no “one way” to skin that cat, and never was. Burt’s design was clever, and perhaps intrinsically safer, but it was not necessary, and there are other, better ways to do the job that are safe enough. It’s not at all clear that the SS1 approach is the best one for a commercial application, and if one includes in that the hybrid propulsion, it’s already caused delays (though those are partly due to Scaled taking on a project outside their area of expertise–they’re an aircraft manufacturer, not a propulsion house) in their development program, and it’s certain to result in higher operational costs and increased turnaround time.
The real point is that if only Burt could win the X-Prize, it wasn’t because he was the only guy smart enough to design a vehicle to do it. It was because he was the only guy with the reputation of being smart enough to be able to raise the money to do it. When it comes to space ventures, the hardest part is always raising the money. The technical challenges generally pale in comparison.
So, with schedule delays in SS2, now comes XCOR. XCOR has a reputation of its own, hard won over the past eight years, of underpromising and overdelivering. So when they have a (rare, almost unheard of) press conference announcing that they have the design and the cash to build a suborbital vehicle, with an endorsement from the Air Force Research Laboratory, the world listens, and suddenly it’s a real race.
Evidence that the mystique has been broken is this CNBC story by Jane Wells from last week, after XCOR’s announcement, with the hed “Branson And Northrop May Be Backing “Wrong” Rocket Man!”
Burt is no longer God, other companies are getting serious attention from both business journalists and investors, and it’s been a very good week for the new space industry and space age.
I remember when I first started blogging, over six years ago, it was considered quite controversial to state that being hit by extraterrestrial objects was a legitimate concern, and one in which we should invest resources to prevent. But over the past few years, evidence continues to accumulate that there have been significant events within historical times that, had the occurred today, could cause millions of casualties. For example, some researchers are now quite confident that if God destroyed Sodom and Gomorrah, He did it with an asteroid.
On the other hand, a half-mile-wide object would make a hell of a bang that should be pretty obvious from orbit today, so one has to be a little skeptical. I’d like to see how they arrived at that diameter.
Virgin
It occurs to me that with hundreds of millions being spent on crewing Virgin’s air fleet that spending a few tens of millions to build and operate Space Ship Two might be justified on personnel policy grounds. Giving the Virgin airlines pilots a chance to go to an elite school to learn to be White Knight pilots or Space Ship Two pilots might make them happier, more productive workers who spread good cheer and promote good labor relations. The same could be true for customer and aircraft ground personnel. So the Virgin Galactic investment might make sense for labor morale and not just for marketing and to keep the owner happy.
XCOR
I like Lynx (see The Space Review this week). At $17 million, it needs operating profit of $4.25 million to achieve a 25% return for investors. I don’t think XCOR has been seeking debt financing (contrary to the philosophy of take the smallest possible risk) so strategic investors can invest with their heart and be happy seeking a slightly lower monetary return. $4.25 million assuming 1/3 going to the space line and 1/3 going to cost would leave 1/3 to pay investors so XCOR would need to capture $12.75 million/year of the market. At $100,000/flight that’s 128 flights or about 5% of their annual capacity assuming three vehicles and 50% up-time for each vehicle and 4 flights/day.
With some predicting a 15,000 seat market ($3 billion/year at $200,000 which is closest to EADS’s estimate) and Futron at 500 seats growing to thousands of seats over a couple of decades ending at about $700 million/year in 2021, XCOR’s required fraction of the market to achieve a 25% investor return is about 25% of seats or 14% of money given their initial price point in a 500-seat/year market 2% of the money in a $700 million/year market or 1% of a 15,000 seat market (0.5% of the money).
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If either of these teams is to begin test flights in 2010 and service in 2011 or 2012, I’d look for announcements like “fully funded”, regulatory hurdles met, various announcements about engineering hurdles, then an actual test flight program. It would be nice if they gave a public timeline of minimum time from each event to first paying participant flight. I don’t think more secrecy than is necessary for mystery and buzz is beneficial with each team taking a different approach and offering a well-differentiated product that requires extensive disclosure to meet regulatory hurdles and attract customers.
