A Division of SpaceWorks Engineering, Inc. (SEI) IAC-08-E6.1.5 59th International Astronautical Congress (IAC), 29 September – 03 October 2008, Glasgow, Scotland, UK Reviewing the New Space Entrepreneurs: Origins, Management, And Influence Version A Mr. A.C. Charania President | SpaceWorks Commercial | [email protected] | 1+770.379.8006 | 1+770.379.8001 (Fax) Mr. Amaresh Kollipara Founder and Managing Partner | Earth2Orbit, LLC | [email protected] Note: opinions that are expressed here are solely those of authors and do not represent any official viewpoint of their respective organizations 1 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved INTRODUCTION 2 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved SpaceWorks Commercial is a division within SpaceWorks Engineering, Inc. (SEI) - a leader in advanced space concept design and analysis. SpaceWorks Commercial deals with commercial and international space ventures. 3 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved SAMPLE SPACEWORKS ENGINEERING, INC. (SEI) PROJECTS 4 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved BACKGROUND AND MOTIVATIONS 5 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved “A review of history’s ambitious projects -- those that have garnered an uncommonly large fraction of a nation’s gross domestic product -- demonstrates that only three drivers have been sufficient to create them: defense (e.g. Great Wall of China, Manhattan Project, Apollo Project), the promise of economic return (e.g. Columbus Voyages, Magellan Voyages, Tennessee Valley Authority), and the praise of power (e.g. Pyramids, Cathedrals, Palaces). −Astrophysicist Neil deGrasse Tyson, director of New York City's Hayden Planetarium 6 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − Perspectives on entrepreneurs − French economist Jean-Baptiste described the entrepreneur as one who “shifts economic resources out of an area of lower and into an area of higher productivity and greater yield,” − Austrian economist Joseph Schumpeter states that successful entrepreneurship, he sets off a chain reaction, encouraging other entrepreneurs to iterate upon and ultimately propagate the innovation to the point of “creative destruction,” a state at which the new venture and all its related ventures effectively render existing products, services, and business models obsolete. − Peter Drucker: “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity,” − Israel Kirzner, who identifies “alertness” as the entrepreneur’s most important trait − Entrepreneurship definition [Roger L. Martin and Sally Osberg] −The combination of a context in which an opportunity is situated, a set of personal characteristics required to identify and pursue this opportunity, and the creation of a particular outcome. − “The entrepreneur is attracted to this suboptimal equilibrium, seeing embedded in it an opportunity to provide a new solution, product, service, or process” − Inspired or frustrated THE ENTREPRENEUR 7 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − What defines the NewSpace industry? − The term has been utilized over the last few years to describe the range of new, entrepreneurial focused space companies (another term is alt.space). − One characteristic offered here is that most of the NewSpace companies are those companies that have come in the wake of or offered substantially different products than during the mobile satellite system (MSS) and global satellite telephony ventures of the late 1990s − These included the firms of Iridium (66 satellites) and Globalstar (48 satellites), both of which eventually went bankrupt, but still exist today after various technical and management restructuring efforts. − There current generation of companies that make up the NewSpace industry including many launch providers. − If one defines the space economy broadly to include hardware (launch vehicle, satellites, etc.) and services, then space launch is a small component of the commercial space industry (but an important one nonetheless). − Even so, this presentation focuses on many of the NewSpace companies devoted to development for space launch services. Thus even at the outset the authors acknowledge the skewed nature of the following narrative wherein most revenue in the space industry is generated from services. NEWSPACE DEFINITIONS 8 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − AirLaunch LLC − Armadillo Aerospace − Blue Origin − Rocketplane Global − Space Adventures, Inc. − Virgin Galactic − Zero Gravity Corporation − Bigelow Aerospace − Ecliptic Enterprises Corporation − XCOR Aerospace, Inc. − SpaceDev (OTCBB: SPDV) − Transformational Space Corporation − JP Aerospace − Masten Space − Orion Propulsion, Inc − SpaceHab − Orbital Sciences Corporation − Surrey Satellite − ClydeSpace − Innovative Solutions In Space (ISSI) SAMPLE NEWSPACE COMPANIES 9 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − 1. EMERGING SPACE COMMUNITY IS REAL AND READY TO WORK; AT BEST IT IS THE MOST EFFICIENT PROVIDER, AT A MINIMUM AS AN OFF-RAMP. − A mistaken perception of relative risk should not preclude use of the emerging commercial space community (or “new space”) in exploration activities. These firms offer the government efficiency, something quite at odds with the traditional aerospace contracting process. − 2. DON’T JUST ENGAGE, BUT LEARN HOW TO ENGAGE. − Bureaucracy and inconsistency (i.e. changing requirements, non fixed-priced contracts, etc.) are large barriers to commercial sector involvement with the government. − 3. NASA HAS A LEGITIMATE ROLE TO PLAY. − NASA can still act as a champion for exploration in general. NASA could also utilize commercial expertise in the promotion of the VSE (e.g. ISS crew/cargo support). − 4. BUY, DO NOT DEVELOP. − NASA should not develop ETO launch services but buy where appropriate. − 5. MANAGE PRIZES APPROPRIATELY. − The government should continue the use of prizes but be careful in their applicability. Prizes for activities with excessive risk will not be attractive for commercial companies. − 6. OTHER SERVICES BEYOND TOURISM. − Telecommunications and ground services may be immediate areas of additional commercialization beyond sub-orbital and orbital tourism. − 7. BRIDGE BUILDING BETWEEN EMERGING AND TRADITIONAL SPACE. − he government should encourage partnerships between the emerging/“new space” community and the traditional aerospace industrial base. − 8. BUSINESS IS INTERNATIONAL, SPACE IS INTERNATIONAL. − The government, along with industry, should reexamine existing International Traffic In Arms (ITAR) regulations. − 9. BASIC TECHNOLOGY RESEARCH. − The more appropriate technologies for the government to fund are those fundamental, enabling technologies that affect the major design disciplines (power, propulsion, and structures). − 10. MORE FOCUSED DIALOGUE. − This type of dialogue is a valuable activity and should go forward, yet with a broad variety of voices and with facilitated discussions. SOME PERSPECTIVES OF THE NEWSPACE COMMUNITY Source: EDS Workshops Summary Report, SpaceWorks Engineering, 2005 10 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − “A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change” [Wikipedia] − Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact s/he has on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors. − “If we can be one of the companies that makes it possible for humans to become a multi-planetary species, that would be the Holy Grail. It sounds a bit crazy but it's going to happen, and only if people build the means to do so. We're making progress toward a greater philosophical goal while building a sound business.” − Elon Musk, SpaceX THE NEWSPACE ENTREPRENEUR AS A SOCIAL ENTREPRENEUR? 11 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved OBSERVATIONS 12 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved Source: The Space Report 2008: The Authoritative Guide to Global Space Activity, http://www.thespacereport.org/ NOW: GLOBAL SPACE ACTIVITY (2007, FROM THE SPACE REPORT) 13 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved Historical Launches and Forecast 2008-2017 Sustained out-year activity in 2008 forecast 2008 Non-Geosynchronous Orbits Commercial Space Transportation Forecast, John Sloan, Federal Aviation Administration, Office of Commercial Space Transportation, May 16, 2008. NEXT: MIS-FORECASTING THE FUTURE 14 Copyright ©2008, SpaceWorks Commercial, A Division of SpaceWorks Engineering, Inc. (SEI) All Rights Reserved − Lack of general knowledge in the aerospace