Impact of SpaceX rideshare on small sat launchers market

[matthewkantar]

“Most sats are years in the making” is no longer true. Most sats are Starlink sats and they are made in a couple of days.

It’s true NASA wanted more than one provider for ISS access, the military didn’t, they actually created a monopoly company, albeit with two dissimilar launchers.

[trimeta]

In other contexts, the military accepts single suppliers.  It is familiar with such arrangements.  It seems likely that they would be more or less comfortable with such in space launch, if that single supplier is performing well.

Consider this (not pleasant but bear with me) - there is a loss of crew on F9 and it is grounded for an indefinite period of time. There is no more guaranteed access to space with such a single provider. I would venture to say that the stakes are probably quite a bit higher for LVs than for the examples of the military, although I don't know what sort of examples you're referring to and how they would apply.

Very much disagree that "assured access to space" is a meaningless statement. Wise to not put all of your eggs in one basket and subsidize other LVs if need be.

SpaceX if still a private company and could still fail, even though it doesn't seem likely right now.

I think what RedLineTrain is saying is that the DoD's eggs are already in one basket. They need a company that can launch >50 times a year, each launch carrying >20 megaconstellation satellites built in-house by that same company. No amount of subsidy can get another company to that point in under five years, so the DoD should just give up and accept that if only SpaceX can provide what they need, then they only need SpaceX.

Whether you agree that this is the new minimum table stakes for the DoD is a separate question.

[Asteroza]

“Most sats are years in the making” is no longer true. Most sats are Starlink sats and they are made in a couple of days.

It’s true NASA wanted more than one provider for ISS access, the military didn’t, they actually created a monopoly company, albeit with two dissimilar launchers.

Do non-megaconstellation sats have such short timelines on an average basis? Hell, do even "regular" constellations have such short timelines?


The end thesis is, in a SpaceX and Blue Origin world of Falcon 9/Starship and New Glenn (and their accompanying megaconstellations), is the government and commercial industry capable of supplying enough crumbs to keep other players alive? Is OneWeb going to be convinced enough to hitch their wagon to something european?

Heck, look at the chinese market microcosm in the face of Guowang. The market shakeout for all those ICBM solid rocket derivative launchers will probably mirror the same situation.

[meekGee]

For most definitions of "competition," you're not really competing unless in a couple of years, you have a high flight rate fully reusable SHLV plus a captive megaconstellation roughly equivalent to Starlink.  Neutron probably won't cut it.

I know this sounds harsh and unreasonable, but Falcon 9 itself is proving to be an extinction-level event, let alone Starship.  Absent Starship, Falcon 9 will be flying 250-300 times in 2026 (the vast majority of which will be packed to the gills).  Nobody had this in their business plans that they used to justify their launch investments.

Living on scraps from a sparsely-laid table doesn't seem satisfying to me.  It will be just jumping from one minimum viable product waypoint to another, with no end in sight.  Table stakes in the tens of billions of dollars.

Yes, but there are major payload customers with a vested interest in having another launch provider than SpaceX, and they are not all named "the Defense Department." That alone guarantees one other major player in the U.S. launch market.

Which major customers, and how much are they willing to pay extra?

All things being equal, they prefer that there'd be more than one provider, but this doesn't guarantee anything.

[meekGee]

In other contexts, the military accepts single suppliers.  It is familiar with such arrangements.  It seems likely that they would be more or less comfortable with such in space launch, if that single supplier is performing well.

Consider this (not pleasant but bear with me) - there is a loss of crew on F9 and it is grounded for an indefinite period of time. There is no more guaranteed access to space with such a single provider. I would venture to say that the stakes are probably quite a bit higher for LVs than for the examples of the military, although I don't know what sort of examples you're referring to and how they would apply.

Very much disagree that "assured access to space" is a meaningless statement. Wise to not put all of your eggs in one basket and subsidize other LVs if need be.

