How Will SpaceX Actually Make Money?

[Zucal]

So NASA basically used SpaceX as a guinea pig for reusability, then?

Actually, NASA is interested in SpaceX's barge landing attempts because of their use of supersonic retropulsion. Essentially, powered landings from orbit with heavy objects. They're keen on it because they don't get to do anything like that, and that data is very useful for landing heavy cargo on Mars.

[Nibb31]

So NASA basically used SpaceX as a guinea pig for reusability, then?

The implementation choices, and stuff that isn't part of NASA requirements, are decisions made by SpaceX, but the R&D for reusability is peanuts compared to the cost of developing the rocket and engines.

The Merlin engine was originally based on a NASA reference design from a few years back. The development of Falcon 1 was pretty much from Musk's pockets, but Falcon 9 and Dragon development were funded by NASA.

This is what makes the constant harping about "this new era of commercial spaceflight" a bit annoying. SpaceX's main customers are NASA and USAF. The launch industry, including SpaceX, only exists because it is heavily subsidized by the taxpayer.

Edited August 21, 2015 by Nibb31

[Rakaydos]

This is what makes the constant harping about "this new era of commercial spaceflight" a bit annoying. SpaceX's main customers are NASA and USAF. The launch industry, including SpaceX, only exists because it is heavily subsidized by the taxpayer.

That's like saying the car industly only exists because the road network was heavilly subsidised by the goverment. /you're right, of course, but it doesnt change how spaceX is changing the industly.

[Albert VDS]

@Nibb31: Most of the money SpaceX received from is for launches, only a "small" portion was subsidized and used for development.

SpaceX is what it is today thanks to NASA, but that doesn't mean it can't exist without NASA. It's like saying road workers only exist because of government funding.

[shynung]

The implementation choices, and stuff that isn't part of NASA requirements, are decisions made by SpaceX, but the R&D for reusability is peanuts compared to the cost of developing the rocket and engines.

The Merlin engine was originally based on a NASA reference design from a few years back. The development of Falcon 1 was pretty much from Musk's pockets, but Falcon 9 and Dragon development were funded by NASA.

This is what makes the constant harping about "this new era of commercial spaceflight" a bit annoying. SpaceX's main customers are NASA and USAF. The launch industry, including SpaceX, only exists because it is heavily subsidized by the taxpayer.

So this is more like:

SpaceX : We have a great idea! Let's land spent rocket boosters vertically to reuse them later!

NASA : Neat! Here's some money, go try it out.

Or did I misunderstood somewhere?

[Nibb31]

No, more like:

SpaceX : Let's try to make the launch business by making it cheaper.

NASA : Neat! Here's a contract to deliver stuff.

SpaceX : Let's use that money to experiment all sorts of things that might or might not work.

Reusability isn't a goal. SpaceX's goal is to bring down the cost of orbital launches, which is what they have actually done. Reusability is one of many industrial experiments to see if it can further that goal.

NASA isn't giving any money to SpaceX to develop reusability. They paid SpaceX to develop the Falcon 9, which it has, and they pay SpaceX to deliver cargo (and crew) to a destination for a given price. What SpaceX does with its first stage after doing its job is SpaceX's own business.

[shynung]

I see. So it's just business as usual, it's just that SpaceX spends more of its income into R&D than most other launch service companies.

[Nibb31]

I see. So it's just business as usual, it's just that SpaceX spends more of its income into R&D than most other launch service companies.

No, probably not. Boeing, Lockheed Martin, Airbus et al. probably spend far more on R&D than SpaceX.

The main difference in term of R&D is that SpaceX uses fast prototyping to throw stuff against the wall to see what sticks. Other aerospace companies spend money on trade studies and CAD modelling to figure out if something can work, then they try to find customers that are willing to pay, then they start building.

SpaceX's approach seems to be more like trial and error, which isn't typically very efficient and is high risk.

Edited August 21, 2015 by Nibb31

[Rakaydos]

No, more like:

SpaceX : Let's try to make the launch business by making it cheaper.

NASA : Neat! Here's a contract to deliver stuff.

SpaceX : Let's use that money to experiment all sorts of things that might or might not work.

Reusability isn't a goal. SpaceX's goal is to bring down the cost of orbital launches, which is what they have actually done. Reusability is one of many industrial experiments to see if it can further that goal.

NASA isn't giving any money to SpaceX to develop reusability. They paid SpaceX to develop the Falcon 9, which it has, and they pay SpaceX to deliver cargo (and crew) to a destination for a given price. What SpaceX does with its first stage after doing its job is SpaceX's own business.

Isnt that putting the cart before the horse?

Elon : Let's put a greenhouse on mars as a PR stunt!

NASA, Russians, ESA : Here's the price to put something on mars.

Elon: WT-F? bullcrap.

NASA, Russians, ESA : that's the way the industry works.

Elon: Let me call my friends. BRB.

SpaceX: Hey, Nasa, Elon here. We got our Falcon 1 into orbit for a fraction of the normal dollar-per-pound. Can we have some money for something bigger?

