Rocketforge

In “Ad Astra Wihout NASA,” Winds of Change.NET said:

bq. “This coming decade has the potential to be the most exciting time in the history of human space travel since the 1970s – maybe ever. All the pieces are there….”

Well, not quite. In fact, there are 2 major pieces missing, and they’re affecting America’s military as well as its civilian space program. One is cheaper launch technologies. The other is a space industry that doesn’t have to depend solely on NASA and other central-planning agencies. This follow-up post examine those missing pieces, offering analysis and links that will bring you up to speed – and maybe, just maybe, change the way you think about our next steps to space.

read the rest! »

In C. Blake Power’s two latest articles (A Business Plan For Space and Near-Term, Incremental Space Business Development)
he covers the basics about business plans that anyone interested in a
viable space industry should already know. This article isn’t a disagreement
with Blake. Instead it’s an attempt to push
the discussion to the next level. The point I will be attempting to make below
is that we have to go back to the beginning and think differently about the
entire industry. That we need to stop thinking in terms of technology or
goals. Instead think about customers, markets, and ROI.

A little bit of background (and a bit of a confessional) might help frame
where I’m coming from. My ‘day job’ is with VeriSign’s R&D group (VeriSign Labs). I’ve been there since 1996.
Before that I was at Georgia Tech and
was involved in some of the earliest work on the World Wide Web. Coming
from an academic background and heavily immersed in the IETF I had a very
naive view of what it took to deploy technology. At the time the Internet
was relatively tiny compared to today. It was run by people who had easy
access to ‘free’ money (governments, grants, etc) to upgrade the network.
New technology was deployed easily because everyone was a geek and new
stuff was just cool. It was a false economy.

As I moved into VeriSign I took that “just build it and they will come”
naivete with me. I attempted to build several new services but could never
figure out why the market wouldn’t just starting doing what I thought
was the right thing. Eventually I started reading business books and
understanding why certain things were successful and others weren’t.
I basically forced myself through a Business 101 course. I learned
several critical things that I think we need to apply to commercial
space policy:

1. Start with the customer, not the technology

   This is so fundamentally important and well understood in business that
   its not even mentioned. Talking about it in business circles would
   be like remarking on how well that oxygen thing seems to be working for us
   carbon based life-forms. This means understanding a customer as a human
   being with a set of irrational needs, wants, and desires. A term I picked
   up is something called a ‘pain point’. Its the point at which a person
   is willing to part with money to satisfy the pain of some situation, be it
   hunger, status, coolness, fear, etc.

   The lack of any customer focus within the space industry is amazing. No
   wonder the American people have lost interest in space, no one ever
   thought to figure out how it directly applied to their lives. There is
   no space ‘pain point’. Many of us even attempted to do just that at one
   point or other. We annoyed our families with questions like: “Is there anything
   about space you would be willing to pay for”? While a valiant attempt, it
   still begs the question. As an industry we should be getting to know
   the customer well enough that we understand their existing pain points.
   We should be asking them a much more fundamental question: What are the
   problems in your life that you want products or services to fix”? When
   we have those answers then we can figure out if there are space related
   technologies that can provide the goods and services needed to satisfy
   those pain points.

   And that means market research. It also means throwing out old pet projects
   that no consumer is willing to pay for. It means listening to 12-year-old
   girls since market research shows that they have the most influence on
   consumer trends. It means talking to people like the
   Zandl Group.

2. Risk mitigation means $1 profit on 10 million items is better than
   $10 million profit on one item

   This has been one of the largest problems with attracting venture capital to
   space businesses. They have all invariably required investments of hundreds
   of millions of dollars before even the first dollar of revenue is made.
   It also means that the loss of one rocket can wash out the entire business.
   Take He3 production on the moon for example, even a robotic test facility
   would require hundreds of millions of dollars just to test viability.
   If there were any accidents then the lost interest income of waiting to
   build another mission would scare off any intelligent investor.

