Author Topic: SpaceX vs BlueOrigin - Whose Approach / Business Strategy is Better?  (Read 59154 times)

Offline sanman

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Like their founders Elon Musk and Jeff Bezos, SpaceX and Blue Origin have differences in their respective approaches, strategies, and paths to the future.

Whose seems likely to bear better fruit, extrapolating purely based on what we currently know of them?

SpaceX seems to have interwoven iterative R&D flight-testing with immediate servicing of govt launch contracts and private payload launches, for revenue purposes. In that interest, it has sought to achieve orbital flight first, then reusability, and finally leaving crewed flight for last.

Blue Origin has kept itself more private and undercover, while pursuing a focus on manned spaceflight for space tourism, along with reusability, while deferring higher orbital flight velocities for later. Meanwhile, it has signed R&D deals with other SpaceX competitors such as ULA with its specialization for cargo delivery, to defray costs.

What are the various pro's and cons of the technical and business strategies of each?

To me, one advantage in the Blue Origin approach may be the ability to rush into the mass market for space tourism sooner than SpaceX could. For basic space tourism, suborbital flight is all you need to start cashing in. Orbital spaceflight for tourism purposes may offer diminishing returns relative to the cost expenditure. Because suborbital brings spaceflight directly to the masses much sooner, then Blue Origin could get the early adopters and early enthusiasts who are willing to pay more to enjoy the experience sooner.

What are the opinions on how the market for suborbital space tourism stacks up revenue-wise, in comparison to conventional satellite launches and ISS resupply? Perhaps only time will tell, and may throw up some surprises.

Offline Katana

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Financing differences:

Musk: sold Paypal early to startup SpaceX, then grow SpaceX in bootstrap mode, plus VC.
Bezos: kept Amazon up to now, and power Blue Origin with tap-off mode.

Revenue of the whole launcher market: 4~5B, a small niche to grow.

Revenue of Space X: 0.5B
Valuation of SpaceX: 12B
Shares of Musk: unknown, after lots of rounds.

R&D cost from BE-2 to BE-3: 0.5B
Revenue of Amazon: 88B
Valuation of Amazon: 241B
Shares of Bezos: 10~20%?

Selling the same amount of shares to VC / capital market could release much more cash to Bezos.
« Last Edit: 11/25/2015 01:43 PM by Katana »

Offline sanman

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Yes, it's been mentioned numerous times that Bezos is much more deep-pocketed than Musk, and that enables/affords a different approach by Bezos.

Musk is operating on a thinner margin, trying to earn/pay as he goes, while Bezos can do his deep-pocketed stealth development effort, and just show off the successes when he feels it's warranted.

And yet there seems to be a race going on between these 2 very accomplished pioneering gentlemen.

Is it a race to market? Is it a race for posterity in history?

It doesn't seem like Musk has been looking over his shoulder at Bezos. Musk and Spacex seem to have simply been proceeding according to timelines set with their main customer NASA.

I'm just trying to figure out whose approach will be vindicated in the long run, as the more effective path to space. Recognizing that Bezos has had far more budgetary latitude from the start, was the decision to go direct for manned suborbital space tourism better than trying to COTS his way to space? Is that potential suborbital tourist market a reasonably sound bet? Is it a better bet than cargo-to-orbit first and crewed-to-orbit later? Will he logically extend suborbital space tourism to orbital?

It seems from past videos, there's a strong hint of going to the Moon eventually. Will Bezos focus on the Moon, even while Musk has been famously focusing on Mars? It seems reasonable to assume that Blue Origin can take people to the moon before SpaceX can take people to Mars, since the latter is an altogether more difficult (albeit more impressive) achievement.

Now that the Cold War is left behind, will SpaceX vs BlueOrigin become the great space race of our times?
Who's more deserving of the title of underdog here? As has been said, Bezos has had deeper pockets, on the other hand he's also coming from behind, with SpaceX having long been in the lead.

Can tapping the space tourist market earlier through suborbital then accelerate advancements for Blue faster than what Spacex has been able to achieve through COTS?
« Last Edit: 11/25/2015 01:53 PM by sanman »

Online MattMason

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You're comparing totally different goals.

SpaceX's prime objective is to colonize Mars, full stop. To do this, SpaceX is making systematic ventures that develop launch vehicles and spacecraft that deliver human and unmanned payloads to LEO. These results fund larger vehicles and technology that eventually reach Mars. Unlike Blue Origin, SpaceX does not show any interests in space tourism or commercial HSF for the masses.

