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It’s a MAE MAE MAE MAE MAE MAE World…. November 26, 2010

Posted by shubber in Manned Space, military, NASA, public service announcement, space, space tourism, Uncategorized.
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4 comments

A recent article in TheStar.com discusses how space may be the first frontier for the next major conflict. By major conflict I assume one in which the US is engaged with another world power and not the sort of massively asymmetric warfare we are engaged in in the Iraq & Afghanistan.

Thinking through how a conflict might unfold – there are lots of scenarios that could potentially lead to the start of a shooting war between the major powers, such as China finally getting around to trying to “take back” Formosa (maybe they haven’t updated their maps to call it Taiwan..?) – the issue of how it starts is less relevant; what is more relevant is what might happen next.

China’s ASAT “test” (some prefer to call it demonstration) where they blew one of their own defunct weather satellites into smithereens was IMO the modern day equivalent of what the US and USSR did back in the 50s and  60s before the test ban treaty – a show of force that “we have nukes, too” just in case the other side had somehow forgotten about the doctrine of Mutually Assured Destruction (MAD).

Critics immediately decried the test/demonstration as irresponsible due to the cloud of debris that it immediately generated. There are currently over 600,000 pieces of debris floating around the Earth according to ESA, the remnants of satellite launches, debris from collisions, the occasional intentional destruction a la the ASAT test/demonstration, etc.  Our friends at NASA are currently tracking many of these to help keep our satellites, rockets, ISS, and astronauts safer.

So now I propose that a new doctrine is in play – one that supercedes the MAD doctrine (because c’mon, no one REALLY expects us to go nuclear against each other in this day and age, so those weapons are effectively just expensive museum pieces).  I call this the doctrine of:

Mutually Assured Exclusion (MAE)

The problem is that, unlike MAD, this doctrine is not well known or possibly actually factored into policy thinking as it should be – the fact that we already have 600,000+ pieces of debris is clear evidence of our lack of foresight and planning when it comes to littering the space around our planet.  But it is something that we must discuss now, in the context not simply of reducing debris from launches and other non-conflict-related space activity, but rather in relation to what might happen in a real conflict involving members of the space faring club on opposing sides (i’m going to ignore for the moment the scenarios of the “rogue nation” launching a nuke into orbit in some Dr. Evil-like plot to destabilize the world).

If we were to get into a shooting war with another major power, the first thing that the “weaker” of the two would do is to level the playing field as much as possible – in this case, by taking out our space-based superiority.  After all, depriving the US of GPS and spaced based imagery capabilities would have a non-trivial impact on our ability to wage a war “over there”.  Think Kirk entering the Mutara Nebula.   (“We daren’t follow them into the nebula, Sir! …. Our weapons would be useless!”)  Granted, you may still have a general or admiral who will cry, “Full Power! Damn You!”, but I doubt it.

 

Whatever the results of the shooting war on the ground, one effect that I haven’t heard much talk, but should be of supreme concern especially to those in the alt.space community, is that of MAE – the debris field created through the targeted destruction of numerous satellites could dwarf what is out there right now and make access to space virtually impossible for a long time.  If you thought they had it tough in the Millenium Falcon going through the asteroid field, you have no idea….

 

I swear, this guy is one of us August 3, 2009

Posted by Thomas Olson in CRATS, hot air, investment, offworlding, space tourism, Wasting Money.
2 comments

Much love to Cynic-in-waiting Paul Contursi, who offered us this very cynical take on on-orbit refueling by Rob Coppinger. Equally entertaining are the comments.

Didn’t we already discuss this? March 11, 2009

Posted by Thomas Olson in economy, finance, investment, offworlding, smack talk, space tourism, suborbital tourism, Wasting Money.
7 comments

I saw in Space Daily yesterday an interesting take on “spaceports”.

The money quote from the sidebar was: “All in all, there are some 20 active, or soon to be active, space launch sites around the world. Last year the total worldwide orbital launch count was 68. Simple arithmetic tells us that the average number of launches for each site is around three.”

I seem to remember writing a three-part series on “Extreme Ports” almost three years ago, now. But the buildup of infrastructure continues unabated, with nothing to insure that it will in any way pay for itself down the road.

Of course, as the article claims, many of the buildout projects are by governments, fed by hapless taxpayers, as a way to declare “SEE? WE’RE in the club too!” despite the fact that their annual flight rate might be one.

