What paying customers really want

[aero313]

Buried in an article in this week's Space Review is a very telling quote from Jim Butterworth at DirectTV.  In response to a question from Gwynne Shotwell about DirectTV's interest in a $35M Falcon 9, Jim responded:

“DirecTV is not driven by the price of either the launch vehicle or the satellite,” he said. “What DirecTV is really most interested in, both from our launch vehicle providers and from our satellite providers, is quality, reliability, and on-time delivery.”

“A new entrant is fine,” he continued. “I still marvel at the number of people who try to become launch vehicle manufacturers. If you can come up with a vehicle that can loft our payloads, we will definitely talk with you.” However, he added, “my guess is that you won’t be at that price when you’re ready to launch.”

As an aside, I worked with Jim years ago at Hughes Space and Comm.  He's a very sharp guy with decades of flight hardware experience.  You can read the entire article here:

http://www.thespacereview.com/article/847/1

The quote is about halfway through the article.

[bad_astra]

And some paying customers, like Planetary Society, are willing to deal with sketchy performance records and unpredicable launch scedules in return for a price they can afford for their payloads. A startup that can meet low end pricing can go after that market (and perhaps find a willing market that didn't exist previously), and if they can prove reliable operations quickly enough, they can move on to the higher tier customers.

[rpspeck]

bad_astra - 12/4/2007  12:15 PM

And some paying customers, like Planetary Society, are willing to deal with sketchy performance records and unpredicable launch scedules in return for a price they can afford for their payloads. A startup that can meet low end pricing can go after that market (and perhaps find a willing market that didn't exist previously), and if they can prove reliable operations quickly enough, they can move on to the higher tier customers.

 I agree.  There are “dreamers” presently locked out of participation in space.  It has never been entrenched customers with solid business models who are “early adopters” for new product offerings.  They can always wait for solid proof, and buy their way in when clearly desirable. (This is sometimes called the “Low Risk – Harvard MBA – model”).

I use the microcomputer as a market model because I lived through its introductory era.  I literally could not then afford an “Apple™” computer (priced like a new small car).  My first production computer (other than the 6502 circuits we embedded into niche products) was a “Sinclair” (Clive Sinclair was knighted for his contribution to British education with this product – sold initially as a $100 kit).  

Often the biggest technological breakthroughs are spelled $$$.  A company offers lukewarm technology, streamlined and simplified at an aggressive price and blows the doors off their predecessors.   What did they bring to the table?  Nothing but clearer vision.

[aero313]

I'm not sure what your point is.  Apple, with the high-cost, high-quality business model, has made considerable profits and is still in business.  Sinclair is not.

The Sinclair ZX81 is such a slow and difficult to use computer, many people found that it works better as a door-stop than as a computer...

[savuporo]

Door stop ? For that price, it had great games on audio cassette tapes and incredibly easy operating system/Basic interpreter that taught you programming basically inevitably. getting into assembler has never been easier on any other system.

[bad_astra]

Aero, I'm not sure what your point is. Sinclair still exists, but it makes different things now instead of 80's era entry level computers. (Apple isn't making Apple II's or Lisa's anymore either, which was what they were making around the Sinclair 1000 production).

I had one of those Sinclairs briefly. I didn't like it much but I was using TRS-80's at the time.

[rpspeck]

My point is simple: for thousand (or in the computer case, tens of millions) of potential users, nothing is more important than price.  A technically superior product which you can’t afford (or more literally, are not willing to stretch to afford because the “promised benefits” are speculative) is irrelevant.  When you have proven to yourself that the product is not too demanding for you to use and enjoy, then you can think seriously about upgrades.  If it can be mastered only by “University Eggheads”, then it has no value to you at any price and with any specifications!  

The most important “computer” invention was the “Dummy’s” book series!

It makes little difference to society (but a lot of difference to stockholders) if the company which “broke the ice” and got people into a new activity succeeded or eventually failed (often because they had neither the vision nor the resources for the next step – MOS Technology being a clear example).

The airplane that put recreational aviation “on the map”, was the Aeronca C-2 (with the same gross weight, 215 kg, as the GE “MOOSE” reentry system).  Not a manufacturer ranked with Boeing today!  Boeing could use one for a doorstop!

Human beings expect to move on, but some remember how they got started in an activity that they subsequently found valuable.  Few of us have the privilege of starting at the TOP!

There are going to be spaceflight systems which break open new markets – some of them will fail as investments, but the markers they open will live on.  

