Author Topic: Comparing Astra and Rocket Lab business models  (Read 13686 times)

Offline PM3

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Comparing Astra and Rocket Lab business models
« on: 02/10/2020 11:04 am »
edit/gongora:  Split off from the Astra thread as the numbers in the examples have started diverging greatly from what Astra is intending to do.

Satellite insurance risks and therefore costs are directly linked to the reliability of the launcher.

Exactly. And on the price of the launch which is insured. Let's do an example:

We want to send 100 kg of satellite(s) to SSO. We payed $ 3 Mio. for the satellite(s) and now want to buy a dedicated launch.

Rocket Lab:

- launch costs $ 6 M
- let's assume 99 % launcher reliability (one failure in 100 launches)
- insurance must cover the 1 % failures + management costs and earn some money, so insurance premium may be about 3 % of total costs (check: Ariane 5 insurance premiums are around 3 %)

On the bottom line, you will pay ($ 3+6 M) * 1.03 = $ 9.27 M total

Astra:

- launch costs $ 2.5 M
- let's assume a launcher reliability of 80 % (one failure in 5 launches)
- 19 % less reliability => ~ 19 % more insurance costs, i.e. ~ 22 % of total costs

On the bottom line, you will pay ($ 3+2.5 M) * 1.22 = $ 6.71 M total.

So you save lots of the money when launching with Astra. No matter if it is a single satellite or 20 nanosats, and including full insurance.

The cheaper your satellites are, the more you will save with Astra (in % of total costs). So Astra will get the high volume constellation contracts and achieve the high launch cadence, which is necessary to earn money with cheap launches. Rocket Lab will get the low-volume contracts for rather expensive custom satellites and stay with a lower launch cadence.

This all presuming that Astra manages 80 % reliability and scaling production to at least ~ 2 rockets per month.


Btw, Astra is not tied to Kodiak, e.g. the DARPA launches will go from two different sites. Launch sites would compete for high volume Astra launches, which gives negotiation power to Astra. Don't believe that they would pay $ 0.5 M per launch for a high launch frequency at Kodiak.
« Last Edit: 02/10/2020 03:36 pm by PM3 »
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Offline envy887

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Re: Re: Astra Space (small launch vehicle)
« Reply #1 on: 02/10/2020 01:15 pm »
iif the launcher is unproven or consistently unreliable you may not even be able to get insurance on your payload, or on the flight costs. You are playing with Gambler's Ruin i.e. just because the last one failed doesn't mean the next one will fly and vice versa. ...

If the vehicle reliably fails at a 20% clip, insurers will gladly charge 30% of the insured value to cover it. That's not gambling - it's a guaranteed profit as long as they can cover enough launches.
« Last Edit: 02/10/2020 01:16 pm by envy887 »

Offline edzieba

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Re: Re: Astra Space (small launch vehicle)
« Reply #2 on: 02/10/2020 01:18 pm »
To use the earlier Fedex analogy:

If you have a Priceless Ming Vase you want to ship, you send it via a white-glove courier service and insure it up the wazoo. You only have one, and have no real way to replace it. You play white-glove-courier prices and maximum-gouge insurance costs due to that risk.

If you want to ship 10,000 moulded porcelain vases that all need to go to slightly different places, then you Fedex them in individual boxes or small packs. Some may break in transit, so you make some extras. Each vase may cost a few bucks, and each shipping charge may be close to the same. It's inconvenient to have them break and need to send another shipment, but it may well be cheaper to skip insurance altogether if the vases and shipping cost little enough that you can afford to lose a few.

Online gongora

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Re: Re: Astra Space (small launch vehicle)
« Reply #3 on: 02/10/2020 01:25 pm »
Astra is targeting reliabilty far higher than 80%. 

Offline Lars-J

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Re: Comparing Astra and Rocket Lab business models
« Reply #4 on: 02/10/2020 05:42 pm »
I'm still not sure that targeting a 95% reliability (which I assume they are) is going to be enough.

Payloads are still important to smaller customers. And whereas large constellations can handles such losses more easily, I remain skeptical that smallsat launches will capture much of that market, when Soyuz and F9 can launch constellations more effectively and cheaper.

Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #5 on: 02/10/2020 05:42 pm »
RL prices aren't set in concrete, plus they are moving to a RLV.

Offline gmbnz

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Re: Comparing Astra and Rocket Lab business models
« Reply #6 on: 02/10/2020 10:06 pm »
If Astra need 100 flights per year to be profitable I hope they have a lot of runway in their financing... Both because they won't have the desired launch rate for a while but also because I bet those early rockets cost a lot more than the later ones.

All companies (SpaceX, RL, VO) have missed both launch and then scaling targets by miles. The fact that they are still going suggests that whoever is holding onto the purse strings at those companies is more realistic than the PR machines.

