13 ms·

SpaceX Data Shows Loss in 2015, Heavy Expectations for Nascent Internet Service

82 points by artsandsci 10y ago

kosei 10y ago
Original WSJ article referred to in this post: https://www.google.com/amp/www.wsj.com/amp/articles/exclusive-peek-at-spacex-data-shows-loss-in-2015-heavy-expectations-for-nascent-internet-service-1484316455?client=safari https://www.google.com/amp/www.wsj.com/amp/articles/exclusiv...
- enzanki_ars 10y ago
  Link for those that do not wish to use AMP: http://www.wsj.com/articles/exclusive-peek-at-spacex-data-shows-loss-in-2015-heavy-expectations-for-nascent-internet-service-1484316455 http://www.wsj.com/articles/exclusive-peek-at-spacex-data-sh...
  - sctb 10y ago
    Thanks, we've updated the link from https://news.fastcompany.com/spacex-wants-to-be-an-ispand-it-has-some-very-elon-musk-like-subscriber-projections-4028723 https://news.fastcompany.com/spacex-wants-to-be-an-ispand-it....
    - lmm 10y ago
      You've "updated" it from non-paywalled to paywalled. Please don't.
chriskanan 10y ago
There is a Reddit post about the article in which the author of the WSJ article answers questions [1]. He won't reveal where he got the information or if he had permission to report on these numbers, but it seems like a leak. [1] https://www.reddit.com/r/spacex/comments/5nqxs9/exclusive_peek_at_spacex_data_shows_loss_in_2015/ https://www.reddit.com/r/spacex/comments/5nqxs9/exclusive_pe...
mabbo 10y ago
The SpaceX internet service isn't just about building a new product- it's about smoothing demand for SpaceX's primary business. Space launches are a high-variability industry. Sometimes there's lots of demand, sometimes you lose the ability to launch for 4 months because of a minor accident (or $250m explosion...). This internet service is a new customer who can smooth demand out. SpaceX sets a goal for launches for a year, and gives the internet company 20% of their launches. If they oversell, some internet launches get cancelled. If they undersell, the internet company buys extra. Either way, booster production remains smooth. Every other customer is afraid of using used boosters? No problem, watch SpaceX use them themselves. And if the internet thing doesn't turn out to be profitable? Ah well, the capital that financed it probably came from outside anyways.
- zitterbewegung 10y ago
  If the internet isn't profitable then don't they also not smooth out demand , use up money that could be used to improve their rockets and or have actual profit ?
- babyrainbow 10y ago
  >And if the internet thing doesn't turn out to be profitable? Ah well, the capital that financed it probably came from outside anyways... So like paying one credit card bill with another credit card. Right?
  - giarc 10y ago
    Except those outside investors won't be paid back if it fails.
    - gondo 10y ago
      isn't that exactly the same risk for any other kind of investment? if it works out, you get paid, if it fails you loose your money
      - giarc 10y ago
snarfy 10y ago
From the FAQ: > It's ok to post stories from sites with paywalls that have workarounds. So what's the workaround? The web link doesn't work anymore.
- jdavis703 10y ago
  Click the web link and use the AMP version (you may need to spoof your browser's user agent as being either Android chrome or iOS Safari).
- CodeWriter23 10y ago
  Copy / paste headline into Google. Then click in from from the search results. Google Webmaster Rules require the exact same content delivered to the spider to be delivered to a search user.
  - andrewstuart2 10y ago
    Have you tried that? It doesn't work for me any more. It definitely used to but it's not worked the last few times I've tried it.
    - nhebb 10y ago
      In the past it worked best for me when I Googled the article title using Chrome in incognito mode (in case of cookies). For some reason it's never worked for me in Firefox. Most of the time it's not worth the hassle, so I don't jump through hoops anymore to read paywalled articles.
      - stillsut 10y ago
        I believe they did eliminate all loopholes for one day to see how it would affect traffic and subscriptions. I'm able to get this article but not others. I think they might be doing more cross-sectional A/B type tests along this line now, making different articles available open or closed to the google-referral-loophole. Maybe even different access to different IP blocks?
ctrl_freak 10y ago
Sorry if this is off-topic, but is anyone else having trouble getting around the WSJ paywall? The usual trick of redirecting through Google doesn't work for me any more, even with an incognito window or using another device.
- mrep 10y ago
  try this: https://twitter.com/Ally_Abrams/status/819924260005277697 https://twitter.com/Ally_Abrams/status/819924260005277697
- grzm 10y ago
  It's been hit or miss for me. Last week I was having issues, and I don't have any with this one. Perhaps it's related to cookies or other browser cache? Or perhaps server-side fingerprinting?
adventured 10y ago
