Impact of SpaceX rideshare on small sat launchers market

[john smith 19]

SpaceX would do transporter missions at a loss. They really have 1 main goal here - to starve small launch companies of contracts so they can't grow up and build bigger rockets to compete.

That is a belief. If SX were offering these payloads at less than cost then that would be monopolistic behaviour and is illegal. Naturally getting the detailed information on SX operating costs is very difficult, which is what you would need to prove such an assertion.

But there is no evidence that they are doing so and SX is under no obligation to set rideshare prices at a level their competitors can operate at.

Mind you no one should be under any  illusion that should they be in a position to dictate launch prices within any sector of the market those prices will go up.

Just as they did when ULA became the effective sole supplier of NSS launches to the USG.

[imprezive]

Nah, there are ways to do it. Stoke’s approach is one way.

Stoke hasn’t even built a rocket let alone a launch business. I don’t think it’s possible for any of the small LVs to make it just by being a launch company. It’s not that big of a market and has some significant established players. The amount of launches they would need are unrealistic. Just look at the SPAC decks for Astra and Virgin. You’re talking 40+ launches a year, which just doesn’t exist. Rocket Lab did it right by having adjacent businesses. Also note that we know Rocket Lab loses money on every launch but I don’t see anyone calling them a monopoly trying to stomp out their small LV competition.

[M.E.T.]

If you could make $10 profit while leaving some business for your competitors, but instead you choose to make $2 profit while starving your competitors, is that illegal? Nope.

That’s what’s happening here.

Smart.

[Robotbeat]

Nah, there are ways to do it. Stoke’s approach is one way.

Stoke hasn’t even built a rocket let alone a launch business. I don’t think it’s possible for any of the small LVs to make it just by being a launch company. It’s not that big of a market and has some significant established players. The amount of launches they would need are unrealistic. Just look at the SPAC decks for Astra and Virgin. You’re talking 40+ launches a year, which just doesn’t exist. Rocket Lab did it right by having adjacent businesses. Also note that we know Rocket Lab loses money on every launch but I don’t see anyone calling them a monopoly trying to stomp out their small LV competition.

Stoke’s Nova is medium, not small.

[imprezive]

Nah, there are ways to do it. Stoke’s approach is one way.

Stoke hasn’t even built a rocket let alone a launch business. I don’t think it’s possible for any of the small LVs to make it just by being a launch company. It’s not that big of a market and has some significant established players. The amount of launches they would need are unrealistic. Just look at the SPAC decks for Astra and Virgin. You’re talking 40+ launches a year, which just doesn’t exist. Rocket Lab did it right by having adjacent businesses. Also note that we know Rocket Lab loses money on every launch but I don’t see anyone calling them a monopoly trying to stomp out their small LV competition.

Stoke’s Nova is medium, not small.

No one really knows yet since they don’t even have a users guide but ok sure let’s say on the small end of medium.  They still need a ridiculous cadence to be profitable. Keep in mind most rockets in modern history launch less than 10 times per year. Even Falcon 9 without Starlink probably launches  that # range of LEO missions a year without NSSL.

[DanClemmensen]

Nah, there are ways to do it. Stoke’s approach is one way.

Stoke hasn’t even built a rocket let alone a launch business. I don’t think it’s possible for any of the small LVs to make it just by being a launch company. It’s not that big of a market and has some significant established players. The amount of launches they would need are unrealistic. Just look at the SPAC decks for Astra and Virgin. You’re talking 40+ launches a year, which just doesn’t exist. Rocket Lab did it right by having adjacent businesses. Also note that we know Rocket Lab loses money on every launch but I don’t see anyone calling them a monopoly trying to stomp out their small LV competition.

Stoke’s Nova is medium, not small.

No one really knows yet since they don’t even have a users guide but ok sure let’s say on the small end of medium.  They still need a ridiculous cadence to be profitable. Keep in mind most rockets in modern history launch less than 10 times per year. Even Falcon 9 without Starlink probably launches  that # range of LEO missions a year without NSSL.

Take a look at
     https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches
in 2023 so far,  F9/FH have launched 75 times. 48 were Starlink and 2 were NSSL. That leaves 25 F9/FH other launches so far this year. I'm not sure how you characterize "LEO missions", so I cannot refine this further. Could you please say which of these missions do not count?
There were 4 FH missions and about 7 F9 GTO missions. If we remove these we still have 14 mission so far this year.