Blue Origin, specifically Bezos himself, has said explicitly that he is strictly interested in commercial human spaceflight, and New Shepard is specifically designed for human space suborbital joyrides, like Virgin Galactic's troubled SpaceShipTwo. This article appears to summarize his current goals. He's secretive and hasn't spelled out his long-term HSF goals, even in LEO. He has yet to consider launching private satellites as part of any funding initiative. Unlike SpaceX, Blue Origin is currently 100% privately funded by Bezos himself.
"Why is the logo on the side of a rocket so important?"
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Offline sanman

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Presumably, when Blue Origin gets its commercial spaceflight operation up and running, then it will be priced for self-sustenance, and no longer rely on Bezos' personal funding.

Thusfar, it's very early on in Musk's plans to get to Mars, and it's not clear how many detours may have to be taken in the meantime, as circumstances arise.
Is it a mistake for Musk to pin himself to Mars right now? Is it possible that if something like suborbital takes off and catches fire and proves to be quite lucrative, that SpaceX could feel compelled to revise its plans in order not to miss out?

BlueOrigin's name seems to imply a neverending voyage outwards, until the Earth becomes that "pale blue dot" which Carl Sagan spoke of. But from their videos, it seems like the Moon is on their path outward. Blue's plan to get there seems much less clear, and I notice there's much less Kremlinology done on BlueOrigin as compared to SpaceX, since Bezos reveals far less than Musk does.

Will we see a change in Bezos' style in the future, as more of his plans crystallize into tangible achievements? Will he be more forthcoming eventually, at some point? Or will he always keep his cards closer to his chest, even as commercial flights are started? How far away does it appear BlueOrigin is from commercial spaceflights?


Offline NovaSilisko

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Oh boy, I was afraid of this. As soon as I saw the Blue Origin video, I just knew it was going to turn into a presumably never-ending battle between Blue fans and SpaceX fans on many levels.

I suppose this thread can be the main battleground so it doesn't take over other areas.

Offline sanman

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Okay, but I don't really have any intrinsic preference, myself - I'm hoping each approach will yield its respective benefits. If anything, this little space race is proof that a multi-competitor playing field can produce multi-fold improvements.

What practical reasons are there to favor one effort over another? Is the market not big enough to sustain both? Is it even possible for one to chase the other out of the market space, or can't each find its sustainable niche?

I see that a lot of longtime SpaceX fans may have become emotionally invested in SpaceX's efforts, so that they want SpaceX to be the big victor, and see its approach vindicated. On the other hand, it's the market which will ultimately decide.

SpaceX has pretty much gone it alone - but BlueOrigin has made strategic deals with entities like ULA. Are there any other entities with whom BlueOrigin might form further alliances with in the future? Again, somehow I'm thinking that Bezos could do a tie-up with Branson to allow him to purchase and operate his suborbital vehicle, while BlueOrigin continues to progress to higher endeavors.

Does anyone thing that Bezos could make BlueOrigin a publicly traded entity down the road?
« Last Edit: 11/25/2015 03:47 PM by sanman »

Offline leaflion

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They both have the right approach given their goals.

Blue's goal seems to be to "Have millions of people living in a working in space."  So they are heavily focused on lower the cost of HSF.  Suborbital is the only large enough market to be able to have enough people fly to realize cost savings.  Then once they have lowered the cost with suborbital, they can start doing orbital tourism, and because of the lower costs due to the suborbital market maturing, there will be a big enough market to be able to mature and lower the cost yet again.  Launching payloads will not be that effective since humans make the problem 2X more complex.

Musk wants to go to Mars. (note how I say Musk not Spacex-I have no guarantee that all of Spacex's owners share that passion)  To do this mostly he needs to be able to launch tons of cargo cheaply.  So he is working on that problem first.  He won't need to launch nearly as many people to achieve his goal, but will need more energetic launches.  So he has gone down the path of make it big first, then put people on it.  Makes total sense.

Personally, I think they must secretly be in cahoots, because they way things are going Blue is working on solving one half of the puzzle while Spacex is working on the other half. (of course, there is some overlap, as seen yesterday)  Then in 10-15 years when they get to the really tough parts that are no longer overlapping they will be in the perfect position to help each other out.

Offline SimonFD

"one advantage in the Blue Origin approach may be the ability to rush into the mass market for space tourism"

I'm not sure how much of a market there is for sub-orbital flights. Virgin Galactic had a flurry of sign-ups which peaked and then seemingly stayed about the same up until last years disaster. I suspect it will make people very wary about expressing a (financial) interest in Blue Origin's New Shepard. Then, of course, there's the money. What will a 4 minute free-fall trip cost? I suspect substantially less than VG as Amazon's business model seems to be run-at-a-loss.