Not really related to Astra but here's one of my all time favourite hypes - if the business plan actually required this then it would be bad:
https://twitter.com/jeff_foust/status/964214407306928128

RL prices aren't set in concrete, plus they are moving to a RLV.
I haven't seen any pricing the a reused stage, has RL ever said anything? It's be interesting to know if savings are a similar proportion to SpaceX.

Offline ringsider

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Re: Re: Astra Space (small launch vehicle)
« Reply #7 on: 02/10/2020 10:44 pm »
iif the launcher is unproven or consistently unreliable you may not even be able to get insurance on your payload, or on the flight costs. You are playing with Gambler's Ruin i.e. just because the last one failed doesn't mean the next one will fly and vice versa. ...

If the vehicle reliably fails at a 20% clip, insurers will gladly charge 30% of the insured value to cover it. That's not gambling - it's a guaranteed profit as long as they can cover enough launches.

I would reply explaining why that is incorrect but I don't like that his thread was split off from the Astra discussion.
« Last Edit: 02/10/2020 10:45 pm by ringsider »

Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #8 on: 02/10/2020 11:17 pm »


If Astra need 100 flights per year to be profitable I hope they have a lot of runway in their financing... Both because they won't have the desired launch rate for a while but also because I bet those early rockets cost a lot more than the later ones.

All companies (SpaceX, RL, VO) have missed both launch and then scaling targets by miles. The fact that they are still going suggests that whoever is holding onto the purse strings at those companies is more realistic than the PR machines.

Not really related to Astra but here's one of my all time favourite hypes - if the business plan actually required this then it would be bad:
https://twitter.com/jeff_foust/status/964214407306928128

RL prices aren't set in concrete, plus they are moving to a RLV.
I haven't seen any pricing the a reused stage, has RL ever said anything? It's be interesting to know if savings are a similar proportion to SpaceX.

They need to recover and refly a
boosters before deciding on pricing. I'm sure there will be significant discounts for first 1 or 2 reflown boosters. Planet would be likely first customer, willing to take risk for cheap price, especially as they can handle loss of few cubesats.


Offline high road

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Re: Comparing Astra and Rocket Lab business models
« Reply #9 on: 02/11/2020 06:47 am »
If Astra need 100 flights per year to be profitable I hope they have a lot of runway in their financing... Both because they won't have the desired launch rate for a while but also because I bet those early rockets cost a lot more than the later ones.

All companies (SpaceX, RL, VO) have missed both launch and then scaling targets by miles. The fact that they are still going suggests that whoever is holding onto the purse strings at those companies is more realistic than the PR machines.

Not really related to Astra but here's one of my all time favourite hypes - if the business plan actually required this then it would be bad:
https://twitter.com/jeff_foust/status/964214407306928128

RL prices aren't set in concrete, plus they are moving to a RLV.
I haven't seen any pricing the a reused stage, has RL ever said anything? It's be interesting to know if savings are a similar proportion to SpaceX.

RL say reusability is only about keeping up with customer demand, as they can't produce Electrons fast enough. So no price reduction.

OTOH, this is coming from the company that keeps saying they're launching once a month, which is a considerable overestimate. So YMMV

Offline john smith 19

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Re: Comparing Astra and Rocket Lab business models
« Reply #10 on: 02/15/2020 12:42 pm »
Just a note.

Historical ELV reliability figure is about 5% failure IE 1 in 20. Ariane 5 and Atlas V have managed better

BTW this is not the first time people have asked what happens if you trade reliability for cost.

OTRAG in Germany did it in Germany in the 70's and  Loral were planning to do it for bulk re-supply to the ISS (1 tonne of low value easily replaceable stuff).

And TBH it's not unreasonable strategy if the payloads are low value (like the proverbial ISS toilet paper and bottle water run) or (like) astra planning to launch smallish clumps of much bigger constellations at each launch so any one launch failure is not that big a deal..

However that raises the question when a launch fails (and your business model expects failure) and how the MIB and FAA react.  SOP is to stop all launches till a cause is found but it seems astra want more of a "Let's keep launching in the mean time while we investigate and change the design of the next batch accordingly"

Time will tell how well that sits with the FAA.
Time will tell how

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Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #11 on: 02/15/2020 02:46 pm »
Just a note.

Historical ELV reliability figure is about 5% failure IE 1 in 20. Ariane 5 and Atlas V have managed better

BTW this is not the first time people have asked what happens if you trade reliability for cost.

OTRAG in Germany did it in Germany in the 70's and  Loral were planning to do it for bulk re-supply to the ISS (1 tonne of low value easily replaceable stuff).

And TBH it's not unreasonable strategy if the payloads are low value (like the proverbial ISS toilet paper and bottle water run) or (like) astra planning to launch smallish clumps of much bigger constellations at each launch so any one launch failure is not that big a deal..