Or zero.

There are still, at minimum, five sites on the table, funded by private money, in various stages of completion. But in this global economic meltdown, I can’t foresee, near term, a great run on space tourist operations. Hope the investors in these projects are taking the long view.

So Much For Space Tourism… March 5, 2009

Posted by shubber in finance, gauntlet being dropped, Manned Space, NASA, public service announcement, smack talk, space, space tourism, suborbital tourism.
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6 comments

When Dennis Tito flew to ISS, there was an outpouring of cheering from the alt.space community because the era of space tourism was finally here.  Claims were put forth about how the $10m price tag was only the start, to be followed by a decreasing price that would make space accessible to more and more of the masses over time.

Fast forward a few years, and with the flight of Anousheh, even more of an outpouring of cheering and “this changes things” was heard from the maddening alt.space masses.  This Cynic was blasted by not a few for daring to question what her flight did for the greater “space tourism” movement.  But the thickness of their heads is matched by that of my skin, so no harm done.

While it might be a good time to point out that the Cynics were right, and that the price of trips to ISS would (contrary to the economically challenged arguments of the alt.spacers) continue to rise, as evidenced by the most recent $10m hike in price to Mr. Simoniy, there is a more interesting note that has just come out of Russia.

It appears that the Russian Space Agency has decided it wants no more tourists going to ISS after 2009.  Bummer.

Then again, this could be that much-needed boost to Mr. Bigelow’s efforts to build a space hotel, now that ISS will no longer be a govt subsidized alternative.

</crickets chirping>

Alt.Space – The Thinkers and the Lunatic Fringe October 25, 2008

Posted by shubber in CRATS, gauntlet being dropped, hot air, investment, NASA, public service announcement, smack talk, space, space tourism, suborbital tourism, venture capital, Wasting Money.
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(this post is from the Old Space Cadet)

On October 13, 2008, The Space Review carried my article The commercial suborbital sounding rocket market: a role for RLVs? http://www.thespacereview.com/article/1228/1 .

This article provoked some interesting commentary (and a lot that wasn’t so interesting). For convenience of the reader, I am reproducing the text of the article below and am then following with some comments and my responses:

The Article:
The commercial suborbital sounding rocket market: a role for RLVs?

by John M. Jurist Monday, October 13, 2008

The current total US market for high altitude sounding rockets with payloads in the 50 to 200 kilogram range and apogees in excess of 100 kilometers is roughly 100 launches annually. At an average of one million dollars charged per launch, one might conclude that a real market exists for RLVs filling this niche.
At present, this market is essentially filled by solid-fuelled ELVs. What is the potential for market entry by a newcomer with the proverbial bright idea conceived in a garage?

The RLV concept
Developing an RLV might look attractive since the vehicle can be reused and operating costs might potentially approach propellant costs per flight. If it isn’t trashed after a few flights, the manufacturing cost can be spread over a number of flights. However, developing an RLV with investment capital for this existing market makes no investment sense.

An accepted rule of thumb for high risk speculative investments is that they should return at least 18 percent annually on capital (Ref. 1). Based on a few startups that have considered this field, a total optimistic investment of perhaps $5 million might result in a workable prototype vehicle. Personally, I believe this figure to be low by some integer multiple, but we will use that development cost anyway. A return of 18 percent would require that at least $900,000 annually return to the investors from the ongoing revenue stream.

Remember that dividends are paid from corporate after tax dollars. If foreign sales are involved, ITAR and other assorted export controls become a potential issue and legal costs for regulatory compliance escalate accordingly.

The estimates given above suggest that the total revenue from the US suborbital sounding rocket market is roughly $100 million annually. At least one RLV startup is offering future flights to 100 kilometers at $250 per kilogram (Ref. 2). A 200-kg payload would result in $50,000 revenues for the flight by this startup. If the entire US market were to be captured at this admittedly attractive price, 100 flights would result in revenues of $5 million annually.