I do agree with others here that SpaceX and Blue Origin are going down separate paths to their goals (whatever BO's might be) and as such aren't seemingly competing with each other. I don't believe there'a an absolute "right" or "wrong" approach, just a search for one that works. From that perspective, both Elon and Jeff are doing the "right" thing for themselves.
Space is big! Really big! You just won't believe how vastly, hugely, mind- bogglingly big it is! I mean, you may think it's a long way down the road to the chemist's, but that's just peanuts to space. Listen............

Online edkyle99

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SpaceX is thriving on sizable government contracts, augmented by a healthy commercial payload business.  It is a modern "commercial" version of the classic defense contractor.

Blue Origin has only talked about joy rides for paying customers, which seems to me unlikely to pay the rent long term.  I suspect that the company has eyes on some of the same business that SpaceX is working.  Blue is a decade behind, but it may be leapfrogging SpaceX on the propulsion side with BE-3 and BE-4.  BE-4, of course, is being developed for ULA too, which is a conduit for some of that government money to Blue. 

Personally, I see Blue thriving on those engines more than anything.  Unlike SpaceX, they've already sold one to another company.  I think they will sell more before it is all said and done.

 - Ed Kyle
« Last Edit: 11/25/2015 04:16 PM by edkyle99 »

Offline bad_astra

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I suspect that race will turn out to be Vulcan vs Falcon. The consumer wins.
"Contact Light" -Buzz Aldrin

Online MattMason

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"one advantage in the Blue Origin approach may be the ability to rush into the mass market for space tourism"

I'm not sure how much of a market there is for sub-orbital flights. Virgin Galactic had a flurry of sign-ups which peaked and then seemingly stayed about the same up until last years disaster. I suspect it will make people very wary about expressing a (financial) interest in Blue Origin's New Shepard. Then, of course, there's the money. What will a 4 minute free-fall trip cost? I suspect substantially less than VG as Amazon's business model seems to be run-at-a-loss.

I do agree with others here that SpaceX and Blue Origin are going down separate paths to their goals (whatever BO's might be) and as such aren't seemingly competing with each other. I don't believe there'a an absolute "right" or "wrong" approach, just a search for one that works. From that perspective, both Elon and Jeff are doing the "right" thing for themselves.

Humans are thrillseekers, or the existence of amusement parks would be meaningless. But we tend to want cheap thrills. I'm sure that it will cost several thousand dollars for that New Shepard ride, but with enough interest, a few dollars could be found. I don't think there's a lot of disposable income for that, however.

What I see Jeff looking to do, unlike Musk, are space habitats. Might cost a bit to get you into space but is comporably cheap to keep you there with the right infrastructure. People do spend thousands of dollars now for multi-week cruises and other trips, so why not try something really different? The catch here is having enough clients and enough rooms and recreation to accommodate them, with reliable resources for launches, returns, emergency returns, supplies, and staff. Daunting, but not as scary as making a profit from joyrides, IMO. That's why I believe Bezos "Very Big Brother" lipstick special rocket is part of that strategy.

But how fast will the BE-4 engine, the heart of VBB and UMD Vulcan, be ready?
"Why is the logo on the side of a rocket so important?"
"So you can find the pieces." -Jim, the Steely Eyed

Offline Lars-J

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The key differences between SX and BO - SX plays wide, fast, and loose accepting more losses, while BO is narrow, slow, and tight.

SX fast - "well that didn't work, add grid fins in fraction of a year, it may work, oh, and add FT and half a dozen other changes in more better". Serial numbers in handfuls. BO slow - "hmm failure on booster recovery, remedy systems and take enough time to prove, possibly years, before next flight". Increment in serial number.

How do you know? BO is far more secretive, and has deeper pockets, so they can just be quiet until they have something to show. We don't know how many design iterations they have gone through, or how the significant the changes have been from earlier - failed - attempts.

Offline Darkseraph

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The companies who ought to be compared are Blue Origin vs Virgin Galactic. Blue are five or more years away from entering the orbital market. However, their suborbital work has some significant advantages over what Virgin is doing.

- Their owner has deeper pockets so they don't rely on publicity. They can work in private until it's done!

- There are no pilots to kill in the testing phase. They can iron out most of the flaws before killing someone.

- Not having the booster part of the crew module structure is an obvious safety advantage.

- They have an escape system and simpler aerodynamics.

- It is very scalable, SS2 is not.


The unknowns here are obviously cost. And that is connected to how much service these vehicles need between flights and how many flights they can do.
"For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled." R.P.Feynman

Online LastStarFighter

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The key differences between SX and BO - SX plays wide, fast, and loose accepting more losses, while BO is narrow, slow, and tight.

SX fast - "well that didn't work, add grid fins in fraction of a year, it may work, oh, and add FT and half a dozen other changes in more better". Serial numbers in handfuls. BO slow - "hmm failure on booster recovery, remedy systems and take enough time to prove, possibly years, before next flight". Increment in serial number.

