In recent years, a rapidly-growing space industry has emerged and the importance of this industry to the economy, our future, and individual lives is drastically underestimated. Which is precisely why this book by Raphael Roettgen, founder of the investment firm E2MC, published by the Space Business Institute, is so important. I have read dozens of books on this subject, but few authors manage to present the topic in its entirety with such competence and clarity, making complex concepts understandable to a broader audience.
The space industry encompasses a wider range of categories than most people would ever realize. In addition to companies that focus on producing rockets (launchers) or manufacturing satellites, there is a distinct sector known as “remote sensing,” which involves the space-based collection of Earth observation data and is of major importance to business, science, and the military. This is a particularly attractive sector for start-ups because, unlike futuristic endeavors such as asteroid mining, money can be earned right here, right now. The same applies to the fields of satellite communications and satellite navigation, which already play a crucial role in modern society and has a positive impact on the everyday lives of individuals and the overall economy
Then there are companies that specialize in conducting scientific experiments in space, and others that go as far as working on manufacturing products in space, because the special conditions found in space (most importantly, weightlessness) allow interesting use cases and cannot be easily replicated on Earth. Finally, there is the field of space tourism, which many experts predict will have a great future as soon as costs decrease.
Reducing costs is undeniably one of the most significant outcomes of the growing involvement of private companies. While the exact extent of the cost reduction is difficult to pinpoint, it is clear that there has been a substantial decrease. As such, it is realistic when Roettgen writes: “These days, an uncrewed payload flight to Low Earth Orbit (LEO) on a SpaceX Falcon 9 costs between fifty and sixty million dollars. Since the vehicle has a maximum payload capacity of over twenty-three tons (but usually carries less, in part because extra propellant is needed to bring back the first stages), the price per kilogram (2.2 pounds) of payload is less than US$3,000.” Other rockets, such as the European Ariana 5, cost about seven to ten thousand dollars per kilogram of payload. “Although SpaceX does not publish figures regarding its own costs, it can be estimated from various data points that the Falcon 9 rocket probably costs less than half of what SpaceX’s end customers pay.” SpaceX probably orients its pricing strategy to align with its next cheapest competitor.
The author believes that launch costs as low as US$1,000 dollars per kilogram will soon be achievable, representing a potential reduction of around 90 percent compared to the previous standard in public-sector space travel prior to the emergence of private space flights. This substantial decrease in costs is projected to open up new opportunities for business models within the space industry that were previously considered unprofitable. As a result, demand for transportation options is expected to surge, which will in turn drive further cost reductions and foster a positive cycle of decreasing costs and an expanding space industry.
SpaceX, for example, frequently launches a number of satellites into space at once and releases them all at the same location, which isn’t always where they are actually needed. These shared flights are part of SpaceX’s ride-share program, which gives smaller satellite providers more affordable access to space but little opportunity to determine exactly where their satellites are deployed. Until now, it has taken a long time for the satellites to reach their final target orbit. Recognizing this challenge, companies have begun developing micro-launchers – smaller rockets that launch satellites at the exact time and place that the customer wants. Additionally, new business models have emerged, including so-called “space tugs,” which are modeled on tugboats pulling barges on rivers. Also known as orbital transfer vehicles, these space tugs transport satellites to their intended destinations in space.
Other companies are working on building the equivalent of orbiting gas stations to provide a means of refueling satellites or rockets that have run out of propellant. And, of course, there are also business models that hope to generate money in the more distant future, such as constructing data centers on the moon or asteroid mining.
The author presents a wide array of business ideas, some of which are already earning a lot of money today, others – perhaps – only in the distant future. The beauty of capitalism is that, unlike government-funded space programs, which usually only select and finance a few, large and very expensive projects, capitalism gives rise to thousands of companies and ideas. While many will fall by the wayside, some, like SpaceX, have the potential to revolutionize entire industries in ways that state-owned enterprises cannot. Wherever there is a problem, there are creative companies developing solutions and business models. For instance, the issue of space debris is becoming increasingly problematic, and new methods need to be devised for its disposal. Entrepreneurs are simply more adept at developing innovative solutions to problems than government-run entities. However, this does not mean that public-sector space programs such as NASA will become obsolete. These programs will continue to play a crucial role in basic research and serve as valuable clients and partners for private space companies.