Our required after tax return of $900,000 divides out to $9,000 per flight. We assume that the hypothetical RLV operations involve a full-time team of five employees averaging $75,000 fully burdened annual salaries each (well below market averages), and we might assume $1,000 per flight for propellants. Fixed costs could be converted to a per flight basis by dividing annual costs by 100. Look at the following set of estimated expenses per flight:
RLV flight costs at 100 per year
Area Flight Cost
Investor Profit on sunk R&D $9,000
Federal Corporate Taxes (ignoring NOL carried forward) 12,300
Range and Spaceport Fees 1,000
Launch Insurance 1,000
RLV Operations Staff 3,750
Propellant 1,000
Plant (with utilities) 240
R&D for Future Development 1,000
Lost Vehicle Sinking Fund 500
Support Staff 1,000
Regulatory Compliance 500
Catchall (Including Margin) 28,810
Total Expenses Charged Against Revenues 50,000

If you don’t like my numbers, use your own. Range and spaceport fees are probably wildly underestimated in this table.

Killers in this model include R&D overruns for vehicle development, time to market (which also runs up personnel costs), failure to capture 100 percent of the market, and others. For example, if R&D costs are doubled (most R&D costs more and takes longer than anticipated), the expected minimum investor return jumps by another $9,000 per flight. If market share is only 50 percent rather than 100 percent, revenues per flight are reduced to $25,000, which eats into the “margin” substantially.

The table shown above ignores interest costs, state and local taxes of all types, and numerous other expense categories. The table also seriously underestimates payroll and regulatory compliance costs.
How can we make this work with better odds of success?

Raise prices: Rather than $50,000 per flight, competition might be possible with revenues in the $500,000 per flight range. This is an exercise in price cutting competition against existing suppliers and an established market and is critically sensitive to range and insurance costs.

Increase market size: If one believes in the “build it and they will come” philosophy, the market will increase passively. Otherwise, add a line to the above table for sales and marketing staff and another for advertising. I suspect the academic market, which is largely served by free rides manifested on existing launchers, would not enlarge much unless there are significant increases in space-related research grant funding opportunities.

ELV threat: The shift from liquid-fuelled sounding rockets to solid-fuelled vehicles was driven by at least two factors: legacy engineering from larger tactical missiles or smaller strategic missiles and by the high development cost and finicky nature of pump-fed liquid versus solid systems. At present, an alt.space startup with a largely legacy sounding rocket design is UP Aerospace (Ref. 3). This dropped their upfront development costs to the point where they can afford to enter the market. Another approach for liquid-fuelled ELVs is to use composite propellant tanks that can supply pressure-fed motors and still be low mass compared to similar strength metallic tanks. Avoiding propellant turbopumps reduces the system parts count markedly. Microcosm’s Scorpius Space Launch Company uses this approach (Ref. 4).

A solution
Get others to pay for the R&D. This was partially done by UP Aerospace as mentioned above. This also suggests a role for university-corporate partnerships in which the university side uses specific development topics for educational efforts, such as senior engineering design classes, and gives out academic credit instead of money. The university gets a piece of the corporation for its development foundation in return and rental income on some of its facilities. To some extent, this is the approach used by Garvey Spacecraft Corporation with California State University at Long Beach (Ref. 5) and by Flometrics with the San Diego State University and with the University of California at San Diego (Ref. 6). Interestingly, Garvey has flown a Microcosm composite oxidizer tank (Ref. 7).

Structures to implement a solution
An approach I favor is forming a university consortium analogous to those that design, build, and operate large cooperative research assets, such as telescopes and particle colliders. That consortium could develop a suborbital RLV or even a nanosat launcher to be used by consortium members for academic projects. Since the consortium would design and develop the vehicles, participating universities would be more likely to use them for student research under some type of cost-sharing arrangement with federal granting agencies.

Dr. Steve Harrington proposed something a bit different recently:
If you took all the money invested in alt.space projects in the last 20 years, and invested in one project, it could succeed. More underfunded projects are not what we need. The solution is for an investment and industry group to develop a business plan and get a consortium to build a vehicle. There is a lot of talent, and many people willing to work for reduced wages and invest some of their own company’s capital. Whether it is a sounding rocket, suborbital tourist vehicle or an orbit capable rocket, the final concept and go/no go decision should be made by accountants, not engineers or dreamers (Ref. 8).

