spaceportal.arc.nasa.gov

Space Entrepreneurship:The Next Big Thing

Greg Schmidt - NASA Lunar Science InstituteBruce Pittman - NASA Space Portal

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Ames Research CenterSpace Is Neat

• The public is fascinated with space– The Mars rovers website received over 6

billion hits in a 6 week period– Movies such as Star Wars and Star Trek

have brought in $ billions– The Smithsonian Air and Space Museum

draws in 5 million visitors a year– But . . .

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Ames Research CenterSpace Is Difficult & Expensive

• Getting there and living there is a challenge – Go up 200 miles and accelerate to 17,500 mph in 8 minutes– Hard vacuum– Lethal radiation– Microgravity– The hots are very hot (120C) and the colds are very cold (-100C)

• The cost of going to space has remained stubbornly high over the last 3 decades– $10,000 to $20,000 per kg– The best systems out there are only 98% reliable

• You fail in about 1 in 50 attempts sometimes catastrophically

• But there are changes on the horizon

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LaunchLaunch

Space OpsSpace Ops

Access from SpacePayload Return DemoPayload Return Demo

Rendezvous Docking Formation Flying

Rendezvous Docking Formation Flying

ExplorationExplorationLow Cost Commercial LunarLow Cost Commercial Lunar

Ground ActivitiesGround Activities

Science and DiscoveryNew CustomersSpace Access CertificatesAggregate Payloads

Increase DemandIncrease Demand

BIG SOLUTIONSfrom small space systems

BIG SOLUTIONSfrom small space systems

Automated LaunchIntegrated Ground Ops

Automated LaunchIntegrated Ground Ops

NASA Ames Research Center

NACA Style Research & Test Support Laptop Flight OperationsSpace Simulations

NACA Style Research & Test Support Laptop Flight OperationsSpace Simulations

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Ames Research CenterThere Have Been Many Failures

Business collapse of ambitious low-Earth orbiting satellite constellations in 1990’s (Iridium, Global Star) seriously limited commercial investment Kittler Aerospace OTRAG Beal Aerospace Rotary Rocket ARC Technology/Starstruck/AMROC - IP sold to SpaceDev in 1999 Iridium - 66 satellites Globalstar -48 + satellites Teledesic - 840 satellites

NASA hasn’t done so well either and has spent a lot more money NASP X-33 X-34 X-37 X-38, X-43 ALS OSP

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Ames Research CenterSome Successes

• Orbital Sciences• SpaceHab• Direct TV• Dishnet• XM Radio/Sirius

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Ames Research CenterEntrepreneurial Space ParadigmEntrepreneurial Space Paradigm

Venture CapitalGovernmentPrivate

Launch ServicesOrbital PlatformsSmall to Large SatellitesCapsule Return Systems

Government, DODBiotechnologyMicrogravity Materials

Space LaboratoriesEntertainmentTourism, Other

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Ames Research CenterNew Approaches Are Needed

Government has had the lead in space so far but this is changing Large net worth individuals are getting into this game, Paul Allen,

Jeff Bezos, Richard Branson, Bob Bigelow, Elon Musk, and others NASA has the ability to enter into unique agreements call Space

Act Agreement COTS program assisting development of commercial launch

industry, but more needs to be done that benefits a broader community

What are the proper roles for the government, industry and academia?

The NACA (National Advisory Committee on Aeronautics) model worked well in developing the US aeronautical industry in the 1920s-50s

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Ames Research Center

Opening the Space Frontier

Government Directed and Led

Opening the Space Frontier

Government Directed and Led

Developing Commercial Space

Government Supports and Guides

Developing Commercial Space

Government Supports and Guides

Opening New WorldsGovernment Directs and Leads

Opening New WorldsGovernment Directs and Leads

Learning from HistoryLearning from History

Developing Commercial and Military Aviation

Government Supported and Guided

Developing Commercial and Military Aviation

Government Supported and Guided

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Ames Research CenterGovernment Is Trying To Help

