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I don't see how having a loss leader for viewing space is going to work out for them financially. What are you going to upsell? Although I do recognize this do

I don't see how having a loss leader for viewing space is going to work out for them financially. What are you going to upsell? Although I do recognize this doesn't really appear to be a purely commercial venture, yet.

craftyguy 8y ago
Maybe it's a way to fundraise. Take rich people into space, they're wowed, impressed, etc, and then more likely to invest in them?
- lettergram 8y ago
  True - I guess that would work from a loss leading perspective. Although it's not making money in the classic sense, that could lead to lucritive contracts.
  - craftyguy 8y ago
    Maybe it can lead to lucritive contracts. It could be advertising: you take clients who are wealthy enough to pay $200k for the experience, those clients might be business owners/influencial folks, who are then moved to integrate it in some what into what they do? Seems plausable at least. Then again, Bezos could float the company for quite a long time if he personally invests, so maybe it's just a way to build credit and then do other things (e.g. gov. contracts). Amazon was unprofitable for quite a long time before it took over the world, afterall..
    - mkempe 8y ago
      It's spelled lucrative. From Latin http://latin-dictionary.net/definition/25941/lucrativus-lucrativa-lucrativum http://latin-dictionary.net/definition/25941/lucrativus-lucr...
gwern 8y ago
Sending your own employees up first will work out even worse financially. I assume it's a combination of safety testing, eating-your-own-dogfood (in a potentially fatal sense), working out minor kinks for an overall positive experience, and maybe that cost includes a lot of the startup/fixed costs and the final amortized cost will be closer to under $200k. Sort of like Tesla cars.
stcredzero 8y ago
I don't see how having a loss leader for viewing space is going to work out for them financially. Does the article say it will be a loss leader? If so, then I missed that. I've seen $200,000 quoted for the fuel of an orbital rocket.
Robotbeat 8y ago
Costs per passenger for a reusable vehicle like this are largely a function of launch rate. Launch a few per year, it'll lose millions. Launch a hundred, and they'll make plenty of money. Additionally, you should highly doubt this kind of outside estimate of cost per New Shepard launch. It sounds like they used the same costs as you would expect for a fully expendable rocket like Falcon 1e class (same first stage thrust, for instance), even though New Shepard is fully reusable. And lastly, these suborbital New Shepard launches are also a big advertisement for orbital New Glenn launches which are orders of magnitude longer in duration. New Glenn could also take people around the Moon or, with the (eventually) reusable "Blue Moon" lander that Blue Origin is also developing, to the Moon's surface and back. So there's actually a lot of upsell, and I believe they've been explicit about using New Shepard to upsell for eventual orbital flights.
- rory096 8y ago
  >Additionally, you should highly doubt this kind of outside estimate of cost per New Shepard launch. It sounds like they used the same costs as you would expect for a fully expendable rocket like Falcon 1e class (same first stage thrust, for instance), even though New Shepard is fully reusable. The article discusses intended price, not cost. And $1.2 million/flight is significantly less than Falcon 1. >So there's actually a lot of upsell, and I believe they've been explicit about using New Shepard to upsell for eventual orbital flights. Definitely. It's also important to note that New Shepard and New Glenn have significant technology overlap - NS development costs won't have to be amortized by passenger flights alone.
  - Cogito 8y ago
    From the article: > While Blue Origin has not disclosed its per-flight operating costs, Teal Group aerospace analyst Marco Caceres estimated each flight could cost the firm about $10 million. With six passengers per trip, that would mean losing millions of dollars per launch, at least initially.
adventured 8y ago
> I don't see how having a loss leader for viewing space is going to work out for them financially. What are you going to upsell? I see a lot of the same mistake being made in this thread. Confusing short-term vs long-term. The tourist business is a meaningless part of the long-term strategy that Bezos is pursuing. Short-term it might bring in some revenue as they pursue building ever more powerful rockets. You're better off entirely disregarding anything Blue Origin does as it relates to tourism, it's a momentary toy for stage one; it's not where they're going. As a side, it also has the simultaneous benefit of enabling Blue Origin to get paid to work on dealing with civilians in space, as they seek to push further in the general direction of building infrastructure in space over decades. To go that direction, they'll have to build-out systems that are extremely well designed for non-astronauts. If your vision is to have very large numbers of people in space, your requirement can't be that they're all as well trained for space as astronauts are today. Bezos currently has $143 billion of paper worth to utilize. It's not going to be spent on a $50 million per year space tourism business.
mrep 8y ago
Jeff bezos is worth 143 Billion dollars [0] and he sells a billion dollars a year to fund his toy space company blue origin [1]. With your standard 4% takeout from investments, he could increase their funding by 6% forever and not lose any money. With the way Amazon stock is growing, that could be an order of magnitude higher. Financials mean nothing to this company. [0]: https://www.google.com/search?q=jeff+bezos+worth&oq=jeff+bezos+worth https://www.google.com/search?q=jeff+bezos+worth&oq=jeff+bez... [1]: http://fortune.com/2017/04/05/jeff-bezos-amazon-stock-sale-blue-origin/ http://fortune.com/2017/04/05/jeff-bezos-amazon-stock-sale-b...