I would concur with Dr. Harrington’s final remark except I would expand the decision making group to include management and business experts nominated by the consortium members with whatever technical input they needed.
References

  1. F. Eilingsfeld and D. Schaetzler: The Cost of Capital for Space Tourism Ventures. Proceedings of the 2nd ISST, Daimler-Chrysler GmbH, Berlin, German, 1999.
  2. Masten Space Systems, Inc. web site: http://masten-space.com/, Sept. 29, 2008.
  3. UP Aerospace, Inc. web site: http://www.upaerospace.com/
  4. Microcosm, Inc. web site: http://www.smad.com/ie/ieframessr2.html, Sept. 29, 2008.
  5. Garvey Spacecraft Corporation web site: http://www.garvspace.com/, Sept. 29, 2008 and John Garvey, personal communication, Aug. 13, 2008.
  6. Flometrics web site: http://www.flometrics.com/rockets/index.htm, Sept. 29, 2008.
  7. Garvey Spacecraft Corporation, loc. cit.
  8. Steve Harrington, Space Access Society Annual Meeting, Phoenix, AZ, Mar. 29, 2008.

In his varied and somewhat schizoid career, Dr. John Jurist has variously served as a professor of surgery (orthopedics) at the University of Wisconsin Medical School, as a professor of space science and engineering at the same university; and as a professor of medical sciences, physics, and mechanical and aerospace engineering in the Montana State University system. He is currently Adjunct Professor of Space Studies in the Odegard School of Aerospace Sciences at the University of North Dakota. As a lucky entrepreneur, he has invested in a number of small aerospace and related startups, but he is not an investor in any of the corporations mentioned above. He can be reached at JMJSpace@AOL.com.

A comment in RLV News by Bob Steinke:
I’d like to point out one flaw in the sounding rocket article.

Mr. Jurist says that the current market demand is 100 flights per year and figures the hypothetical company’s revenue based on 100 flights per year. But the right way to figure it is that the current demand is $100 million per year.

Most current customers are government and educational institutions that have a certain budget and they are going to spend their entire budget regardless. So even if you assume no demand growth the current customers will spend the same amount and if prices are lower they will buy more flights.

There’s no shortage of scientists who would like to send payloads. The limitation is the budgets of the funding agencies, and you can count on the budgets of government agencies to stay pretty much the same regerdless [sic] of what they get for their money.

So a company that sells flights for $50,000 and captures the entire $100,000,000 per year market could sell 2000 flights.

The bad economy and federal deficits might reduce the current market, or there may be market growth from new customers when prices go down. But if you are going to do an analysis of current markets assuming no demand change you should measure deman [sic] in dollars, not flights.
The Old Space Cadet responds:

Your point is well taken, but I actually divided the postulated total market demand by number of flights to get the per flight revenue. Also, you are assuming that the launch demand is elastic and based on the size of the money pool rather than on the total mass of the payload pool. A company working under that assumption would be betting the farm until and unless the postulated increase in demand was extremely rapid. The assumption that the entire market or some large fraction could be captured is questionable. I did use that assumption in my paper, of course, in order to overstate the case for RLVs. I would also expect that entities such as MARS would respond by flooding the academic launch “market” with surplus solid-fuelled missile motors for use at their facilities. Finally, costs that are firmly tied to flight numbers would reduce the percentage margin as flight numbers increased if the market is fixed in dollars. Thank you for your comment.

An interesting comment in Transterrestrial Musings by David Summers:
Um, some comments on his accounting (or lack thereof) in the section “RLV flight costs at 100 per year”:

  1. Federal Corporate Taxes: 12,300 – note, if you are operating at a loss, there are no taxes…
  2. R&D for Future Development: 1,000 – future development is charged against future profits, not current operations. Treat future stuff like the separate investment that it is.
  3. Catchall (Including Margin): 28,810 – um, look, if half your numbers are in the “other” category, you aren’t presenting any data.

And look – if you subtract out those numbers, the $50,000 cost per flight becomes closer to $8,000… which is pretty darn close to the “required” $9,000 per flight. And, duh, they should raise prices if the presented scenario was even close to correct.

But it isn’t correct – to my knowledge, there is not a $100M market for suborbital flights right now. (see http://www.faa.gov/about/office_org/headquarters_offices/ast/media/3Q2008%20Quarterly%20Report.pdIf anything, there are a bunch of people willing to sink $1M of their money in order to fly there own rocket… so not only would this be a dumb idea because capitalism beats a command economy, but it wouldn’t even address anyone’s needs!