However that raises the question when a launch fails (and your business model expects failure) and how the MIB and FAA react.  SOP is to stop all launches till a cause is found but it seems astra want more of a "Let's keep launching in the mean time while we investigate and change the design of the next batch accordingly"

Time will tell how well that sits with the FAA.
Time will tell how
That downtime while failure are investigated, means no cashflow and customers switching LVs as they don't want to wait. A failure means cost of that LV needs to be recovered from next few launches profit margin.

Better to start with reliable and more expensive LV and work towards reducing launch costs. Customers will always come back tomorrow to reliable LV if price has been reduced to competitive level.
« Last Edit: 02/15/2020 02:47 pm by TrevorMonty »

Offline john smith 19

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Re: Comparing Astra and Rocket Lab business models
« Reply #12 on: 02/15/2020 08:32 pm »
That downtime while failure are investigated, means no cashflow and customers switching LVs as they don't want to wait. A failure means cost of that LV needs to be recovered from next few launches profit margin.
That's how it normally happens. Which means Astra need either a) A much expedited investigation process b) FAA allows them to continue launching during the investigation.
Quote from: TrevorMonty
Better to start with reliable and more expensive LV and work towards reducing launch costs. Customers will always come back tomorrow to reliable LV if price has been reduced to competitive level.
Well that's the question isn't it? 

Is the increased up front engineering analysis, presumably higher quality parts (and possible multiple redundancy) worth the (projected) increased business?

Astra seem to be saying that it is not.
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Offline PM3

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Re: Comparing Astra and Rocket Lab business models
« Reply #13 on: 02/21/2020 06:00 pm »
Astra target a rocket production price that is closer to $ 250.000 than 500.000. What is Electron production cost?

Electron can launch only from dedicated, expensive pads which need a year to build and then people to maintain. "Astra says its Rocket 3.0 and all associated launch infrastructure fits within four semi-trailers."

Astra is going for mind-boggling low cost and quick iterative development. Just like SpaceX. Both Californian Companies.

And I wonder how much Rocket Lab's reusability initiative is driven by Astra, forcing them to lower cost (on the long run).

https://twitter.com/SciGuySpace/status/1230899624015212544
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Offline jongoff

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Re: Comparing Astra and Rocket Lab business models
« Reply #14 on: 02/21/2020 07:03 pm »
Time will tell how well that sits with the FAA.
Time will tell how
That downtime while failure are investigated, means no cashflow and customers switching LVs as they don't want to wait. A failure means cost of that LV needs to be recovered from next few launches profit margin.

Better to start with reliable and more expensive LV and work towards reducing launch costs. Customers will always come back tomorrow to reliable LV if price has been reduced to competitive level.

While I'll admit I'm a skeptic of the wisdom of a mass-produced lower reliability rocket, I think there are some misconceptions here. When it comes to orbital launches, the FAA only is in charge of regulating 3rd party safety. In most cases when a rocket fails the stand-down isn't imposed by the FAA, it's driven by the launch provider wanting to know what's going on. Unless the failure happened in a way that specifically implicated the launch provider's ability to ensure 3rd party safety, I'm not sure if the FAA can actually force a stand-down. If you've really drunk the koolaid on this being a deliberately less than 100% reliable vehicle, you could in theory keep launching while you do the failure investigation in parallel (or even not do a failure investigation). I'm not a fan of that approach, and being too cavalier about that might jeapordize your ability to get future launch licenses and 3rd party liability insurance (which IIRC is required), but I don't think there's actually a requirement for Astra to stand down after a failure.

Not saying that's how I would do things, just trying to question assumptions.

~Jon

Offline john smith 19

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Re: Comparing Astra and Rocket Lab business models
« Reply #15 on: 02/25/2020 06:26 pm »

While I'll admit I'm a skeptic of the wisdom of a mass-produced lower reliability rocket, I think there are some misconceptions here. When it comes to orbital launches, the FAA only is in charge of regulating 3rd party safety. In most cases when a rocket fails the stand-down isn't imposed by the FAA, it's driven by the launch provider wanting to know what's going on. Unless the failure happened in a way that specifically implicated the launch provider's ability to ensure 3rd party safety, I'm not sure if the FAA can actually force a stand-down. If you've really drunk the koolaid on this being a deliberately less than 100% reliable vehicle, you could in theory keep launching while you do the failure investigation in parallel (or even not do a failure investigation). I'm not a fan of that approach, and being too cavalier about that might jeapordize your ability to get future launch licenses and 3rd party liability insurance (which IIRC is required), but I don't think there's actually a requirement for Astra to stand down after a failure.

Not saying that's how I would do things, just trying to question assumptions.