[aero313]

rpspeck - 13/4/2007  7:01 PM

My point is simple: for thousand (or in the computer case, tens of millions) of potential users, nothing is more important than price.

And I would argue (as I admittedly have in the past) that both Yugo and Honda have disproven that.  Price is important so long as the product meets a certain minimum acceptable level of (for lack of a better word) performance.  The paying customers ultimately determine what the appropriate metrics for performance are.  

[bad_astra]

This is why Planetary Society paid OSC to launch Cosmos 1? No wait.. let me think..

[Analyst]

If you spend $ 50 million for a small 300kg science spacecraft (NASAs SMEX program), you don't want to save a few million dollars for launch services. You want your payload in the desired orbit. If you lack the money like the planetary society did, you gamble. They lost. There are not thousands of potential payloads not being build because of high launch costs. They are not build because you have to spend a certain amount of money (tens of millions at least) to get a spacecraft with a worthy mission. This is reality, everything else is dreaming.

Thinking about orbital debris, this situation is not bad. Imagine thousands of cheap fun smallsats in LEO.

Analyst

[hop]

Analyst - 14/4/2007  5:53 AM
 They are not build because you have to spend a certain amount of money (tens of millions at least) to get a spacecraft with a worthy mission.

There has been interesting science done by quite inexpensive payloads. http://www.astro.ubc.ca/MOST/ for example. Are there thousands of such payloads at an achievable price point ? I don't think anyone knows for sure.

The hight cost of launches has a feedback effect on the cost of payloads. If you are paying $bigbux to launch the thing, you are going to try to squeeze every ounce of capability in, and trim every gram of mass. This in turn promotes to thin margins and high development costs.

[MKremer]

savuporo - 13/4/2007  3:12 PM

Door stop ? For that price, it had great games on audio cassette tapes and incredibly easy operating system/Basic interpreter that taught you programming basically inevitably. getting into assembler has never been easier on any other system.

The keyboard sucks, the video output is barely stable as-is (and especially with an external rf-modulator), and the external plugin packs (including RAM) cause errors right and left because their connectors are intermittent as well.

[MKremer]

Analyst - 14/4/2007  7:53 AM

If you spend $ 50 million for a small 300kg science spacecraft (NASAs SMEX program), you don't want to save a few million dollars for launch services. You want your payload in the desired orbit. If you lack the money like the planetary society did, you gamble. They lost. There are not thousands of potential payloads not being build because of high launch costs. They are not build because you have to spend a certain amount of money (tens of millions at least) to get a spacecraft with a worthy mission. This is reality, everything else is dreaming.

Thinking about orbital debris, this situation is not bad. Imagine thousands of cheap fun smallsats in LEO.

Analyst

Agreed - you/your organization has a limited wad of cash (including predicted future donations/income). You end up blowing most of your wad (both current and future) on your spacecraft (materials/construction/testing, including additional exensive changes/corrections as the process goes on). That can leave you with a less-than-expected wad of cash to spend on finally getting the thing into orbit.
'You pays your money, you takes your chances, and you have to accept the final outcome as it happens.'

[rpspeck]

aero313 - 10/4/2007  8:12 AM

“DirecTV is not driven by the price of either the launch vehicle or the satellite,” he said. “What DirecTV is really most interested in, both from our launch vehicle providers and from our satellite providers, is quality, reliability, and on-time delivery.”

With no experimental launch sector (outside of China, India, Iran and North Korea) that list translates as: “Same old, tried and true.  No money for innovations.”

Since it actually does apply to both DOD and commercial space efforts, the future of these technologies in the US is pretty well spelled out.

“Space Cadets” can look forward to enduring frustration and lowered expectations.  

Since these facts are not secret, it is no surprise that students shun “Aerospace” careers.  
Experience in Aerospace and Military work is a blot on your resume: it marks you as not being smart enough to be hired for video game work.  (“Rocket Science”, as a description, has two implications: Esoteric and incomprehensible, plus irrelevant, Nobody Cares.)

Since China, for example, does not have a long history of “what we’ve always done”, and can read these postings as easily as anyone, I can imagine that innovative (and affordable) spaceflight will follow VCRs, TVs and Camcorders to the Pacific Rim.  

[aero313]

rpspeck - 3/5/2007  6:37 PM

aero313 - 10/4/2007  8:12 AM

“DirecTV is not driven by the price of either the launch vehicle or the satellite,” he said. “What DirecTV is really most interested in, both from our launch vehicle providers and from our satellite providers, is quality, reliability, and on-time delivery.”