These projections are for, essentially, a $400 billion market value company in eight years. The $22 some odd billion in operating income they're projecting, would likely make them among the couple dozen most profitable companies in the world (at that point). I'd be very concerned that they're forecasting what they think they have to hit to get to Mars, rather than what's realistic. Getting even ten million satellite subscribers at $60 or $70 per month in eight years, will be an amazing accomplishment. More likely, unfortunately, is that SpaceX achieves a fraction of these figures by 2025 and struggles to figure out how to afford the push to Mars (NASA co-funding is the likely solution). This goal reminds me of the 500,000 sales goal by Tesla that's due in 24 months (they'll miss that target by at least half). Maybe SpaceX Internet will get to 40 million eventually - it's certainly possible - it'll take a lot longer than eight or nine years however.
Rapzid 10y ago
SpaceX is one of those companies I could imagine having minor setbacks with a quarter billion dollar annual loss. I could see investors throwing money their way just to be a part of space tech; so long as they aren't completely imploding.
pbreit 10y ago
Rant: it's annoying when writers use "quarter of", I guess to make the number sound bigger (in this case, quarter of a billion in losses). Even "half" is a stretch.
- Dylan16807 10y ago
  "250 million" has a very big sound to me. I don't really agree with your premise, and "quarter billion" is easier to parse and flows better.
mordant 10y ago
Satellite-based Internet service sucks. High RTTs kill TCP performance. Rain kills it, too.
- ezzaf 10y ago
  Have you read the details of SpaceX's planned internet offering? Existing satellite based internet services have high latency. This is exactly the problem their solution aims to solve.
  - dragontamer 10y ago
    Erm, can SpaceX solve the issue that the speed-of-light is pretty damn slow? Geostationary Orbit is 35,000km above the Earth. Light "only" travels at 300,000km per second. That's a minimum latency of ~246 ms per packet, once you go round-trip from Earth -> Satellite -> Earth again. Remember that starting up a TCP connection is Syn -> Syn-Ack -> Ack, which means a minimum latency of 750ms before a TCP connection is established. You're well into seconds+ before you can view Google's homepage. I guess this part can be sped-up with a smarter satellite. Anything above 200ms is damn near unplayable for video games IMO. That's the minimum latency according to current laws of physics. If you lower the orbit below Geostationary, then life starts to get extremely complicated for the people down on the ground. You can't just point your dish in a particular direction in the sky, because the satellite would be moving. If you had a neighborhood completely clear of trees, maybe you could program a mobile radar dish to rotate with the moving satellites as they move across the sky (Subsynchronous orbit). But this doesn't seem too applicable to most people's home situations.
    - kitsunesoba 10y ago
      That's why they plan to launch over 4k satellites into LEO: while each satellite only covers a small area, together they blanket the surface with coverage. Further latency savings are had by having them all communicate with each other with lasers, preventing awkward and unnecessary back-and-forths between ground and satellite in many cases.
    - 10y ago
GreenPlastic 10y ago
Had a chance to buy some SpaceX stock and passed because I didn't see a path to liquidity with the large capital requirements to get to Mars. Not for everyone, but satellite internet is the ultimate power law play and SpaceX is in a great position to make it a reality. However, even if it is successful, they burn cash for 20 years with no way to cash out.
ChuckMcM 10y ago
I was idly wondering how the cost to build his Internet works if he only uses 'used' boosters. That seems like an interesting trade-off of cost/risk.
- walkingolof 10y ago
  Not "used", "flight proven" :)
  - trav4225 10y ago
    Certified Pre-Flown ™
foota 10y ago
Perhaps my expectations have simply been skewed by reading about negative billiion dollar incomes in valley companies, but It seems to me that spaceX is doing pretty well to be in the black with such large growth. (other than this year) It also seems disingenuous to compare spaceX's launch history with that of a 36 year old company (Arianespace)
jaimex2 10y ago
pay wall, didnt read.
deleted 10y ago
[deleted]
Dylan16807 10y ago
> The company determined the culprit was a 24-inch long strut, or low-tech metal support structure, that hadn’t been properly inspected. Some of the struts they bought were 1/5 as strong as specced. I wouldn't call that an inspection failure.
- sephamorr 10y ago
  It was an inspection failure from SpaceX's perspective. The vendor mismanufactured the part initially, but the failure rates of the parts were very low (to the order of several out of a batch of 10000 units), hence they weren't caught in batch testing. Also note that metal performance at cryogenic temperatures is often very different. Certain impurities that are largely harmless at room temperature can cause metals to be completely brittle at 90 kelvin. So testing every single strut would be very expensive, though SpaceX probably does that now regardless.