~Jon
I did not know this. I had assumed they would be grounded, in the same way aircraft are when it's believed there may be a type wide issue.

So, in principle, with the right customer launches could continue following a launch failure.  Interesting.
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Offline PM3

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Re: Comparing Astra and Rocket Lab business models
« Reply #16 on: 03/16/2021 12:33 pm »
Here we go: Astra's no-frills low-cost business model beats Rocket Lab's high-quality high-cost model. NASA contract went to unproven rocket because auf much lower price. For sure they did an overall calculation including risk hedging, and Astra hat the better offer on the bottom line.

Quote
The competition came down to Astra and Rocket Lab, whose proposal had several strengths, but also a “significantly higher” price than Astra. NASA concluded that “after reviewing the benefits associated with Rocket Lab’s proposal and Astra’s assessed risk in combination with their significantly lower price, the technical benefits do not offset the significant difference in price” and selected Astra for launching the TROPICS mission

https://spacenews.com/spacex-bid-on-launch-of-nasa-cubesat-mission/
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Offline Davidthefat

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Re: Comparing Astra and Rocket Lab business models
« Reply #17 on: 03/16/2021 01:12 pm »
IMO, these discussions really come to no or the wrong conclusion as they are typically done with out of date information (you have no idea what actual customers are actually paying for missions). Each mission isn't priced the same either. A lot of the information and numbers that people attach to things are typically not public and can be very off the mark.

Offline trimeta

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Re: Comparing Astra and Rocket Lab business models
« Reply #18 on: 03/16/2021 06:49 pm »
I kind of wonder to what extent Astra is moving away from "our rockets fail more!" and more into "we carry less payload, but if that's all you need we have lower launch costs" as a selling point. Although if they're really charging like 1/3 of Rocket Lab, then even if they're able to carry as much as 50% of Electron's payload, that's actually better from a cost-per-kg standpoint. (Not that we can say much about their payload capacity, since it seems like they won't get very much payload until they're flying Rocket 4; even the TROPICS mission only requires 6U of payload per launch.)

That said, another factor is profit per launch: if Rocket Lab is selling launches for $7.5 million but they only cost $4 million internally (and with first-stage reuse, they should be able to get below that), that's a profit of $3.5 million per launch. Even if they end up booking half as many launches as Astra, they could still end up with more profit.

Offline PM3

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Re: Comparing Astra and Rocket Lab business models
« Reply #19 on: 05/15/2022 01:44 pm »
Astra business model confirmed, as discussed above. Chris Kemp on the upcoming Tropics launches:

Quote
“I know the team will do everything we can to make sure all three launches and all your satellites are deployed, but it’s good to know that the price point of three launches allows NASA to enable a mission where even if only two are successful […] it is nice to know that even NASA is designing constellations so that the overall constellation performance is the end goal, not thinking about every single satellite, every single rocket launch.”

“If two out of the three [launches] are successful, it’s not mission failure,” he said. “It’s just a lower refresh rate for the constellation.”

Article including Rocket Lab price comparison:

https://techcrunch.com/2022/05/13/astras-playing-the-long-game/amp/
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Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #20 on: 05/15/2022 03:59 pm »
Large constellations can absorb odd launch failure without problem. Small constellations and one offs are lot less tolerant of failure.

When they is failure its not just cost of replacing HW but also lost revenue stream caused by delay. For startup it could be case of going back to investors for more money and dilute existing shareholders holdings or worst still nail in coffin for business.




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Offline chopsticks

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Re: Comparing Astra and Rocket Lab business models
« Reply #21 on: 05/15/2022 06:04 pm »
I'm not a fan of ELVs but I think it's worth mentioning Astra seems to be going more in the "fail fast, fail often, fail early" mode. Unless they intentionally want to fail, the reliability of their LVs will undoubtedly go up, potentially surpassing that of Electron if they can in fact launch as much as they want to. If we're praising the methodology of the SpaceX approach, I think that Astra deserves the same, no?

It seems like a decent strategy to me, although time will tell.

Offline xyv

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Re: Comparing Astra and Rocket Lab business models
« Reply #22 on: 05/15/2022 09:16 pm »
Yes but Astra is currently failing fast with customer payloads.  SpaceX is using the fail fast methodology to perfect a rocket, a GSE complex and the "right sized" factory without risking customers payloads.  The fact that they can launch there own Starlink 2 on the first orbital attempt is just gravy.

I will say for Astra that they get manufacturing.  Their director of ops (Bryce(?) - see the NSF tour video that just got reposted in the main Astra thread) clearly has worked around automotive single piece flow and hybrid manufacturing models. Whether they can sustain a business with their revenue structure remains to be seen but that guy is the real deal when it comes to manufacturing.
« Last Edit: 05/15/2022 09:19 pm by xyv »

Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #23 on: 05/16/2022 01:48 am »
$4m for 300kg to orbit. That’s the number that matters when assessing Astra. $13000/kg.

