Tag Archives: spacex

Bring your own business plan and be ready to die, if you want to go to Mars

by Steve Blum • , , ,

Elon Musk outlined his technical roadmap for getting to Mars in a remarkable hour and a half long presentation at the International Astronautical Congress in Guadalajara, Mexico on Tuesday. Most of what’s been written about it has focused on two themes: the need for a back-up planet in case something catastrophic happens on Earth and the $200,000 ticket price for a ride to Mars. The latter isn’t exactly accurate, and the former is not Musk’s reason for doing it.

He stressed that it’s about adventure and the innate satisfaction of taming a new frontier, and the people who go will be driven by their own visions and dreams…

The goal of SpaceX is really to build a transport system. It’s like building the Union Pacific railroad, and once that transport system is built, then there’s a tremendous opportunity for anyone who wants to go to Mars and create something new or build the foundations of a new planet. So, it’s like who wants to be among the founding members of a new planet and build everything from iron refineries to the first pizza joint? We’ll want them all.

His business model is a physical version of the online economy written on a grand scale. He’ll provide the Interplanetary Transportation System to move people and their possessions to Mars and beyond; everything else is up to them.

Which is why the media focus on the $200,000 ticket price is misleading. Musk made it clear he’s not offering a package holiday. His responsibility ends on arrival. Mars colonists will have to figure out what to bring, how to pay for it and support it across millions of kilometers, and what to do with it once they get there.

Which is exactly how it should be. Different people will try different things, and some will live and some will die. Some will struggle on the edge of extinction and some will make their fortunes. The stakes are higher than in the dot-com world, where a failed business plan is just bragging rights on a resume, but the principle is the same. It’s also the same principle that drove colonisation of the Americas – some settlements were completely lost and others barely survived. Even the Massachusetts Bay colony of Mayflower fame suffered a 50% death rate its first year. And there won’t be a friendly Indian tribe to help Mars colonists. Probably.

The first SpaceX flight to Mars will be in two years, using rockets and spacecraft that are already in service and taking payloads for hire. The new ITS, which can deliver 100 people to Mars and return, will fly in about ten years, if all goes well. Musk isn’t interested in selecting who goes, except that he wants to go himself eventually. Anyone with the cash can buy a seat, and there’s only one qualification.

“The risk of fatality will be high”, Musk said. “Are you prepared to die? Then that’s ok, then you’re a candidate for going”.

Click to download Musk’s presentation deck
Video of Musk’s presentation
Full video with Q&A session

Billions to be spent replacing Iridium satellites – will the business fly this time?

by Steve Blum • , , ,

A flood of cash was ploughed into building telecommunications systems in the 1990s, with generally bad results for the original investors. Some companies went through bankruptcy, but more or less came out the other side still functioning. Others collapsed completely, with the assets selling at fire sale prices.

The most glorious of those failures had to have been Iridium. Backed by Motorola, it launched a low earth orbit constellation of 66 satellites that were designed to communicate with brick-sized phones from any point on or over the planet. And it worked. I beta tested a unit, taking it to New Zealand where it easily handled a call from the top of Mt. Tongariro, all the way around the world to England. And kept me in touch with day to day business back home, the occasional dropped call notwithstanding.

Shortly thereafter, though, the company imploded and its initial investment of something like $6 billion was wiped out. An entrepreneur bought it out receivership for about $25 million, and has been operating it ever since.

Unlike the fiber networks of the same era, though, the Iridium constellation won’t last forever. It’s approaching the end of its useful life, and the company has to start replacing the birds soon. The plan is to begin launching Thales Alenia Space-built replacements 11 at a time on Space-X Falcon rockets beginning next June. According to a company spokesman, the total cost is in the $3 billion range, with the French government floating the necessary loan.

The difference between then and now is that Iridium claims to have “nearly a million” customers, which translates into actual cash flow. The service isn’t cheap – talk time and data connections cost more than $1 per minute, with speeds of 2.5 Kbps or slower typical – and the U.S. military accounts for about a quarter of total revenue. That’s a slow connection, but sufficient for M2M purposes, which is a growth area for the company. Whether that’s enough to pay off the note by 2019 as planned remains to be seen, though.

Musk takes on another impossible dream

by Steve Blum • , , ,

It’s hard to bet against Elon Musk. He made a fortune as a founder of PayPal, but instead of fading into a life of one-hit wonder obscurity sitting on boards and listening to investment pitches, he doubled down by going weird: electric cars and rocket ships, old ideas with a long trail of broken genius. Each venture had “billionaire vanity project” written all over it. Now, both look likely to revolutionise transportation. We can only hope his Hyperloop daydreaming follows the same path.

Can he revive a 1990s satellite mega-constellation project? Musk has confirmed that he has a 700-satellite low earth swarm under development, a globe circling network of 100 kg birds that could deliver Internet connectivity anywhere on the planet – land, sea or air. Details are scarce, but it sounds a lot like a revival of the Teledesic project, which started out as a proposal to put 800 or 900 birds in orbit, each capable of handling as much as a gigabit of throughput.

The two guys behind it – Craig McCaw and Bill Gates – had as much cred then as Musk does now. But the reality of launching what was originally a $9 billion system was too much even for them. Eventually scaled back to 288 satellites and finally to nothing, Teledesic fell victim to the reality of physics and economics: cutting costs means reducing mass which decreases available power which equals less bandwidth. Scarce capacity is expensive capacity – eventually the billions add up to real money – making it the bandwidth of last resort. It’s hard to make a business model work on that basis.

Gates and McCaw thought so, anyway. Teledesic was shelved along with several other grand satellite plans of that era. But Musk seems ready to make another try. It’s hard to think of anything that’s changed significantly: technology is a lot better but bandwidth demand and expectations are even higher. But if it was easy to think of, someone would have figured it out already. Musk isn’t just someone. So it’s worth paying attention.

Boldly spend with PayPal Galactic

by Steve Blum • , , , , ,

What fun would moon golf be without a friendly wager?

There’s more than a whiff of publicity stunt about it, but even so, the launch by PayPal and the SETI Institute of a project to create a payment system that can be used in outer space is a fascinating idea. The initial problem they want to address is creating a medium of exchange for the space tourism industry.

Elon Musk, one of PayPal’s founders, is also behind SpaceX, which makes real rockets that are already sending cargo into orbit and should soon be capable of transporting people too. The odd jaunt by multimillionaires aside, it’ll be years before there’s anything like passenger service to low earth orbit, but sub-orbital flights on Virgin Galactic are nearly a reality. Private sector economic activity won’t be far behind.

I can think of a couple of different approaches to the problem. The dull way is to use existing credit card systems, perhaps with a dedicated payment gateway for transactions made in LEO (or beyond) to sort out exchange rates and any other national banking issues that might arise. That scenario would be little different from using a credit card on a cruise ship in international waters. Like I said, dull.

The interesting way would be to create a completely new virtual currency for outer space, or adapt a terrestrial one, like Bitcoin. LEO doesn’t present any serious technical problems. Even linking with the Moon or L5 only introduces a couple of seconds of light speed latency. But developing something that could be used where ever mankind goes in the solar system would be a challenge. It takes more than 30 hours for a radio signal to go from one extreme edge of the solar system to another.

Buying something with Bitcoin, which relies on a large, highly encrypted log of transactions, is probably possible at that distance. Mining Bitcoins, which involves winning a computational race, wouldn’t be practical even from the minimum Mars distance of 4 light-minutes.

So we need another way. With Musk already in the space business and co-founder Peter Thiel developing both virtual currencies and sovereignty, PayPal has the pedigree to find it.