Saturday, August 19, 2006

Final Thoughts on SmallSat 2006

The 20th annual SmallSat meeting in Logan, Utah was attended by roughly 800 people representing industry (from Boeing on down), academia (both faculty and students), US government (USAF, USN, DOD, and NASA) and a number of foreign interests. The 3-1/2 days of talks included presentations by the NASA Administrator, the recently retired commanding general of USAF Space Command, and the head of ESA. There were more than 60 commercial exhibitors and 15 university/student exhibits.

My various random conclusions and reinforced biases from the meeting are:

(1) The military is the elephant in the room and is heavily represented at SmallSat.
(2) Both DOD and NASA are sincerely interested in seeing launch costs go down with frequent launch availability.
(3) Some creative people in the government are seeding various projects to encourage #2 within their operating constraints.
(4) There is a current surplus of launch capability: If launch costs were to be cut in half today, launch demand would change very little if at all.
(5) Current trends in technology favor smaller, special purpose satellites which drive down willingness to pay high launch costs. Who wants to pay $1 million to launch a $50 thousand satellite? That encourages waiting for a free ride on a multisatellite launch for many missions.
(6) The very smallest (picosat) payloads are primarily academic with the mix of military and commercial increasing as payload size increases. Academic payloads are less time sensitive in some regards, but academic careers can be deeply affected by prolonged launch delays.
(7) Several papers suggest there is a market for launchers of 1-10 Kg satellites with launch costs of perhaps $40K/Kg by trading time for cost notwithstanding #6.
(8) Cost per unit mass is an appropriate metric for multisatellite launchers, but cost per launch is a better metric for the smallest end of the mass spectrum.
(9) There is an alt.space industry. It attends SmallSat. This alt.space industry and its members work the system. The various space advocacy groups tend to whine about that which they don't have rather than go out and get it. They are nevertheless worth inclusion because they occasionally create some interesting ideas and are seen as the go-to guys by the media even though BS filtering is inadequate.
(10) I would pay dearly for a system in my car that would switch my cell phone into a satellite link if the phone couldn't locate usable cell towers. Cell coverage in the boondocks is spotty, and there are boondocks between Logan, Utah and the rest of civilization.

9 Comments:

Blogger Professor L said...

I too was at SmallSat this year and confirm the analysis you just read by the Oldspacecadet who was by far and away not the oldest space cadet at the conference! This means there is hope for us all in the future as we age because some of the seniors at SmallSat were still talking, presenting papers and looking to do a deal. I was very impressed by the amount of business opportunity available at SmallSat along with the professionalism represented by those attending and the exhibitors. This group of alt.space businesses is going after markets, is financed or being financed, and is being run by business people who know what they are doing. People were there to talk business, get their product out into the public in a visible way, and to explore new developments in related fields. Yes, NASA is a favorite whipping target but clearly its not seen as an obstacle to stop them from doing what they want to do and need to do. This group seems to just go do it despite the flaws in the system.

SmallSat is always at Logan, Ut as it is hosted by Utah State University. Its always the same time of year in August and the dates for the next three conferences are already set. I urge people to attend the next one, just visit www.smallsat.org. You will find some real business opportunities among the people attending, the exhibitors, and you will learn and appreciate the advanced level of networking. Also, the parties are great. The party by Orbital and the other by Space X were to die for! This is the place to be if you are developing a product or anything commercial or looking for customers or even innovative financing. For example, I learned of many Air Force programs for rides and project financial assistance that while public, are simply not well known.

I second the Oldspacecadet comments about spotty cell coverage. Boy, it sucks driving across Northern Nevada and parts of Utah that are not near civilization. Yet all the time I had XM Satellite Radio blaring away telling me every thing I ever wanted to know about Jon Benet and then some. Fortunately, XM also gave me some good music choices. But if I can get XM all the time, except when a hill blocked my southern exposure for a few seconds, why can't cellular service do the same thing? Of course we all know the answer but here is an innovative new satellite market to exploit. Does anyone know if their is additional capacity on the Iridium or Global Star constellations? Verizon and the others, are you listening?

Saturday, August 19, 2006 8:10:00 AM  
Blogger Shubber Ali said...

But if I can get XM all the time, except when a hill blocked my southern exposure for a few seconds, why can't cellular service do the same thing?

because there aren't enough cell towers around ;-)

Of course we all know the answer

oh, never mind then

but here is an innovative new satellite market to exploit. Does anyone know if their is additional capacity on the Iridium or Global Star constellations?

There is plenty of capacity - but do you have an iridium or Globalstar phone, or do you intend to buy one just to cover your short periods of desert driving? That seems like a waste of $$$

Verizon and the others, are you listening?

Yeah - and when they hear that there is ENOUGH demand to warrant the capital investment in cell towers along those roads, they will do it. Just as they did in wiring the entire drive from LA to Vegas...

Saturday, August 19, 2006 5:11:00 PM  
Blogger Monte Davis said...