Which constellations are going to make use of that on a large scale, rather than launching their satellites on larger rockets at half the cost?

And large scale is critical to their business plan. The odd one-off launch for unusual reasons isn’t going to give them the daily launch cadence they need to sustain their operating model.

RL has realised this. Their solution is a Hail Mary reusable medium rocket program. But at least they’ve acknowledged the problem.

« Last Edit: 05/16/2022 11:10 pm by M.E.T. »

Offline chopsticks

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Re: Comparing Astra and Rocket Lab business models
« Reply #24 on: 05/16/2022 01:53 am »


Yes but Astra is currently failing fast with customer payloads.


True, but if the customers are okay with accepting the extra risk (at least at first, and I'm not sure if this is the case), it's not that much different really. They should be collecting lots of data each time for a much more reliable LV in the future.

Offline trimeta

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Re: Comparing Astra and Rocket Lab business models
« Reply #25 on: 05/16/2022 04:07 pm »
My biggest question with Astra's business case is to what extent their quoted prices depend on their high flight rates. Can they really sell Rocket 4 launches for $4M each if they only launch monthly, or do the efficiencies of their manufacturing really only kick in once they're launching weekly or more? This is where I think Rocket Lab's reusability makes more sense, since they don't need to ramp up production rates (and therefore risk having too much factory given the actual demand).

Of course, if they can get Rocket 4 to consistently underprice Electron, that's a problem for Rocket Lab, since Rocket 4 and Electron have effectively the same payload capacity. But perhaps that sort of price pressure would force Rocket Lab to lower launch prices for reused Electrons -- I'm sure they have that capability internally, they've just said "this is about increasing launch rates, not lowering costs" to set expectations (and because there's no reason to lower prices until forced).

Offline XRZ.YZ

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Re: Comparing Astra and Rocket Lab business models
« Reply #26 on: 05/16/2022 08:42 pm »
You could expect all SLV companies are selling launch below the operating cost. (and you still have R&D, marketing and Admin cost)

Even Rocket Lab is still in this stage.

So, the price is more about how deep your pocket is than anything related to cost.
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Offline trimeta

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Re: Comparing Astra and Rocket Lab business models
« Reply #27 on: 05/17/2022 05:42 pm »
I decided to check each company's Q1 2022 SEC filings to determine how close they are to selling above operating cost. Astra launched twice, LV0008 and LV0009, with a revenue of $3.9M and a cost of revenues of $5.5M (gross margin of -41%). Rocket Lab on the other hand launched once, The Owls Night Continues, with a revenue of $6.6M and a cost of revenue of $7.3M (gross margin of -12%). That said, Astra is earlier in their development process, so it's not surprising their gross margin is lower: in 2021, Rocket Lab launched six times (with one failure) with a revenue of $39M but a cost of revenue of $54M, for a gross margin of -38%.

I guess this reframes my original question as whether and how quickly Electron launches can move into profitability, and if Astra's trajectory to the same state is faster and can proceed without depending on extremely high cadence. But that doesn't entirely counter XRZ.YZ's point that Astra can continue launching unprofitably as long as they've got cash reserves, and possibly tank Rocket Lab in the process (even if not actually moving towards profitability themselves).

Offline high road

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Re: Comparing Astra and Rocket Lab business models
« Reply #28 on: 05/18/2022 11:15 am »
I decided to check each company's Q1 2022 SEC filings to determine how close they are to selling above operating cost. Astra launched twice, LV0008 and LV0009, with a revenue of $3.9M and a cost of revenues of $5.5M (gross margin of -41%). Rocket Lab on the other hand launched once, The Owls Night Continues, with a revenue of $6.6M and a cost of revenue of $7.3M (gross margin of -12%). That said, Astra is earlier in their development process, so it's not surprising their gross margin is lower: in 2021, Rocket Lab launched six times (with one failure) with a revenue of $39M but a cost of revenue of $54M, for a gross margin of -38%.

I guess this reframes my original question as whether and how quickly Electron launches can move into profitability, and if Astra's trajectory to the same state is faster and can proceed without depending on extremely high cadence. But that doesn't entirely counter XRZ.YZ's point that Astra can continue launching unprofitably as long as they've got cash reserves, and possibly tank Rocket Lab in the process (even if not actually moving towards profitability themselves).

with both companies getting an increasing part of their revenues from non-launch activities, selling launches under cost is not going to make the competition go away. And with two years worth of runway, Astra would be/is on the clock

Offline Robotbeat

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Re: Comparing Astra and Rocket Lab business models
« Reply #29 on: 05/18/2022 01:25 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.
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Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #30 on: 05/18/2022 02:00 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.

