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Honestly, I think this might be one of the only companies I know of recently where I've gone "huh, that seems like a low valuation". Is this a hype factor or do

by foota 9y ago

Honestly, I think this might be one of the only companies I know of recently where I've gone "huh, that seems like a low valuation". Is this a hype factor or do knowledgeable others feel similarly?

InTheArena 9y ago
The addressable market for space flight isn't as large as it will be yet. However, unlike software where coporations get a bye on this problem because the capital expense for consumers or others to adopt a given technology is low, the cost to companies to adopt technology like SpaceXs is really really high. So far, we are not seeing a ton of new types of traffic that just would not be feasible where it not due to SpaceX's lower launch cost. I think that will come, but it will come with the LEO based communication satellite fleet, and that is still a ways out.
- bluGill 9y ago
  To be fair, it takes time and money to build the new traffic SpaceX has not been low cost for long enough to enable the new markets. I would suggest if all the new markets had the correct foresight and built their satellites for launch starting now SpaceX would be forced to refuse a lot of customers (probably by raising prices until they are not low cost) since they can't make/reuse rockets fast enough yet. Note that I specified correct foresight above. I'm confident that some things will be launch on the now cheaper rockets over the next 20 years that turn our to be commercial failures. I don't know which they are though, just that they are. If you have an idea that might work with a cheaper launch you should start building it, but you should start small to prove it can work.
chrischen 9y ago
I think given the popular culture status of sci fi and space fantasies, the exploitation of space travel is probably overhyped. It may seem to be on the cusp of our technological grasp due to the Star Treks and Star Wars, but it could be much farther than one may think. It’s going to tend more towards deploying satellites rather than exploring Mars.
cornholio 9y ago
I would like to have a piece of that for wholly non-hype reasons. The space business is limited but the bussiness potential for Starlink, an integral part of the company, is simply monstrous. If it pans out, Starlink can disrupt a massive, $1 trillion/ year telecom market that is itself booming. Depending on how well they can productize long-term (miniature receivers embedded in laptops, tablets etc.) they stand to capture whole percentage points or even tenths of that market, giving Starlink itself a valuation in the trillions. It's also an ultra-high moat business, a truly global monopoly. Once you have 12.000 sats in the sky amortized and own the only launch service capable of servicing them, you are impossible to budge.
- joshmarlow 9y ago
  > Depending on how well they can productize long-term (miniature receivers embedded in laptops, tablets etc.) Does SpaceX even have to do that? Can't they just open source all the designs and let anyone with an account use their network? Leave the construction, sale and support for receivers up 3rd parties.
  - shanghaiaway 9y ago
    Why do you think they would do this?
    - bluGill 9y ago
      Because they need the manufactures to put the radio in everything. If the radio is cheap enough everybody will have it by default so it is a no brainer for a large number of people to subscribe and use it. If the it isn't installed by default everywhere that shuts out a lot of potential market.
      - jrowley 9y ago
        On the other hand, if SpaceX's product is vastly superior, they could capture market share considerably, then at a later time open source to get the rest.
api 9y ago
Valuations are based on financial analysis, not how cool or ultimately important something is. A casino could be valued higher than a hospital. This is a very high valuation for such a capital-intensive high-risk company.
outworlder 9y ago
There needs to be an "SpaceX"-like developing the payloads as well. Most commercial payloads are very expensive and one -off R&D. That's even worse than what rockets were before SpaceX came along. Rockets would be exactly the same as each other. Once you can pick and choose your satellite parts Domino's like and have it built, then you'll see the valuation skyrocket. That may be as hard or harder than building another SpaceX.
- greglindahl 9y ago
  All of the larger constellations, starting with Iridium, then Oneweb, then Starlink, involve building a factory and an assembly line. Iridium hoped other constellation makers would use theirs, apparently hasn't scored any new business and they're getting close to finishing. Oneweb has a factory under construction that's bigger, and Starlink's factory will be even bigger. Oneweb's is built in collaboration with Arianespace and also hopes to sign up business. Insomuch as Oneweb uses off-the-shelf parts, they want so many of them that their suppliers are having to build new factories to build those parts. Their solar array supplier is doing that, for example. I suspect Starlink will use a model closer to the Gigafactory and Tesla's partnership with Panasonic. Lots of people are offering standard satellite parts, at high prices and low volumes. It'll be interesting to see what kind of trickledown Oneweb causes.

by foota 9y ago

Honestly, I think this might be one of the only companies I know of recently where I've gone "huh, that seems like a low valuation". Is this a hype factor or do knowledgeable others feel similarly?