The Old Space Cadet responds:

  1. If you are operating at a loss, there are no taxes, but my article assumed an 18% minimum annual return to investors. That return comes from profits and profits are taxable. Dividends are not deductible as a business expense so they are essentially paid from after tax dollars. If the company is operating at a loss, there is no return for investors (unless it is a Subchapter S Corporation passing the losses to the shareholders).
  2. R&D should be charged against future profits for accrual accounting, but suppliers and subcontractors like to be paid for their services. Since the company can’t print money like Barney Frank, Chrisopher Cox, Barack Obama and their ilk, those payments have to come from somewhere – either the net revenue stream, liquid capital, or a line of credit. Given current economic conditions, how would you rank a line of credit as a source of R&D funding? Also, how often have we heard the mantra that revenues from some space-related activity could be used to fund future development – such as orbital tourism from suborbital tourism revenues?
  3. I was wondering if anyone would catch that one. Congratulations. However, remember range fees, integration costs, and insurance. UP Aerospace, using a solid-fuelled expendable sounding rocket that is essentially a legacy design, charges roughly $200K per flight. How that is distributed against range, integration, insurance, and EBITA is not public, but I bet the terms range fees and insurance could account for a lot of that “Catchall” term instead of the $1,000 each I used in my paper. Now consider insurance. The formula presented in the paper: J. M. Jurist, S. Dinkin, D. Livingston: When physics, economics, and reality collide: The challenge of cheap orbital access, American Institute of Aeronautics and Astronautics, AIAA-2005-6620 (Sept 05) by Dr. Sam Dinkin (a Ph.D. economist and insurance expert) when coupled with the insurance costs for Falcon-1 released by Elon Musk on a per pound GLOW basis for MPL suggest that a 98 percent reliable RLV would cost roughly $75,000 per flight for risk-based insurance. Oops, there goes the “Catchall” and then some.
  4. You are right about market size. There is not a $100 million suborbital sounding rocket market. It is much less than that. That strengthens my argument about the lack of market capable of recapturing the additional expense of an RLV vs. legacy ELVs. That also reduces margin. The underlying and unstated issue is a narrow academic need. A lot of intangible factors are addressed by such a consortium arrangement.

Thank you for your comments.

A fascinating comment in Transterrestrial Musings by Stephen Fleming:
And we can all eat at Taco Bell forever. Since it’s the only restaurant to survive the Franchise Wars of 2032.

The Old Space Cadet responds: ??

A bizarre comment in Transterrestrial Musings by Adam Greenwood:
Please, all my Great Depression warning lights are blinking anyway . . . and now we have folks talking about the inefficiencies of competition and the need to form industry wide trusts run by experts. AAAAH! What’s next, anti-semitism? Oh, wait.

The Old Space Cadet responds sadly:

This comment needs no response by me.

The other dozen or so comments in Transterrestrial Musings about socialism, socialized medicine, STS, etc.:

The Old Space Cadet responds again:

What does any of this have to do with a proposed university consortium generating a reusable sounding rocket design for academic use? What does it have to do with university corporate partnerships? There are several university consortia on the space payload side, but there isn’t one on the launch side (yet).

Anybody who knows me knows that I am anything but a socialist (especially when socialized medicine comes up for discussion). Are these comments representative of alt.space thinking? If so, I weep for our spacefaring future.

In Space, Can Anybody Smell the B.S.? September 20, 2008

Posted by oldspacecadet in distracting PR, gauntlet being dropped, hot air, public service announcement, smack talk, space, space tourism, Wasting Money.
39 comments

As a sometime investor in various space-related startups, I troll the web periodically looking for potential opportunities or even just interesting technologies.

In the early afternoon of September 16th, I came across the web site for Masten Space Systems, Inc.: http://masten-space.com/

I know next to nothing about the company other than it is located in Mojave and is working toward the announced goal of developing a reusable sounding rocket with several employees. This vehicle is to use vertical take-off and vertical landing technology for several flights daily according to the web site. I also understand that Masten has made a few tethered flights and is making some progress, which is laudible, and is also looking for potential qualified investors. Since I meet the definition of a qualified investor, I looked a bit more closely at their web site main page:


In case you have trouble reading the text over the image of the Earth, a vehicle, and space, I have copied it below:

What do you want to fly into space?