It increasingly feels like the launch businesses of these companies are merely the marketing arms for their ACTUAL revenue generation divisions, which are intended to be space systems and/or satellite operations.
« Last Edit: 05/18/2022 02:02 pm by M.E.T. »

Offline Robotbeat

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Re: Comparing Astra and Rocket Lab business models
« Reply #31 on: 05/18/2022 02:17 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.

It increasingly feels like the launch businesses of these companies are merely the marketing arms for their ACTUAL revenue generation divisions, which are intended to be space systems and/or satellite operations.
I mean, yeah, that’s the only way this makes any sense. Launch is always a tiny fraction of satellite and especially satellite services revenue.

Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
« Last Edit: 05/18/2022 02:18 pm by Robotbeat »
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Offline JayWee

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Re: Comparing Astra and Rocket Lab business models
« Reply #32 on: 05/18/2022 02:21 pm »
Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
Careful, it'd be hard to distinguish between nuclear and non-nuclear ones. Similar to how the Navy does NOT want nuclear missiless on their ships - enemy would then treat all ships as nuclear ones.

Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #33 on: 05/18/2022 02:33 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.

It increasingly feels like the launch businesses of these companies are merely the marketing arms for their ACTUAL revenue generation divisions, which are intended to be space systems and/or satellite operations.
I mean, yeah, that’s the only way this makes any sense. Launch is always a tiny fraction of satellite and especially satellite services revenue.

It’s more than that general truism, however.

What I mean is - in the case of SpaceX, Starlink cannot work without F9 and eventually Starship. So launch is a necessity to access that larger revenue pie. A mandatory development cost.

The same is not true for these smaller newcomers. They attract 95% of their general attention for their launch efforts, despite it being largely superfluous, of dubious financial viability - and even completely unnecessary as a revenue generation mechanism if in space services will be their greatest opportunity.

Hence my conclusion is they use launch to generate hype and public interest. So it is largely a marketing activity.
« Last Edit: 05/18/2022 02:36 pm by M.E.T. »

Offline edzieba

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Re: Comparing Astra and Rocket Lab business models
« Reply #34 on: 05/18/2022 02:51 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.

It increasingly feels like the launch businesses of these companies are merely the marketing arms for their ACTUAL revenue generation divisions, which are intended to be space systems and/or satellite operations.
I mean, yeah, that’s the only way this makes any sense. Launch is always a tiny fraction of satellite and especially satellite services revenue.

It’s more than that general truism, however.

What I mean is - in the case of SpaceX, Starlink cannot work without F9 and eventually Starship. So launch is a necessity to access that larger revenue pie. A mandatory development cost.

The same is not true for these smaller newcomers. They attract 95% of their general attention for their launch efforts, despite it being largely superfluous, of dubious financial viability - and even completely unnecessary as a revenue generation mechanism if in space services will be their greatest opportunity.

Hence my conclusion is they use launch to generate hype and public interest. So it is largely a marketing activity.
Photon would not exist without Electron. You can see how much difficulty other companies trying to develop rideshare tugs have had in a) trying to get funding in the first place, and b) actually being able to launch and test those tugs successfully. Rocketlab on the other hand have launched 23 kick stages, of which 2 (3 if you count the pathfinder) have had the extra solar cells for long duration operation in addition to the avionics. And as far as has been reported, with no failures.
The key offering of Rocketlab (and others aiming to mimic their business model) is not "satellite components" - of which there are many suppliers - but the service of giving one company your payload and them getting it to orbit and operating it there. Considering the "getting there" as a marketing ploy misses the point entirely.
It's the difference between a website host offering a one-stop hosting service for your website; and a server component supplier, OS vendor, web server application vender, COLO site, ISP, etc. Both may have the end result of your website running on a server hosted in a datacentre connected to the internet, but one involves "here's my website, make it do the thing", and the other involves learning how to do a bunch of ancillary work and corralling multiple suppliers, contractors and subcontractors, and taking on the burden of ongoing operations and support yourself.

Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #35 on: 05/18/2022 03:00 pm »
The biggest competitor to both is SpaceX. They’ll run out of money before trying to subsidize their own launches below SpaceX’s prices.

It increasingly feels like the launch businesses of these companies are merely the marketing arms for their ACTUAL revenue generation divisions, which are intended to be space systems and/or satellite operations.
I mean, yeah, that’s the only way this makes any sense. Launch is always a tiny fraction of satellite and especially satellite services revenue.

It’s more than that general truism, however.

What I mean is - in the case of SpaceX, Starlink cannot work without F9 and eventually Starship. So launch is a necessity to access that larger revenue pie. A mandatory development cost.

