6 ms·

Why SpaceX Is at Risk of Bankruptcy Part 1

38 points by sethbannon 4y ago

qualudeheart 4y ago
The government will give them money if they need it. American administrations since the Obama admin have pivoted to compete with China. As with the space race against the Soviets, the United States is in a space race with China to mars. SpaceX is the tip of the spear. Musk has the wherewithal to manufacture the Falcon 9 without government funds. With them his victory is guaranted. To the extent that the SpaceX business model is about selling rockets and not about selling other products, the government is an excellent customer. SpaceX can also offer the service of getting payloads to orbit.
- tuatoru 4y ago
  The military applications alone of something like Super Heavy/Starship would justify keeping the program going. Now it's possible, it has to be done. > To the extent that the SpaceX business model is about selling rockets and not about selling other products SpaceX's business is selling launches to orbit. Its great achievement to date is changing the expensive first stage from being a consumable (used up at the time) to being a fixed asset (a machine) used for launches.
  - consumer451 4y ago
    > The military applications alone of something like Super Heavy/Starship would justify keeping the program going. I'm a pretty big SpaceX fan, but what exactly are these applications? Point to point? Ability to launch bigger payloads for the NRO?
    - uejfiweun 4y ago
      Not a military guy but I assume the ability to launch much more into orbit would enable the military to "flood the zone" so to speak. Just fill orbit with so many military satellites and weapons that space superiority is essentially guaranteed.
      - consumer451 4y ago
        Yeah, this is probably the best argument even though it’s not very specific. The only issue is that already, launch is not the largest cost component of space assets, it’s the assets themselves. Say Starship could launch 5 NRO assets at once, could we afford to build them?
        tuatoru 4y ago
        > launch is not the largest cost component of space assets, it’s the assets themselves. This is only because they are essentially one-off projects. Plan to launch 100,000 of something: launch costs start to become important.
    - Nomentatus 4y ago
      I'm thinking point to point. What else can do the job now? Look at the ukraine war. Smart weapons such as antitank and GPS-guided munitions rule, there. But aircraft aren't delivering them - antiair, including lasers are too good now. Even drones aren't surviving that long. Artillery launched smart weapons are scanty and expensive, the acceleration is just too rude. A quick reusable launch platform that's only up where it can be hit briefly but extends the range of a cluster of anti-tank missiles by several times is obviously useful. Maybe the main future delivery platform. HiMars is a weak and too-expensive version of this; but it's rockets too.
      - consumer451 4y ago
        The problem with deploying Starship to a war zone is that it looks exactly like a ballistics missile on radar, since it is in-fact, a ballistic missile. This could somewhat understandably result in a nuclear exchange.
      - TheLoafOfBread 4y ago
        I don't think that starship would survive in a hostile airspace longer than average drone. Starship is not fast, it has huge radar reflection surface and it has very hot engine. It will get shot down by basically any SAM or MANPAD made in last 50 years.
        Nomentatus 4y ago
        Something smaller than starship (but with raptor, say) would fly briefly for a couple few minutes boost far away from the front line and head back down quickly. It wouldn't get near hostile airspace, but it's projectiles will. Moreover 3D printed engines (which other rocket companies are developing) are cheap enough that you could absorb some losses.
    - tuatoru 4y ago
      Point to point, 100 tons, anywhere on the globe in six hours--repeat as required; orbital kinetic energy weapons (500 kg tungsten rods) in the tens or hundreds of thousands; orbital satellite killers in the tens of thousands; directed energy weapons as alternatives to ICBMs. (Yes, Reagan's "Star Wars".) Those just off the top of my head. I'm sure military analyst types could come up with more.
      - TheLoafOfBread 4y ago
        How would you get forklift into Starship so it can unload cargo from it?
        consumer451 4y ago
        Well, the lunar version includes a built-in crane. So that could work, problem is that in this configuration the starship does not leave the landing zone, ever.
        TheLoafOfBread 4y ago
        I am finding that concept amusing. They would have Starship, with (almost) empty tank and several tones of cargo in top part. And this top-heavy and probably unstable object would get a crane on its side to unload the cargo....
        consumer451 4y ago
        Don't forget leaving 9 or so bleeding-edge Raptor engines near the battlefield. Disclaimer: I don't think anyone has seriously proposed using Starship like this, have they?
      - consumer451 4y ago