SpaceX if still a private company and could still fail, even though it doesn't seem likely right now.

The knee jerk reaction of grounding everything for an indefinite amount of time is so misguided.

At this point SpaceX can recover and resume flights faster than anyone else can field another launch.

Once the entire rocket is reusable, these are vehicles with individual and well understood histories, and you can recover from accidents much faster, if not immediately.

[chopsticks]

In other contexts, the military accepts single suppliers.  It is familiar with such arrangements.  It seems likely that they would be more or less comfortable with such in space launch, if that single supplier is performing well.

Consider this (not pleasant but bear with me) - there is a loss of crew on F9 and it is grounded for an indefinite period of time. There is no more guaranteed access to space with such a single provider. I would venture to say that the stakes are probably quite a bit higher for LVs than for the examples of the military, although I don't know what sort of examples you're referring to and how they would apply.

Very much disagree that "assured access to space" is a meaningless statement. Wise to not put all of your eggs in one basket and subsidize other LVs if need be.

SpaceX if still a private company and could still fail, even though it doesn't seem likely right now.

The knee jerk reaction of grounding everything for an indefinite amount of time is so misguided.

At this point SpaceX can recover and resume flights faster than anyone else can field another launch.

Once the entire rocket is reusable, these are vehicles with individual and well understood histories, and you can recover from accidents much faster, if not immediately.

Really misguided eh? When was the last time a loss of a crewed vehicle NOT grounded? Whether that would happen to SpaceX on a private or NASA mission, you can bet that F9 wouldn't be flying for some time afterwards.

Even after fairly benign anomalies that have happened with F9, they have paused flights.

Not sure how you guys are thinking that they are somehow immune from this sort of thing.

[M.E.T.]

In other contexts, the military accepts single suppliers.  It is familiar with such arrangements.  It seems likely that they would be more or less comfortable with such in space launch, if that single supplier is performing well.

Consider this (not pleasant but bear with me) - there is a loss of crew on F9 and it is grounded for an indefinite period of time. There is no more guaranteed access to space with such a single provider. I would venture to say that the stakes are probably quite a bit higher for LVs than for the examples of the military, although I don't know what sort of examples you're referring to and how they would apply.

Very much disagree that "assured access to space" is a meaningless statement. Wise to not put all of your eggs in one basket and subsidize other LVs if need be.

SpaceX if still a private company and could still fail, even though it doesn't seem likely right now.

The knee jerk reaction of grounding everything for an indefinite amount of time is so misguided.

At this point SpaceX can recover and resume flights faster than anyone else can field another launch.

Once the entire rocket is reusable, these are vehicles with individual and well understood histories, and you can recover from accidents much faster, if not immediately.

Really misguided eh? When was the last time a loss of a crewed vehicle NOT grounded? Whether that would happen to SpaceX on a private or NASA mission, you can bet that F9 wouldn't be flying for some time afterwards.

Even after fairly benign anomalies that have happened with F9, they have paused flights.

Not sure how you guys are thinking that they are somehow immune from this sort of thing.

Soon SpaceX will have two completely different crewed launch vehicles for full redundancy. Of course, SpaceX will want to retire F9 and Dragon and move completely to Starship.

But NASA/DoD can then pay to keep Falcon and Dragon in production for less money than subsidizing the development and operations of an entirely new launch vehicle family.

[meekGee]

In other contexts, the military accepts single suppliers.  It is familiar with such arrangements.  It seems likely that they would be more or less comfortable with such in space launch, if that single supplier is performing well.

Consider this (not pleasant but bear with me) - there is a loss of crew on F9 and it is grounded for an indefinite period of time. There is no more guaranteed access to space with such a single provider. I would venture to say that the stakes are probably quite a bit higher for LVs than for the examples of the military, although I don't know what sort of examples you're referring to and how they would apply.

Very much disagree that "assured access to space" is a meaningless statement. Wise to not put all of your eggs in one basket and subsidize other LVs if need be.