How do you know? BO is far more secretive, and has deeper pockets, so they can just be quiet until they have something to show. We don't know how many design iterations they have gone through, or how the significant the changes have been from earlier - failed - attempts.

While Blue Origin is far more secretive... I know from chatting with one of them last year that they hate being called "BO" and prefer to be called "Blue" if people want to abbreviate ;)

Offline feynmanrules

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Personally, I think they must secretly be in cahoots, because they way things are going Blue is working on solving one half of the puzzle while Spacex is working on the other half. (of course, there is some overlap, as seen yesterday)  Then in 10-15 years when they get to the really tough parts that are no longer overlapping they will be in the perfect position to help each other out.

i don't know about being in cahoots because there is some ego and attention jostling going on here.   

besides that you're exactly right, each adopted a vision and goals based on very different starting points.   both can be successful and have some friendly competition in these areas of importance where they overlap.    this is want we need if we're to actually have people living on moon or mars.   great companies as they both have demonstrated, neither is perfect.   it's better to have two diversified ways to get home than one (see 'the martian' :).  i expect once musk gets his first landing they'll be more of this type of message worked in when musk mentions BO than he has in the past.   

it's a bit enivitable that there's going to be some BO vs spx conversations now... if only because musk as the little guy w/spx and tesla favors david v golliath imagery (ULA or big3 automakers are the "bad guys").     it's not reality, but it works better when your supporters can not only relate to but fill in a story.   

so as of yesterday david has a wealthier, more reserved older brother who seems like he might also throw a mean stone.   nice thanksgiving twist...


Offline QuantumG

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Isn't it funny how Blue Origin only left sleepy hibernation mode after Elon dissed them? I bet they're celebrating now. It makes you wonder if they'll go back to sleep now that they have their victory.
When someone is wishing for a pony, there's little to be gained by suggesting a unicorn would be ever better.. ya know, unless it's sarcasm.

Offline Lars-J

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While Blue Origin is far more secretive... I know from chatting with one of them last year that they hate being called "BO" and prefer to be called "Blue" if people want to abbreviate ;)

If they are bothered by that, perhaps they should have thought of that before they named their company Blue Origin. They can fight it to the end of time if they want, but people will keep using the abbreviated company name.

Offline rayleighscatter

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They can fight it to the end of time if they want, but people will keep using the abbreviated company name.
If Musk can convince people that the abbreviation for Space Exploration Technologies Corporation is "SpaceX" then Bezos still has a chance to get "Blue" to catch on.

Online Coastal Ron

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SpaceX is thriving on sizable government contracts, augmented by a healthy commercial payload business.  It is a modern "commercial" version of the classic defense contractor.

Blue Origin has only talked about joy rides for paying customers, which seems to me unlikely to pay the rent long term.  I suspect that the company has eyes on some of the same business that SpaceX is working.

If Blue Origin's goal is to increase the number of people living and working in space, then it would seem like they would start going after some of the same markets that SpaceX is targeting.

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Blue is a decade behind, but it may be leapfrogging SpaceX on the propulsion side with BE-3 and BE-4.

Not sure how you figure that.  The Merlin 1D ithrust-to-weight ratio is the highest ever achieved for a rocket engine, has a 70-100% throttle capability, and has been constantly evolved and matured over more than a decade.  For domestic use, which I would call Earth local space, the Merlin 1D is hard to beat on any metric.

Plus SpaceX is well into developing their own methane fueled engine, the Raptor, which will have almost 3X the amount of thrust the BE-4 does.

So from a general standpoint, I'm not sure where Blue Origin has any advantages.  It could be argued that they are at the same level of capabilities that SpaceX is, but leapfrogging?  I'd have to see what the metrics are.

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BE-4, of course, is being developed for ULA too, which is a conduit for some of that government money to Blue.

Well, they are only a commercial contractor to a government contractor.  They would never sell directly to the government.
 
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Personally, I see Blue thriving on those engines more than anything.  Unlike SpaceX, they've already sold one to another company.  I think they will sell more before it is all said and done.

Being a component supplier to what could be the weakest competitor in a market with only two competitors is not a very good position to be in.  And there is not a lot of upside in that market unless ULA figures out how to compete price-wise with SpaceX (and ESA, Russia, China, Japan, etc.), which means Blue Origin won't be making a lot of profit on their engines.

The real profit opportunity for Blue Origin is the same one that SpaceX is pursuing, which is creating and selling the end product.  And they have the financial backing to pursue that market better than most.  Selling engines will be a side business, and it may be a profitable one, but developing their own services will likely be a better play for them.

My $0.02
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

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