Space Business Blog

SpaceWorks Nanosat Market Study

noreply@blogger.com (Colin Doughan) — Wed, 23 Nov 2011 04:09:00 +0000

SpaceWorks Commercial today released their latest nano/microsatellite market study. You can download it here. The study is quite bullish on the growth of Nanosatellites over the next decade with over 20% growth per year through 2014.

If you are a regular reader of this blog, you know I am a big advocate for Nanosats and Nanosat launchers . But I do want to caution us that the authors of this analysis are also developing the Generation Orbit Nanosat launch vehicle. Some may doubt how unbiased their nanosat market study can be when they are developing a vehcile to launch them. However, the counter argument could also be, it was reviewing this same market data several months ago (now made public) that led som of the folks over at SpaceWorks to start Generation Orbit in the first place.

Here are a few highlights from the report. Note many of these comments are direct quotes from the SpaceWorks study itself:

180 known future nano/microsatellites to launch by 2014
Range of 100-142 nano/microsatellites (1-50kg) that will need launches globally in the year 2020 (verses 23 in 2011)

32 are estimated to be 11-50kg satellites
68 are estimated to be 1-10kg satellites
75% expected to be foreign or academic payloads
Military growth accounts for the majority of the delta between the 100 launch estimate and the 142 launch estimate for 2020

New Program list of Known NanoSats:

QB50 – 50 Cubesats to be launched between 2013 and 2014
NRO Colony I – 12 Cubesats to be launched over next few years
NRO Colony II – 20-50 Cubesats to be launched following Colony I
ALASA – 36 mirosatellites to be launched beginning in 2015

The number satellites launched may not equal the number of launches since many satellites are multiple-manifested
4.38% growth in Nano/microsatellite launch demand since 2000
22.5% growth (!) in Nano/microsatellite launch demand expected from 2011-2014
Market saturation point was set at 150 launches per year (the projected 2030 value) (however SpaceWorks admits that some estimates project CubeSat launches at over 600 per year – well above their 150 launch ceiling)
For a fee, Customers can license SpaceWorks more detailed database of nano/microsatellites

Additionally, the SpaceWorks estimates in this market study are based on growth in popularity of Nanosatellites and Microsatellites on existing launch vehicles (with the possible exception of the launches connected with ALASA). As soon as you CAN launch every week or day on board a new generation of quick response Nanosat launchers, many new uses will be found for this class of satellite. And many new customers, yet to be identified, will be taking advantage of such frequent access to space.

Investing in Virgin Galactic

noreply@blogger.com (Colin Doughan) — Thu, 20 Oct 2011 23:08:00 +0000

Abu Dhabi’s Aabar made a second investment in Virgin Galactic in July, increasing its stake in the company to roughly one-third ownership. This marks the second investment by the Abu Dhabi based fund in the last three years.

Bottom line:

2009 investment for $280M equaled a 31.8% stake. Post Money valuation of $900M.
2011 investment for $110M increased its ownership stake to 37.8%.

Based on this data I estimate one of two scenarios:

Scenario #1: The 2009 investment was a down round with prices per share less than what Virgin had previously valued the company, and the 2011 was an up round. An example of this scenario is provided below. Note the percentage change between share price is valid but the share price itself is not publicly known, so I am using a simplified $1 per share for example purposes.

Scenario #2: The share price has not changed since the company's founding. In addition to the two Aabar investments Virgin has brought in $21.5M from other outside investors. An example of this math is below.

Both of these scenarios match the data provided by Aabar for the last three years.

Reasons for Virgin taking additional investment range from:

1. Preparations for new growth (Nanosat Launch vehicles or other new products)

2. Paying for the delays in reaching commercial operations for its suborbital product

3. Building up a war chest for a rainy day (when money is available sometimes you just take it)

Risk Pricing for the Reusable Falcon 9

noreply@blogger.com (Colin Doughan) — Mon, 17 Oct 2011 22:05:00 +0000

In my last post I explored how the SpaceX's reusable Falcon 9 (rF9) could threaten those companies offering suborbital launch services.

Discussion has focused on the risks preventing the rF9 from reaching the optimistic breakeven price point of $130 per kg (discussed in my last post). Here are a few of the risk categories you have raised:

Increased variable costs: Elon may claim only $200K of propellant per flight, but the variable costs of an rF9 flight will surely be higher
Reduced number of flights: When you factor in the complexities of reusing a launch vehicle and the potential for a crash or loss of vehicle
Reduced payload capacity: Adding reusability will increase the mass of non-payload components – reducing the payload mass

What rF9 breakeven price points might we expect if we take these concerns into account? In the table below, I explore these risks and their impact on breakeven price per flight and breakeven price per kg.

In the second column are the breakeven prices today for an expendable Falcon 9. This is the upper end of cost. Weight any of these risks to the point you get price points beyond $5K per KG and customers will prefer the current Falcon 9 over the reusable version. The third column shows the optimistic assumptions from my last post. Columns four through six:

Increase variable cost per mission from $200K to $2M
Reduce reusability from 47 missions per vehicle down to only 10 missions per launch vehicle
Reduce payload capacity by 50% from 10,450KG to 5,225KG

These risk values give us a range we can talk about. Even variable costs of $2M per flight, only 10 flights per vehicle, and half of the payload mass consumed with reusability hardware, SpaceX should be able to reach breakeven price points of about $1500 per KG and $7.5M per flight.

And the great thing about risks…they get retired. Be as pessimistic as you want to be about the capabilities of the initial versions of the rF9. Variable costs will drop over time. Flight rates per vehicle will rise, and payload mass will creep back up. The key has been (and will always be) flight rates. I wouldn't be surprised to see SpaceX subsidize their first generation rF9, offering first generation customers prices SpaceX won’t be able to satisfy profitability until the second generation rF9 – all in the name of increased flight rates.

How optimistic or pessimistic are you about rF9 capabilities? Here is an interactive spreadsheet for you to explore your own risks and their effects on breakeven prices.

Will the Reusable Falcon 9 Kill the Suborbital Launch Industry?

noreply@blogger.com (Colin Doughan) — Sun, 02 Oct 2011 02:41:00 +0000

With SpaceX’s announcement this week that the company would not only develop a reusable first stage for its Falcon 9 family of rockets but would make a completely reusable rocket system (I will use Clark Lindsey’s nomenclature: "rF9" for reusable Falcon 9), I have been wondering about the future of the young NewSpace companies developing reusable suborbital rockets. Will companies like Masten, Armadillo and to a lesser extent XCOR and Virgin Galactic, survive this incursion from a well-funded NewSpace Cousin?

(the youtube video via Clark Lindsey's youtube channel.)

SpaceX has announced the company is developing the “Grasshopper,” a 100 foot-tall suborbital Falcon 9 first stage that SpaceX’s cadre of young, talented engineers will use to test this initial piece of the rF9. SpaceX has NOT announced any intention to commercialize the Grasshopper. But if Masten, XCOR, and Armadillo continue to delay bringing a product to market that can reach 100KM, and SpaceX continues to develop products in its typical rapid fashion, might customers ask to buy payload space on an upcoming Grasshopper test?

Or would SpaceX be willing to sell Grasshoppers to operators who then provide a suborbital launch service to users using the Grasshopper all before Masten has reached 100KM? Could the unmanned Grasshopper be modified to carry passengers and compete with Virgin and XCOR? If an operator came with funding, wouldn’t SpaceX take their money to make the modifications to "manrate" Grasshopper?

But the big money is the orbital market. Most of the suborbital companies have expressed interest in using their suborbital experience and even their suborbital vehicles to expand current offerings to include an orbital system. XCOR has published this image of an orbital capability.

Virgin Galactic even took investment money from the Middle East to jump start their orbital program. Could an rF9 meet all market demand for both suborbital and ultimately orbital launches as well? And if they do, are the current suborbital companies doomed?

It all comes down to money.

How cheaply could SpaceX really launch their new rF9? We don’t know. SpaceX does not even know yet. But we can make some interesting estimates. The heart of these projected orbital price reductions stems from reusing the rF9 like Southwest reuses its 747’s (which can fly commercially for 30 years with proper maintenance). How many reuses is SpaceX planning on?

At this point, the best data I have is a nugget SpaceX's CEO, Elon Musk, said this last week that he is targeting $500K trips to Mars as a market for his reusable craft.

Let’s make some assumptions so we can approximate SpaceX’s reusability assumptions:

A price for a Dragon/Falcon 9 trip to Mars will be equal to the price SpaceX is currently charging NASA for ISS visits ($130M per trip) - optimistic assumption
5 paying passengers per Mars Trip - optimistic assumption
10% profit per launch
All maintenance and between-flight costs are included in the launch price - optimistic assumption

SpaceX breaks even after 47 flights (but that is a lot of assumptions). here is a table to help visualize the math:

Assuming a 47-flight amortization, what could be SpaceX’s breakeven price per KG to LEO? Or to say it another way, how low would the suborbital company’s prices have to be to beat SpaceX?