InTheArena 9y ago

The addressable market for space flight isn't as large as it will be yet. However, unlike software where coporations get a bye on this problem because the capital expense for consumers or others to adopt a given technology is low, the cost to companies to adopt technology like SpaceXs is really really high. So far, we are not seeing a ton of new types of traffic that just would not be feasible where it not due to SpaceX's lower launch cost. I think that will come, but it will come with the LEO based communication satellite fleet, and that is still a ways out.

bluGill 9y ago
To be fair, it takes time and money to build the new traffic SpaceX has not been low cost for long enough to enable the new markets. I would suggest if all the new markets had the correct foresight and built their satellites for launch starting now SpaceX would be forced to refuse a lot of customers (probably by raising prices until they are not low cost) since they can't make/reuse rockets fast enough yet. Note that I specified correct foresight above. I'm confident that some things will be launch on the now cheaper rockets over the next 20 years that turn our to be commercial failures. I don't know which they are though, just that they are. If you have an idea that might work with a cheaper launch you should start building it, but you should start small to prove it can work.

chrischen 9y ago

I think given the popular culture status of sci fi and space fantasies, the exploitation of space travel is probably overhyped. It may seem to be on the cusp of our technological grasp due to the Star Treks and Star Wars, but it could be much farther than one may think. It’s going to tend more towards deploying satellites rather than exploring Mars.

cornholio 9y ago

I would like to have a piece of that for wholly non-hype reasons. The space business is limited but the bussiness potential for Starlink, an integral part of the company, is simply monstrous. If it pans out, Starlink can disrupt a massive, $1 trillion/ year telecom market that is itself booming. Depending on how well they can productize long-term (miniature receivers embedded in laptops, tablets etc.) they stand to capture whole percentage points or even tenths of that market, giving Starlink itself a valuation in the trillions. It's also an ultra-high moat business, a truly global monopoly. Once you have 12.000 sats in the sky amortized and own the only launch service capable of servicing them, you are impossible to budge.

joshmarlow 9y ago
> Depending on how well they can productize long-term (miniature receivers embedded in laptops, tablets etc.) Does SpaceX even have to do that? Can't they just open source all the designs and let anyone with an account use their network? Leave the construction, sale and support for receivers up 3rd parties.
- shanghaiaway 9y ago
  Why do you think they would do this?
  - bluGill 9y ago
    Because they need the manufactures to put the radio in everything. If the radio is cheap enough everybody will have it by default so it is a no brainer for a large number of people to subscribe and use it. If the it isn't installed by default everywhere that shuts out a lot of potential market.
    - jrowley 9y ago
      On the other hand, if SpaceX's product is vastly superior, they could capture market share considerably, then at a later time open source to get the rest.

api 9y ago

Valuations are based on financial analysis, not how cool or ultimately important something is. A casino could be valued higher than a hospital. This is a very high valuation for such a capital-intensive high-risk company.

outworlder 9y ago

There needs to be an "SpaceX"-like developing the payloads as well. Most commercial payloads are very expensive and one -off R&D. That's even worse than what rockets were before SpaceX came along. Rockets would be exactly the same as each other. Once you can pick and choose your satellite parts Domino's like and have it built, then you'll see the valuation skyrocket. That may be as hard or harder than building another SpaceX.

greglindahl 9y ago
All of the larger constellations, starting with Iridium, then Oneweb, then Starlink, involve building a factory and an assembly line. Iridium hoped other constellation makers would use theirs, apparently hasn't scored any new business and they're getting close to finishing. Oneweb has a factory under construction that's bigger, and Starlink's factory will be even bigger. Oneweb's is built in collaboration with Arianespace and also hopes to sign up business. Insomuch as Oneweb uses off-the-shelf parts, they want so many of them that their suppliers are having to build new factories to build those parts. Their solar array supplier is doing that, for example. I suspect Starlink will use a model closer to the Gigafactory and Tesla's partnership with Panasonic. Lots of people are offering standard satellite parts, at high prices and low volumes. It'll be interesting to see what kind of trickledown Oneweb causes.