By now, you may have heard of Bigelow Aerospace's announcement last week laying out some details from its business plan. In this week's The Space Review, Jeff Foust transcribed many of the details of the plan, so I will not repeat them here. My first reaction was that these prices seem awfully high -- they are low only in relation to the outrageous prices for work at the International Space Station. But after thinking about the details over the last week, I have to admit that the business plan as stated is plausible for Bigelow's target markets: private business clients and sovereign clients.
For private businesses, the price and execution will be the driving factors. The stated prices for some Bigelow services are high. However, it seems likely that Bigelow will aggregate lots of small pieces of business. The key will be to make it easy for each client to start very small -- well under a million dollars -- to get its feet wet. This strikes me as a very laborious and risky business for Bigelow. It will require lots of client hand-holding. This business probably will start very slowly. And even if Bigelow executes flawlessly, the attractiveness of microgravity manufacturing and research is unknown.
For sovereign clients (countries), the PR value and politics will be the driving factor. It seems that the demand at these prices will be inelastic -- e.g., a country would be no more or less willing to buy a month of hang time if the price is $15 million per month versus $5 million per month, since neither value will break the budget. The pool of potential sovereign clients seems healthy -- 50 or 60 countries that may be interested and capable of maintaining an affordable space program. The market is proven, with South Korea's recent purchase of a flight to ISS aboard the Soyuz and associated services. Bigelow may see some of its business driven by rivalries between countries. For instance, Taiwan may gain a PR benefit by maintaining a space program in the face of Chinese space expansion. Likewise, Pakistan, impoverished as it is, might see a need to keep up with the Indian space program.
The transportation piece of the business plan confuses me a little. I understand the necessity of diversity in the pool of potential launch vehicles and agree that sacrificing low costs for diversity might make sense. However, Bigelow takes away much of that diversity by stating that it doesn't want to do a splash landing. Unfortunately, the vehicle that may drive down Bigelow's operating costs the most -- the Falcon 9 with Dragon capsule -- splash lands. Is a splash landing really that dramatic? Were the Apollo capsule landings too exciting?
Overall, I'm intrigued by Bigelow's plan. It isn't obviously ridiculous, and Bigelow has several years to adjust the plan as the company learns more. The transportation picture is a little murky, and I will be interested in knowing more about Bigelow's plans in that regard.