Again, let’s make some assumptions:

A price for an rF9 to LEO is the same as current LEO Falcon 9
Falcon 9 payload to LEO is unchanged
10% profit per launch
All maintenance and between flight costs are included in the launch price.
Propellant Cost per Launch = $200K
rF9 breaks even after 47 flights

Based on these assumptions, SpaceX's breakeven Price to LEO for rF9 is $130 per KG or ~$1.4M per flight. Again, here is a table to summarize how I came to this conclusion. At the end of this post is a link to an interactive spreadsheet where you can modify these assumptions to create your own analysis.

These SpaceX prices are surely the most optimistic for the near term:

What if the rF9 doesn’t get 47 flights per vehicle?
What if between-flight maintenance costs for the rF9 are significant?
What if payload capacity has to be significantly reduced to accommodate rF9’s reusability elements?
What if near term launch demand is not high enough to fly as often as they need?

Even with the identified risks, this analysis would indicate:

Yes, rF9 could compete against suborbital companies for suborbital market share (especially if SpaceX sells the Grasshoppers to entrepreneur operators)
Yes, rF9 could compete against suborbital companies for orbital market share through extraordinarily low prices

So how can XCOR and Masten compete?

I continue to be bullish regarding the utility of Nanosat-class launch vehicles. When suborbital companies start offering orbital services (a second generation service), their initial orbital offerings would probably be within this Nanosat class - broadly speaking, payload space significantly under 100kg. Is there still a market for suborbital companies to offer this type of orbital service? Even if SpaceX may be able to now match (or beat) them on price?

Yes. Here is why:

Sometimes smaller is better. The smaller vehicles these suborbital companies will eventually offer on orbit should:

Be easier to "fly full"– to get the $130/KG price on an rF9, you have to wait for the manifest to fill. Not so with a smaller vehicle. XCOR was talking about a payload of 12-20KG initially.
Be easier (and cost less) to maintain.
Be launched with less integration or preparation – this advantage is the BIG one. XCOR talks about multiple flights on the same day, taking off and landing from existing airports. Even if the rF9 could launch that often, it will be some time before regulations allow SpaceX to fly that often - especially if they are still flying from the Cape or Vandenberg where ops tempo is measured in "launches per month" not "launches per day".

Nanosat launchers are the future, but only if their ops tempo is fast enough to justify paying a premium for preferential launch windows.

This advantage of the small won’t last forever. SpaceX will keep improving its initial RLV offerings. Spaceport operations will grow to allow for more airline-like ops tempos. So Nanosat launch operators (today’s suborbital companies) will have to keep improving too.

But there is a market for Nanosats and it hinges now on ops tempo. There is hope.

The bigger worry…

…is in the near term. I mentioned earlier, I doubt SpaceX will pursue commercializing their Grasshopper suborbital vehicle. But they may be open to selling this suborbital vehicle for others to operate. Such a suborbital operator flying the Grasshopper would have tremendous suborbital market advantages and could be a major competitor to those suborbital companies focusing on suborbital research (Masten, Armadillo, etc.).

Suborbital companies should be worried, but not panicking. If the reusable Falcon 9 hastens the development of viable Nanosat launchers, the industry will be doubly blessed – low launch costs from the rF9 and high ops tempo from Nanosat launchers.

Here is the interactive spreadsheet so you can build your own rF9 assumptions.

The Outside Insider

noreply@blogger.com (Colin Doughan) — Tue, 23 Aug 2011 17:26:00 +0000

ASM "D2S" reaching out from ISS

In my last post, I talked about the business lessons applied in developing the Altius Space Machines Business Plan.

Jon Goff, Altius’s CEO, thanked quite a few people in his post here. On the business side, recommendations and advice came from a host of valuable people including:

Friends and Internal reviewers of drafts
Online Resources like Venture Hacks
Business Plan Judges (post-pitch feedback)
Company Advisors and Investors

One person that fills the dual-role of Advisor and Investor for ASM is Richard David of NewSpace Global. Richard David has been a great asset to Altius providing that critical opinion,

“How does this look from the eyes of an investor?”

If you don’t have such a person for your venture – get one! You need an “Outside Insider” on your team. Someone that believes in you/your Company and understands your business plan/market/technology but still can bring fresh eyes to how you explain these themes to the uninitiated.

Richard is also bullish on the new space industry and will be rolling out New Space Global in the coming weeks at which time I will post a more formal interview with Richard and let him explain his new venture first hand.

But for now, let me thank all of those people that contributed business ideas and recommendations that got swirled together into the Altius Space Machines business plan win.

THANKS!

Does your Mom Understand your Business Plan?

noreply@blogger.com (Colin Doughan) — Wed, 17 Aug 2011 04:31:00 +0000

Several months ago Jonathan Goff, CEO at Altius Space Machines, called me. ASM was preparing for a business plan “sprint” to compete in the 2011 Heinlein Business Plan competition in Silicon Valley (hosted by the Space Frontier Foundation). Could I help with the business stuff?

Jon had been pitching his new technology – “Sticky Boom” which is a really long tube with glue pads on the end of it. Only the tube can be rolled in or out and the glue can be turned on or off via an electric current. Altius knew Sticky Boom had space rendezvous and docking applications (think servicing satellite, grabbing lost wrenches during EVAs, etc.), but could we wrap a business around this cool technology?

Assisting on the Altius Business plan has been a big part of my life over the last few months which is my excuse for light blogging.

I am pleased with the result (yes, we won the $25K grand prize). Here is Jon Goff, Altius's CEO, pitching the plan (worth watching to get a better feel for what ASM is really trying to do as a company - about 6 minutes long).

Here are a few highlights the team at Altius and I kept discussing while developing this plan:

Is there a problem people will pay you to solve? If not, you do not have a market.
An attractive Market is even more valuable than an attractive technology. New space technology is cool to us space nerds, but markets determine how valuable company technology really is.
Your customer is the organization that pays you – not necessarily the group that uses your product.
Once you have found a market, be cautious before competing head to head with incumbents (those competitors already selling to your market) – how do you take market share away at the edges without drawing an incumbent response – a disruptive strategy .
Management team – do you have the right team? This is so important. If you get the market and management right (and maybe a little traction), investors know that even if the product or technology changes over time, the company will have a good chance at success. There is no substitute for the right market and the right team.
Money: how much do you need and how are you going to get it? Banks probably won’t lend to you (at least not at first). Investor money is an obvious choice but have you thought about govt contracting or strategic partnerships?
Few investors understand NewSpace (if you find one that does, keep him/her happy!). The industry is small and in its infancy. It is not right to expect Tech and Biotech investors to immediately understand: ISS regulations, LEO vs GEO, terminator tethers, plane changes, lagrange points, etc. The question becomes how to present your idea in terms/images VC’s will understand while still being concise? I recommend pitching your deck to your spouse or your mom. If your Mom doesn’t understand your plan, VC’s won’t take the time to understand it either. Simplify. Simplify. Simplify.
The “prize” in most public competitions is the publicity and connections made as a result of winning, not in a the few dollars at stake. This is what the Google X-Prize teams are fighting over – the media rights! To highlight the value of publicity, here are a few of the Altius Space Machines articles that have been written since winning the prize. Ask yourself how long it would have taken to generate this media attention without the win?

List of articles:

Aviation Week
CNBC
The Space Review
Business News Daily
Plus the sites that published the press release or the many posts by NewSpace blogs (thanks guys).

Business plans are like going to College – professors push you to do what you probably could not discipline yourself to do on your own. This is why we have all-nighters finishing 20-page papers and cramming for tests. On your own, you would just go to bed.

Business plans are great forcing functions and entrepreneurs learn a lot through the process. I am glad I got to be apart this journey.

Here was some great advise we tried to follow when preparing the slide deck for the competition:

Pitching Hacks Preview

View more documents from Venture Hacks

Interview with Dr. Steven Tsitas - Cubesat Earth Imaging Constellations

noreply@blogger.com (Colin Doughan) — Thu, 07 Jul 2011 13:35:00 +0000

This week I interviewed Dr Steven Tsitas of the Satellite Navigation and Positioning Lab and lead author of the paper, “6U CubeSat design for Earth observation with 6.5m GSD, five spectral bands and 14Mbps downlink.” This paper has been peer reviewed, and appears in the November 2010 issue of The Aeronautical Journal which is published by the Royal Aeronautical Society. I analyzed the business potential of such a cubesat constellation in a previous post here.

Dr. Steven Tsitas received his BSc(Hons) in Physics from the University of Melbourne, MS in Physics (with Distinction) from California State University Fresno and MS and PhD in Planetary Science with a minor in Astronomy from the California Institute of Technology. His two part PhD thesis title is The effect of volcanic aerosols on ultraviolet radiation in Antarctica and A novel method for enhancing subsurface radar imaging using radar interferometry. After completing his PhD Steven worked as a Management Consultant at Bain & Co. in San Francisco. He recently completed a MSc in Astronautics and Space Engineering at Cranfield University, receiving the Vega Space Systems Engineering Prize for Excellent Performance in Dynamics Related Subjects 2008/2009. His most recent papers detail the system design and commercial applications for an 8 kg, 6U CubeSat that can perform Earth observation missions equivalent to those of current 50-150kg microsatellites, with a corresponding reduction in cost.