[imprezive]

Nah, there are ways to do it. Stoke’s approach is one way.

Stoke hasn’t even built a rocket let alone a launch business. I don’t think it’s possible for any of the small LVs to make it just by being a launch company. It’s not that big of a market and has some significant established players. The amount of launches they would need are unrealistic. Just look at the SPAC decks for Astra and Virgin. You’re talking 40+ launches a year, which just doesn’t exist. Rocket Lab did it right by having adjacent businesses. Also note that we know Rocket Lab loses money on every launch but I don’t see anyone calling them a monopoly trying to stomp out their small LV competition.

Stoke’s Nova is medium, not small.

No one really knows yet since they don’t even have a users guide but ok sure let’s say on the small end of medium.  They still need a ridiculous cadence to be profitable. Keep in mind most rockets in modern history launch less than 10 times per year. Even Falcon 9 without Starlink probably launches  that # range of LEO missions a year without NSSL.

Take a look at
     https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches
in 2023 so far, there F9/FH have launched 75 times. 48 were Starlink and 2 were NSSL. That leaves 25 F9/FH other launches so far this year. I'm not sure how you characterize "LEO missions", so I cannot refine this further. Could you please say which of these missions do not count?
There were 4 FH missions and about 7 F9 GTO missions. If we remove these we still have 14 mission so far this year.

Just trying to hone in on which of those missions Stoke could actually compete for. You take out Dragon and Euclid by my count that’s leaves 8 assuming your 14 is right. That’s in a historically strong year for F9. Granted that would be a few more Stoke missions than F9 but even if you’re generous and assume it’s 2 per that’s 16 potential missions that they still have to compete against SpaceX for.

[TrevorMonty]

Development costs are hard to compare.
Lot money is spent building high volume production facilities. RL built Mahia launch site from scratch which also involved improving access roads and internet communications.  Others used existing sites with minimum equipment built into shipping containers.

If Stoke can make a fully RLV then they should be able to avoid building high volume production facilities.

[john smith 19]

Development costs are hard to compare.
Lot money is spent building high volume production facilities. RL built Mahia launch site from scratch which also involved improving access roads and internet communications.  Others used existing sites with minimum equipment built into shipping containers.

If Stoke can make a fully RLV then they should be able to avoid building high volume production facilities.

High volume yes, but they are still deep in R&D. They are going to be doing a lot of refining, including mfg methods. Some they can do by upgrading their current stage, some will be radical enough to need a new one. They would be wise to have a second one under construction in any case due to the risk of a major launch failure.

The next big item is stg1. In theory the simple bit but it  needs to be sized to the stg 2.

An obvious question would be treat it as a conventional cylinder or match it to the stg2, like the N1?

People will say that's asking for trouble but a lot of the N1's issues were down to the decision to do on board power generation rather than using batteries and the failure to appreciate how much RFI this would generate in sensors and telemetry. 

[john smith 19]

If you could make $10 profit while leaving some business for your competitors, but instead you choose to make $2 profit while starving your competitors, is that illegal? Nope.

That’s what’s happening here.

Smart.

And no one's saying it isn't, as long as they are not operating at a loss while doing so.

But it is a second warning (the first being what happened to pricing when they got first stage reuse working) of what will happen if they have no effective competition in a market.

Anyone who fails to note that lesson is likely to be quite disappointed by their behaviour. 

[john smith 19]

The thought process is simple.  A smallsat ELV is a natural first development goal for a new organization. 

20 years ago certainly.  10 years ago maybe. But once SX demonstrated reuse it didn't take an MBA to work out that if their refurb and operating costs were anything less than enormously high they'd enjoy a step change in profit per launch.

Given that their reuse was facilitated by their stg1 being maximum sized for its mission ( and a lot of the recovery hardware is a "recovery kit" that they can choose to not install if they want to expend the stage) and rideshare has always been a part of their business model running a dedicated rideshare flight as a part of their business model should have been predicable (no I didn't see it coming,

But we're seeing that this proposition is uninvestable.

Frankly, I don't believe any launchers are investable at this point, now that SpaceX is pulling up the ladder that it used to get where it is.  The amount of capital needed to eventually thrive in this environment is insane.  Tens of billions of dollars.  An amazing money pit.

I wouldn't go that far. There are some niches both in the market space and the architecture space, although I don't know who's pursuing them.