With no experimental launch sector (outside of China, India, Iran and North Korea) that list translates as: “Same old, tried and true.  No money for innovations.”

I'm afraid you've completely missed the point.  A commercial company like DirectTV couldn't care less about launch technology.  The LV is a delivery truck.  All they care about is that their satellite gets delivered to the required orbit at the required time for the best value price.  That best value includes the cost of insurance - not just launch insurance but also lifetime insurance.  Commercial comsat customers have demonstrated a willingness to use low-reliability Chinese boosters when the insurance rates were low enough.  As the rates go up, insurance plays a much more important role in the delivery method selection process.  The one thing commercial customers like DirectTV DO NOT care about is funding new technology, any more than you would care about paying FedEx to develop battery-powered delivery vans.

This is NOT to say that investment in new technologies isn't important or doesn't have the potential to pay back dividends.  Just don't expect commercial customers to fund it.

[guidanceisgo]

rpspeck - 3/5/2007  5:37 PM



Since these facts are not secret, it is no surprise that students shun “Aerospace” careers.  
Experience in Aerospace and Military work is a blot on your resume: it marks you as not being smart enough to be hired for video game work.  (“Rocket Science”, as a description, has two implications: Esoteric and incomprehensible, plus irrelevant, Nobody Cares.)
 

Wow, I just realized my career had a blot on it!  Once you sit in the count , commit to launch, and actually successfully fly real launch vehicles, its hard to consider writing the new "missile command".  You don't quite get the same buzz from launching that Estes rocket that the "space cadets"  dream of.

[bad_astra]

rpspeck - 3/5/2007  5:37 PM

Since these facts are not secret, it is no surprise that students shun “Aerospace” careers.  
Experience in Aerospace and Military work is a blot on your resume: it marks you as not being smart enough to be hired for video game work.  (“Rocket Science”, as a description, has two implications: Esoteric and incomprehensible, plus irrelevant, Nobody Cares.)

Not to mention the shock of moving from the private sector to a government-contractor big aerospace firm. These are not (in my experience) companies that make you feel welcome or even needed, nor is the efficiency and work ethic as valued as it may have been a lean hungry private sector company. They've been doing government business so long they're even more bass ackwards then the feds.

Then again I have only worked at one so far, and soon another and I haven't left yet. Sorry this is more than a rant then anything. I couldn't see myself encouraging anyone to actively seek employment in aerospace.

[rpspeck]

aero313 - 4/5/2007  6:34 PM

I'm afraid you've completely missed the point.  

I have not missed YOUR point at all. I don't expect commercial customers to fund launch R&D.

MY point is that there may be no-one actually funding it, in which case the future of this industry in the U.S. can be pretty easily predicted.  (Russian launchers anyone?  Russian motors?)

This is nothing new, just another example of technology being abandoned and moving offshore.  Do we care?  Should we care?  Does “Strategic Technology” mean anything?

The NSF has an outstanding history of feeding R&D (and small teams) for technologies still far from commercial use.  But they aren’t authorized to fund innovative space research.

I have not invented the observations about “Aerospace” education, nor about the judgment of resume reviewers.

I know that flying rockets is a blast – the bigger the better.  But most look at the few who get to do exciting things with envy, and go elsewhere for their careers.

(P.S., re. an earlier interchange: How much coverage of the Billion Dollar “America’s Cup” have you seen?  It is now about 1/3 over.  Average attendance runs 30 to 50 thousand on sailing days.  For contrast “>50% of Americans say they want to go into space.”  They would watch it if it were interesting, and MIGHT have room for them.)  

[rpspeck]

guidanceisgo - 4/5/2007  11:12 PM

  You don't quite get the same buzz from launching that Estes rocket that the "space cadets"  dream of.

“Space Cadets” I talk to intend to fly IN their rockets – just as I intend to – even though they may seldom talk about it.

Some have already succeeded: Burt Rutan’s team (with eAc and SpaceDev both demonstrating adequate propulsion), Armadillo Aerospace, XCOR Aerospace, RMI and several “Rocket Pack” replicators have all conducted manned flights.  RMI (Reaction Motors Incorporated) is particularly interesting.  Its four “Amateur Rocket Hobbyists” incorporated in 1941 after spending the prior year perfecting a stable and reliable version of their liquid fueled motor.  Six years later they delivered an integrated, four chamber version which pushed the first human through the sound barrier (X-1, 1947).