craftyguy 8y ago

Maybe it's a way to fundraise. Take rich people into space, they're wowed, impressed, etc, and then more likely to invest in them?

lettergram 8y ago
True - I guess that would work from a loss leading perspective. Although it's not making money in the classic sense, that could lead to lucritive contracts.
- craftyguy 8y ago
  Maybe it can lead to lucritive contracts. It could be advertising: you take clients who are wealthy enough to pay $200k for the experience, those clients might be business owners/influencial folks, who are then moved to integrate it in some what into what they do? Seems plausable at least. Then again, Bezos could float the company for quite a long time if he personally invests, so maybe it's just a way to build credit and then do other things (e.g. gov. contracts). Amazon was unprofitable for quite a long time before it took over the world, afterall..
  - mkempe 8y ago
    It's spelled lucrative. From Latin http://latin-dictionary.net/definition/25941/lucrativus-lucrativa-lucrativum http://latin-dictionary.net/definition/25941/lucrativus-lucr...

gwern 8y ago

Sending your own employees up first will work out even worse financially. I assume it's a combination of safety testing, eating-your-own-dogfood (in a potentially fatal sense), working out minor kinks for an overall positive experience, and maybe that cost includes a lot of the startup/fixed costs and the final amortized cost will be closer to under $200k. Sort of like Tesla cars.

stcredzero 8y ago

I don't see how having a loss leader for viewing space is going to work out for them financially. Does the article say it will be a loss leader? If so, then I missed that. I've seen $200,000 quoted for the fuel of an orbital rocket.

Robotbeat 8y ago

Costs per passenger for a reusable vehicle like this are largely a function of launch rate. Launch a few per year, it'll lose millions. Launch a hundred, and they'll make plenty of money. Additionally, you should highly doubt this kind of outside estimate of cost per New Shepard launch. It sounds like they used the same costs as you would expect for a fully expendable rocket like Falcon 1e class (same first stage thrust, for instance), even though New Shepard is fully reusable. And lastly, these suborbital New Shepard launches are also a big advertisement for orbital New Glenn launches which are orders of magnitude longer in duration. New Glenn could also take people around the Moon or, with the (eventually) reusable "Blue Moon" lander that Blue Origin is also developing, to the Moon's surface and back. So there's actually a lot of upsell, and I believe they've been explicit about using New Shepard to upsell for eventual orbital flights.

rory096 8y ago
>Additionally, you should highly doubt this kind of outside estimate of cost per New Shepard launch. It sounds like they used the same costs as you would expect for a fully expendable rocket like Falcon 1e class (same first stage thrust, for instance), even though New Shepard is fully reusable. The article discusses intended price, not cost. And $1.2 million/flight is significantly less than Falcon 1. >So there's actually a lot of upsell, and I believe they've been explicit about using New Shepard to upsell for eventual orbital flights. Definitely. It's also important to note that New Shepard and New Glenn have significant technology overlap - NS development costs won't have to be amortized by passenger flights alone.
- Cogito 8y ago
  From the article: > While Blue Origin has not disclosed its per-flight operating costs, Teal Group aerospace analyst Marco Caceres estimated each flight could cost the firm about $10 million. With six passengers per trip, that would mean losing millions of dollars per launch, at least initially.

adventured 8y ago

> I don't see how having a loss leader for viewing space is going to work out for them financially. What are you going to upsell? I see a lot of the same mistake being made in this thread. Confusing short-term vs long-term. The tourist business is a meaningless part of the long-term strategy that Bezos is pursuing. Short-term it might bring in some revenue as they pursue building ever more powerful rockets. You're better off entirely disregarding anything Blue Origin does as it relates to tourism, it's a momentary toy for stage one; it's not where they're going. As a side, it also has the simultaneous benefit of enabling Blue Origin to get paid to work on dealing with civilians in space, as they seek to push further in the general direction of building infrastructure in space over decades. To go that direction, they'll have to build-out systems that are extremely well designed for non-astronauts. If your vision is to have very large numbers of people in space, your requirement can't be that they're all as well trained for space as astronauts are today. Bezos currently has $143 billion of paper worth to utilize. It's not going to be spent on a $50 million per year space tourism business.

mrep 8y ago

Jeff bezos is worth 143 Billion dollars [0] and he sells a billion dollars a year to fund his toy space company blue origin [1]. With your standard 4% takeout from investments, he could increase their funding by 6% forever and not lose any money. With the way Amazon stock is growing, that could be an order of magnitude higher. Financials mean nothing to this company. [0]: https://www.google.com/search?q=jeff+bezos+worth&oq=jeff+bezos+worth https://www.google.com/search?q=jeff+bezos+worth&oq=jeff+bez... [1]: http://fortune.com/2017/04/05/jeff-bezos-amazon-stock-sale-blue-origin/ http://fortune.com/2017/04/05/jeff-bezos-amazon-stock-sale-b...