   That’s one of the reasons space tourism is so attractive: if there is
   one lost sale there are hundreds of thousands of other sales opportunities
   to be had. If you are attempting to run a He3 extraction business there will
   probably be only one or two buyers. A lost He3 sale would be a disaster.

   What this means is that we should be focusing our search for opportunities
   on things that have large unit sales numbers. Satellite radio understands
   this: they amortize their satellite costs over millions of listeners and
   content providers.

3. Evolve a product line. The final product should never be done first.
   Figure out how to make even your smallest component dual use.

   The software market understands this very well. Never sell more than
   the customer wants. Save features for new versions of the products. This
   is another area where space tourism out-shines other products. Space Adventures
   is making money now off of space tourism without ever making it into
   space. People are willing to pay for version 0.1 of their product. At each
   stage of development figure out some way to make money off of what the product
   is capable of at that point. Sure, people are willing to pay significant
   money for a trip into space. But I’m willing to bet a not insignificant
   number of people would also pay money for a ride in a rocket that never
   went into space. Those people can provide revenue that can be used to
   subsidize subsequent product development.

   One of the more significant payoffs of this approach is that you are
   including the customer in the product development process. By the time
   you’ve gotten the first few iterations of the product out you already have
   a customer base that provides invaluable feedback. For example, I
   bet we will learn that tourists don’t want their ride to be to smooth.
   A little bit of rattle and roll makes the experience more valuable. But you
   won’t know that until you’ve taken a few people on non-suborbital trips.

   By making components dual use you create secondary markets
   that can fund your primary market’s development costs. In many cases
   amateur rocket engineers are using parts from the high performance
   automotive and paint ball industries. That type of dual use is a two
   way street: once you’ve perfected materials for use in engines or avionics,
   figure out how to sell them back to the industry you borrowed them from.

4. Aerospace costs have either stayed static or dropped slightly in the
   past 60 years. Conversely, due to globalization, the number of accessible
   customers for any product has reached into the multiples of billions.

   There is a reason so many businesses are tripping over themselves to get into
   the Chinese market. One product with $1 profit sold to one third of that
   one countries population would instantly get you into the same country club
   as Bill Gates and Warren Buffet. I’m mostly speaking to Americans here
   since we don’t seem to notice the rest of the world as anything more than
   a headline subject on the evening news. But we are missing an extremely
   important opportunity to bypass some of what I’ve discussed above when
   it comes to some of our more science fiction inspired dreams. The world
   has become an economic engine that can be used to propel us further
   than any rocket. Simple, directed and goal-oriented capitalism can provide
   funding that would dwarf anything any government could be convinced of
   supplying. A few hit products sold around the world could easily dwarf
   NASA’s annual budget. That kind of money in the hands of business people who
   understand project planning and cost mitigation could easily put a colony on
   the moon.

I’ve found these lessons useful when it comes to business development
for the Internet and I think they are ‘Business 101′ enough to be directly
applicable to the space markets. We simply have to start applying them.
That means dropping any pretext about missions, rockets, projects, bases
or all the other stuff we see in our minds eye when we read our science
fiction author. As engineers we must always let the data lead us to the
right conclusions. If the data says a girder will fail we don’t keep
installing it in the hopes that one day it won’t fail. The data has
told us that all of our previous methods of space commercialization have
largely failed. Maybe its time to go back to first principles and
re-evaluate our approach.

(via Transterrestrial Musings) Clark Lindsey (aka Mr. HobbySpace) has an excellent plan for what he would do with NASA if he were “declared King of NASA”. Roughly:

• Purchase more Soyuz/Progress missions to keep the ISS up
• Starting in ‘06, contract for ISS re-supply flights
• a revitalized suborbital science program as a way to do science and help create a suborbital marketplace
• move science and deep space probes to university, research institute and commercial contracts
• funding for X vehicles that are not intended to be operational
• NASA should work on innovative space technologies to support large scale space settlements
• expanded development of deep space transports

He calculates all of this using ’shuttle equivalent’ dollars. I.e. 1 $SE = $500 million.

So who wants to start the Lindsey For NASA Administrator campaign?