SpaceX if still a private company and could still fail, even though it doesn't seem likely right now.

The knee jerk reaction of grounding everything for an indefinite amount of time is so misguided.

At this point SpaceX can recover and resume flights faster than anyone else can field another launch.

Once the entire rocket is reusable, these are vehicles with individual and well understood histories, and you can recover from accidents much faster, if not immediately.

Really misguided eh? When was the last time a loss of a crewed vehicle NOT grounded? Whether that would happen to SpaceX on a private or NASA mission, you can bet that F9 wouldn't be flying for some time afterwards.

Even after fairly benign anomalies that have happened with F9, they have paused flights.

Not sure how you guys are thinking that they are somehow immune from this sort of thing.

"We" are thinking that the world of spaceflight is changing.

When the Dragon capsule exploded on the pad, that was a moment.  Amos-6 and CRS-whatever-it-was were too.

Recovery from all was swift and hardly a bump in the road.

Future manned vehicles will have a long unmanned history before they fly with a crew, and that will be unprecedented.

Also, at some point SpaceX will be flying mostly for itself, even with manned flights.  That too will be unprecedented.

[matthewkantar]

Soyuz MS-10 Suffered a separation anomaly resulting in a launch abort system activation on the 11th of October, 2018. Soyuz Ms-11 lifted off with crew on the 3rd of December the same year.

Around seven weeks. No reason to think SpaceX couldn’t do better.

[deltaV]

SpaceX is so far ahead that in a few years, there will be <10 non-SpaceX US launches annually, all of which are NSSL launches contractually handed out to whichever company the US government decides to keep alive.

SpaceX has about a decade more experience than anyone else at rocket reuse so they're the favorite to win. But there are lots of plausible scenarios where someone else takes the lead. For example:
- Maybe ceramic tiles will be a maintenance and reliability headache for Starship like they were for the shuttle. Designing a new thermal protection system for Starship could delay it enough for Stoke's Nova to get to economical full reuse first.
- Maybe Starship's excessively large size for most payloads and resulting higher expenses such as maintaining 39-42 engines will keep Starship from competing well for smaller payloads.
- Maybe one of the above will happen and additionally Elon will have a burst of over-optimism and SpaceX will retire Falcon despite Starship not working well.

Unfortunately for the small launchers that this thread is about, most scenarios where SpaceX loses are won by another medium or heavy launcher. Getting squished by someone unexpected doesn't help them.

[trimeta]

SpaceX is so far ahead that in a few years, there will be <10 non-SpaceX US launches annually, all of which are NSSL launches contractually handed out to whichever company the US government decides to keep alive.

SpaceX has about a decade more experience than anyone else at rocket reuse so they're the favorite to win. But there are lots of plausible scenarios where someone else takes the lead. For example:
- Maybe ceramic tiles will be a maintenance and reliability headache for Starship like they were for the shuttle. Designing a new thermal protection system for Starship could delay it enough for Stoke's Nova to get to economical full reuse first.
- Maybe Starship's excessively large size for most payloads and resulting higher expenses such as maintaining 39-42 engines will keep Starship from competing well for smaller payloads.
- Maybe one of the above will happen and additionally Elon will have a burst of over-optimism and SpaceX will retire Falcon despite Starship not working well.

Unfortunately for the small launchers that this thread is about, most scenarios where SpaceX loses are won by another medium or heavy launcher. Getting squished by someone unexpected doesn't help them.

Since all of the companies which could plausibly still be flying a small-launch vehicle in five years have plans for medium-lift vehicles (Rocket Lab, Firefly, and even ABL, although they've been very quiet about it), they probably wouldn't mind "getting squished" by their own larger launchers. Although according to people in this thread, those medium-lift vehicles will then be up against the exact same calculus with Starship (or even Falcon 9, which is already better today than anything else which could fly in the next decade), and we could have this exact same thread about "Impact of SpaceX on medium- and heavy-lift launcher market."