Joe Pistritto: We have a couple teams (Virgin and XCOR) that are planning to fly in a couple years, about the same time as the Shuttle is retired. At that point, the NewSpace industry will be the only way that Americans can get into space, and in that first year more people may fly into space on the new vehicles than have flown in space to date. At that point everyone in the country will have a better idea what this new industry does.
Henry Vanderbilt: Also, they’ll see that there is a horse race. A year or two ago it was assumed that Virgin would be first to market. That’s no longer the case.
Joe: There are going to be different types of experiences at different price points, and as the horse race becomes more clear, it will expose the business to a lot of potential investors who haven’t been paying attention up to now. This is good not just for investment, but for creating a supply chain of suppliers that are needed. Still thinks that this is an individual investor market. Venture funds can’t justify this investment in the current business environment. Can do it with their own money, but not someone else’s. For someone with their own money, there’s no industry that is more exciting than this one.
Henry: Not important who comes in first. Emphasis needs to be that there is competition and that we’re in for exciting times.
Muncy: Difference between spaceflight participants (passengers) and Russ Blink strapping on an oxygen tank and flying out of the atmosphere on an Armadillo vehicle. Markets are wonderful magical things. We have no idea what the possibilities are (who knew that someone would program Doom eventually when Bill Gates said 640K would be plenty). Smart guys in the military might figure out what to do with these things once they’re flying. NASA may want to replace the T-38s now that they’re not flying the Shuttle any more (I think he means Gulfstream), or they might want to practice lunar simulations.
Challenge is to figure out how to get customers interested beyond the tourist flights. It will be different flying in the back of SpaceShipTwo than flying in the cockpit of the Lynx. We’ll see what the market wants. Lord willing the market will want both, and other flavors. The good things about markets is that if you offer something out there of value, it will be rewarded. Thinking about package tours of all the vehicles: Grand Slam of rockets.
[Update]
At that point, I got pulled up to join the panel by Muncy, so I couldn’t blog it.
Anyway, another conference is history. More thoughts later.
Jeff Foust has a report on an interesting talk by Charles Miller that I missed yesterday.
Says that we have to engage SEDS, both because it’s a good source of enthusiastic people who will work cheap, and more importantly because we aren’t getting any younger, and we have to start nurturing young people.
He’s here from Washington, and he’s here to help.
Depressing to sit in meetings in Washington listening people talk about The Vision, and hearing the same things he heard about X-33, SEI, Space Station Freedom, etc. They don’t even seem to learn any new lies.
It is silly season in Washington. Working on the budget. It’s an election bill so they won’t even finish the budget before the election. Wants the election to be over, and has wanted it to be over for months.
Does it matter? Probably not. He and Lori Garver did a “debate” (really an assessment of the candidates at the time) a month and a half ago. Hillary is probably the most supportive of space spending. Fairly pro defense for a New York Democrat. Has in tepid words endorsed the idea of the vision. Also said positive words about private companies and working with them. Has not specifically endorsed Ares.
McCain’s experience with space has been primarily concerned with cost control and getting the job done right.
Obama is the most interesting, and unclear what he thinks. But there is potential for something different, because he says Shuttle is boring. Instincts are not to support current NASA approach. But worst thing would be to continue Ares I and Orion and delay lunar missions. Could create opportunities, or not. Crisis is coming, and crisis represents opportunities. NASA and Air Force are not monoliths.
“You should see the list of things that Orbital wants from Florida to get them to move ther e from Wallops.” There are figures inside the establishment calling for different approaches. Senator Nelson is writing a bill that increases COTS by several hundred million dollars to augment SpaceX and bring in an additional provider for crew transport. He recognizes that this is the only way to have a chance of closing “the Gap.” Senator Shuttle recognizes that he has to bring private space companies to Florida.