I acknowledge that none of these teams have yet accomplished orbital, lunar or interplanetary flight.  I expect that similar teams will have achieved all of this – eclipsing all prior human accomplishments in space – by the end of THIS decade.

[rpspeck]

The Logic of Heavy Lift:

Engineering, like business, is taught with many “Rules of Thumb”, conceptual guidelines and references to historic examples.  This is useful (particularly as a “reality check”), but if not used cautiously smothers innovation and calcifies thinking.  (Every advance in electronics and computers broke the old rules and guidelines.)  The most ridiculous guideline in existence is a variant of this thinking, “Moore’s Law” which proclaims that old guidelines will be regularly and consistently eclipsed!  (It was justifiably unpopular when introduced, fails totally when projected far enough into the future, but survives because for these few decades it does describe reality!)

Space technology is not burdened with any such mind boggling concept.  It makes do with guidelines borrowed from the buggy whip days, and finds justifications for increasing real prices.  When stable guidelines seem to work, they usually become “Mantras”, drilled into new engineers until they understand “What can’t be done.”

The idea that the second stage of a launch vehicle “Must Cost More” then the first stage is one of these ideas.  Granted that such a cost can be justified (a surprising revelation to newcomers), this concept is treasured and applied regularly.

This gives rise to “Heavy Lift Logic.”  If a modest sized launch vehicle is sufficient to put its payload into orbit, then this assembly must be sufficient to guide a larger launch vehicle to orbit as well.  This assembly would be used intact (with or without fuel in what could become a third stage).  When a seven times larger first stage is added, the combination will be able to place eight times the mass into orbit.  The wonderful expectation is that the larger FIRST STAGE MUST COST LESS then the existing second stage assembly.  Thus the cost per pound to orbit must drop by more than a FACTOR of FOUR!

Unless, that is, the logic is flawed.  A high cost for the computer systems and sensors in the second stage of a launch vehicle (in 1958) certainly made it more expensive that the bulky first stage.  This cost could be justified since it was necessary for operation.  The cost of ANY ESSENTIAL COMPONENT can be justified.  The economic limit for the cost of any item is set by the minimum cost which must be paid for an alternative replacement.  If there is no alternative, then the price of that one component can be a very large fraction of the customer’s budget and many times the price of other large and complex subsystems.  

If “Di Lithium” crystals were the key to affordable spaceflight, then the price of those could approach the total cost of the current launch vehicles that would be replaced.  If only one gram were needed (and the rest of the hardware was small and affordable), this unknown, magic substance could be a bargain at $50,000,000 per gram!

A more practical guideline for tradeoffs observes that every pound saved in the last launch stage increases the payload capability by one pound.  (The cost/(weight saved) ratio is a very powerful metric to coordinate all of the tradeoff decisions in a vehicle.) The competitive price for space launch, in $$ per pound of payload, thus sets the incremental cost limit for weight saving technology upgrades.  A lower limit will exist in the first stage (lower by the stage mass ratios) since weight saved here will produce a smaller increase in payload capability.  Both weight/cost tradeoff guidelines are bounded on the low end by the cost of known good hardware. Beyond the maximum incremental cost tradeoff guideline (payload delivery $$/pound, or a fraction of this) higher costs for “essential” equipment must simply be absorbed, since no tradeoff exists by definition.  The optimized total or average cost of a stage can under unusual conditions equal the stage weight multiplied by the tradeoff limit. But in practice, the diminishing returns of customized technology can place any upgrades beyond the guidelines, producing little weight reduction for any affordable investment.  The vehicle costs then collapse to the cost of known good hardware multiplied by each stage’s weight, plus essentials.  The first stage then costs 7 times as much as the second stage (possibly clustering identical motors and tanks), after subtracting guidance and communication essentials.  And the “Logic of Heavy Lift” nearly vanishes.

 
The Logic of Heavy Lift was bolstered by misapplying another old guideline: “Economy of Scale”.  Never in history has “Economy of Scale” been successfully related to the SIZE of products, but only the Production Volume!  Fixed ratios have been profoundly demonstrated for ships and boats of a particular type (like battleships, $$/ton displacement), for building construction of a given type ($$/square foot), and aircraft of particular types (jet transports, $$/kg).  If actual “Economy of Scale” is applicable (volume based, of necessity), then replacing eight vehicles with one will always increase the cost per pound, and do so even more spectacularly when development costs are apportioned.  (This neglects the dilution of essential equipment cost in a larger assemble.  Such costs are historically small – expect for nuclear reactors).

