SpaceX Mars Strategy
SpaceX - Startup or Corporation
Following the second test flight of Starship, SpaceX seems well on their way to reaching Mars. Their technical approach appears sound and they have a truly accomplished workforce, so the last component is finance. A NASA study estimated it could cost $500bn to reach Mars, and realistically this figure could easily double due to delays, cost overruns and inflation. Fortunately SpaceX have good cost control in all its operations, including development, although their ambition is far greater than merely reaching Mars. They want to construct a colony consisting of a million people with perhaps ten times that automata, accompanied by all the plant necessary to make them self-sufficient by the year 2050!
“Megatons per year to orbit are needed for life to become multiplanetary. Starship design goal is 3 flights/day avg rate, so ~1000 flights/year at >100 tons/flight, so every 10 ships yield 1 megaton per year to orbit. Building 100 Starships/year gets to 1000 in 10 years or 100 megatons/year or maybe around 100k people per Earth-Mars orbital sync” ~ Elon Musk
A conservative estimate for the SpaceX investment might be $1tn between Mars launch windows (every 26 months), for the first decade at least considering the scale of ambition. SpaceX will largely self fund this effort, so it follows their business strategy must somehow account for this figure when they make the big push for Mars. Whether the colony ultimately succeeds or fails will largely come down to financial support, essentially there can be no half measures. The Apollo moon landings demonstrated with sufficient financial support, everything else will follow i.e. technical personnel, technologic advance, even public support. Given what’s at stake, it’s probably worth examining SpaceX’s strategy to see if they are on course to achieve their lofty goal.
Profit and Loss
SpaceX’s core income comes from providing launch services, so let’s compare their commercial launch prices across a range of satellites.
Rather unsurprisingly SpaceX dominate the commercial launch market, mainly due to their reduced operating cost, which they largely pass on to customers. Accompanying this they have large capital expenditures for their Starship and Starlink development projects, $2bn p.a. for Starship and a comparable figure for Starlink. Overall this means SpaceX incur a loss more often than a profit, hence rely on outside investment to cover development costs. In effect the company operates more like a tech startup than a profit driven corporation. Considering the robust finances required for Mars it’s probably worth examining the benefits and drawbacks to either strategic approach given the quality of challenges that lie ahead.
Startup Approach
Applying a tech startup approach has served the company well, providing low cost space access for satellite operators and crew flights for NASA has expanded the space market, resulting in continuous revenue growth in a virtuous circle. There seems no limit to how far the market could expand using this model, and Starship promises to lower launch costs by an order of magnitude, providing ever more stimulus and income.
Perhaps of even greater promise is their Starlink constellation, which can supply high bandwidth broadband anywhere around the world. This system is currently used by millions and could end up supplying up to 100 million, some of which will be premium customers. Arguably their best customer would be the Department of Defense (DoD) who will eventually pay billions to use Starlink. In 2018 the DoD asked SpaceX to build Starshield, a tracking and surveillance constellation situated in low Earth Orbit (LEO). This relatively small constellation (~400 satellites) will rely on the much larger Starlink constellation (5,000+ satellites) to transfer heavily encrypted data via laser interlinks, avoiding less secure fiber networks entirely - priceless from the DoD’s perspective.
“The SpaceX contract provides for Starshield end-to-end service (via the Starlink constellation), user terminals, ancillary equipment, network management and other related services,” ~ Space Force spokesperson Ann Stefanek/CNBC
Going forward, SpaceX have committed to support NASA’s effort to build a moon base for lunar research and commercial activities. No doubt NASA will rely on Starship to make this possible as the Human Landing System (HLS) version can carry 100 people or 100 tonnes of cargo to the moon at relatively low cost. To illustrate, the following table compares the different bids submitted to NASA to win a HLS development contract.
Overall Starship offers a profound increase in capabilities, which should allow the space economy to expand far beyond LEO and generate even more income for SpaceX. Perhaps all told the return from all these various space enterprises will top out at ~$300bn p.a., a significant sum, though somewhat short of the $1tn per 26 month target figure.