And now my conversation with Dr. Tsitas:

Q: Your paper posits the potential of a constellation of cubesat earth imaging satellites capable of performing their job on par with current industry leaders like the European company Rapideye. To fit so much capability into a 6U Cubesat is incredibility daunting. What innovations are you proposing to accomplish this?

Steven Tsitas: I employ several innovations to make such a solution possible:

Time Delay Integration (TDI) to allow a small imager to collect as much light as a larger aperture;
Determining attitude during imaging by rate integration using a Fiber Optic Gyroscope to meet the requirements for pointing stability following from the use of TDI; and
DVB-S2 encoding and a three speed transmitter to allow fast downlink from such a small spacecraft.

One of the things that I like about space engineering is you can twist and turn around obstacles to find solutions - it is quite a creative process. However the design process isn't arbitrary, the culture of space engineering is to design to requirements, and if done well every component in the spacecraft can be traced to a top level requirement through a process of step by step logical decisions. Just as a limited palette doesn't limit an artist, this logical discipline doesn't have to limit creativity in the design of spacecraft.

Q. RapidEye produces images in five spectral bands including infrared – does your proposed 6U system do the same?

Steven Tsitas: Yes, it images in the same 5 spectral bands as RapidEye.

Q. RapidEye produces a 6.5-meter resolution image – what resolution image does your proposed 6U system produce?

Steven Tsitas: 6.5 m Ground Sample Distance (GSD), the same as RapidEye.

Q. RapidEye admits their 6.5-meter resolution is not adequate for some commodity customers like those tracking crops like grapes, strawberries, and peanuts. What is the highest resolution (better than 5-meter?) that you believe possible today in a 6U?

Steven Tsitas: Good images aren't just about resolution, but also having good contrast at medium spatial frequencies. This is quantified by the Modulation Transfer Function. I've seen a high resolution image with poor contrast at medium spatial frequencies, and it looked much worse than an image of the same scene with lower resolution but higher MTF at mid spatial frequencies. I could improve the GSD of the 6U CubeSat design at the expense of contrast, but this wouldn't necessarily give better or more useful images. Fundamentally resolution is limited by aperture size, and the 6U CubeSat design has an 89 mm aperture imager. Given the 6U CubeSat is just 100 mm thick this is obviously close to the limit. Short of some kind of foldable optics or deployable membrane mirror technology I don't think you are going to do much better than that with 6U.

Q. RapidEye’s satellites are designed to last seven years – your research indicates a 12 year satellite life per 6U. How would the orbital life of each satellite change by offering the RapidEye service of a photo anywhere on earth within 24 hours?

Steven Tsitas: To be clear, the paper indicates that the orbital lifetime could be 12 years, and in fact could exceed 25 years requiring a deorbit device, for which provision is made in the design. The orbital lifetime is not necessarily the same as the operational lifetime. Regarding the effect of imaging operations on operational lifetime, the 6U CubeSat design does not include propulsion or any consumables, so there is no direct link between a particular imaging campaign and the operational lifetime of the spacecraft.

Q. In a recent post, I speculate on the economics of a such a 6U cubesat constellation. What further are you planning in this area?

Steven Tsitas: I discuss the commercial implications of the 6U CubeSat design in an upcoming paper. Standby. Perhaps we can continue this conversation after the release of the new paper.

Thank you Steven. Yes, let’s talk again with the release of your paper on the economics of such a cubesat system.

Commercial Asteroid Return to Station

noreply@blogger.com (Colin Doughan) — Wed, 22 Jun 2011 19:49:00 +0000

Back in 2010, Michael Mealing began to consider a spacecraft mission to capture and return a very small Near Earth Object (NEO) to the ISS or Bigelow module for study. He writes about business concept here. Michael’s point, humanity will only travel into the solar system if they can make money at each step. NEOs may be the next step after LEO.

Then in January, 2011, the topic of a NEO capture and return to LEO comes up again in the comment discussions on the Space Business Blog here. So Michael and I have teamed up to continue refining this business concept.

Here’s a Pencast describing the basic concept for a mission to return a small asteroid sample to a space station in LEO. I also include a few markets that might make such a mission profitable.

NEO Return to Station

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Next, I will walk you through the spreadsheet model built to analyze what would be required for a mission like the one described in the Pencast above.

Assumptions:

Spacecraft launched to LEO Space station to standby until target asteroid has been identified.
Spacecraft launched from LEO space station and returning to LEO space station.
Haul all propellant for round trip (no refueling).
A duplicate amount of Delta-V will be required for both the trip out to the asteroid and the trip from the asteroid back to a LEO space station (assuming NO aerobraking to avoid damaging asteroid). Note: The mission’s costs could be greatly reduced if one could determine a smart engineering method to reduce the needed delta-v for the return trip to a LEO space station.
Mass of dry spacecraft: 200Kg (Similar to NEAP but swap out all of NEAP's science gear for some type of grappling mechanism).
Engine efficiency Isp = 342 seconds.
Although spacecraft is docked to LEO space station before mission start, this model assumes no propellant boil-off or LOX top-off prior to mission start.
Since the target NEO is still undetermined, multiple Delta-V’s were modeled to reach NEO targets. Delta-V’s between 5500, 4500, 3500, and 2500 m/s were considered.
Asteroid 2010 RF12 has a radius of 3.5m and a mass of 500,000kg according to NASA. Prorating these values to a radius of 0.5m gives you a sphere slightly smaller than the desired “refrigerator” in Michael Mealing’s earlier posts with a mass of 71,429Kg. This mass is larger than what I wanted to consider for a proof of concept mission, so although I include the 71K Kg mass in the analysis, I focus on target asteroid masses of 500, 300, 100, 50, 25, and 10Kg.

Conclusions:
The table below is the summary of my analysis. The columns in the table below represent the multiple delta-v’s modeled for our 200Kg spacecraft to travel from a LEO space station and AR&D with the target NEO. The rows are the various NEO masses that were considered (or – how big of a rock the mission can go out and get). The data populated (the cells with numbers) are the total mission masses for each combination of delta-v and NEO mass. The total mission mass includes all propellant needed not only to reach the NEO but to return it to LEO as well. The color coding correlates to the launch vehicle table below – Dnepr in green, Falcon 9 in orange, and Falcon Heavy in purple.

A few Observations:

Finding low delta-v targets will dramatically increase the size of the asteroid one could successfully return. For example, instead of a 10Kg target at 5,000m/s of delta-v, the same spacecraft could return a 500Kg target if only 2500m/s of delta-v were needed to reach it (and at almost half the total mission mass!) – that is a lot more rock for scientists to analyze – 500kg instead of 10kg.
Are there ways to decrease the delta-v required to reach these targets or return from them (currently avoiding aerobraking, but maybe a small asteroid could be shielded during aerobraking)?
Because such small NEO objects will be difficult to spot a head of time (there are many more NEOs than we have on record - especially small ones), such a mission has to be very patient waiting on station many months/years for the “perfect” NEO to approach with the right blend of low delta-v and a mass that is “just right”. And to respond to new targets, the mission must be ready to depart the station on very short notice in pursuit of any newly identified targets.
Growing humanity’s knowledge of very small NEOs increases the chances of mission success.

Here is an example of the tables I built to analyze propellant needs. Here are the tables feeding the 5500 m/s of delta-v column. The colored cell in each table varies the asteroid masses. Here is the interactive spreadsheet for those that want to modify my assumptions and want to view the tables for the delta-V's modeled as well.

Delta-V 5500m/s:

Next steps:
Michael and I plan to refine this concept over the coming months. Look for follow-up posts here on SBB and over on Michael’s blog.

Business Case for a CubeSat-based Earth Imaging Constellation

noreply@blogger.com (Colin Doughan) — Tue, 31 May 2011 21:36:00 +0000

The use of Commercial Earth Imaging Satellites is growing. Individuals, corporations and governments are finding varied and unique applications for images of our planet.

Futron estimates the market for commercial earth imaging topped $1B last year (2010).

Uses of Earth Imaging:

Disaster Relief – think of all of the satellite images you saw after the Japan Earthquake (including the nuclear reactors)
Disaster avoidance - George Clooney (among others) paying to patrol boarder of north and south Sudan using Earth imaging satellites.
Helped with hunting down Osama bin Laden (but were any these images from commercial satellites?)
Food Commodities tracking – allowing traders to ask and answer questions like, “how do the wheat crops in Kansas look after last night’s hail storm?”
Remote Infrastructure observation – the oil industry uses it to keep track of their assets in remote locations
Even the US Government is turning to Commercial providers. Last year, the U.S. National Geospatial-Intelligence Agency (NGA) awarded separate 10-year, $3.5 Billion contracts to image providers DigitalGlobe and GeoEye (these contracts are now under review).

The Commercial earth observation markets:

Market #1: High-Resolution images (1.5 meters per pixel). But the cost of each satellite means providers have a limited number of satellites (usually 1-2) on orbit.

Market #2: Med-Resolution images (5-7 meters per pixel) – lower quality images, but providers tend to have more satellites in orbit and may offer more spectral bands to choose from for each image and offer more frequent photo opportunities due to the higher number of satellites within the constellation.