The same is not true for these smaller newcomers. They attract 95% of their general attention for their launch efforts, despite it being largely superfluous, of dubious financial viability - and even completely unnecessary as a revenue generation mechanism if in space services will be their greatest opportunity.

Hence my conclusion is they use launch to generate hype and public interest. So it is largely a marketing activity.
Photon would not exist without Electron. You can see how much difficulty other companies trying to develop rideshare tugs have had in a) trying to get funding in the first place, and b) actually being able to launch and test those tugs successfully. Rocketlab on the other hand have launched 23 kick stages, of which 2 (3 if you count the pathfinder) have had the extra solar cells for long duration operation in addition to the avionics. And as far as has been reported, with no failures.
The key offering of Rocketlab (and others aiming to mimic their business model) is not "satellite components" - of which there are many suppliers - but the service of giving one company your payload and them getting it to orbit and operating it there. Considering the "getting there" as a marketing ploy misses the point entirely.
It's the difference between a website host offering a one-stop hosting service for your website; and a server component supplier, OS vendor, web server application vender, COLO site, ISP, etc. Both may have the end result of your website running on a server hosted in a datacentre connected to the internet, but one involves "here's my website, make it do the thing", and the other involves learning how to do a bunch of ancillary work and corralling multiple suppliers, contractors and subcontractors, and taking on the burden of ongoing operations and support yourself.

Why could Photon not launch as a payload on F9- saving RL hundreds of millions in development cost, saving them the need to build and operate launchpads, and launching more cheaply than it could on Electron on top of it all?

They do not need to be launch providers to build their space systems/services business.

Offline edzieba

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Re: Comparing Astra and Rocket Lab business models
« Reply #36 on: 05/18/2022 03:22 pm »
Why could Photon not launch as a payload on F9- saving RL hundreds of millions in development cost
Would it? Much of the development cost of an long-duration-satellite-bus-come-upper-stage is learning how to build space vehicles, and a good way to do that is to learning how to build a space vehicle. Skipping that and just trying to build the bus on its own has been attempted by others, who have not seen Rocketlab's degree of success (e.g. thus far, SHERPA have launched one ion-propelled dispenser, and Momentus have not launched yet).
It would also mean Rocketlab would not be able to directly provide a "payload to exactly this orbit" service, but instead they (and their customers) would need to deal with rideshare scheduling and additional transport from that rideshare orbit to the target orbit, which may either be expensive or impossible depending on the plane change needed. It means Rocketlab can offer capabilities like CAPSTONE or the Venus probe, which are not matched by any other single provider thus far.
Insourcing critical services is not just for saving the overhead costs of outsourcing, it also means you gain internal capabilities that can be applied to other aspects of the business, and allows for independence from a single critical contractor.
« Last Edit: 05/18/2022 03:26 pm by edzieba »

Offline Pueo

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Re: Comparing Astra and Rocket Lab business models
« Reply #37 on: 05/18/2022 10:50 pm »
Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
Careful, it'd be hard to distinguish between nuclear and non-nuclear ones. Similar to how the Navy does NOT want nuclear missiless on their ships - enemy would then treat all ships as nuclear ones.
The discrimination problem with conventionally armed or low yield ballistic missiles is well argued and warned about, but it hasn't stopped the DoD from deploying the low yield W76-2 SLBM, nor has it stopped generals from pushing the development of prompt global strike capability.  If Astra can develop their vehicle to provide PGS capability in the realm of $2-3 million dollars the DoD will likely be willing to purchase it no matter how bad of an idea it might be from the point view of strategic stability.
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Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #38 on: 05/19/2022 01:44 am »
Why could Photon not launch as a payload on F9- saving RL hundreds of millions in development cost
Would it? Much of the development cost of an long-duration-satellite-bus-come-upper-stage is learning how to build space vehicles, and a good way to do that is to learning how to build a space vehicle. Skipping that and just trying to build the bus on its own has been attempted by others, who have not seen Rocketlab's degree of success (e.g. thus far, SHERPA have launched one ion-propelled dispenser, and Momentus have not launched yet).
It would also mean Rocketlab would not be able to directly provide a "payload to exactly this orbit" service, but instead they (and their customers) would need to deal with rideshare scheduling and additional transport from that rideshare orbit to the target orbit, which may either be expensive or impossible depending on the plane change needed. It means Rocketlab can offer capabilities like CAPSTONE or the Venus probe, which are not matched by any other single provider thus far.
Insourcing critical services is not just for saving the overhead costs of outsourcing, it also means you gain internal capabilities that can be applied to other aspects of the business, and allows for independence from a single critical contractor.

How will this “dedicated launch offering” work when Neutron replaces Electron? Seems to me the Neutron program is an acknowledgment that the business case for smallsat dedicated launch does not close.

Yes, you can point to a few examples where such missions were contracted, but a dozen such launches a year does not justify the expense of keeping a separate Electron program alive.