But at this point anyone doing small ELV only is a VC game to get to IPO ASAP, get a flotation and sell out. 

[Redclaws]

I wouldn't go that far. There are some niches both in the market space and the architecture space, although I don't know who's pursuing them.

But at this point anyone doing small ELV only is a VC game to get to IPO ASAP, get a flotation and sell out. 

I think this is a little unfair, ie, I think a lot of folks are working on hope, but it’s certainly a pipe dream.  Fundamentally “delivery to orbit” differentiates almost exclusively on price.  So the small sat launcher space has likely largely closed to new companies without some cleverness (that many think they have but no one has demonstrated) and those who are already in it are desperately trying to make sure it doesn’t close on them too.

[imprezive]

If you could make $10 profit while leaving some business for your competitors, but instead you choose to make $2 profit while starving your competitors, is that illegal? Nope.

That’s what’s happening here.

Smart.

And no one's saying it isn't, as long as they are not operating at a loss while doing so.

But it is a second warning (the first being what happened to pricing when they got first stage reuse working) of what will happen if they have no effective competition in a market.

Anyone who fails to note that lesson is likely to be quite disappointed by their behaviour. 

People keep saying there is no current competition but it’s just not true. Vega literally just launched an SSMS mission (their version of Transporter) this month. PSLV launch has also launched two aggregated small sat missions this year and SSLV launched a dedicated small sat launch. The small sat market has never been dependent or mostly served by small LVs. Space enthusiasts focus on them because they are cooler and make all the press but the small sat industry has been primarily served by rideshare on foreign launchers since it’s inception.

[Stan-1967]

If you could make $10 profit while leaving some business for your competitors, but instead you choose to make $2 profit while starving your competitors, is that illegal? Nope.

That’s what’s happening here.

Smart.

And no one's saying it isn't, as long as they are not operating at a loss while doing so.

But it is a second warning (the first being what happened to pricing when they got first stage reuse working) of what will happen if they have no effective competition in a market.

Anyone who fails to note that lesson is likely to be quite disappointed by their behaviour. 

This idea that SpaceX or any private company for that matter, is under obligation to cut a competitive market price when they figure out a way to cut costs is truly a naive and unrealistic expectation.  Anyone disappointed in SpaceX's actions may need to look inwards at the basis of their own expectations vs. projecting malign intent on a company. It's magical thinking with no basis in the financial reality of the market.

imaginary scenario:
Musk to private equity investors:  I'd like you all to invest billions of $$ into my SpaceX venture. We have just spent 2-3 Billion $USD to perfect S1 re-use & FH flights.  SpaceX will now drastically cut prices in this inelastic market and reduce our gross margin per flight so that we may possibly get an ROI of 5%-10% in 20 years time. 

Investors:  What if you kept prices static or just slightly reduce them to still maintain status as the low cost option?  I calculate we could get an +30% ROI in just 5-10 years.  I can get 5-10% safely by just investing in bonds or treasuries.  Why should our firm invest is such a mediocre & risky venture without some real expectation of gain?  I mean we ( equity fund managers) have a fiduciary responsibility for how we use our funds efficiently.

Musk: Well if I lower prices far below market rates, it might make some internet nerds really happy.  Yes, it means we won't be able to afford Mars or building a nextgen rocket, but that is the economic cost of making internet spaceflight nerd police happy. 

Investors:  OK then....when is lunch?


I think the bigger lesson in the fallout of SpaceX burying upcoming competitors was the terrible waste of resources SPACS & other funds put into all these launch companies, when the real need for investment was into ideas for interesting payloads and "in space" applications. 

What were they all thinking? Even SpaceX pivoted to a bigger picture (Starlink revenue) once they got lower cost access to space worked out.

[john smith 19]

This idea that SpaceX or any private company for that matter, is under obligation to cut a competitive market price when they figure out a way to cut costs is truly a naive and unrealistic expectation.

Actually the complaint (from their competitors) is that they have cut their prices too much and they are being choked off.

  Anyone disappointed in SpaceX's actions may need to look inwards at the basis of their own expectations vs. projecting malign intent on a company. It's magical thinking with no basis in the financial reality of the market.

True.

The only way prices go down in this market is if there is effective competition in it.

Realistically that means at least one competitor with at least first stage reuse.  WRT to the thread title the impact is.

Competition destroyed --> rideshare prices rise.