In a recent Nov 2010 paper, “6U CubeSat design for Earth observation with 6.5m GSD, five spectral bands and 14Mbps downlink,” author, Dr. Steven Tsitas outlines how a constellation of 6U CubeSats could serve Market #2 (frequent med-res images) competitively. (Sorry, I think you will have to buy the paper. If a reader finds a free version of the paper online, let me know and I will change the link). I hope to post an interview with Steven Tsitas soon.

But why even consider a CubeSat at all for such a mission? Here are just a few of the advantageous of using CubeSats:

High amount of innovation in the field – from NASA, universities, and private industry
Low ITAR restrictions (CubeSat programs are thriving in many nations)
Low mass of each satellite
Reduced launch cost per satellite
Reduced cost to replace/upgrade constellation as satellites age, breakdown, or new technology becomes available

Rapid Eye, a German company, is the current leader serving Market #2. Below I will provide some details about Rapid Eye and how a CubeSat constellation might be able to compete with Rapid Eye. First, a little education about Rapid Eye.

Rapid Eye Details:

Five identical sun-synchronous Earth observation satellites
Five spectral bands
Launched in August 2008
Satellites built by Surrey UK
650KM circular orbit
Captures 4mil km squared of earth’s surface every day
Once an order is placed for an image, can take a photo of any location on earth (between 75 degrees N and 75 degrees S) within 24 hours.
Offers not only images, but offers services for the analysis of images – especially good at providing comparative analysis of images taken over a period of time

Rapid Eye, the Numbers:

Customer price for images: $1.33 per square KM (must purchase 5,000 KM at a time (at current Euro conversation rates that is equal to $6650 per very large image)
Satellite Constellation construction: $35M
Expected 2009 Revenue: $29.5M (have not confirmed this number)
Total Capital needed to break even: $224M

Assumptions about Rapid Eye’s business:

Assumed Rapid Eye is now profitable
Assumed the cost of the single Dnepr launch necessary to lift the five Rapid Eye sats: $15M
Assumed a $50M infrastructure Hardware purchase (ground station and other startup infrastructure)
Assumed a five year startup at a cost of ~$25M per year in operating (non-HW, non-infrastructure costs)

So what if we could launch a constellation of ten cubesats that could perform a very similar function as Rapid Eye’s current constellation of five small sats? Are their savings if we could? For this post, I will use Steven Tsitas’s conclusions that, yes, such a cubesat constellation would be technically possible.

I will build my business case, not from a technology discussion, but by attempting to answer the business question of - how much could an business save by using Cubesats instead of small sats?

CubeSat Venture Assumptions:

Cost per 6U CubeSat: $400,000
Number of CubeSats in constellation: 10
6U CubeSat mass: 8 lbs each
Falcon 1 launch: $9.8M
SpaceX willing to prorate launch cost based on mass

If we assume the CubeSat venture would operate using the same Hardware and Operating Costs as the Rapid Eye venture, then the CubeSat savings are limited to the cost of the satellites themselves and the cost to launch them into orbit:

Rapid Eye’s satellite and launch costs: 23% of breakeven costs
CubeSat venture’s satellite and launch costs: 3% of breakeven costs

This would mean a CubeSat venture competing with Rapid Eye could theoretically lower image prices by twenty percentage points over competitors (all other things being equal). This by itself may close the business case for some CubeSat constellation investors.

But perhaps competing toe-to-toe with Rapid Eye is the wrong business model. As a general rule, it is hard to out Wal-Mart, Wal-Mart. What-if the CubeSat earth imaging venture could, instead, become the low-price, no frills, earth imaging provider?

In the earlier example, the CubeSat advantage was limited to lower satellite costs and cheaper rides to orbit on SpaceX launch vehicles. But what-if the venture could also save money on ground costs: Hardware/ground stations and operating expenses?

CubeSats, the low-cost leader in earth imaging Assumptions:

Continue with assumptions regarding low satellite costs
Continue with assumptions regarding low launch costs
Lower ground Hardware and Infrastructure costs from $50M to $25M
Lower operating costs from $25M to $10M per year.

Here is a quick cost comparison between the options:

Next Questions (beyond the scope of this post):

Market price elasticity: How price sensitive is the earth imaging market? How would cutting Rapid Eye’s price by 20-60% affect demand for a CubeSat-based image product?
What realistic cost reduction methods are possible in ground hardware and personnel?
Admittedly, my Rapid Eye information was limited to publicly available data, a more serious effort should be conducted to understand the competitor’s cost structures and current profit forecasts
What are the cost implications from using a CubeSat-based system? Where are system costs reduced? Where are system costs increased?
Admittedly, images from a CubeSat are of a lower quality than the best in orbit (5-7 meters per pixel compared to 1.5 meters per pixel from the industry leaders of market #1). How sensitive is the market to image quality? And what can be done to increase the quality of an image taken on a 6U CubeSat?

Interview: Alan Wasser & Space Property Rights Textbook

noreply@blogger.com (Colin Doughan) — Sun, 22 May 2011 20:48:00 +0000

The National Space Society posted last week about a new Law School text book that includes a chapter on space property rights written by Alan Wasser and the Space Settlement Institute.

I first interviewed Alan Wasser a year ago and later built a business case on a lunar facility operating under Alan’s proposed land claims legislation.

With the release of the new textbook, I wanted to catch up with Alan so he could give you an update:

Q. For those that don’t know, what is "Land Claims Recognition" and how does it relate to space property rights?

Alan Wasser: There is one very high value, zero volume product that already exists in space, just lying around waiting for us to exploit it: Real Estate.

Land Claims Recognition would allow private Lunar settlements to claim some Lunar real estate and sell portions to people back on Earth, serving as a revenue source to fund private enterprise space settlement. No need to set up a factory in space, No need to mine it. No need to haul it back. Just land, set up a permanent settlement, claim it, and start selling the surrounding land to investors and speculators back on Earth to pay back the cost of developing affordable transport.

The US government has now officially decided not to go back to the moon, philanthropists cannot afford it, and there is nothing else on the moon or Mars that could be profitable enough to justify the cost of private enterprise developing safe, reliable and affordable human transport.

Therefore, Land Claims Recognition is now clearly the only way we are ever going to see a significant return to the moon, but this time to stay.

Q. You provide a legal defense of these land claims. Talk to me about your efforts.

Alan Wasser: Land Claims Recognition would allow individuals or companies to appropriate and sell lunar land, - but ONLY after they have already established a true permanent human settlement on the land they are claiming.

It is the settlement, itself, (and only the settlement) that can make a claim under the Outer Space Treaty. No Earth government can claim the land or give it to them. The only thing governments can do (or not do) is pass laws about how their courts should treat sales of Lunar (or Martian) property to their citizens - "recognizing" the legitimacy of the settlement's claim and therefore, the validity of the sale.

When I started this debate, some argued that I was wrong about the legality of land claims recognition under the Outer Space Treaty, etc. So Doug Jobes and I took the time to establish an airtight legal case for it. In its winter 2008 edition, SMU Law School's "Journal of Air Law and Commerce" published our article describing land claims recognition in detail and establishing the legal basis for it, complete with 182 footnotes. The Journal is the oldest scholarly periodical in the English language devoted to the legal and economic problems of aviation and space, and is the most prestigious law journal in its field.

You can read the article here. For a less legalistic version of how Land Claims Recognition work (and the answers to 25 frequently asked questions) see here.

Q. And now Land Claims Recognition has been included in a new law text book?

Alan Wasser: Yes! The fact that lunar land claims will now be taught in law schools is an even more convincing demonstration that, though there may always be some dissent, the general legal community seems to have accepted Land Claims Recognition as being fully in accord with existing international law.

The textbook is from Westview Press: "International Law", Silverburg, ed., (ISBN 978-0-8133-4471-3). "Space Settlements, Property Rights and International Law: Could a Lunar Settlement Claim the Lunar Real Estate It Needs To Survive?" is Chapter 13, pages 275 to 299.

Q. When we last spoke, you were marshalling an effort to approach Congress with legislation consistent with your articles. What is the status of your legislation?

Alan Wasser: The AIAA Space Colonization Technical Committee (SCTC) recently sent two teams to Congress to lobby for a Land Claims recognition law. They got a good reception but no comittments. It will need much more support from the Space community to actually get introduced and passed, setting off the next space race.

Space Business Blog Footnote and full disclosure: Over the last year I have become more and more convinced by the mission of the Space Settlement Institute, so earlier this month I joined their volunteer staff as a policy analyst.

Creating Culture at a Commercial Space Company

noreply@blogger.com (Colin Doughan) — Sat, 21 May 2011 05:24:00 +0000

“If you want to build a ship, don’t drum up the people to gather wood…Instead, teach them to yearn for the vast and endless sea.” -Antoine De Saint-Exupery, Author of The Little Prince

When young entrepreneurs talk to me about starting companies – I encourage them to articulate what they want the culture to look like five years from now. Culture is a sneaky thing…it always gets developed. No company lacks a culture, but many lack good ones!

