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SpaceX Falcon 9 SmallSat Rideshare Program - Transporter Missions

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SpaceX rideshare program putting downward pressure on prices - SpaceNews.com — SpaceNews
The rideshare program is “incredibly competitive,” Safyan told SpaceNews. He called it “one of the more significant programs for the smallsat industry especially because of the pricing, the reliability and the number of orbits.”

“You don’t control the orbit or the schedule” but the cost savings are significant. It’s the equivalent of taking the bus versus an Uber. If there are no buses going to the desired orbit, one option is to pay a higher price for a dedicated launch. Another is to hire space tugs that are now being offered as a service.

“That can get you that last mile while still taking advantage of the bigger rideshare rockets,” said Safyan. “I think we’ll see more of that as years go on.”
 

Its worth noting that one of, if not the driving tenant to SpaceX's approach to relationships with external entities is a unique evaluation of LOE. While business relationships generally factor in level of effort required to realize revenue into contractural/pricing models (=more difficult relationships command larger bottom lines), Spacex's analysis approach is much more basic. Its no insider secret that, quite bluntly, they don't want PITA (from their perspective) relationships; they do not subscribe to notion of chasing dollars simply because they're available dollars. While that general concept is not unique in the world it is VERY atypical within the commercial space industry, where the legacy approach is basically to 1) have BD lock in the revenue because any money is good money, and then 2) have the execution teams figure out how to not over-extend resources that would bleed margin off of that revenue (due to unfactored/hnadwaved LOE).

Spacex's approach is clearly a function of keeping their eye on the Starlink prize. Even factoring realistic limitations onto the aspirational financial rack ups that are often floated around regarding Starlink, its pretty clear that Starlink's revenue is going to FAR outweigh the launch side of the house. SpaceX, due in large part to being a private company run by the richest guy in the world, has the luxury of passing on guaranteed short term revenue (that is also small relative to Starlink and potentially distracting from the Starlink timeline) and simply focusing on the future--the big picture.

Ridshares are an interesting case study for SpaceX. Initially their thought was that Spaceflight was a good deal--SX would sell SF a rocket, SF would bolt a bunch of *sugar* onto that rocket, and SX would come back launch it when it was ready...all with little SX effort other than the rinse-and-repeat rocket operations. The SSOA experience changed all that, and SX realized that with a reasonably small LOE--certainly much less than the SSOA experience--they could offer a ride share service and realize more revenue to boot. So...they spun up that service and basically relegated the aggregators to a middle-man--SX found balance in allowing the aggregator (SF, exo, etc) to work the really small satellites (cubesats, etc.) and then also deal with getting satellites away from the mission insertion orbit (like Sherpa).

Fast forward to today, and it seems like the latest Sherpa incident has pushed SX over the PITA line. While we all know (or have heard) that it can be difficult to work with SX, I suspect there's been plenty of legitimate (in SX's mind) 'little things' over the years working with SF that have basically just racked up under the recent 'big thing' incident, and SX/Elon's conclusion was that SF simply isn't worth working with anymore. Leaking propellant is a BFD for everyone (except The Russians, but that's another story...), and Range Safety surely has had a coronary over the whole thing, especially because it was flight equipment and not just operator/procedure error during fueling ops. Very much speculative here, but the relative behaviors between SF and SX during the post-incident investigation likely is a large contributor to SX's mandate.

Too bad for SF as its basically like being given a horse's head, but...SX isn't in the charity business.
 
“They definitely control and have a dominant position in the market,” said Curt Blake, former chief executive of launch services company Spaceflight who now leads the commercial space group at law firm Wilson Sonsini, of SpaceX. “I think the real question is pricing, and what is their cost, and why so low, so dramatically low?”
Uh…because they re-use most of the rocket and can pack dozens of sats into a single F9 fairing?

And other companies are complaining about that…
 
And other companies are complaining about that…
They're complaining that SpaceX allows for no competition. In America, we have laws that prevent companies from stifling competition. If SpaceX is setting their prices so low in order to prevent competitors from getting any traction, then that's a problem. From a legal standpoint, someone would have to establish intent. SpaceX may be setting their prices only because they're perfectly profitable at that level, and they want to foster the industry that uses spaceflight. If so, then it falls to politicians to decide whether they want another Boeing situation where there's really only one company that builds our spacecraft. Other companies would have to go after things like habitat modules, robotic arms, life support and so on - assuming that SpaceX doesn't get moving on those as well. Elon does not play well with others.

