The Betamax vs. VHS competition, or Mac vs. Wintel competition, redux … in space.

Where “good enough” cost-effectiveness won out over maximum performance.

If only the English language had a way to make self correcting messages, as computers do:
https://www.youtube.com/watch?v=X8jsijhllIA (20 minutes; Three Blue One Brown “How to send a self-correcting message (Hamming codes)”)

If you are crazy into computers: Part 2: https://www.youtube.com/watch?v=b3NxrZOu_CE (17 minutes).

My recollection of the time was that the “impractical” opinion was almost universal and the “impossible” opinion was even closer to universal among cognizant scientists and engineers. The SpaceX critics seemed in anticipation of being able to say “I told you so!” It seems to me that they had not anticipated the reentry burn, which slows Falcon to a similar speed as New Shepard during entry through the denser part of the atmosphere.

(I was not as skeptical as these people, but I did have concerns about landing on a barge that was rocking and rolling in the waves, and even if a landing succeeded, keeping a booster from falling overboard afterward would be a problem. They did lose a couple of boosters over the side, but for the most part have solved these problems. The Falcon booster and Merlin engines underwent some iterations, most likely in order to improve the economic viability for reusability.)

After the first time that Falcon survived reentry and “landed” in the ocean, the critics changed from “impossible” to “impractical.” That criticism gained so much traction that it is easy to see why so many people believe that Falcon launches lose money.

However, the Space Shuttle showed that it was not impossible to reuse even an orbital spacecraft, and early concepts for launching the Space Shuttle included adding wings to a Saturn V first stage so that it could return and be used for additional Shuttle launches. Reusable first stages were accepted as possible and practical way back then. What was the difference between the late 1960s and 2010? The Space Shuttle.

The Space Shuttle had been such a disappointment that NASA and Congress chose to revert to Apollo era launch techniques rather than improve on the flawed Shuttle system. NASA chose the Ares expendable rocket for their Constellation program to return to the Moon, and Congress chose the Space Launch System rocket design, which also eschewed reusability. Before these decisions, I believed that the Shuttle project had done some good in the cause of space exploration, but I now believe that the Shuttle had done much more harm than good.
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Ray Van Dune wrote: “Yes, I have often remarked that SpaceX is going to have to try mightily to get out of the F9 / FH business, because customers are going to want to keep buying those rides until SpaceX makes it too expensive for them! Which might take a while, since I’ll bet Elon is not as cutthroat as you might think.”

We already know that Falcon 9 will have to remain in service until 2030 in order to support the contract with NASA to fly Dragon to the ISS. It remains to be seen whether other customers will continue to prefer Falcon.

Elon Musk and his SpaceX company need not be too terribly cutthroat. The price to launch a payload on a Falcon is lower than the competition, but not necessarily as low as it could be. There is a concept of an “umbrella” price in which a preferred supplier charges a set price for his product and the competition need only set their prices a little lower in order to get customers to come to them. The competitors may make a high profit, if they have found better efficiencies than the preferred supplier. It is only when the preferred supplier loses too many customers that it goes from being annoyed at the competitors to needing to find its own efficiencies so that it can lower its prices in order to get customers back from the competition. In the launch industry, we have seen several launch providers work at finding these efficiencies. We have also seen many companies join the competition to provide launches, from smallsat launchers to Blue Origin, to other nations starting their own new launch companies and setting up their own launch sites.

SpaceX set their prices to be similar to the prices of Russia (which has reliability issues) and China, Falcon has become a preferred supplier and the rest of the world is scrambling to find efficiencies in order to undercut SpaceX. SpaceX has three of the three most important factors going for it: price, availability, and reliability. Falcon has left plenty of room for companies to find efficiencies, as the Starship project is showing us.

The best part of this competition among launch providers is the large number of new private space companies (e.g. https://behindtheblack.com/behind-the-black/points-of-information/esa-commits-more-than-100-million-to-encouraging-private-space-companies/ ) that are starting up in order to use this newly found easy access to space for their own business opportunities. This is why Musk had chosen to enter the launch provider market rather than the space exploration business. He had originally wanted to explore Mars, but when he found that launch services were too costly, he switched to finding ways of making it less expensive to get there. With this success, he now intends to settle Mars. To do that, the cost to get there has to be very low.

What looks like cutthroat business tactics is improving the entire space industry.

The reality is that, in his rush to get people to Mars, Musk has left several opportunities to find additional efficiencies that he didn’t have time to find. If Starship works as intended then it will do for space exploration what the Space Shuttle was intended to do.

I must add that this occurred shortly after Musk had announced SpaceX’s plan to land the first stage, and had not done it yet. Moreover, this professor’s opinion was not an outlier at the time. It was the accepted wisdom in established space circles that reusing a first stage was impractical and possibly impossible.

Michael McNeil: Sorry but this conversation occurred at a university event years ago where I was giving a keynote lecture. I do not remember the name of the person who said it, only that he was a professor of physics at that school.

Richard M: Fixed.

NASA and the U.S. Space Force have significant access to SpaceX’s financials too, you know.

I don’t think any company that wants to stay in business should try mightily to get out of a profitable sector. Starship or no, abandoning F9 while it is still profitable seems like a bad move. Only if F9 operations are somehow interfering with more profitable Starship operations would I agree that shutting it down ASAP makes sense.

Yes, I have often remarked that SpaceX is going to have to try mightily to get out of the F9 / FH business, because customers are going to want to keep buying those rides until SpaceX makes it too expensive for them! Which might take a while, since I’ll bet Elon is not as cutthroat as you might think.