[M.E.T.]

More from Elon:

https://x.com/elonmusk/status/1796031244846645493?s=46&t=eQrUtTJk6IAt4GyTzH7J2w

“ Thank you for the thoughtful rebuttal. To the best of my knowledge, none of the rideshare missions have lost money.

I do hope that rocket companies focus on reusability. That is the fundamental breakthrough needed for humanity to become a spacefaring civilization. Falcon is ~80% reusable and the team is doing incredible work launching every 2 or 3 days.

With extreme effort, Starship will eventually take reusability to ~100%. There are many tough issues to solve with this vehicle, but the biggest remaining problem is making a reusable orbital return heat shield, which has never been done before. The Shuttle’s heat shield required over 6 months of refurbishment by a large team, so was not reusable by any reasonable definition of the word.

This will take a few kicks at the can to solve and requires building an entirely new supply chain for low-cost, high-volume and yet high-reliability heat shield tiles, but it can be done.”

[deltaV]

More from Elon:

The tweet by the ABL founder that Elon replied to is also interesting.

[FutureSpaceTourist]

https://twitter.com/danpiemont/status/1795946191118799031

As a founder of a launch company, I disagreed with the thrust of this NYT article. I admire SpaceX and welcome their success.

Our goal at ABL is to create fundamentally better launch systems, spread them all over the world, and launch all kinds of new technology that is 10x – 100x better than what exists today. We can help guarantee security, explore our solar system, study the cosmos, and improve billions of lives in the process.

The only way to do this seriously is to push the cost of launch as close as possible to it’s physical limit. Everyone working on launch systems is on the same team in this goal. SpaceX continues to raise the bar as high as they can. We don’t feel short-changed by it, we feel challenged and motivated to do the same.

Addressing a few specific points in the article:

Is rideshare pricing anticompetitive?
Some rideshare missions have definitely launched at a loss. Just do the math. Others have launched at a profit (particularly those with “cake toppers”). On average, with all costs baked in, it’s probably somewhere between a slight loser and slightly profitable. Which side of the line it’s on doesn’t really matter. Whether you are losing $4MM or making $6MM per rideshare launch, there’s no doubt it’s the least profitable activity.

And yes, it’s (partially) motivated by putting pressure on new entrants. That’s not too hard to corroborate if you speak to the right people and they are honest with you.

but…

at the end of the day this program has been a MASSIVE boon to our industry. Almost every innovative space program I can think of depends on rideshare to get started, test technology, get heritage, and build further. The existence of this program has increased the total demand for launch over the next 10 years by a multiplicative amount.

Is counter-selling anticompetitive?
No… if you are trying to win an investment or customer sale, you should expect other bidders to make their case against you. Many of ABL’s customers and investors are also customers and investors of other launch companies. This is not an issue…

Is it OK for the government to rely on a single commercial vendor for key national security capabilities?
Obviously not. And yes, it is relevant if a vendor is governed by an individual majority shareholder, as opposed to a syndicate of institutions with a diverse board.

Is it OK for former government officials to work for vendors they favored while in office?
This is a textbook example of something should generally not be happening if you want fair play. There are rules to govern it, cooling off periods etc. Everyone should follow them and not mess around with exceptions waivers and loopholes.

How do launch companies compete?
First of all, launch is not one market. Even just in LEO, the market for a 3U cubesat vs. a 150kg satellite vs. a 600kg satellite vs. a 1-ton constellation plane stack vs. a 10- or 20-ton plane stack are completely different. Beyond that there are distinct markets for MEO, GEO, cislunar and planetary missions. Without new entrants, the best option to launch a 2-ton satellite to polar LEO today is to use 15% of the capacity of a $60MM+ launch vehicle. So there’s plenty of room for improvement purely through diversification. LEO Rideshare + OMV doesn’t solve this due to the OMV costs which are not substantially lower than small ELV costs.

