Thoughts on Bigelow's Business Plan

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.

Comments

[Aaron Oesterle]

Dan, I've had similiar thoughts about the issue of water landing. My personal suspicion is that, while its not a deal breaker (because I didn't get that impression), they really want to avoid those. Part of that though raises the question - just how big does the body of water have to be when landing? Do they need the margin of error that the ocean provides? Or can they get by with smaller, and if so, how much smaller? Can something the size of the Great Lakes work? What about something the size of the Finger lakes? What about Houghton Lake, in Michigan (It's about 7.5 miles by 4.5 miles)? If you could put down in something like the Finger Lakes, or Houghton lake, my suspicion is that Bigelow would have much less to complain about (you'd just need a glorified tugboat, and a crane).

But can you put down in a lake that size, and maintain acceptable safety margins - I haven't heard anyone give a good answer. But I can see how/why he'd like to avoid a water landing, IF it has to be in an ocean.

[nobody]

I think you are wrong about there being a market for sovereign clients on BA modules:

There is a lot of political significance to having a national astronaut visit, cooperate with and use a national facility like ISS or Mir. There is no political significance and worse, negative prestige, to sending a national astronaut to a commercial facility rented from a puny American company. I doubt there will be many real sovereign clients the way people are thinking about them. I suspect there will be some private space tourism clients masquerading as sovereign clients to get out of paying taxes, as was the case with Shuttleworth.

[Robert Horning]

I disagree that the sovereign nations as a market is irrelevant, but it is a niche market only so far that Bigelow and other alt.space companies could "bootstrap" nations that may want to get into the game, such as an Israeli orbiting lab. Clearly Israel has the technical capabilities of doing something like this on their own, but sticking with commercial production models could significantly reduce costs for doing this just as commercial production of nuclear power plants in France has significantly reduced the cost of nuclear electricity generation.

On the other hand, the main reason for building an indigenous spaceflight program is a way to announce to the world that your country has the capability of dropping a bomb, especially a nuke, anywhere in the world that they care to put it.

This was something not lost to the U.S. military when Sputnik I was launched, and it drove the point home when (perhaps coincidentally) it crashed into the middle of Wisconsin after re-entry. The Apollo program in a certain context could be viewed that the USA could put into orbit (and de-orbit at will) nearly anything of any size that you cared to put into space. The Space Shuttle program was in some ways a demonstrations we could also snatch anything that is in orbit and bring it back to the Earth whenever the USA wanted to do that task.

As far as Bigelow Aerospace getting respect in terms of being a business, I think the size of Budget Motels and the construction companies of Robert Bigelow would demonstrate economic viability to the endeavor that would be sufficient to convince most people to consider this approach in term of getting into space. This is not the dreamers of the 1980s who wrote a bunch of stuff in SF magazines only to discover that it took real money in order to get into space. And even that wasn't sufficient to do something like buy your own private Space Shuttle.

There will be many people, including governments, that will have a much easier time dealing with Bigelow Aerospace precisely because it is an independent company and not an agency of the U.S. government, subject to approval from Congress on what bolts to buy from what manufacturing company or subject to 4-year-cycles due to changes in presidental administration. Many individuals have been burned by things like the "Get away special" program and attempts to commercialize the space on the Space Shuttle, not to mention governments that have been shut out of shuttle flights due to the Challenger and Columbia mishaps. I don't see Bigelow Aerospace putting up with a 3-5 year launch delay because of a similar kind of mishap.

[absermele]

Друзья заходите к нам на сайт, здесь есть все новые шаблоны для dle, модули платные и бесплатные, хаки, новейшие релизы для datalife engine мы собираем все для вас со всего интерната [url=http://dlemodern.ru/]релизы dle[/url]

[MotToornabats]

Хотите Скачать филмы быстро и бесплатно, Вам сюда [url=http://expresskino.ru/]Комедии бесплатно[/url]