The Netflix culture is well articulated in the slidedeck below (by Reed Hastings, Netflix's CEO) - fastest 128 slides you will ever read. Well worth every slide! Now aerospace companies won’t be able to leverage all of these ideas – especially Netflix’s policies and procedures on “policies and procedures”, but Netflix has intriguing ideas that many new space entrepreneurs will benefit from:

Hiring the best (to minimize the need for written procedures)
Keeping only the passionate people (see the opening quote)
Take as much time off as you want (if you love what you do, too much vacation won’t be a problem)

Culture

View more presentations from Reed Hastings

Altius Space Machines: Sticky Boom Markets

noreply@blogger.com (Colin Doughan) — Wed, 18 May 2011 06:18:00 +0000

Jon, Mike, and Forrest of Altius Space Machines stopped by my house after their successful Zero-G flight. I only got a few hours with them, but I did get to see (and touch) their current "Sticky Boom" prototype. Below is my pencast (from LiveScribe) based on conversations with Altius founder, Jon Goff.

In addition to a summary of the technology, the pencast discusses three potential Sticky Boom markets:

Cleaning up space debris
Enhancing science missions
Enabling micro-cargo delivery to space stations

Sticky Boom - Altius Space Machines
brought to you by Livescribe

And for those that missed it, here is ASM's highlights from Saturday's Zero-G flight.

NASA's Commercial Crew/Cargo Market Assessment

noreply@blogger.com (Colin Doughan) — Mon, 16 May 2011 19:19:00 +0000

NASA has released a 40-page Commercial Crew/Cargo Market Assessment for Low Earth Orbit. RLV News pointed me to the softcopy – thanks Clark.

Here is NASA’s summary of the next ten years of projected commercial demand for cargo and crew to Low Earth Orbit (LEO) with commercial demand ranging from 7K-60K lbs of cargo and from 44 to 360 commercial astronauts.

Here are the Nuggets from NASA's assessment I found especially valuable:

Crew Transportation drives the overall market.
4 Commercial Crew/Cargo Markets: (1) Countries lacking Space Programs, (2) Space Tourism, (3) Applied Research, (4) Other Markets – Satellite Servicing, Media, Education
Report looked at a ten year time horizon
Report excluded NASA Crew/Cargo usage - commercial usage only
The average ISS crew member uses 10.3 lb/cargo per day (based on historical NASA/Russian usage)
4 Space Tourism Growth Constraints: (1) Crew Transport Availability, (2) Cost per customer, (3) lack of destinations besides ISS, (4) long training time
ISS’s Upmass Requirements 2011-2020 = 318K lbs: (1) Core Systems/Operations = 194,820 lbs, (2) Funded Research = 80,067 lbs, (3) National Lab Utilization (unfunded) = 43,266 lbs
Current ISS limitations as a research platform: (1) Inadequate HW/instruments to support research, (2) lack of frequent and affordable up/downmass to/from ISS
Report concludes that availability of up and downmass is “a major constraint to development of the market” and quotes the National Research Council as saying, “conditioned down mass of particular importance…”
Current research on ISS: Basic Research. Over next ten years, ISS research will gradually shift to governments paying for proof of concepts and private ventures pursuing commercialization of successful proof of concepts.
NASA is on contract to purchase 132K lbs of ISS cargo through 2015. According to the authors, NASA ISS cargo demand from 2016-2020 is currently flat for another 132K lbs
4 Classes of Research conducted on ISS: (1) Biology/Biotech – 70% of ISS research to date, (2) Earth Observation, (3) Physical/Material Sciences, (4) Technology Development/Space Qualifying
United States does 36% of the research on ISS
But only 9% of all research on ISS to date is “Commercial” in nature – and even this “commercial” research to date has been subsidized by non-commercial sources.

Comments:

Although not presenting very much new data, the authors confirmed and consolidated a significant amount of commercial market data into one place
The authors relied heavily on industry values to determine the upper end of these markets.
The authors never exceeded industry's optimism. The authors in every case established low end demand by extrapolating from history.
Although mentioning the critical importance of downmass to station research, the authors did not provide a downmass demand estimate for the next decade
I look forward to the day when commercial research on orbiting stations far exceeds the current 9%!
Overall, a very helpful report (if, perhaps conservative) that will stay on my shelf as a reference.

XCOR's Nano Sat Launcher

noreply@blogger.com (Colin Doughan) — Thu, 05 May 2011 18:25:00 +0000

At Last Week's Space Tourism Society’s +10 Dinner, I spoke with two of the founders of XCOR: Aleta Jackson (Co-Founder/Chief Technician), and Dan DeLong (Vice President/Chief Engineer). We discussed general Lynx status, customers, regulation concerns for each flight, XCOR’s preference to fly out of standard airports, etc. And then we changed gears to discuss the Lynx’s “Dorsal pod” intending to ride a top of the Lynx.

Here is an image of the Lynx without the Dorsal pod – in tourist configuration (my term).

Here is an image of the Lynx with the Dorsal pod on top – in NanoSat configuration (again, my term).

XCOR’s stated plans are to develop an upperstage that can ride inside of the Dorsal pod to launch Nano-Satellites. the Lynx would act as a first stage to get to 100km and the upperstage would take the payload to orbit. Here is an XCOR image of an upperstage launching out of the Dorsal Pod carrying a nanosat on board (perhaps my favorite XCOR image ever).

Here are a few of the XCOR Upperstage specs:

76cm diameter
340cm long
Mass up to 650kg
12kg Nanosat Payload
400km circular orbit

This discussion with XCOR’s founders got me thinking again about NanoSat launches themselves. The small payload market (which include nanosats) can be segmented by how time-sensitive their launch is:

Low Time Sensitivity: Traditional NanoSatellites – a delay of a few days/weeks would be frustrating, but par for the course with rocket launches.
High Time Sensitivity: Urgent NanoSatellites perhaps fulfilling an ORS mission for the military of disaster relief
High Time Sensitivity: Package delivery to space stations – daily milk runs – fresh apples – critical (but small) replacement parts

I have said before how I believe package delivery to station to be a large portion of this “small payload” market because of the frequency of needed launches and ridiculously low integration requirements (how long does it take to load a bag of apples into a “no bruising” canister for launch?).

Now XCOR has a long way to go. A lawyer friend of mine reminded me last week when I was discussing this topic with him, “Yes, but XCOR has not flown their version 1 vehicle to altitude yet.” And he is right. The NanoSat launcher from a Dorsal Pod would be a Version 2 vehicle (at least), but…

…If I was to build a business to serve the small-payload-to-LEO market, I would want to secure a method to reach LEO as frequently as my customers needed. XCOR through their Lynx/Upperstage vehicle would provide an attractive solution if they can truly fly as often as they say they will be able to. It would not surprise me that, in the end, the market leader will be the company who can fly the most.

Space Tourism Society’s +10, Turning a Family into an Industry

noreply@blogger.com (Colin Doughan) — Mon, 02 May 2011 18:58:00 +0000

On Thursday I attended Space Tourism Society +10 event in Los Angeles, CA. Dennis Tito, Space X, Virgin Galactic, 62 Mile Club and others spoke. This was less of a Commercial Space conference for those familiar with the feel of Space Access or Space Frontier Foundation’s NewSpace Conference. Instead this was more of a Dennis Tito-focused celebration of how far space tourism has come over the last ten years and what is to come in the next ten years.

What surprised me was the diverse audience at +10. I spoke with Alan Stern before the event. He commented on the high percentage of new faces in attendance. During the pre-meal reception, I spoke with:

entertainment executives,
real estate investors,
lawyers, and
Virgin Galactic customers undergoing centrifuge training.

The event taking place in LA partially accounts for the diverse attendance list. But when John Spencer, event organizer, gets on the front page of the USA Today (above the fold) talking about Space Tourism, you know Times: they are a-changin. For those close to the New Space community, be ready for "the growing of the tent". For those new to Space Tourism, New Space, Commercial Space, etc. – welcome!

I expect over the next years, investor (and customer) interest in the sector will continue grow at the expense of that “family reunion” feeling we get at current new space gatherings. This is healthy: the family is growing into an industry. And it looks like an industry more and more each day. The Space Tourism Society’s +10 even is only the latest indication.

Jeff Greason at TEDxSanJoseCA

noreply@blogger.com (Colin Doughan) — Mon, 25 Apr 2011 04:19:00 +0000

Thank you Jeff. Jeff Greason eloquently explains "Why Space?," and "Why do we need a frontier?" I especially love this quote...

But the most important element of a frontier is psychological, because it is hard to sustain that believe in limits - that belief in the zero sum game - when you can see, stretching before you, new lands - untamed, untapped.

I don't think it is an accident that the industrial revolution coincided with the age of sail. I don't think it was an accident that the United States was founded on the edge of a very sparsely populated and untapped continent. And this time, the lands that we see are truly unpopulated. They are waiting for the gift for life. ~Jeff Greason

Planned Daily Updates from Altius Space Machines

noreply@blogger.com (Colin Doughan) — Tue, 19 Apr 2011 04:32:00 +0000

Remember the days of reading the Armadillo updates every Monday?! I miss that level open communication by a New Space company. I know some of Armadillo's customer's prevent them from sharing everything, but I enjoyed feeling a part of Armadillo's efforts each week.

That is why I am excited that Altius Space Machines just announced an intense effort to mature their "Sticky Boom" docking tool. And through that "sprint" as they call it, Altius intends to blog daily on their progress - good or bad - words or pics or video. Their website makes it sound like a pretty aggressive development schedule to develop their "Sticky Boom".