In the long term though, cost is the most important factor as continued cost improvement unlocks larger and more frequent flights, creating a virtuous cycle. Reusability is a huge lever, and I think every launch system will eventually get there. But reusability is on a spectrum it’s not the only lever. Staffing level is the biggest and therefore workflow automation is a huge competitive opportunity. Material selection, machine selection, verticalization, design simplicity, testing costs, logistics costs, and infrastructure costs are all critical as well. Excellence in all of these areas (not ticky tacky pricing games or social dynamics) will determine the competitive outcome as the industry continues to drive forward.

[M.E.T.]

https://twitter.com/danpiemont/status/1795946191118799031

As a founder of a launch company, I disagreed with the thrust of this NYT article. I admire SpaceX and welcome their success.

Our goal at ABL is to create fundamentally better launch systems, spread them all over the world, and launch all kinds of new technology that is 10x – 100x better than what exists today. We can help guarantee security, explore our solar system, study the cosmos, and improve billions of lives in the process.

The only way to do this seriously is to push the cost of launch as close as possible to it’s physical limit. Everyone working on launch systems is on the same team in this goal. SpaceX continues to raise the bar as high as they can. We don’t feel short-changed by it, we feel challenged and motivated to do the same.

Addressing a few specific points in the article:

Is rideshare pricing anticompetitive?
Some rideshare missions have definitely launched at a loss. Just do the math. Others have launched at a profit (particularly those with “cake toppers”). On average, with all costs baked in, it’s probably somewhere between a slight loser and slightly profitable. Which side of the line it’s on doesn’t really matter. Whether you are losing $4MM or making $6MM per rideshare launch, there’s no doubt it’s the least profitable activity.

And yes, it’s (partially) motivated by putting pressure on new entrants. That’s not too hard to corroborate if you speak to the right people and they are honest with you.

but…

at the end of the day this program has been a MASSIVE boon to our industry. Almost every innovative space program I can think of depends on rideshare to get started, test technology, get heritage, and build further. The existence of this program has increased the total demand for launch over the next 10 years by a multiplicative amount.

Is counter-selling anticompetitive?
No… if you are trying to win an investment or customer sale, you should expect other bidders to make their case against you. Many of ABL’s customers and investors are also customers and investors of other launch companies. This is not an issue…

Is it OK for the government to rely on a single commercial vendor for key national security capabilities?
Obviously not. And yes, it is relevant if a vendor is governed by an individual majority shareholder, as opposed to a syndicate of institutions with a diverse board.

Is it OK for former government officials to work for vendors they favored while in office?
This is a textbook example of something should generally not be happening if you want fair play. There are rules to govern it, cooling off periods etc. Everyone should follow them and not mess around with exceptions waivers and loopholes.

How do launch companies compete?
First of all, launch is not one market. Even just in LEO, the market for a 3U cubesat vs. a 150kg satellite vs. a 600kg satellite vs. a 1-ton constellation plane stack vs. a 10- or 20-ton plane stack are completely different. Beyond that there are distinct markets for MEO, GEO, cislunar and planetary missions. Without new entrants, the best option to launch a 2-ton satellite to polar LEO today is to use 15% of the capacity of a $60MM+ launch vehicle. So there’s plenty of room for improvement purely through diversification. LEO Rideshare + OMV doesn’t solve this due to the OMV costs which are not substantially lower than small ELV costs.

In the long term though, cost is the most important factor as continued cost improvement unlocks larger and more frequent flights, creating a virtuous cycle. Reusability is a huge lever, and I think every launch system will eventually get there. But reusability is on a spectrum it’s not the only lever. Staffing level is the biggest and therefore workflow automation is a huge competitive opportunity. Material selection, machine selection, verticalization, design simplicity, testing costs, logistics costs, and infrastructure costs are all critical as well. Excellence in all of these areas (not ticky tacky pricing games or social dynamics) will determine the competitive outcome as the industry continues to drive forward.