82 points by artsandsci 10y ago

kosei 10y ago

Original WSJ article referred to in this post: https://www.google.com/amp/www.wsj.com/amp/articles/exclusive-peek-at-spacex-data-shows-loss-in-2015-heavy-expectations-for-nascent-internet-service-1484316455?client=safari https://www.google.com/amp/www.wsj.com/amp/articles/exclusiv...

enzanki_ars 10y ago
Link for those that do not wish to use AMP: http://www.wsj.com/articles/exclusive-peek-at-spacex-data-shows-loss-in-2015-heavy-expectations-for-nascent-internet-service-1484316455 http://www.wsj.com/articles/exclusive-peek-at-spacex-data-sh...
- sctb 10y ago
  Thanks, we've updated the link from https://news.fastcompany.com/spacex-wants-to-be-an-ispand-it-has-some-very-elon-musk-like-subscriber-projections-4028723 https://news.fastcompany.com/spacex-wants-to-be-an-ispand-it....
  - lmm 10y ago
    You've "updated" it from non-paywalled to paywalled. Please don't.

chriskanan 10y ago

There is a Reddit post about the article in which the author of the WSJ article answers questions [1]. He won't reveal where he got the information or if he had permission to report on these numbers, but it seems like a leak. [1] https://www.reddit.com/r/spacex/comments/5nqxs9/exclusive_peek_at_spacex_data_shows_loss_in_2015/ https://www.reddit.com/r/spacex/comments/5nqxs9/exclusive_pe...

mabbo 10y ago

The SpaceX internet service isn't just about building a new product- it's about smoothing demand for SpaceX's primary business. Space launches are a high-variability industry. Sometimes there's lots of demand, sometimes you lose the ability to launch for 4 months because of a minor accident (or $250m explosion...). This internet service is a new customer who can smooth demand out. SpaceX sets a goal for launches for a year, and gives the internet company 20% of their launches. If they oversell, some internet launches get cancelled. If they undersell, the internet company buys extra. Either way, booster production remains smooth. Every other customer is afraid of using used boosters? No problem, watch SpaceX use them themselves. And if the internet thing doesn't turn out to be profitable? Ah well, the capital that financed it probably came from outside anyways.

zitterbewegung 10y ago
If the internet isn't profitable then don't they also not smooth out demand , use up money that could be used to improve their rockets and or have actual profit ?
babyrainbow 10y ago
>And if the internet thing doesn't turn out to be profitable? Ah well, the capital that financed it probably came from outside anyways... So like paying one credit card bill with another credit card. Right?
- giarc 10y ago
  Except those outside investors won't be paid back if it fails.
  - gondo 10y ago
    isn't that exactly the same risk for any other kind of investment? if it works out, you get paid, if it fails you loose your money
    - giarc 10y ago

snarfy 10y ago

From the FAQ: > It's ok to post stories from sites with paywalls that have workarounds. So what's the workaround? The web link doesn't work anymore.

jdavis703 10y ago
Click the web link and use the AMP version (you may need to spoof your browser's user agent as being either Android chrome or iOS Safari).
CodeWriter23 10y ago
Copy / paste headline into Google. Then click in from from the search results. Google Webmaster Rules require the exact same content delivered to the spider to be delivered to a search user.
- andrewstuart2 10y ago
  Have you tried that? It doesn't work for me any more. It definitely used to but it's not worked the last few times I've tried it.
  - nhebb 10y ago
    In the past it worked best for me when I Googled the article title using Chrome in incognito mode (in case of cookies). For some reason it's never worked for me in Firefox. Most of the time it's not worth the hassle, so I don't jump through hoops anymore to read paywalled articles.
    - stillsut 10y ago
      I believe they did eliminate all loopholes for one day to see how it would affect traffic and subscriptions. I'm able to get this article but not others. I think they might be doing more cross-sectional A/B type tests along this line now, making different articles available open or closed to the google-referral-loophole. Maybe even different access to different IP blocks?

ctrl_freak 10y ago

Sorry if this is off-topic, but is anyone else having trouble getting around the WSJ paywall? The usual trick of redirecting through Google doesn't work for me any more, even with an incognito window or using another device.

mrep 10y ago
try this: https://twitter.com/Ally_Abrams/status/819924260005277697 https://twitter.com/Ally_Abrams/status/819924260005277697
grzm 10y ago
It's been hit or miss for me. Last week I was having issues, and I don't have any with this one. Perhaps it's related to cookies or other browser cache? Or perhaps server-side fingerprinting?