        > point to point The devil is in the details. The Starship stack requires major ground infrastructure on both ends unless it’s one-time use. See: mechazilla. So it’s anywhere on earth where you’ve had a couple years to build the “stage zero” infrastructure which includes a giant propellant tank farm, and the logistics to fill said tanks. Regarding other theoretical applications, the only one that is not truly sci-fi is the ability to launch Starlink size swarms. But use of kinetic anti-space asset weapons are also likely the end of space access. It’s a very fragile theater up there.
    - georgeburdell 4y ago
      I don’t have a link handy but they got military funding to study deliver supplies anywhere in the world in an hour, so yes, point to point is of enough interest
  - _hypx 4y ago
    So basically "more war" is the killer feature. Some see this as a total failure.
    - tuatoru 4y ago
      Would you prefer living in the Chinese system? Edit: I am no fan of military stuff. It'd be much better if all that went away: it's a drain on our ability to make life better for everybody in the world. But we live in the world in which we live, not some utopia.
    - qualudeheart 4y ago
      The “killer feature” is kick starting an aerospace revolution, no matter if that’s civilian or not. The “killer feature” is kick starting an aerospace revolution, no matter if that’s civilian or not. If you’re in an aerospace career, you know that the commercial aviation industry has been in a steep decline. The “air” part is struggling, but imagine the applications coming from the “space” part. Just manufacturing in space is a massive opportunity.
- bwestergard 4y ago
  I would hope that public servants wait for bankruptcy so they are able to purchase the company at a favorable price before folding it into NASA.
  - m463 4y ago
    I suspect they wouldn't get the secret sauce (which is that spacex is not nasa).
twoodfin 4y ago
This article doesn’t attempt to explain why the growing reach and capacity of terrestrial wireless networks won’t swallow up the lion’s share of this “trillion dollar market”. I’m sure folks with hunting cabins in the Maine wilderness are thrilled that Elon is burning investor dollars to bring them broadband Internet at $100/month, but doesn’t that market tap out pretty quickly?
pedalpete 4y ago
Maybe I have to wait for Part 2, but I don't see how this is related to Bankruptcy, of course, to the exclusion that Elon says that would happen. The conclusion seems to be that after raising $10B, SpaceX can't justify it's $127B Private Market Valuation. The chart shows Starlink projected revenue to be $15B in '22 and over $20B in '23 and operating income of over $5B in '22 and $10B in '23. If these numbers are anywhere close to correct, is bankruptcy really a possibility? Even if they were 2 years behind schedule and only had operating income of $4B and growing at 80%+ per year, couldn't they raise another $5B if they needed?
- bombcar 4y ago
  I suspect that Musk could round up $4b from his couch even after being forced to buy Twitter.
- sebastialonso 4y ago
  I hope you're correct. There's no actual decent alternatives to Starlink for rural settings where I live.
walrus01 4y ago
If I had a dollar for every speculative article written about ISPs or starlink by someone who's never worked in ISP core network engineering or two way satellite...
WheelsAtLarge 4y ago
Blah,blah,blah, Space X has been the only company that's been able to advance space technology as a private company in the last 20 yrs. All other companies have just rehashed what was previously developed. NASA and the US government will be foolish to let it disappear via bankruptcy. If the company gets in real trouble, we will suddenly see that NASA will award it a long-term contract for its services that will get it out of trouble. Right now Space X is the best space option that the government has available. As long as it can deliver, Space X will continue to exist. There's no way Space X will disappear due to bankruptcy any time soon.
- senttoschool 4y ago
  Sounds like you're saying tax payers should bail out whatever bad decisions SpaceX employees make. No thanks.
  - j-pb 4y ago
    There's plenty of bailouts that were unnecessary, e.g. banks, hedge-funds. Space exploration is one of those problems that are inherently difficult enough that you can do everything right, and still go bankrupt.
  - WheelsAtLarge 4y ago
    The Space industry is very volatile at this point. The business models are few and very expensive. I am not saying that Space X should have a blank check for anything they want to do but they should be given a small safety net and the benefit of the doubt. They have proven that they are able to advance the technology so they should be helped should they fall into trouble. Additionally, the alternative is to let the government do it. Either way the money will be spent. I think it's best to let an entrepreneurial company like Space X decide how best deploy the money at this time.
    - senttoschool 4y ago
      >let an entrepreneurial company like Space X decide how best deploy the money at this time. And if you bail them out, what motivation do they have to behave like an entrepreneurial company?