• DARPA initiated the Falcon program as part of their Operationally Responsive Space– 100 lbs to orbit on 24 hours notice for < $5 million

• SpaceX Falcon 1• Air Launch

• NASA Commercial Orbital Transportation Services (COTS) program was established to demonstrate the capability to deliver cargo and possibly passengers to the International Space Station ISS - $500 million over 5 years on Space Act Agreement– Two companies originally selected

• Space X - Falcon 9• Kistler Aerospace - K-1

– Kistler failed their investment milestone and agreement was cancelled

– Orbital Sciences was awarded the remaining Kistler $$

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Ames Research CenterSpaceX Falcon 9

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Ames Research CenterRocketplane Kistler K-1

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Ames Research CenterOrbital Sciences Taurus II

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COTS Paradigm is StrategicallyImportant to the NASA Vision!

COTS Paradigm is StrategicallyImportant to the NASA Vision!

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Ames Research CenterInternational Space Station - ISS

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Ames Research CenterISS National Laboratory

The NASA Authorization Act of 2005 designated that the US portion of the International Space Station be designated a “national laboratory”

“The Administrator shall seek to increase the utilization of the ISS by other Federal entities and the private sector through partnerships, cost-sharing agreements, and other arrangement that would supplement NASA funding of the ISS”

NASA prepared a plan for Congress describing how the national lab will be implemented and operated

The plan states the intention of NASA to offer usage of the ISS free of charge

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Ames Research CenterScience On ISS

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Ames Research CenterBigelow Orbital Facility

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Ames Research CenterSuborbital Tourism

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Ames Research CenterGoogle Lunar X Prize

OdysseyMoon

Astrobotic

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Ames Research CenterUsing Space Resources

Virtue Arts

Entrepreneurial Space Partners

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Ames Research CenterThe Business Case For Space

• What can you do in space that is worth the price/risk/difficulty of getting and staying there?

• Telecom is the only clear winner so far• Other potential opportunities:

– Tourism and entertainment– Biotech– Materials processing– Space Solar Power– Resource utilization from Moon and asteroids

• ISS National Lab will be available soon• How to perform proof of concept to attract outside money?

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Ames Research CenterSpace Investment Summit

• Boeing, EADS Astrium and several of the other major aerospace companies have been sponsoring a series briefings for the venture capital and angel investor communities

• 7 summits have been held since 2007 with the 8th planned for Chicago in May

• The purpose of the meetings is to start a dialog between the entrepreneurial space community and risk capital community about the opportunities for using space to make money– This is more than just rockets

– Users of the space environment are highlighted such as biotech and materials

– Value added services

– Entertainment, sports and advertising

– Focus on smaller investments, less risk and quicker returns

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Ames Research CenterSpace Diving

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Ames Research CenterSpace Investment Challenges

• The markets are often not established– Space tourism

• New technology is often involved• The amount of money that needs to be raised is large

– Out of the realm of angel investors– Super angels such as Paul Allen, Jeff Bezos and Richard Branson

have stepped in

• Payback is uncertain– IRR is historically low for aerospace– Payback may be 7 or more years in the future

• There are a lot of risks and uncertainties• There has yet to be a Yahoo or Google type IPO event and this

is what the institutional investors are waiting for• But there is a lot of sizzle!

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Ames Research CenterRecommendations

• Start small

• Focus on near term niche markets

• Get early cash flow– SBIR/STTR/IPP Seed Fund– Subcontract to larger companies

• Manage your risk– Technical - keep high risk items off the critical path– Cost and schedule - just assume it will cost twice as much and take twice as

long (or more) than your business plan says– You need a business plan and you need to write it yourself– Take money only from people you trust and want to have around for a long

time

• Keep your eye on the goal but be flexible in how you get there

• Learn from the mistakes of others, do your homework

• Keep your sense of humor and enjoy the adventure