Thanks. For some reason the posts on X no longer appear in full here when I copy the link. Only the link address shows. Not sure what I need to do to have it appear as yours did above.

[mn]

Thanks. For some reason the posts on X no longer appear in full here when I copy the link. Only the link address shows. Not sure what I need to do to have it appear as yours did above.

Change the link to twitter.com instead of x.com

[trimeta]

What's interesting is that Dan Piemont doesn't seem to actually rebut any of the substantive claims from the NY Times article (not even the weak ones regarding government investment or lobbying/hiring government officials), he basically just says "all of that is legal, so we've just got to deal with it and compete with SpaceX anyway."

[kenny008]

What's interesting is that Dan Piemont doesn't seem to actually rebut any of the substantive claims from the NY Times article (not even the weak ones regarding government investment or lobbying/hiring government officials), he basically just says "all of that is legal, so we've just got to deal with it and compete with SpaceX anyway."

Correct.  That is what large businesses do.  They lobby, they try to sell their services to the customers of competitors, etc.  There are legal frameworks in place to keep everything pretty level, and as long as they are following those requirements, there is nothing to rebut.

I think what makes this somewhat unique is that the SCALE.  SpaceX isn't just the major competitor.  They are completely dominating the market.  It makes it seem more unfair to competitors, but that is just how a controlled free market works.  If it becomes unbearable to the public, the legal framework will be tweaked.  Until then, there is nothing to rebut.

[Exastro]

What's interesting is that Dan Piemont doesn't seem to actually rebut any of the substantive claims from the NY Times article (not even the weak ones regarding government investment or lobbying/hiring government officials), he basically just says "all of that is legal, so we've just got to deal with it and compete with SpaceX anyway."

This struck me as the most important takeaway from Piemont's post:

Without new entrants, the best option to launch a 2-ton satellite to polar LEO today is to use 15% of the capacity of a $60MM+ launch vehicle. So there’s plenty of room for improvement purely through diversification. LEO Rideshare + OMV doesn’t solve this due to the OMV costs which are not substantially lower than small ELV costs.

It raises the question: if there's an opportunity there, why hasn't SpaceX already jumped on it?  Unlike most of the startups, they've already got most of the components developed and in current production at rates that make their cost basically unbeatable, together with a bunch of skilled engineers and of validated models for just about everything needed to get it done quickly and cheaply.  And even with those advantages it apparently doesn't make economic sense to develop and field such a launcher.

So why would it make sense for a startup to try it?

[DanClemmensen]

What's interesting is that Dan Piemont doesn't seem to actually rebut any of the substantive claims from the NY Times article (not even the weak ones regarding government investment or lobbying/hiring government officials), he basically just says "all of that is legal, so we've just got to deal with it and compete with SpaceX anyway."

This struck me as the most important takeaway from Piemont's post:

Without new entrants, the best option to launch a 2-ton satellite to polar LEO today is to use 15% of the capacity of a $60MM+ launch vehicle. So there’s plenty of room for improvement purely through diversification. LEO Rideshare + OMV doesn’t solve this due to the OMV costs which are not substantially lower than small ELV costs.

It raises the question: if there's an opportunity there, why hasn't SpaceX themselves already jumped on it?  Unlike most of the startups, they've already got most of the components developed and in current production at rates that make their cost basically unbeatable, together with a bunch of skilled engineers and of validated models for just about everything needed to get it done quickly and cheaply.  And even with those advantages it apparently doesn't make economic sense to develop and field such a launcher.

So why would it make sense for a startup to try it?

Last Edit: Today at 10:07:00

Currently, these customers use F9. A SpaceX "F3" (or whatever) would cut into their F9 business. No incentive to do this unless someone else is already offering this service. If the customer base is small, it will not justify the development and operations costs of the "F3". The elephant in the room as always is Starship, which is already in the late stages of development. The putative "F3" and its competitors must beat the launch cost of Starship, not the launch cost of F9.