The Logic of Heavy Lift uses an outdated “Mantra”, bolstered by misapplication of a pervasive reality (actually applied backward), to feed a utopian dream.  Not surprisingly every effort to apply this logic fails spectacularly.  


The way forward will require sacrificing many sacred cows and outdated Mantras.  

The cost of much necessary launch hardware should have fallen radically in the last 50 years.  But we have two operational manned launch systems.  The high reliability one, which can launch on time with tolerable costs per passenger, was developed in 1966. The one designed in 1975 launches ocasionally and has nearly ten times the cost per passenger.  Lower cost technology does not diffuse into a production system with frozen design.  Moore’s law has been in existence for 40 years and is doing its mind numbing thing on schedule.  Integrated circuit densities have increased by a factor of a million, with comparable drops in cost.  A usable computer for an orbital vehicle can now equal the cost of one aerospace bolt.  Sensor prices have not fallen as far.  Sophisticated units still cost as much as a good valve.  But details aside, these essential systems costs have fallen so far that they could be minor cost items in even the smallest launch vehicle.    

I grant that Space Launch is presently a tiny market, focused on extremely risk averse customers, and has no experimental sector.  In 2005 (the last year reported) the FAA counts 5 total licensed US commercial space launches ($350 Million estimated total value).  The previous year 3 manned launches were accomplished in a private research vehicle.  This is not a small number of launches by comparison, and portends future changes.

Given these realities, it is no surprise that “economy” approaches to space launch are “unproven” – nobody presently cares to pay to try them.  A few experiments would not be statistically valid in any case: ALL the commercial flights would be too few for reliable statistics!  This is not likely to change until the millions of individuals who want to go into space personally realize that they are no longer locked out of this frontier.  Then we can see progress.

I participated earlier in a discussion of “White Space” (Off the Map, speculative business efforts with no established customer base.)  Certainly private space launch (including orbital and interplanetary flight) falls into this category.  But when human “Memory Warp” is avoided, there are many parallels in computers and communications systems.  In 1980, “Visionaries” were extolling “Home Computers”, while many knowledgeable people were questioning why any rational person would want a computer in his home, and what he would do with it.  This fact is hard to remember or believe today, when it is common to worry about the “Digital Divide” and the possibility that “Computer Illiterate” Americans or foreign nationals will be outcasts in future society.  

The business computer was discussed earlier, with Memory Warp claiming an obvious “productivity enhancement” motivation.  But before 1979 computers were only used in business by the accounting and engineering departments.  Sophisticated companies made computer access possible with time share terminals.  But hammering out a formatted page of data at 10 characters per second on a teletype was painfully slow.  (This required one to two minutes to update a modest table of data.)   Middle managers relied on good calculators plus intuition and experience to guide optimization efforts.  But VisiCalc changed all that.  The combination of this program and affordable, dedicated desktop computers with video displays (initially the Apple II) accelerated this processes by orders of magnitude.  So unprecedented was this breakthrough, that managers purchased their computers personally:  there were no corporate policies which would allow for such an expense.  FOLLOWING this breakthrough, the imitators had a recognized market to address with promises of productivity enhancement and competitive upgrades.  BEFORE this breakthrough this new toy was just another expensive boondoggle.

Personal spaceflight will follow related patterns.  The key in 1979 was to accomplish interactive number crunching with a slow (6502) processor and little memory.  The key for personal spaceflight in 2009 will be to pack light (very light), and go anyway.        

[edkyle99]

rpspeck - 3/5/2007  5:37 PM

Since these facts are not secret, it is no surprise that students shun “Aerospace” careers.  
Experience in Aerospace and Military work is a blot on your resume: it marks you as not being smart enough to be hired for video game work.  (“Rocket Science”, as a description, has two implications: Esoteric and incomprehensible, plus irrelevant, Nobody Cares.)

If students shun aerospace, it is because they can make more money elsewhere.  And good for them if that is the path they choose.  But as a former "aerospace" employee myself, I have to loudly disagree with your assertion that experience in "aerospace and military work" is a "blot on your resume".  I would hire one of those blotted resume holders every time ahead of a "video game developer".  

 - Ed Kyle

[rpspeck]

Good for You!  I would probably do that also, since I work in the real world, on multidisciplinary challenges and aerospace is good preparation for those.  Yet I see what I have described in many companies.  

I also believe this situation will change when more than a few have experience with SpaceShipOne type programs!