The Altius website described Sticky Boom as a long boom with a sticky pad on the end that can:

get meaningful adhesion to almost any material imaginable. Plastic, metal, rock, ceramic, MLI or MMOD blankets. Flat surfaces, curved surfaces, multi-faceted surfaces, completely random surfaces like NEOs. Even dust or regolith for that matter. You get all of the “contact at a distance” benefits that Kirk and Joseph Bonometti talked about, while also enabling secure connection with “non-cooperative” objects like uncontrolled satellites, Mars Sample Return sample canisters, space junk, and even asteroids or comets.

Altius says they have one month to get a Sticky Boom prototype ready for a ZeroG micro-gravity flight in May 2011. This "sprint" should be fun to watch. Good luck Altius Space Machines - we are cheering for you. Follow Altius's Sprint here.

When you Are on the Moon you can Touch it!

noreply@blogger.com (Colin Doughan) — Sat, 16 Apr 2011 17:56:00 +0000

In school this week, my son learned about his senses. In an effort to describe the difference between "sight" and "touch" the teacher used the moon as an example. "The moon is something we can see but not touch," my son's teacher explained. Incredulous, my son announced,

"When you are ON the moon you can touch it."

It is our job to create this attitude in a whole new generation - of course you can touch the moon when you are on it because your generation will travel to the moon - not just the astronauts of this new generation, but you personally. This new generation will go to the moon and use the moon's resources and learn from the moon and have fun on the moon. The moon is REAL - let's go touch it!

Asteroid Prospecting in the Triangular Equilibrium

noreply@blogger.com (Colin Doughan) — Tue, 12 Apr 2011 19:28:00 +0000

A few months ago I analyzed a SpaceDev/NEAP-style commercial NEO prospecting mission.

An interesting asteroid report last week has made we consider a Hybrid NEO prospecting/research mission:

A few thoughts on the timing challenges of a prospecting mission of any kind:

One potential market for the information gathered about the target asteroid(s) is to sell the data to those interested in mining such asteroids.
Most NEO’s are in orbits whose paths cross infrequently with earth’s orbit.
Most “low cost” mining efforts would require a near earth asteroid to pass by earth at least two times – one pass for the prospector to prospect (sending back data) and a second pass to mount a mining expedition. Without two passes would require the venture to combine prospecting and mining into a single mission. I believe this approach to be too high risk for an investor-led venture.
Finding NEOs that return frequently enough to earth to attract investment dollar for a mining mission (double orbit missions) may be difficult.
And the prospector company (the company that flew to multiple NEOs in search of data about asteroid composition, etc.) will have a hard time selling their data if they have to wait for the NEO to approach a second time.
For example: Asteroid 2006 RH120 at its closest distance from earth could be reached with only 3.8km/sec of delta-v. According to JPL, Asteroid 2006 RH120 last approached earth on 14 June 2007 and won’t return again until 29 Oct 2028. If your prospecting mission had gathered data on 2006 RH120, the scientific community might purchase the data gathered (yay), but commercial groups would not if the commercial ventures had to wait 20+ years to turn that data into profits.
Some NEOs return to earth more frequently than this example, but it illustrates a principle – prime targets for commercial NEO prospecting missions would combine a low delta-v to reach and frequent return trips to earth.

Enter 2010 SO16.

2010 SO16 is unlike most NEOs and at 7.6 km/sec of delta-v to reach, it may offer an attractive target for a NEO prospecting mission. Some quick facts:

Located in a similar orbit to earth’s – just 60% ahead
~50x the distance to the moon
Very stable orbit – been there a long time!
May be a part of the theorized objects located at the triangular equilibrium points 60 degrees ahead of and behind the Earth in its orbit
Scientists may find such an object interesting because as the article put it, “If they [triangular equilibrium objects] do exist, they may represent relic material from the formation of Earth, Moon and the other inner planets”
200-400 meters across - plenty of rock to prospect.

Why Prospect Asteroid 2010 SO16?

Pretty close to earth – so you can prospect the asteroid
Always pretty close to earth – so other could mine the asteroid if they determine it profitable to do so. This makes your prospecting data more valuable too.
Valuable as an earth observation point? Perhaps?
Valuable to watch for NEOs? (not sure on this point – need some engineers out there to help me). The alternative is to send a probe to Venus to watch earth – which would be easier or more valuable?
If 2010 SO16 is actually ejecta from earth/moon formation as some scientists have theorized, this asteroid may hold significant scientific value.
If 2010 SO16 is actually apart of other objects located close by, once there, additional objects may be close by to prospect as well.

Commercial value. Scientific value. Profitable?

Falcon Heavy Impact on NewSpace

noreply@blogger.com (Colin Doughan) — Wed, 06 Apr 2011 18:32:00 +0000

With the announcement from SpaceX yesterday about the Falcon Heavy, I went back over the recent missions I had been analyzing here at Space Business Blog to determine if any of them would benefit directly from the Falcon Heavy’s superior performance and reduced per pound launch cost.

The Answer: No. Well, mostly no.

Let me explain. Most of the innovative missions I had been considering were near term missions that could be performed on a single launch without the added capability of the Falcon Heavy.

CubeSat “Observers” of LEO/GEO assets – too small, mission may benefit from cheaper secondary payload prices
A NEO prospector mission – too small, mission may benefit from cheaper secondary payload prices
Nanosat Launchers – if anything, as launchers get larger, the need for a very small/responsive alternative grows, not decreases
LEO/GEO/L1 tug – a Falcon Heavy launch capability may actually harpoon this whole idea of a transfer tug (at least in the near term). Probably worth a new post on how the Falcon Heavy illuminates/reduces the value for such a capability
Refueling of Iridium’s constellation - too small, mission may benefit from cheaper secondary payload prices

But here are a few humble thoughts on why a Falcon Heavy changes the game:

Further NewSpace validation: Still a lot of doubt in congress that a commercial company can do rocket science – one more answer to these critics. New Space firms benefit from the validation that SpaceX creates.
Cheaper Secondary Payloads: With 53 metric tons to LEO available for each mission, smaller payloads could be combined to take advantage of all of that capability. This would allow more users to benefit from the $1000/lb price point, not just the big payloads.
Cheaper Falcon 1 and 9 missions: The Falcon family of launchers use the Merlin engine. Falcon 1, Falcon 9, and the Falcon Heavy (which could be called Falcon 27 since it uses 27 Merlins for each mission). In the announcement yesterday, Elon eluded to economies of scale coming from SpaceX making so many of these Merlin engines - 100’s per year. If the Falcon Heavy flies frequently, SpaceX will get even more experience about making many, many, many Merlin engines. The more Merlins you make, the more ways you find to make them cheaper. Yay economies of scale! The hope is that these savings result in lower prices for Falcon 1 and 9 over the long-term.
New mission potential: And now the obvious benefits – you can do more with any mission (more mass lifted at a lower cost). Think of the missions you can do with the raw ingredients being developed. Humans to NEOs, L1, Moon flybys, Venus/Mars flybys, and science missions to Mars and back – limited new hardware needed. The reality that a rich private citizen will soon be able to leave LEO for some impressive destinations has not been grasped by the population at large and will surprise many when such a mission is actually launched:

Falcon Heavy
Bigelow Modules
Dragon
CST-100
Even the Orion, and ISS

Commercial beats contracting: ULA could have built the rocket that SpaceX is building – they have a lot of very smart engineers. But they won’t build it (IMHO). They will wait for a contract to build one – which won’t come. Yes, they will spend their own small R&D budgets to enhance their current offerings. But they won’t spend hundreds of millions to develop a vehicle independently. And because of this, the only reason ULA will be offering launch services at all in ten years will be:

SpaceX can’t keep up with demand or
SpaceX has an accident or
The US govt insists on multiple launch providers to ensure access (funny they lacked that once ULA was formed) or
ULA’s political clout keeps them in the game – even if overpriced
ULA changes from a contractor to acting more like a commercial provider (the hardest switch to make)

**UPDATE:
Next Big Future offers this great cost comparison between the EELV launch costs of ULA and SpaceX:

Even if you DON'T have $80M+, the Falcon Heavy announcement changes how the whole world plans their space missions - even New Space.

Low Costs. Rapid Testing. Right-Sized Processes.

noreply@blogger.com (Colin Doughan) — Tue, 22 Mar 2011 20:53:00 +0000

XCOR 5K18

Why work with a New Space firm? As a major Prime, why not just build it yourself? New Space firms won’t have access to the equipment you do. New Space firms won’t have as diverse of a workforce as you do.

ULA had reasons for working with New Space.

In their announcement this week, United Launch Alliance (LM and Boeing) described the reasons for working with XCOR on a new innovative Aluminum rocket engine technology:

Lower Costs: “performance and reliability our customers need at a more affordable price.” The overhead/G&A cost burdens for large companies often makes one hour of effort for a smaller company cost less than at larger aerospace firms - even when you factor in the smaller firm's profit margins.
Faster to Test and Re-test: “rapid turnaround for build and test cycles that drive innovative learning.” A culture built on the idea of “when in doubt, build” rather than a culture built on “when in doubt, PowerPoint”.
Right-sized Processes: “small company project management approach.” Larger companies often times have a one-size-fits-all set of processes that may work well for large development efforts but may need to be rethought for smaller, more risk-tolerant efforts. Kudos for ULA/XCOR recognizing the need to match the processes with the effort.