Masten Space Systems can fly anything you want into space and back for $250/kg:

· Increase your TRL level for NASA

· Build your own mini-Hubble telescope

· Customize your own earth imaging platform

· Test affects of zero gravity on biological systems

· Teach innovative STEM curriculum

· Create winning science fair projects

· Fly dailyheliospheric survey flights

· Find out what happens to … in space

Note the present tense: “… can fly anything you want into space … .” Note that this does not say that they will be able to fly, or that they hope to fly, but instead states that they can fly. As far as I know, Masten Space Systems has never flown anything into space, or even past the troposphere. ”Build your own mini-Hubble telescope.” If some high school student builds a functional “mini-Hubble” and flies it into space, I strongly suspect he or she would be able to win a science fair prize. “Fly daily heliospheric survey flights”? That’s even better.

OK, I’ll bite because I am a science buff as well as an investor. I want to fly a one kilogram passive payload into space twice in 2 days. That is $500. How about the first flight in a week — Friday, September 26th, with the second the following Saturday? Just show me your AST license for commercial sounding rocket flights to 100 km, guarantee the flights to deliver my payload to space, and I will escrow the funds Monday morning for transfer as soon as you certify the delivery to space. I can ship the payload by next day air Monday morning September 22nd.

Look fellows, I know that developing a vehicle is difficult. I know that obtaining funding is difficult. I even know that you appear to have progressed along your plan. However, I also know that putting out BS like this does nothing to maintain interest in investment in space startups. In fact, it is counterproductive and misleading. Vaporware hurt the software industry, and vaporware will not get us to space. Tone it down.

THE SPACE SHOW AIRS THE FIRST EVER SPACE CYNICS ROUND TABLE DISCUSSION FEATURING A CLOSER CYNICS’ EXAMINATION OF SPECIFIC ISDC 2008 TOPICS AND SACRED COWS. June 8, 2008

Posted by drspaceshow in NASA, space tourism.
Tags: , , , , , ,
75 comments

http://archived.thespaceshow.com/shows/957-BWB-2008-06-08.mp3

Space Cynics Shubber Ali, Tom Olson, and me (DrSpace aka Professor L) met in the hotel coffee shop for an in-person discussion featuring the Cynics’ view of several of the topics discussed at ISDC 2008. This was the first ever in-person Cynics discussion and program, but we hope to offer you more at future conferences or retreats. Unfortunately, our fourth Cynic, Old Space Cadet, could not be with us this time, but as he has already heard the discussion, he wanted everyone to know he was on board with it all and listeners should consider The Old Space Cadet as being fully in sync with his fellow Cynics. We were also joined by Reda Anderson who was both crowned and dubbed Honorary Space Cynic after her stellar performance in offering wise comments, sharing experiences, and otherwise demonstrating her astute business capabilities at all times during this discussion. The gloves were taken off and our discussion was hard-hitting on many topics. We talked about several sacred cows, including the VSE and lunar development plans, space solar power, spaceports, suborbital tourism, and more. Your comments and feedback are welcome, but do it through the Space Cynics blog for all to see, right here at http://spacecynic.wordpress.com/. If you do send a note to drspace@thespaceshow.com, be advised that I will copy and paste the note to the comments section on the blog for the announcement and link to this show, so please, put your comments directly on the Cynics website. All of your views and comments are welcome, even from those of you who will strongly and rudely disagree with all or part of our discussion. You are still respected and welcome to comment although you may not feel that way after one or two Cynics address your question or comment in the true style of a Space Cynic. We hope you appreciate this candid and very frank discussion. A word to the wise, shooting the messenger does not bode well for making your discussion points with us or anyone else for that matter. We, the Cynics, are not the issue, so save your attacks on us. Instead, don’t venting your anger or frustration on a particular Cynic or all Cynics (as tempting as that may be), rather go after what has been said that pushed your buttons. State your facts, make your case, present evidence to the contrary. Make it a learning moment for us all. Shooting the messenger may be lots of fun but it does not make your case as to why you disagree or take issue with what you heard during this discussion. As Sgt. Joe Friday said decades ago, “Just the facts, Ma’am, just the facts.” Try it, I bet it will work outstandingly well, even better than an ISP Kool Aid charged Power Point!