Speaking of Verizon and demand: we've used their DSL service for years. Some months ago they were wiring our area for their faster "FiberOS" service. Since then we've experienced the heaviest marketing bombardment -- snail mail, email, telephone, and lately door-to-door(!?!) -- I've ever seen from a comm provider.

I'd be inclined to think they're desperate to recoup, except I know that comes from too much association with cynics.

Sunday, August 20, 2006 7:19:00 AM  
Blogger Bill White said...

If this is true:

(4) There is a current surplus of launch capability: If launch costs were to be cut in half today, launch demand would change very little if at all.

then the challenge would seem to be to create new demand.

Is there a business case for making the investment needed to lower launch costs?

Monday, August 21, 2006 11:54:00 AM  
Blogger Shubber Ali said...

Is there a business case for making the investment needed to lower launch costs?

Sure there is - it's called the low-cost strategy, which is well known in almost every other industry on the planet. In a relatively inelastic/fixed market, if you can be the low cost producer, you can still win. Dell did it for PCs, Southwest for airlines... and i'm betting on SpaceX for ELVs.

But at the market clearing price of $20m/launch for a Falcon 1, it's still way too expensive to open the new markets most kool-aid drinkers fantasize about.

Monday, August 21, 2006 12:47:00 PM  
Blogger Randy said...

(Great, to actually 'comment' I've now had to become a blogger thanks guys ;o)

Couple of comments;
Glad you folks enjoyed small-sat are you planning on coming back for the National Space Society Regional Space Development Conference in October?
Info here: http://www.utahspace.org/main/index.html

(Gotta 'plug' it, it's in my 'home' town and I've always complained that Ogden doesn't get anything 'good' :o)

"Spaceports": My 'wonder' has always been why build 'new' when you can find what appears to be the 'perfect' spaceport for the kind of activities that are planned easier and cheaper?
Your comments on driving to Utah lead me to believe you've passed through/by what I would have considered a 'perfect' canidate spaceport.

Wendover Utah/Nevada.

West Wendover has the hotels/casinos for the entertainment of the 'guest' and visitors, while East Wendover has the depressed economy, workforce and of course a complete ex-Air Force base with access to the closed airspace over a government weapons range in which to fly your space flights.
Perfect... But what do I know? I'm not Virgin Galactic or Space Adventures :o)

On the 'low-cost' launch strategies; If I may I'd like to get some opinions on a proposal that a freind put forth:
http://radio.weblogs.com/0119080/stories/2003/02/22/interestsMuol.html

This to me sound like a 'logical' and actually fairly 'practical' way of building up the general uses and use of space.

Or am I just looking for a 'drink?'

Randy

Monday, August 21, 2006 3:24:00 PM  
Blogger Bill White said...

Bill: Is there a business case for making the investment needed to lower launch costs?

Shubber: Sure there is - it's called the low-cost strategy, which is well known in almost every other industry on the planet. In a relatively inelastic/fixed market, if you can be the low cost producer, you can still win. Dell did it for PCs, Southwest for airlines... and i'm betting on SpaceX for ELVs.

But at the market clearing price of $20m/launch for a Falcon 1, it's still way too expensive to open the new markets most kool-aid drinkers fantasize about.


= = =

At a market clearing price of $20M for a Falcon 1, Musk cannot beat Dnepr in an open market. Boeing walked away from the commercial launch business for its Delta line and now uses SeaLaunch (Zenit based). Far more money can be made by doing arbitrage with Russian lift rather than building new cheaper rockets from scratch. Boeing (SeaLaunch) and Lockheed (ILS) are real world examples of doing the arbitrage thing.

But why do you believe the personal computer market is inelastic/fixed? While Dell may earn less per box sold that others, their business model require selling lots and lots of units. Southwest Airlines? They continue to expand and if we cannot take water bottles onboard, airline travel will diminish. Hardly inelastic.

SpaceX remains closely held (by Musk) and is not investment grade precisely because Elon Musk is doing it for love, not money. Musk hopes to sell a gadzillion rockets however he appears to understand fully that he might not recoup his investment. And other than Elon Musk, who is investing real money seeking to lower launch costs.

Without new demand, is there a business case for spending money seeking to lower launch costs? If not, where will new demand come from?

Tuesday, August 22, 2006 6:44:00 AM  
Blogger Monte Davis said...

Good stuff, Bill. BTW, I'd like to reiterate a standing request for any background data anyone may have picked up on what goes into Russian and Ukrainian launch costs (as opposed to their prices).

There's lots of very plausible handwaving about their having set up infrastructure for [semi-]mass production since the 1960s, low labor costs, etc., but hardly any actual numbers. People I consider real experts on launch economics, like Henry Hertzberg, basically throw up their hands and say "It's the post-Soviet wild west; what makes you think they have real numbers?"

But I keep hoping :-)

Tuesday, August 22, 2006 8:30:00 AM  
Blogger Monte Davis said...

..umm, make that Henry Hertzfeld

Tuesday, August 22, 2006 8:31:00 AM  

Post a Comment

Links to this post:

Create a Link

<< Home