Corporate Approach
No one has equaled the tech advances of the partially reusable Falcon 9, and SpaceX’s fully reusable Starship will go one step further, putting them beyond any competitor’s reach for decades. This combined with the fact they have achieved market dominance suggests there’s a great deal more income to be had if they adopt a more commercial approach. Once the space economy is established, not too many years from now, SpaceX could leverage their low operating costs and market dominance to accumulate a great deal more capital. This would allow them to build a warchest for their campaign on Mars, providing a financial safety net against changes in the macro environment.
Succinctly: SpaceX need to charge more for their invaluable services.
The US Space Force (USSF) suggest they might require their own means to secure cislunar space, to protect civil, commercial and defense interests, particularly where they overlap with China. Starship would be the ideal vehicle, allowing USSF to perform deep space patrols, service and rescue missions; given the provision of propellant depots. This alone could add another $100bn p.a. to SpaceX’s warchest, and cement their position with the DoD for all their Earth operations (rocket transport, satellite servicing and retrieval etc). For some working with the military might seem distasteful but for any normal corporation it’s gravy, i.e. the acme of commercial achievement.
Generally SpaceX avoids space tourism except when it assists their long term plans, such as the dearMoon mission. However, a single Starship could send 1,000 people to LEO if fitted with high capacity seating, similar to a commercial airliner. Note this wouldn’t be merely joy rides if they could dock with a suitable LEO destination, such as a commercial space station. To ensure flights were filled this station could become a hub for space enterprise, essentially a science park in the sky, where the cost to operate an airlock would effectively become the new launch price. It’s becoming increasingly easy to produce anything using 3D manufacturing and AI, hence even complex satellites could be built in space at fairly short notice with the right chips and feedstock.
SpaceX have the opportunity to ride the dragon, one they gave birth to and nurtured through to maturity. Finding ways to make more money from the space economy should propel SpaceX to their $1tn target and beyond, allowing them to amass a mighty warchest for Mars.
In conclusion
It will he hard founding even a small colony on Mars, and without adequate finance it could easily suffer the same fate as Roanoke, the first English colony in the New World, which failed due to poor resupply. Hence at some point hard decisions must be made by SpaceX over how they will fund Mars colonization to achieve the levels required. As they discovered, launch services can provide reasonable income, but the real money is made from what you do in space, such as satellite communications, Earth observation etc. Hopefully Mars too will supply more income in the longterm but until then they need to get creative with the space services they supply and prices they charge, to ensure Mars colonization happens on a practical schedule. It sounds overly ambitious to suggest a million people on Mars by 2050 but this colonization process needs to progress quickly for the settlement to succeed, there can be no half-measures. Likely we have one shot at Mars in our lifetime so we must take it with eyes open, committed to the cost.
1 https://en.wikipedia.org/wiki/Rocket_Lab_Electron#:~:text=The%20starting%20price%20for%20delivering,service%20at%20this%20price%20point.
2 https://www.reuters.com/article/lockheed-boeing-rockets/vulcan-rocket-launch-in-2019-may-end-u-s-dependence-on-russia-idUSL2N0XA2DE20150414/
3 https://www.spacelaunchschedule.com/launch/h-iia-202-igs-radar-7/
4 https://www.spacex.com/
5 https://www.gao.gov/assets/b-419783.pdf
6
7 https://www.nasa.gov/sites/default/files/atoms/files/option-a-source-selection-statement-final.pdf
8 https://www.nasa.gov/sites/default/files/atoms/files/option-a-source-selection-statement-final.pdf
9 https://www.nasa.gov/sites/default/files/atoms/files/a_sustained_lunar_presence_nspc_report4220final.pdf
What is amazing to me is just how far ahead SpaceX is. I would have expected more competition by now.
Europe’s Ariane 6 is delayed and not living up to expectations. The ULAs Vulcan is delayed and SMART reuse looks increasingly like a dead end. Even China’s rocket giants seem to be years aware from partial reuse.
SpaceX continues to knock it out of the park, demonstrating all of the naysays wrong…again and again.
The development of spacex is pretty amazing, and it's worth thinking of why it took a while for this tj come back to prominence - https://www.strangeloopcanon.com/p/the-new-space-race-what-took-so-long