adventured 10y ago

These projections are for, essentially, a $400 billion market value company in eight years. The $22 some odd billion in operating income they're projecting, would likely make them among the couple dozen most profitable companies in the world (at that point). I'd be very concerned that they're forecasting what they think they have to hit to get to Mars, rather than what's realistic. Getting even ten million satellite subscribers at $60 or $70 per month in eight years, will be an amazing accomplishment. More likely, unfortunately, is that SpaceX achieves a fraction of these figures by 2025 and struggles to figure out how to afford the push to Mars (NASA co-funding is the likely solution). This goal reminds me of the 500,000 sales goal by Tesla that's due in 24 months (they'll miss that target by at least half). Maybe SpaceX Internet will get to 40 million eventually - it's certainly possible - it'll take a lot longer than eight or nine years however.

Rapzid 10y ago

SpaceX is one of those companies I could imagine having minor setbacks with a quarter billion dollar annual loss. I could see investors throwing money their way just to be a part of space tech; so long as they aren't completely imploding.

pbreit 10y ago

Rant: it's annoying when writers use "quarter of", I guess to make the number sound bigger (in this case, quarter of a billion in losses). Even "half" is a stretch.

Dylan16807 10y ago
"250 million" has a very big sound to me. I don't really agree with your premise, and "quarter billion" is easier to parse and flows better.

mordant 10y ago

Satellite-based Internet service sucks. High RTTs kill TCP performance. Rain kills it, too.

ezzaf 10y ago
Have you read the details of SpaceX's planned internet offering? Existing satellite based internet services have high latency. This is exactly the problem their solution aims to solve.
- dragontamer 10y ago
  Erm, can SpaceX solve the issue that the speed-of-light is pretty damn slow? Geostationary Orbit is 35,000km above the Earth. Light "only" travels at 300,000km per second. That's a minimum latency of ~246 ms per packet, once you go round-trip from Earth -> Satellite -> Earth again. Remember that starting up a TCP connection is Syn -> Syn-Ack -> Ack, which means a minimum latency of 750ms before a TCP connection is established. You're well into seconds+ before you can view Google's homepage. I guess this part can be sped-up with a smarter satellite. Anything above 200ms is damn near unplayable for video games IMO. That's the minimum latency according to current laws of physics. If you lower the orbit below Geostationary, then life starts to get extremely complicated for the people down on the ground. You can't just point your dish in a particular direction in the sky, because the satellite would be moving. If you had a neighborhood completely clear of trees, maybe you could program a mobile radar dish to rotate with the moving satellites as they move across the sky (Subsynchronous orbit). But this doesn't seem too applicable to most people's home situations.
  - kitsunesoba 10y ago
    That's why they plan to launch over 4k satellites into LEO: while each satellite only covers a small area, together they blanket the surface with coverage. Further latency savings are had by having them all communicate with each other with lasers, preventing awkward and unnecessary back-and-forths between ground and satellite in many cases.
  - 10y ago

GreenPlastic 10y ago

Had a chance to buy some SpaceX stock and passed because I didn't see a path to liquidity with the large capital requirements to get to Mars. Not for everyone, but satellite internet is the ultimate power law play and SpaceX is in a great position to make it a reality. However, even if it is successful, they burn cash for 20 years with no way to cash out.

ChuckMcM 10y ago

I was idly wondering how the cost to build his Internet works if he only uses 'used' boosters. That seems like an interesting trade-off of cost/risk.

walkingolof 10y ago
Not "used", "flight proven" :)
- trav4225 10y ago
  Certified Pre-Flown ™

foota 10y ago

Perhaps my expectations have simply been skewed by reading about negative billiion dollar incomes in valley companies, but It seems to me that spaceX is doing pretty well to be in the black with such large growth. (other than this year) It also seems disingenuous to compare spaceX's launch history with that of a 36 year old company (Arianespace)

jaimex2 10y ago

pay wall, didnt read.

deleted 10y ago

[deleted]

Dylan16807 10y ago

> The company determined the culprit was a 24-inch long strut, or low-tech metal support structure, that hadn’t been properly inspected. Some of the struts they bought were 1/5 as strong as specced. I wouldn't call that an inspection failure.

sephamorr 10y ago
It was an inspection failure from SpaceX's perspective. The vendor mismanufactured the part initially, but the failure rates of the parts were very low (to the order of several out of a batch of 10000 units), hence they weren't caught in batch testing. Also note that metal performance at cryogenic temperatures is often very different. Certain impurities that are largely harmless at room temperature can cause metals to be completely brittle at 90 kelvin. So testing every single strut would be very expensive, though SpaceX probably does that now regardless.