We’ve seen NASA put out an RFI for human suborbital science from the private sector. Things are changing. But don’t assume that NASA and the Air Force have come around in general. Also don’t assume that NASA or the Air Force are going to write you a check. Have to figure out what their real mission/requirements are.
We are the PC industry of space. It wasn’t just the people running the computer centers and mainframes thinking that PCs were choice. The challenge was getting the people who used computers then to think through what they did, and how they did it, and imagine doing it differently, and how they could use these new small computers. There are half a dozen people like Ken inside of NASA, but that’s not enough. We have to do their job (which is also our job) which is to figure out how to provide value to them
from their perspective. What he does for a living is help companies do that.
We have to figure out how we play a role in this future, and if an Obama becomes president, and we can’t continue to fund space on an ICBM budget, and we want to continue to send people into space, we will have to come up with new ways.
ESAS is not the same as the Vision. The Aldridge Report is right. It’s not perfect, but it’s largely right. It’s not a blueprint, which is why Griffin was upset with it, and wrote one of his own instead.
Work together, build alliances, come up with concepts to get to market sooner. As the dinosaurs die off, there will be some scraps for the mammals, and room to grow. We are coming to the attention of powerful people, which is a good thing. There are good times ahead, and people are figuring out that there is something wrong. The house of cards is going to fall. Can’t say well, but it’s going to fall.
Mike Griffin might be arrogant (and he has enough degrees to justify that) and he may be building the wrong rockets, but he has also been putting money into commercial activities while he builds das rocketz. We haven’t proven ourselves. Elon still hasn’t launched a payload to orbit. John Carmack still hasn’t won his two million dollars. Only Burt has an accomplishment to date. We can’t just be intellectually correct. We have to show the world that we can do it.
Chuck Lauer starts by informing us that Kistler and Rocketplane have been split off into separate companies. Still want to resurrect Kistler–only two-stage reusable out there.
Bottom line was that markets didn’t buy the value proposition that NASA could be a reliable anchor customer.
Drawing contrast between their max gees and Virgin’s. Rocketplane is four, Virgin is six. Thinks it will be a significant difference. In terms of market research, early studies had to spend a lot of time educating the customer. Now there’s a lot more awareness of various products (runway takeoff and landing single vehicle, versus air drop versus vertical) and it would be useful to update the market research.
Need public/private partnership unless you’re a billionaire like Jeff Bezos. They are continuing to partner with Oklahoma, and the action is primarily between the companies and the states, not the federal government. Even Florida is waking up the fact that the entrepreneurial space community is the future.
Marketing strategy is to work with partners all over the world. Going after one third of the tourist market. Expect 80/20 tourism/other (microgravity science and microsatellite), but the latter may be a bigger market than they think. Looking at charter flight model with things like reality teevee shows, sponsorship of contests (currently have one going with Nestle–paying full price for two seats and giving them away). Can see the Kitkat promotion at nestle.fr. Another contest in India for a multi-media company with a four-episode show to pick the winner. Winner’s sound bite: “I want to see what it’s like to pee in space.”
They can provide a blank canvas for corporate customers without having to compete with a brand (as they do with Virgin).
Lost a year plus of schedule in 2005/2006 as a result of the focus on COTS. Original plan was to build a couple four-place Learjet version, and then build a bigger version for more throughput. Since then have taken a step back and decided to go directly to the larger vehicle, built from scratch. New vehicle is pure cylinder fuselage, cabin the size of a large SUV 2+2+2 seating, with more revenue per flight but no increase in ops costs. Upgraded to an after-burning turbo jet with higher thrust, shorter takeoff roll, higher air-breathing altitude.
Frank Nuovo designed the interior of the aircraft (former head cellphone designer for Nokia). Everyone sees out the front (even in the rear seats), has their own window, and a personal video display. Will show tail camera view during ascent. Video screen will also be selectable for different angles. May use Google Earth overlay on monitor to know what you’re looking at.
[Update at 11:30 AM MST]
I got pulled away from the rest of the Lauer talk, but Clark Lindsey has some good notes, as well as more from the Frontier Astronautics talk.