I'm guessing that SpaceX will remain the dominant company in spaceflight and will hold the position of a Boeing* or ASML - nobody else can do what those companies do. It's because of their extensive experience with the technology combined with the capital outlays required. Nobody else is going to just show up and start building commercial airliners in America unless they have something that Boeing cannot duplicate (or isn't interested in). The same with high performance computing and chip fabrication.

Ultimately, all the businessmen who thought that they could carve out their niche in spaceflight will be disappointed. SpaceX has erased the government model and has replaced it with a new paradigm for spaceflight which doesn't permit the terrible inefficiencies of the past.

*I'm not forgetting Airbus. SpaceX will have competition from state-backed entities for the same reason that Airbus exists. It's a kind of vertical integration on a national level.
 
SpaceX has erased the government model and has replaced it with a new paradigm for spaceflight which doesn't permit the terrible inefficiencies of the past.
Agreed, and any company that wants to compete with SpaceX will have to do the same. Rocket Lab may be one such company, and they seem to have a viable path forward. BO is trying to follow the SpaceX model and the recent CEO change there appears to be an attempt to fully break with the old space mentality that has stymied its progress.
 
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Obviously a bit of posturing there to try and stir up sympathy for some gub'ment support, I suspect including a lifeline kind of equivalent to how the various state funded European entities are what keeps Vega flying. But...the bottom line is that most rocket startups (like most startups in general) were always destined to fail, independent of SX's competition.

Playing the broken record, there's still a bit of a customer supply problem too--there really aren't that many entities that want to huck a lot of mass into space, so its not like the space industry has warehouses of things waiting for rockets to be built. Satellites that are both reliable and useful enough to base a credible business model are still relatively expensive (many $M's), and there's perpetual skepticism from The Deep Pockets in paying for that kind of thing (especially after The Year of the SPAC).

Yeah there's a number of entities biding their time with cuebsats (the significant majority of sats on Transporters) until they can raise enough to build something more useful, but there really aren't a lot of entities making a stable living off cuebsats. Planet is the darling of cubesat companies, but most of their revenue comes from a) the Skysats they acquired through the Skybox-->Google-->Planet acquisition flow and b) the ACE engines they acquired through the Apollo Fusion-->Astra-->Planet acquisition flow. Spire has been around long enough (and has grown big enough) to not simply be dismissed, but they're still a far cry from returning whatever their investor decks have been predicting over the years.


[Commercial] Satellite operators going to non-SX launch providers (mostly Rocket Lab) is also notable data point that launch price isn't everything. Capella and BlackSky are some of the bigger/established names and they pretty much exclusively launch on Electron at this point. Being able to launch when you want and where you want is obviously worth a premium to folks running a credible business that needs a persistent fleet of "big" Smallsats (vs cubesats). Note: That's mean to contrast with the significant portion of the bigger Transporter satellites, which are one off, experimental, or proof of concept, all of which can trade sub-optimal launch timing or orbit to keep that pocket full of duckets.

Time will tell if the mid-inclination Bandwagon launches more or less obsolete Electron (and Firefly Alpha, which is pretty much the only credible small vehicle in the pipeline). Time will tell if Neutron obsoletes Electron anyway, as time and time again rockets prove to be an excellent example of economies of scale. Like I've also broken record-ed here, the business case for a small launcher is really really fragile. When Rocket Lab has to build the same number engines for Electron that does for falcon and the majority of the cost is in the design an manufacturing (not the raw material) the opportunity for the small thing to win on cost is somewhat limited.
 
They're complaining that SpaceX allows for no competition. In America, we have laws that prevent companies from stifling competition. If SpaceX is setting their prices so low in order to prevent competitors from getting any traction, then that's a problem. From a legal standpoint, someone would have to establish intent. SpaceX may be setting their prices only because they're perfectly profitable at that level, and they want to foster the industry that uses spaceflight. If so, then it falls to politicians to decide whether they want another Boeing situation where there's really only one company that builds our spacecraft. Other companies would have to go after things like habitat modules, robotic arms, life support and so on - assuming that SpaceX doesn't get moving on those as well. Elon does not play well with others.

To be clear though (and I'm pretty sure you know this, but I want to state it outright for those that don't): Being a monopoly is NOT illegal. Preventing monopolies is not even an intent of the laws. It's fine to be a monopoly, but it is not fine to use that power to stifle competition.

For example, if you're starting out (e.g. SpaceX 12 years ago) and not a monopoly it is perfectly ok to sell things at a loss in order to attract customers. That's just a business tactic and is perfectly fine. Or you can tell a customer that you'll give them a great price on this launch but only if they'll sign a contract for the next launch as well. But once you've cornered the market (SpaceX today) then those same pricing or tying tactics are bullying and illegal.