So, if they’re going to move to rideshare launches on Neutron anyway, well, they could do that on existing cheap launchers without the risk, expense and delay of developing a new rocket.

Which brings me back to the benefit that Electron DOES give them - which is credibility as an orbital launch provider. So, publicity and marketing, in other words.
« Last Edit: 05/19/2022 01:45 am by M.E.T. »

Offline Robotbeat

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Re: Comparing Astra and Rocket Lab business models
« Reply #39 on: 05/19/2022 02:32 am »
Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
Careful, it'd be hard to distinguish between nuclear and non-nuclear ones. Similar to how the Navy does NOT want nuclear missiless on their ships - enemy would then treat all ships as nuclear ones.
I'm not advocating for it. It's one of the reasons I'm not hugely in favor of the mass-expendable approach.
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Offline M.E.T.

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Re: Comparing Astra and Rocket Lab business models
« Reply #40 on: 05/19/2022 03:18 am »
Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
Careful, it'd be hard to distinguish between nuclear and non-nuclear ones. Similar to how the Navy does NOT want nuclear missiless on their ships - enemy would then treat all ships as nuclear ones.
I'm not advocating for it. It's one of the reasons I'm not hugely in favor of the mass-expendable approach.

I thought liquid fuelled ICBM’s lack strategic value due to the slower response times necessitated by the fuelling process?
« Last Edit: 05/19/2022 03:22 am by M.E.T. »

Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #41 on: 05/19/2022 03:37 am »
You need to take this discussion elsewhere, most like different forum.

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Offline Zed_Noir

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Re: Comparing Astra and Rocket Lab business models
« Reply #42 on: 05/19/2022 03:50 am »
Although Astra’s mass-expendable concept also would work well for munitions. A micro-ICBM for Global strike (non-nuclear) for less cost than a Tomahawk cruise missile. (Note they haven’t actually achieved the $100,000 or whatever price point they had been hoping for a while ago.)
Careful, it'd be hard to distinguish between nuclear and non-nuclear ones. Similar to how the Navy does NOT want nuclear missiless on their ships - enemy would then treat all ships as nuclear ones.
I'm not advocating for it. It's one of the reasons I'm not hugely in favor of the mass-expendable approach.

I thought liquid fuelled ICBM’s lack strategic value due to the slower response times necessitated by the fuelling process?
I agree with @Robotbeat. If someone deploys micro-ICBMs, someone will either use them or someone else will try to preempt them. Better if no one deploy them in the first place.



Offline PM3

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Re: Comparing Astra and Rocket Lab business models
« Reply #43 on: 08/08/2022 10:56 am »
The business model as described in post #1 has failed.

Quote from: Eric Berger
The idea was simple. If Astra's small satellite customers would accept a bit of risk, the launch company could cut down on its testing, analysis, and redundancy in design. In turn, Astra would pass those launch savings along to customers.
...
The most recent failure appears to have catalyzed Astra to move in a new direction. In short, Astra will shift away from its previous mantra of being lean in terms of staffing, moving at breakneck speed, and being willing to tolerate failure in launch vehicles.
https://arstechnica.com/science/2022/08/as-losses-mount-astra-announces-a-radical-pivot-to-a-larger-launch-vehicle/

Quote from: Astra
Astra announces that after two of its four Rocket 3.3 flights were successful, the Company will transition to the next version of its launch system and is working with customers to re-manifest all payloads onto the new launch system, designed for higher capacity, reliability, and production rate.
...
Updated, streamlined plan to invest in delivering higher reliability, higher capacity 600kg Launch System 2.0 to market.
https://investor.astra.com/news-releases/news-release-details/astra-announces-second-quarter-2022-financial-results
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Offline trimeta

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Re: Comparing Astra and Rocket Lab business models
« Reply #44 on: 08/08/2022 02:51 pm »
Events since the opening of this thread also show the power of Rocket Lab's broader business strategy of becoming an end-to-end space solutions provider, in particular selling spacecraft components (which is already a bigger part of their bottom line than selling launches). Astra has also talked about similar plans, but their efforts with the acquisition of Apollo Fusion seem to have been less successful so far.

Online TrevorMonty

Re: Comparing Astra and Rocket Lab business models
« Reply #45 on: 08/08/2022 05:40 pm »
Events since the opening of this thread also show the power of Rocket Lab's broader business strategy of becoming an end-to-end space solutions provider, in particular selling spacecraft components (which is already a bigger part of their bottom line than selling launches). Astra has also talked about similar plans, but their efforts with the acquisition of Apollo Fusion seem to have been less successful so far.
The revenue stream from Apollo isn't likely to do much to stem cashburn for LV side of business.
« Last Edit: 08/08/2022 09:52 pm by zubenelgenubi »

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