A Gathering of Cynics June 2, 2008

Posted by shubber in Manned Space, NASA, public service announcement, smack talk, space, space tourism.
6 comments

At this weekend’s ISDC in Washington DC, we had a rare alignment of travel schedules, not unlike the grand alignment of the outer gas giants (spare us the obvious jokes, folks!).  Taking advantage of this opportunity, the three of us (David, Tom, and myself) and our honorary cynic, Reda (known to many as the first ticket holder for Rocketplane..) sat around the mike and recorded a Cynic’s take on what we saw and heard at the event.  We even talked a bit about the ISDC panel I was part of that discussed the business case for Space Solar Power (hint: it doesn’t).  The gloves are off on this one, folks.

The Space Show will air the broadcast on Sunday, June 8, and have it available as a podcast to download.

There’s an hour of your life you’ll never get back…. But hey, if we can make Reda a Cynic, there’s hope for you, too.

Parsing to Excess April 10, 2008

Posted by shubber in distracting PR, gauntlet being dropped, hot air, public service announcement, PYMWYMI, smack talk, space tourism, suborbital tourism, Wasting Money.
2 comments

(Note: the Old Space Cadet is at it again….)

In a recent comment to my April 6, 2008 post, Jon Goff quibbled about my use of the word “airline” rather than the word “airplane.” That attention to detail displays a laudable concern for precision of expression, which is a very important characteristic for an engineer to have. I would expect such precision to also be desired on the time axis.

At 08:45 MDT on April 10, I looked at a page on the Masten site. On this page, there is a note: The roadmap illustrates technical development paths and not an exact timeline since planning beyond 2009 is difficult in such a fast moving industry.” This statement rings true to The Old Space Cadet.

However, the same page also shows their XA-1.0 vehicle characterized as capable of carrying a 100 kg payload to 100 km altitude and expected by the first half of 2008. The second vehicle in the pathway is the XA-1.5, which is specified as capable of carrying a 200 kg payload to 500 km. This vehicle is expected by the end of 2008. Note that both of these vehicles are expected during 2008, yet planning beyond 2009 is “difficult.” Today is April 10, 2008. By my estimate, the end of the first half of 2008 is 81 days away. Their test vehicle apparently crashed from about 20 feet AGL last December. The Old Space Cadet suspects that 100 kg to 100 km is a lot more than 81 days away given the progress listed from the early days through 2007.

My questions to Jon Goff are: If a scale is established in which starting to take a conceptual vehicle through the design process is zero, and your stated goal of 100 kg to 100 km is 100 on that scale, where are you now? If your start date is zero and June 30, 2008 is 100, where is today on the scale? Do you really believe that you can realistically go from 100 kg at 100 km to 200 kg at 500 km in 6 additional months? Where would the XA-1.5 be located on the scale?

These kinds of assertions are why potential investors are so hard to find except for those who are blinded by the coolness of it all. The Old Space Cadet’s cynicism is growing.

What Would Warren Say? April 6, 2008

Posted by shubber in CRATS, gauntlet being dropped, investment, public service announcement, PYMWYMI, smack talk, space tourism, suborbital tourism, venture capital, Wasting Money.
32 comments

(NOTE: this post courtesy of the Old Space Cadet)

When I was a wee young lad in the mid 1960s I bought some stock because of my confidence in the company’s principal. His name was Warren Buffett. Since then, I have made a point of treating the annual reports of Berkshire Hathaway the same way many people treat outstanding textbooks. The latest is no exception. Substitute any of the terms alt.space, space tourism, new space, or suborbital tourism for the term airline in the following Buffet comments from the Berkshire Hathaway Inc. 2007 Annual Report, (Page 8):

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it. And I, to my shame, participated in this foolishness when I had Berkshire buy U.S. Air preferred stock in 1989. As the ink was drying on our check, the company went into a tailspin, and before long our preferred dividend was no longer being paid. But then we got very lucky. In one of the recurrent, but always misguided, bursts of optimism for airlines, we were actually able to sell our shares in 1998 for a hefty gain. In the decade following our sale, the company went bankrupt. Twice.

Given the regulatory environment, economic volatility, and gigantic entry barriers associated with alt.space, and given the frequent demands of the alt.spacers for “airline-like” operations for their fantasy spaceships, could Warren Buffet possibly be making a valid observation? If we are truly not quite into the DC-3 era of space flight, perhaps now is the time to think things through very carefully.

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