Man has always been obsessed with exploration and since the days of Magellan and Christopher Columbus, the excitement of finding something new and the possibility of finding unknown wealth has driven humans to achieve feats that have been considered impossible. Space was always the final frontier. In the late 1950's, thanks to the cold war which brought fear and ego in equal measures, both United States as well as USSR launched into the space race. Starting with Sputnik, the race just got more and more heated up as time went on.
In 1957 Sputnik became the first satellite to the put in space and in 1958 NASA was created.Since the money needed to go space faring was high, with little in terms of returns to show for it, Space remained the domain of governments. They spent money and put satellites in space mostly for the purposes of spying and national security. National security also meant being able to communicate with troops in war fronts and that is how the first communication satellites found their way into space. The US had lost the race to put the first satellite and the first man in space and the next stop was the moon. Hence, the race to the moon had a lot of ego riding on it and both countries threw all of their resources into the program. The head of the USSR space program died and US with the help of an ex-Nazi rocket designer Wernher Von Braun, managed to put man on moon.
This is the equivalent of going on a drive in a car and then abandoning the car because bringing it back and parking it is hard.The Space Shuttle Program mitigated the cost of launch to a certain extent by bringing the shuttle back but the cost of maintenance was nevertheless high. The Space Shuttle Program was plagued with issues of its own. The Challenger and later the Columbia accidents put a nail in the coffin of the STS program. Several private companies were always making grand announcement about building space vehicles and making plans to go to other planets. None of them really did.
Why would you make a 10% margin on a $50 Million launch, if you could make 10% on a $500 Million dollar launch?SpaceX entered the space business because Elon Musk genuinely wanted to build a settlement on Mars. He needed to get the government contracts in order to be able to finance this dream in the meantime. It took SpaceX a great deal of press and legal battles to break the strong hold that the ULA lobby had built up at the United State Air Force (USAF). While that was happening, the Shuttle-less NASA began to warm up to SpaceX because the cost advantage was huge! Also, since America was busy imposing sanctions on Russia over the Crimea issue, depending on the Russians to keep the ISS alive was not the most exciting idea. SpaceX won NASA contracts to transport cargo to the ISS and if all goes well, their Dragon capsule would carry crew as well to the international space station. The eventual settlement of the lawsuit between SpaceX and the USAF, meant SpaceX was free to bid for the Air Force contracts as well. Last week, NASA announced they would plan to privatise the ISS. NASA is slowly getting out of the launch business and outsourcing most of its requirements to other companies already. Since the decommissioning of the Space Shuttle Program almost all of the cargo and crew missions to the ISS have been handled by private players. The only missions they continue to fly are long haul (outer planets of the solar system) and highly experimental missions to asteroids, etc. Also, NASA made all of its research results from over the years public. I am not an expert, but when you put all of these things together it feels a bit like NASA no longer wants to be the biggest player in the space business. I think the organisation will slowly move towards a more regulatory role for space rather than being an active player as far as space and space research is concerned. Just like the Federal Bank regulates all banks.
We are at the precipice of change. Space is going to become a huge business and a private business. Spaceports, launch vehicles, satellites and capsules, lots of money to be made.Most of the news that you get to read today chases the SpaceX's and the ULA's of the world and for good reason. These companies have been pioneers and have created a business model, where none was thought feasible. When Virgin Galactic was launched in 2004, it was considered an expensive hobby being pursued by a rich man. That is not the way a space business is being seen today. In fact, there is visible competition beginning to brew and thought is being extended towards making the journey cheaper and efficient. ULA just proposed an alternate approach to bringing cost down as opposed to SpaceX. It reminds me of the philosophical difference between the design of the Boeing 787 and the Airbus A380. But that is just the tip of the iceberg. The Falcon 9 is the SpaceX workhorse. It measures about 230 feet in height and has a payload capacity of 22,800 Kgs to the Low Earth Orbit (LEO). What if you just want to fly a 50 Kg nanosatellite, which will help you provide traffic surveillance or help improve disaster response or create a corporate communication network? What if you want to setup your super awesome Waze competitor, with real-time space based traffic surveillance? You have to wait and buy space from SpaceX or ISRO or Arianespace, or one of the other launch companies. The associated issue is also that since these launch vehicles are large they don’t fly often, so it would be normal for you to be left waiting for months, if not years to put that small payload in space. The frequency of launches for larger launch vehicles is low because of the cost as well as the number of clients required for the payload to be filled out. Its like having to find enough passengers to fill out an entire ship.
The number of applications for which satellites are being used today are low because the cost of getting up to space is high. The cost of getting up to space is high because the number of organisations committing to put satellites in space is low.Many companies like Vector Space, Rocket Labs and Vulcan Aerospace are committing their resources to developing such launch vehicles. There are two sides to the business, one being the launch vehicle itself, while the other is the design and development of micro/nano-satellites. There is ample potential for startups to explore both sides of the business and to develop solutions. In the long run, the launch business would be much more valuable than the satellite development business. There will be fewer companies that will be in the launch business than the satellite business and the value of each launch would be orders of magnitude greater than the cost of a satellite. An analogy would be to look at this like the car companies vs tyre manufacturers. The components of space business is being defined today. There are going to be many components to this business and how each of the components would work, is ripe for definition. Startups that get into this space now will have the opportunity to define these components and pioneer many of them. If you have the passion, jump in! Space is at the precipice of going prime-time. There are billions, perhaps trillions, to be made over the next 20 years. This is the time to start.