Every industry is replete with examples of large firms working with/buying innovative smaller firms to gain the advantages mentioned above: lower costs, rapid testing, right-sized processes. But first you need to get invited to the dance. New space firms need to demonstrate enough independent success to get noticed by these larger companies. But how do you demonstrate that type of independent success? Lower costs. Rapid testing. Right-sized processes. Congrats, XCOR.

60 NanoSat Mission Ideas

noreply@blogger.com (Colin Doughan) — Mon, 14 Mar 2011 17:26:00 +0000

AxelSpace's WNIsat-1

The 2nd Nano Satellite Symposium is being held today at the University of Tokyo, Japan. Evidently the Tsunami has shortened the event from three days to one day. At the conference, AxelSpace and Symposium organizers announced sixty entries in a NanoSatellite Mission Idea contest.

Symposium organizers list the top 32 entries (and a mission abstract). These top 32 entries come from 22 different countries signaling (or at least hinting at) strong international demand for a NanoSat launch capability.

The Top 32 Mission Concept Titles (listed with 10 Finalists on Top):

Integrated Meteorological / Precise Positioning Mission Utilizing Nano-Satellite Constellation
Distributed Multispectral Imaging System
The Service for Individual to Meet Space; Future Space Funeral
ExoplanetSat Constellation
Northern Communication and GPS-based science Nanosatellite constellation mission
Space Advertiser (S-VERTISE)
Global ship monitoring using space-based AIS receivers
Experiment of Tethered Nanosatellite Flying with Electrodynamic Tether
Demonstration of Optical Stellar Interferometry with Near Earth Objects (NEO) using Laser Range Finder by a Nano-Satellite Constellation: A Cost-effective approach
A Global Water Pollution Monitoring Satellite System (WAMS)
Fire Alarm Constellation
Medium/large vehicle tracking system
Global water pollution monitoring using a nanosatellite constellation (WAPOSAT)
Satellite Constellation for Monitoring of Chemical Composition of Earth Atmosphere
Constellation of Atmospheric Density Research Experiments (CADRE)
Building a long-distance power transmission system that uses magnetic resonance with nano-satellite
EBELESAT 1
Disaster Monitoring Constellation using Nanosatellites
ELYSSAT A Nano Satellite for the desert remote-sensing
Fire observing Nanosatellite Constellation
Global orbital monitoring of nuclear facilities decommissioning - NUCLFADESAT
MARINE LIFE MONITORING AND PRESENTATION
Monitoring of on Earth Vegetation by Means of Spectral Analysis
Nano SOS (Space Object Surveillance)
NANOSATELLITE CONSTALATION
ODEI –C24
SPILL-SATCON, Satellite Constellation Mission Idea to Detect Oil Spills in Oceans
Radio Telescope Nano-satellites
Constelacion de Radio - Satelites
Nanosatellite Constellation for Rural Telemedical Applications
Silk Road Intellectual Transport System
Stranded Traveler Tracking System

Time to Raise Money for a Space Startup?

noreply@blogger.com (Colin Doughan) — Thu, 10 Mar 2011 17:37:00 +0000

Lately, I have been getting questions from space entrepreneurs about a thawing Angel/Venture market and what that means for New Space firms seeking investment capital. Mark Suster over at Both Sides of the Table wrote a great post on:

8 Questions to Help Decide if You Should be Raising Money Now.

Below are Mark’s eight questions with my commentary intermixed. Note, Mark is a Silicon Valley investor so many of his examples are focused in that area – still a lot to glean for New Space.

1. Are you in the “lean” phase?

Are you trying to figure out if your idea is an incremental improvement or a game-changer – if so, keep your capital needs small. Once you have proven (even if just to yourself) the world-changing worthiness of your idea than gather some investment money and ramp up capital use. When seeking seed funding – usually look for $500K to $1M initially from outside investors.

2. How much capital do I need to run my business effectively right now?

A good rule of thumb: an entrepreneur needs capital for 18 months of operations. I appreciated this nugget. As an entrepreneur, eighteen months feels like an eternity, but I should be striving for this!

3. How much dilution am I going to have to take now?

Expect 25-33% dilution per round. What does this mean? Each round your percentage ownership will be “diluted” as investors take a share of the value of the company. Here is a quick example:

An investor offers The founder of Acme Rockets a pre-money valuation of $2M for a $1M investment in Acme Rockets. Should Acme Rockets agree? Before the investment Acme Rockets owned 100% of company. If they accept the investment terms, the Acme Rockets founder’s ownership percentage will be diluted to 67%, a 33 percentage point reduction. Worth it? Maybe.

How about a $2M investment at $2M pre-money? 50% dilution in a single round. Probably not.

4. How many more rounds of capital will I need & what is my expected total future dilution?

Here is the spreadsheet (containing the table above) where I provide an interactive example of Founder Dilution with each Round of additional Investment (overly simplistic to make the point). Fun to play with.

5. What things could I do with capital today that might improve my market positioning?

I hear the argument which goes – wait to raise capital until you can get a more favorable valuation. For New Space companies like Acme Rockets, this means winning government contracts, building demos, increasing customers for an NLV upper stage which is not yet built – anything to mature their technology.

But there is an opportunity cost in waiting. What could Acme Rockets do now with $1M dollars to grow their company? This is “make-the-pie-bigger-and-don’t-care-so-much-about-your-slice-of-it” argument.

6. What things might competitors do if I don’t raise capital that might impact me in the interim period?

The biggest nugget in this section was the psychological effect investors feel if another firm in an industry announces a large funding round. Who wants to invest in NLV upper stages from Acme Rockets after its competitor just took the oxygen out of the room by announcing a $10M investment to build a similar NLV upper stage? Raise capital so your competitor can’t – I agree with this in the short term, but I would rather focus on wowing customers than fearing competitors.

7. What might future markets hold in terms of valuations?

Try raising money right after September 11, 2001. When is the next market dip?

8. What might future markets hold in terms of ability to raise capital?

Mark ends by reminding us that 8 Questions to ask are nice, but don’t over think this, sometimes you take the deal because the money is available…and might not be tomorrow.

Thanks Mark for a great 8-Question post. Worth reading it in Mark's words over at Both Sides of the Table. Space Entrepreneurs, I hope it helps.

NLV Market Analysis

noreply@blogger.com (Colin Doughan) — Mon, 07 Mar 2011 05:32:00 +0000

Garvey's Prospector 7C

In October of 2004, I attended the Space Frontier Foundation’s conference in Southern California on the Queen Mary. There, Masten Space Systems made a big splash announcing it was joining Armadillo Aerospace in developing Suborbital RLV’s.

I remember thinking at the time, how did Masten have enough market data to make that decision? Masten, Armadillo, XCOR, Virgin, Blue Origin – these guys & gals threw their hat in the ring long before there were significant studies confirming suborbital RLV’s made “market sense”. They had vision. They had guts. Or if the data did exist, at the time, I did not know how to find it.

And now, NASA is offering a prize for a Nano-satellite Launch Vehicle (NLV) – “launching very small things quite often”. And as candidate NLV teams consider throwing their hats in this ring, the market data is a little more available for an NLV service than there was for suborbital service almost a decade ago.

This post attempts to consolidate that NLV market analysis. Of course this will be incomplete, so I need your help. Add links to other NLV market data in the comments of this post to benefit the whole group. I will skip a discussion of NASA's NLV Challenge. Here is NASA's NLV Challenge Page for more details.
I have broken the NLV market analysis down into the following categories:

NLV Market Sources
Market Overview
NLV Market Differentiators
NLV Substitutes
Interesting NLV Market Nuggets
Potential Market Competitors
Market Demand Graph
NLV Pricing Discussion
Market Impactors

NLV Market Sources. The authors of these study deserve your business. Buy their papers. They are doing good work. Instead of at the end of this post, I wanted these links near the top!

Foust, J. 2010. “Emerging Opportunities for Low-Cost Small Satellites in Civil and Commercial Space”
Foust, J. 2008. “If you Build It, Who will Come? Identifying Markets for Low-Cost Small Satellites”
Christensen, I, et al. 2010. “Market Characterization: Launch of Very-Small and Nano Sized Payloads Enabled By New Launch Vehicles.” This link will give you the first few pages, have to buy the full version.

Market Overview. The NLV market can be dissected in at least two ways: (1) by payload size and (2) by payload type.

Payload Size. I have heard various naming conventions for small payload launch vehicles. For this blog post, I will use “Nano”, “Micro”, “Small” as three payload sizes to consider. However, I will group them all together and use the name NLV most of the time.

Nano - Under 10kg
Micro - 10-100 kg
Small - 100-200 kg

NASA is focused on a 1kg payload for its NLV Challenge. The Army is interested in at least 20kg payloads. Even if first generation vehicles are only able to launch a few kg of payload, commercial NLV ventures would be wise to endeavor to grow to larger payload sizes over time. Current 200-400kg payloads launched currently on larger vehicles would surely be interested in "going on a diet" if an NLV launcher could carry 100-200Kg yet offer more frequent launches.