Well, that’s embarrassing. The specific impulse is higher, not lower, for hydrogen, meaning that less propellant is needed to provide the same thrust or that the same mass of propellant can provide the same thrust for a longer burn.

Also, in estimating the cost of a Falcon 9 launch, keep in mind that the upper stage is expended, and a new one must be made for each launch. SpaceX suggested that they may launch 100 times, next year, and if almost all of them are Falcon launches then they will need to manufacture almost a hundred upper stages. For me, Starship cannot get here soon enough.

I should add that Edward reminded me of previous data which says SpaceX is actually charging $52 million for Falcon 9 launches with a reused first stage. If that number is still in use, than their profit margin is likely higher.

wayne: I was specific: I estimate SpaceX is charging customers an average of $40 million for a launch. This is the price, not the profit.

As for SpaceX’s cost, with reused stages, I estimate the launch cost is somewhere between $10 million to $15 million. I am making a rough guess, but I suspect if I am wrong it is not by a lot.

Gary–
No book-cooking needs to be undertaken; the one thing Musk understands very well is reusable first stages allowed him to go to scale immediately.

Perhaps SpaceX would do better to charge less for a Falcon Heavy than for an expended booster stage. Of course, Starship will change quite a bit about the price list and the launch-environment requirements for the payloads.

“ … there is one – just one – who manages a fleet of commercial satellite launching rockets. And we may be years away from seeing another!”

Although we can still hope that New Glenn will become operational next year.

“ …Starlink, a revenue source that benefits from the cost savings of using an in-house fleet that nobody else has, … ”

If SpaceX is doing right for its investors, the launch division should be charging the Starlink division for each launch. Otherwise the Starlink investors are getting a free ride at the expense of the launch-division investors.
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Gary asked: “What are the thoughts of y’all?”

The last I heard, SpaceX was charging $52 million for a reusable Falcon 9 launch. Even if a booster cost the usual price, (order of magnitude: $100 million), using one ten times would amortize the cost to only $10 million per launch. This makes it easy — and likely — for each launch to be profitable.

The Russians and the Chinese were charging surprisingly low prices for their commercial launches, so we know that low prices for even the expendable launch vehicles are possible. Much of the rest of the world charged higher prices, because there was little incentive to find efficiencies in order to lower launch costs. Even Ariane V was launching about as often as it could be built, so the business existed for the prices charged. Europe’s willingness to subsidize its launches didn’t help to give incentive to reduce costs. The world’s launch capacity was close enough to being met that there wasn’t much incentive to find new customers through lower prices.

The purpose for founding SpaceX was to reduce launch costs enough that commercial companies could afford to send their own probes to Mars. Elon Musk originally had planned to send his own commercial probes, but when he discovered that the launch costs were prohibitive, he changed goals to lowering the launch costs. SpaceX didn’t waste time getting its rockets from the drawing board to the launch pad, either, saving money during the development phase. SpaceX designed cost efficiencies into its rockets, which is why the fuel efficiencies are lacking. The companies that use hydrogen for their upper stages had difficulties to overcome, as some of the delays with SLS on the launch pad have shown. Hydrogen as a fuel is technically efficient (lower specific impulse), but it is costly to handle. SpaceX reduced costs by eliminating hydrogen and going with the same fuel in the upper stage as the booster stage. This reduced the payload that could be carried, but it also reduced the price per pound (or kilogram), meeting the primary goal for designing Falcon.

Reusability, the move away from hydrogen, the philosophy of simplification, and the use of rapid development have all contributed to the reductions in cost and the ability of SpaceX to charge a lower price, yet still make a profit. This is commercialism in operation. It is free market capitalism in action. It is innovation in fruition.

And don’t let your friends talk about the “government money” that SpaceX supposedly relies on. It makes money from NASA / DOD for services rendered for NASA / DOD, and does it a lot better and cheaper than anybody else has! I get tired of explaining this to my brain-dead relatives.

Gary: The simplest proof that SpaceX is not cooking the books is twofold:

1. Other companies are rising to the challenge to match SpaceX’s prices. If SpaceX was cooking the books, then others would find it impossible to do this.

2. SpaceX has raised $9 billion in private investment capital. People with that kind of money don’t invest it without looking closely at the numbers. If SpaceX’s launch busines was not profitable, that money would not have been invested. Instead, investors eagerly flock to SpaceX.

To sum up, Falcon 9 has been a big money maker for years. At 50 launches a year, based on my estimated average price of around $40 million per launch, it brings in about $2 billion in income per year. Even if you eliminate the Starlink launches, the income produced by the rocket from NASA and other customers easily exceeds $1 billion per year. And since SpaceX’s launch costs are incredibly low because of its successful reuse policy, that income translates into very high profits indeed.

Your friend reminds me of the physicist who told me unequivocally that landing a first stage and reusing it was impossible, and even if you could do it there wouldn’t be enough fuel left to launch anything. That physicist was embarrassingly wrong.

Your friend doesn’t like SpaceX, and is making up reasons to justify that emotion.

What are the thoughts of y’all?

Ray / Blair–
Glad you brought that up. (and tangentially related– where does this specific booster come down? and do they attempt to recover any of the pieces?)
going a little wider-what I’d like to know: What the is the marginal-cost for each additional launch, using the same booster?
The cost-curve for SpaceX, must be amazing.

That’s funny.

Curious if boosters nearing economic end-of-life, are chosen for the sacrificial missions?

It looked funny with no landing legs folded up at the bottom. And when it went through max-Q, it popped two perfect vapor-rings!