Nasa: *looks at numbers* wow, who'd have thought trimming the easy fat would be so effective. *looks at empty shuttle hanger* Uh, sure, you and that other guy with the old russian engines can both try, I guess.

SpaceX: Thanks, here's a Dragon that brings cargo down from the ISS. We heard you cant do that since the shuttle was retired.

Nasa: Oh, that's cool, we'll get you some cargos.

SpaceX: Oh, and we're gonna try some landing experiments on the same rockets to save R&D costs.

Nasa: Will it affect our cargos at all?

SpaceX: Hmmm... No.

Nasa: Sure, whatever. R&D away.

Nasa is paying ULA and spaceX to do things for Nasa. SpaceX is working on going to mars- one step at a time. ULA is just working for their Cost Plus Contract.

[Lukaszenko]

* SpaceX of course designs and builds its own rockets, as do its competitors. However, some of its competitors are using off-the-shelf components while SpaceX is all custom. So even without the landing system, SpaceX spends more on basic rocket design and production per rocket.

I read somewhere that they're making custom parts precisely because off-the-shelf aeorospace parts are so ludicrously expensive.

[WinkAllKerb'']

'Horny Movies' industry, and no gravity ... notice it already has the X in it's name and most of the people that could afford a ticket could probably buy one more for an escort ... anyway might be good for genetic degeneration researchs ... (Heavy sarcasm mode on, but not only) ...

*grumpf*

Edited August 21, 2015 by WinkAllKerb''
¯\_(ツ)_/¯

[windows_x_seven]

'Horny Movies' industry' date=' and no gravity ... notice it already has the X in it's name and most of the people that could afford a ticket could probably buy one more for an escort ... anyway might be good for genetic degeneration researchs ... (Heavy sarcasm mode on, but not only) ...

*grumpf*[/quote']

What the...

Can someone decode or translate what he said, please?

[WinkAllKerb'']

Bah, nevermind, i should remind not to post in here ; ) hehe, at least may be only in the "for question that don't merit there own thread" only ,'')

[RainDreamer]

What the...

Can someone decode or translate what he said, please?

"Adult movies", basically. Space adult movies/entertainment (certain 4 letters word is blocked). Space X already has 1 X, you see? add another 2. Maybe that could be a viable space industry, is the gist of that message.

[windows_x_seven]

"Adult movies", basically. Space adult movies/entertainment (certain 4 letters word is blocked). Space X already has 1 X, you see? add another 2. Maybe that could be a viable space industry, is the gist of that message.

Oh. I see.

Thank you for translating the alien message.

[Torquemadus]

Under the established cost plus system, R&D happens because the customer is prepared to pay for it. The idea of aerospace corporations spending their own money on R&D is so uncommon that many observers view SpaceX as being foolish for doing so. The arrival of a company like SpaceX has been a long time in coming. There have been many false starts.

At the beginning of the 21st century, there was a general understanding that "Old Space" was overpriced, and that the time was ripe for a wave of "New Space" start-ups. This needs to be viewed against the background of dot-com entrepreneurship that prevailed at the time. This culminated in the Ansari X-Prize, which carried with it the hope of a Lindbergh breakthrough that would open the way to commercial investment in the development and exploitation of space. All of the companies involved had the same problem; they had a business plan, but they had only a fraction of the financial backing needed to cover development costs. It was hoped that the X-Prize would serve to attract much needed investment, just as Charles Lindberg's flight did for commercial aviation. A detailed history of this chapter of spaceflight history can be found in Realizing Tomorrow, which is part of the People's History Of Spaceflight series published by the Nebraska Press.

A contemporary comparison can be made in the dilemma faced by Mars One, who need to figure out who will pay for their development costs. Bas Lansdorp made the very brave step of having his plan debated against his MIT critics in front of the Mars Society annual convention in Washington. The event was moderated by Robert Zubrin and was covered by The Space Review in their article: Red Planet Rumble.

SpaceX and their competitors have been very sensible in following the money offered by NASA to fund resupply and transportation costs to the ISS. Governments have an incentive to pay for space exploration due to the payback in scientific advances and the inspiration of young people to learn STEM subjects. Space programs have the potential to pay for themselves many times over provided that the money is spent wisely.

SpaceX can pay the bills through capturing the commercial satellite launch market, but their real potential is in lowering the costs of space exploration beyond Low Earth Orbit.

At the Mars Society convention, I was present at the troubling debate between Harrison Schmitt (Apollo 17 LMP) representing the "Moon First" viewpoint, Robert Zubrin (Mars Society President) advocating Mars Direct, and Casey Dreier (Director of Advocacy, The Planetary Society) advocating the "Flexible Path" approach. I questioned Casey Dreier after the event and asked him about the "flexible" plan to essentially go nowhere and do nothing. His explanation was that SLS and Orion are too expensive to do any actual exploration for decades to come (well into the 2030s, 2040s and 2050s) and that there is no possible political solution that can solve the problem. Therefore, NASA are going to be hopelessly hamstrung for a generation and must accept the fact that they will achieve absolutely nothing of note for decades to come.

Edited August 21, 2015 by Torquemadus