The exhibit hall at the SpaceCom conference in Houston featured companies and organizations inside and outside of the space industry, looking at the industry’s prospects for growth. (credit: J. Foust) Space commercialization: finally ready for liftoff?

The four-letter c-word dominated the conversation at the Space Commerce Conference and Exposition, aka SpaceCom, in Houston last month. Concerns about cost, and the promise of profit, attracted more than 1,500 attendees to discuss space commerce. The main speakers agreed that space commerce was poised at an inflection point for growth; the major disagreement was the angle of increase. The drops in launch costs, spawned by SpaceX, have changed the international launch industry. Whether these reductions will trigger the desired rapid growth is unclear. At the heart of this renewed optimism was reducing costs to increase the affordability of accessing and working in space. Just as the Ford Model T enabled millions to afford their own car, lower mission costs will attract more users. Whether costs will drop significantly enough to fulfill the expectation of commercialization advocates, however, remains the big unknown. The drops in launch costs, spawned by SpaceX, have changed the international launch industry. Whether these reductions will trigger the desired rapid growth is unclear. Measured on a per-pound basis, even reusable launch vehicles will probably cost in the low thousands of dollars. While a significant improvement over the $5,000–10,000 per pound now, that’s still a high barrier to entry. John Elbon, the vice president of Boeing’s Space Exploration Division, argued for looking at total cost, not just launch costs. What would be the benefits of using the Space Launch System (SLS) to send a probe to Europa in two years instead of seven? Designing the James Webb Space Telescope (JWST) to launch on a SLS with a 10-meter fairing probably would have significantly reduced the telescope’s technical challenges and cost overruns. JWST was originally planned to cost $1.6 billion and launch in 2016. At this point, the numbers are $8 billion and October 2018. One area of disagreement concerned component quality. Is the rigorous and expensive testing and certification of space-quality materials and components fully necessary? Jeff Greason, an XCOR Aerospace founder and board member, criticized the space industry for its technical conservatism, one due to the low frequency of flights and the concomitant emphasis on 100-percent reliability. In contrast, frequent flights would allow easier risk-taking, experimentation, and innovation. Experience would provide reliability and safety, creating opportunities for commercial off-the-shelf (COTS) parts suppliers to remake the supply chain. Standing up for technical conservatism was George Bullen, the president of Smart Blades, Inc. He warned that advanced manufacturing innovations meant new unknowns. Bullen cautioned about the importance of understanding and measuring new materials and manufacturing processes. Building and using composites in particular demanded advanced diagnostics to ensure safety and performance. Lowering costs was critical, but so was giving potential users reasons to go to space to make money. What products and services would attract investors as well as users? Erika Wagner, business development manager at Blue Origin, described the importance of developing suborbital flights and low Earth orbit not just as destinations and vantage points but also as tools. Employing microgravity was cited as an increasingly promising opportunity. Why the optimism? The increased availability of lower cost launch vehicles is clearly one answer. Another answer is the CubeSat specifically, and miniaturization in general. Beyond cost, a major challenge to increasing research and commercial operations in space (and near space) was communicating the possibilities to potential users. Some possibilities remained potential, but promising. Michael Jones, the president of the Maritime Alliance, talked about how the lack of collaboration and coordination across ocean industries limited the importance of “Blue Tech” but provided opportunities for greater cooperation with “Space Tech.” Selling space opportunities demands actively reaching out to potential users with language, concepts, and procedures they can understand, according to Gregory Johnson, president of the Center for the Advancement of Science in Space (CASIS), which manages the ISS National Laboratory, and Jeffrey Manber, the CEO of NanoRacks. NanoRacks created a separate organization, dreamup.org, specifically to attract students and innovators. Attracting new users means overcoming the perceptions (and occasional reality) of high cost, long lead times, and a daunting bureaucracy. One goal of SpaceCom was to bring space and non-space communities together to overcome those perceptions. Mark Gittleman, the Executive Vice President of Intuitive Machines, set the gold standard by describing how the oil and space industries resembled each other (e.g., technically challenging environments, high costs of failure) and could learn from each other. Speakers applauded the passage of H.R. 2262, the U.S. Commercial Space Launch Competitiveness Act, which updated the 2004 Commercial Space Launch Amendments Act, itself an update of the 1988 bill that updated the original 1984 bill. Demonstrative of the challenges of commercializing space is the bill’s extension of launch liability from 2016 to 2025. That is, in 2004, advocates thought space commercialization would be strongly established in 2016. In 2015, the expectation remains a decade away. Why is this time different for commercial space? Reassuringly, SpaceCom speakers included veteran space capitalists like Manber and analysts like Tauri Group managing partner Carissa Christensen, but also a new generation, like Silicon Valley Space Center co-founder Sean Casey. Many participants had “business director” on their business cards. This vitality is a very good sign. Why the optimism? The increased availability of lower cost launch vehicles is clearly one answer. SpaceX has shaken up the launch market like Orbital Sciences (now Orbital ATK) never did. There is something to be said for being a private firm backed by a billionaire instead of a public company when pursuing an expensive, long-term venture. Another answer is the CubeSat specifically, and miniaturization in general. As PlanetLabs and other firms have demonstrated, you can pack an impressive amount of technical smarts in a small, lightweight space. Smallsats are truly fulfilling former NASA administrator Dan Goldin’s 1990s policy of “faster, better, cheaper;” the joke then was you could only get two out of three. Virgin Galactic has approximately 551 employees, the number of people who have orbited Earth. In 2014, Uber had less than 500 fulltime employees, but a stock valuation of $50 billion. Two more answers are business plans that provide services, like data, which can be sold multiple ways instead of spacecraft, and new venture capital funding and enthusiasm entering the market. More changes are on the horizon, especially 3-D printing (also traditionally, and more accuratel, known as additive manufacturing), which could radically reshape ideas about operating in space. Yet the future of expansive space commerce is not here yet. George Whitesides, CEO of Virgin Galactic, inadvertently confirmed one of the problems big venture capitalists will have investing in space. Virgin has approximately 551 employees, the number of people who have orbited Earth (in other words, 53 years of human space explorers can only fill an Airbus 380). In 2014, Uber had less than 500 fulltime employees (today it has nearly 2,000), but a stock valuation of $50 billion. The economics of space commerce are changing for the better, as SpaceCom showed. The question will be whether better is good enough. Home