Payload Type. The second NLV market subdivision will be the option of (1) launching a functioning satellite or (2) delivering cargo to stations or depots. Of the two, cargo delivery may very well be the larger of the two sub-markets. It will take far less preparation to send the ISS an NLV-load of fresh apples than it would be to fund, develop, integrate, and launch a nanosat. Both satellite launches and cargo delivery will be sub-markets. Expect the satellite market to retain a diversified customer base. Expect the cargo delivery customer base to be dominated by station owners in the early days (ISS partners and Bigelow), but to expand to Space Station customers in the not so distant future (see: NanoRacks).

NLV Market Differentiators. What makes an NLV unique? An NLV won’t be able to carry as much payload to orbit as its bigger cousins, why would any customers want to use an NLV? Answer: Frequent launches, low integration time.

Cost: Higher Cost per LB than larger launchers but lower Cost per launch
Launch Frequency: Launch *much* more frequently than larger launchers (weekly? Daily?)
Launch Lead Time: Integrate payloads in less time to take advantage of more frequent launches
Payload Mass: a few kg (at first)
Orbit Choice: Customers can choose since not a secondary payload
Suborbit/LEO/GEO: Limited to LEO (at first) – Suborbital applications? Maybe.

NLV Substitutes. Prices for NLV’s cannot be set independent of substitutes. Here’s a list of some big ones:

Launch as secondary payload. Spaceflight Services (Andrews Space) offers a turnkey solution for your payload to fly on the BIG rockets as a secondary payload.
Hosted payloads. Boeing just launched a new service to combine your payload with others on a single satellite bus thus reducing customer costs since they do not need to procure an entire satellite. Note: this would be a substitute only for satellite payloads, not for cargo payloads
Commercial RLV suborbital spaceflight. Masten, Armadillo, and Blue Origin are stuck at 100km for now, but not for long. Watch as future generations of their vehicles climb higher and higher giving customers a greater flight-time, frequent launches, and very low costs.
With COTS deliveries to ISS approaching, deliveries to station will be made by NASA several times per year with ISS partners also delivering cargo to station several times per year.

Interesting NLV Market Nuggets.

Microcosm Inc, identified potential market-wide launch savings of more than $15B over a 12-year period, resulting from the development of a low-cost responsive launch vehicle focused on the SmallSat market (above 100Kg)
In a 2008 presentation, Pete Worden said there were ~80 universities with active cubesat (nanosat) programs
A 2006 Futron Study identified over 30 markets in 6 principle areas for services provided by low-cost satellites in the 100-200 kilogram class
The US Army is interested in Nano Launch and had put a price point of $1M per launch.
My interview with the CEO of CubeSat component manufacturer Clyde Space revealed he thought $250K for a 3u is definitely too much for most customers.
My interview with Professor Jordi Puig-Suari from Cal Poly and professors from MIT, and St. Louis University who are currently active in either university satellite development or active in space research of some kind show they are targeting a price point under $50K per CubeSat with $20K being preferred. Relooking at my notes from those interviews, at a $20K price point, these professors thought the US demand for CubeSat launches would grow to 50-100 each year. Interesting they thought the low flight opps of the current “secondary payload” system a bigger problem than the high cost. Prof Michael Swartwout said in my interview with him, he waits 5-7 years to secure a spot on a rocket to launch his CubeSats. This is longer than an undergrads college career – not too inspiring for young engineers!

Potential Market Competitors. Non-exhaustive – From the Paper: "Market Characterization: Launch of Very-Small and Nano Sized Payloads" by Christsensen, et all. 2010.

Market Demand Graph:

This graph is incomplete but should convey the significant number of different areas where an NLV could gain market share. For an explanation of these categories I would encourage you to get a copy of the wonderful papers I list under the “sources” section of this post.

NLV Pricing Discussion. A major portion of any market analysis is not just what the needs are but what are potential customers willing to pay to meet those needs. For the NLV market you have customers at different ends of a spectrum. Government customers like the Army have stated a willingness to pay $1M to place 20kg in LEO. Universities want to keep Cubesat costs (usually 1-3 kg) to under $20K per U.

Variable Pricing seems like the right answer, where Primary customers pay a premium to fly on their schedule to their orbit and others willing to fly “standby” get a much reduced price but operate on someone else’s schedule and flies to someone else’s orbit. Rather than rewrite the variable pricing details now, here is the post I wrote on variable NLV pricing a few months ago.

If you made me guess right now, I would assume the following prices per U would be acceptable by the market:

Government: $50-200K per U (with discounts per U for larger payloads)
Academia: $20K per U
Commercial: ???, perhaps somewhere between

Market Impactors. Any market has externalities to the market that can help or hurt the industry. Here are just a few:

Of all of the substitutes available to the NLV market, the one that has most potential to steal market share is the second or third generation of suborbital RLV’s. As mentioned earlier in this post, a subset of the NLV market could be served with the extended micro-gravity offered by suborbital RLV’s flying to 500 or 1000 km. But the opposite is also true, a delay or accident affecting the un-manned portion of the suborbital RLV industry (primarily Masten, Armadillo, and Blue Origin) could make some customers consider launching on an NLV rather than waiting for the suborbital ride.
One of the two key sub-markets for NLV’s will be package delivery. More successful space stations, more package delivery. The proliferation of commercial space stations will be a major driver of this sub-market
How the last mile problem gets solved will directly affect the viability of micro package delivery (one of my two submarkets). We need solutions for the last mile problem – the solution will be part technology, part policy, part management. If NLV packages can’t be routinely delivered to space stations, the NLV industry will be severely hampered and space stations will miss out on an enabling method to gain just-in-time deliveries.
NLV’s only work as a market if they can launch frequently with low integration turnarounds. Even if low costs had to come later, the ability to launch frequently with streamlined payload integration will be the driving force behind early NLV success stories. The question operators will need to ask is, “How do I design and manage NLV operations in such a way to achieve the goals of frequent flight opps and low integration turnarounds?”
Although depot development is still years down the road, the potential “match made in heaven” between depots need for frequent propellant deliveries and NLV’s ability to fly frequently should not be overlooked…but I would not build a business plan around depot assumptions just yet.

That is a good dataset to start. I will add some commentary in future posts. Here is the spreadsheet containing the tables used in this post.

Now I welcome your additions. Use the comments section to your links to even more NLV market data.

Funding your "Game Changing" Space Innovation

noreply@blogger.com (Colin Doughan) — Fri, 04 Mar 2011 00:13:00 +0000

NASA’s Game Changing Technology Division (GCT) within NASA’s Office of the Chief Technologist (OCT) announced this week it is looking for “Unique and Innovative Space Technologies” that helps achieve one of the fourteen Technology Areas (TA’s) on NASA’s Space Technology Roadmap:

TA01 Launch Propulsion Systems
TA02 In-Space Propulsion Technologies
TA03 Space Power and Energy Storage
TA04 Robotics, Tele-Robotics and Autonomous Systems
TA05 Communication and Navigation
TA06 Human Health, Life Support and Habitation Systems
TA07 Human Exploration Destination Systems
TA08 Science Instruments, Observatories and Sensor Systems
TA09 Entry, Descent and Landing Systems
TA10 Nanotechnology
TA11 Modeling, Simulation, Information Technology and Processing
TA12 Materials, Structures, Mechanical Systems and Manufacturing
TA13 Ground and Launch Systems Processing
TA14 Thermal Management Systems

The GCT is offering five to ten awards up to $5M per year with no individual award valued at more than $3M over three years ($1M per year max?). GCT is looking for technologies at a TRL of 3-4 and wants to mature them to a TRL of 5-6.

One of the challenges facing a new company with an idea is how to fund development of that idea. Seeking external capital too early usually results in interested investors taking a sizeable chunk of ownership for a relatively small investment since the company valuation is so low. And in many cases, these companies don’t even find interested investors. NASA’s GCT is offering an alternative method to jump start development to bring these innovations to market faster.

Here were some of the solicitation quotes I found interesting:

"This solicitation is focused upon these types of sudden and unexpected innovations that hold a potential for providing a “game changing” impact on the efficiency and effectiveness of space capability"
Speaking of the DARPA-like proposal process, “NASA expects this process to prevent unproductive proposal preparation for technology concepts that are unsuitable for unsuitable under this particular BAA"
"While other technology development activities seek the steady and deliberate evolution of well-understood systems, GCT focuses on developing radically new approaches to the Agency’s future space missions and the nation’s significant aerospace needs. Successful products of GCT will provide or lead to revolutionary advances in capability."
"Appropriateness for GCT: Does the proposed technology or concept have the potential to make radical improvement s in the way NASA accomplishes its missions?"

The GCT proposal process is also innovative (more DARPA-like). Instead of requiring these innovators to submit a full proposal up front (consuming precious time that could otherwise be devoted to innovating), the GCT contracting process starts small:

A one-page exec summary. If NASA GCT likes it then…
A White-paper describing the technology in more detail. If NASA GCT likes it then…
A full proposal.

And all along the way GCT is offering feedback and improvements. All you need right now is a “game changing” innovation and an executive summary. Let’s get to work.