How much by? However much SX want them to (no effective competition to stop them).

I'd like to think that now that both 1st stg reuse and dedicated ride share flights are a reality  any VC's still looking to fund LVs will (maybe) be a little more open to higher risk, but viable RLV or semiRLV concepts.

Because once you drop "Must be viable as a vehicle to take people to mars and be refuelled by Mars ISRU" requirements a bunch of architectures open up that would never work on Mars (but work just fine on earth) open up.

At present I'd say only Stoke in the US is in this space (with others elsewhere).

[john smith 19]

People keep saying there is no current competition but it’s just not true. Vega literally just launched an SSMS mission (their version of Transporter) this month. PSLV launch has also launched two aggregated small sat missions this year and SSLV launched a dedicated small sat launch. The small sat market has never been dependent or mostly served by small LVs. Space enthusiasts focus on them because they are cooler and make all the press but the small sat industry has been primarily served by rideshare on foreign launchers since it’s inception.

IOW if you want to see real competition you need to go to India or the EU with government supported LV's

I think that might help explain why the EU is staying with Ariane 6

[imprezive]

People keep saying there is no current competition but it’s just not true. Vega literally just launched an SSMS mission (their version of Transporter) this month. PSLV launch has also launched two aggregated small sat missions this year and SSLV launched a dedicated small sat launch. The small sat market has never been dependent or mostly served by small LVs. Space enthusiasts focus on them because they are cooler and make all the press but the small sat industry has been primarily served by rideshare on foreign launchers since it’s inception.

IOW if you want to see real competition you need to go to India or the EU with government supported LV's

I think that might help explain why the EU is staying with Ariane 6

Or you could look at it as with just ULA the US never competed in much of the global launch market. Now with two providers we are.

[XRZ.YZ]

Wrong. SpaceX is NOT losing money on the Transporter missions. Educate yourself by checking the SpaceX rideshare website.

The starting fee for any rideshare payload is $275,000. That gives you a ride to SSO for anything weighing up to 50 kg. The $5,500 per kilogram only applies to additional kilograms on top of those 50 kilograms.

But here is the thing: regardless of a Transporter payload weighing 1 kg or 49 kg, both pay the starting fee of $275,000 to get launched.
If I, for example, would fly a 2 kg cubesat on a Transporter mission, then I still have to pay the entire starter fee of $275.000. This is despite the fact that for the same starter fee I could have flown a satellite that is 25 times more heavy.

So, a Transport mission flying 103 payloads generates a minimum revenue of 103 x $275,000 = $28,325,000.
Marginal cost of a Falcon 9 launch was revealed 3 years ago as being "under $25M". Meaning that it is probably even lower today. So, at a bare minimum that particular Transporter mission with 103 payloads generated a profit of multiple millions of dollars.


And if the Transporter missions are profitable, then nobody can accuse SpaceX of deliberate low-pricing to push the competition out of the market. What actually is happening is that the competition doesn't have its act together.

Most of the payload on Rideshare missions either arranged by aggregators or send more than one payload at once, sometimes in dozens like Planet Lab.
So it is not correct to use 103 or whatever individual payload number times 275k as minimum.

Also, it means the companies works with aggregator (some times also has plane transfer vehicle) pays much higher price than SpaceX listed. And they are potential customer of other non-SpaceX launch with higher cost.

[XRZ.YZ]

Even if you are doing only one 1U cube sat of 1kg. You still need to put your sat into a dispenser. So you need to put that mass (and price, although this is the same for other small launcher) into consideration.
And to minimize the cost of dispenser, you will be very likely to share a larger dispenser with other people. So will likely working with some kind of aggregator.

For example, in the attachment, you are seeing a cube sat been ejected from a dispenser. And Exolaunch is an aggregator.

[Exastro]

If you could make $10 profit while leaving some business for your competitors, but instead you choose to make $2 profit while starving your competitors, is that illegal? Nope.

That’s what’s happening here.

Smart.

How sure of that can we be?  Is there documentation or quantitative argument that supports it?

FWIW, and I'm too busy/lazy at the moment to hunt it down, but I seem to recall that Transporter is actually SpaceX's second attempt at dedicated rideshare; the first time their prices were too high, and their offering failed to gain traction until they met with smallsat company reps to find out what they were willing to pay.  This would have been a few months before the current Transporter service was announced IIRC.