38 points by sethbannon 4y ago

The government will give them money if they need it. American administrations since the Obama admin have pivoted to compete with China. As with the space race against the Soviets, the United States is in a space race with China to mars. SpaceX is the tip of the spear. Musk has the wherewithal to manufacture the Falcon 9 without government funds. With them his victory is guaranted. To the extent that the SpaceX business model is about selling rockets and not about selling other products, the government is an excellent customer. SpaceX can also offer the service of getting payloads to orbit.

tuatoru 4y ago
The military applications alone of something like Super Heavy/Starship would justify keeping the program going. Now it's possible, it has to be done. > To the extent that the SpaceX business model is about selling rockets and not about selling other products SpaceX's business is selling launches to orbit. Its great achievement to date is changing the expensive first stage from being a consumable (used up at the time) to being a fixed asset (a machine) used for launches.
- consumer451 4y ago
  > The military applications alone of something like Super Heavy/Starship would justify keeping the program going. I'm a pretty big SpaceX fan, but what exactly are these applications? Point to point? Ability to launch bigger payloads for the NRO?
  - uejfiweun 4y ago
    Not a military guy but I assume the ability to launch much more into orbit would enable the military to "flood the zone" so to speak. Just fill orbit with so many military satellites and weapons that space superiority is essentially guaranteed.
    - consumer451 4y ago
      Yeah, this is probably the best argument even though it’s not very specific. The only issue is that already, launch is not the largest cost component of space assets, it’s the assets themselves. Say Starship could launch 5 NRO assets at once, could we afford to build them?
      - tuatoru 4y ago
        > launch is not the largest cost component of space assets, it’s the assets themselves. This is only because they are essentially one-off projects. Plan to launch 100,000 of something: launch costs start to become important.
  - Nomentatus 4y ago
    I'm thinking point to point. What else can do the job now? Look at the ukraine war. Smart weapons such as antitank and GPS-guided munitions rule, there. But aircraft aren't delivering them - antiair, including lasers are too good now. Even drones aren't surviving that long. Artillery launched smart weapons are scanty and expensive, the acceleration is just too rude. A quick reusable launch platform that's only up where it can be hit briefly but extends the range of a cluster of anti-tank missiles by several times is obviously useful. Maybe the main future delivery platform. HiMars is a weak and too-expensive version of this; but it's rockets too.
    - consumer451 4y ago
      The problem with deploying Starship to a war zone is that it looks exactly like a ballistics missile on radar, since it is in-fact, a ballistic missile. This could somewhat understandably result in a nuclear exchange.
    - TheLoafOfBread 4y ago
      I don't think that starship would survive in a hostile airspace longer than average drone. Starship is not fast, it has huge radar reflection surface and it has very hot engine. It will get shot down by basically any SAM or MANPAD made in last 50 years.
      - Nomentatus 4y ago
        Something smaller than starship (but with raptor, say) would fly briefly for a couple few minutes boost far away from the front line and head back down quickly. It wouldn't get near hostile airspace, but it's projectiles will. Moreover 3D printed engines (which other rocket companies are developing) are cheap enough that you could absorb some losses.
  - tuatoru 4y ago
    Point to point, 100 tons, anywhere on the globe in six hours--repeat as required; orbital kinetic energy weapons (500 kg tungsten rods) in the tens or hundreds of thousands; orbital satellite killers in the tens of thousands; directed energy weapons as alternatives to ICBMs. (Yes, Reagan's "Star Wars".) Those just off the top of my head. I'm sure military analyst types could come up with more.
    - TheLoafOfBread 4y ago
      How would you get forklift into Starship so it can unload cargo from it?
      - consumer451 4y ago
        Well, the lunar version includes a built-in crane. So that could work, problem is that in this configuration the starship does not leave the landing zone, ever.
        TheLoafOfBread 4y ago
        I am finding that concept amusing. They would have Starship, with (almost) empty tank and several tones of cargo in top part. And this top-heavy and probably unstable object would get a crane on its side to unload the cargo....
        consumer451 4y ago
        Don't forget leaving 9 or so bleeding-edge Raptor engines near the battlefield. Disclaimer: I don't think anyone has seriously proposed using Starship like this, have they?
    - consumer451 4y ago
      > point to point The devil is in the details. The Starship stack requires major ground infrastructure on both ends unless it’s one-time use. See: mechazilla. So it’s anywhere on earth where you’ve had a couple years to build the “stage zero” infrastructure which includes a giant propellant tank farm, and the logistics to fill said tanks. Regarding other theoretical applications, the only one that is not truly sci-fi is the ability to launch Starlink size swarms. But use of kinetic anti-space asset weapons are also likely the end of space access. It’s a very fragile theater up there.
  - georgeburdell 4y ago
    I don’t have a link handy but they got military funding to study deliver supplies anywhere in the world in an hour, so yes, point to point is of enough interest
- _hypx 4y ago
  So basically "more war" is the killer feature. Some see this as a total failure.
  - tuatoru 4y ago
    Would you prefer living in the Chinese system? Edit: I am no fan of military stuff. It'd be much better if all that went away: it's a drain on our ability to make life better for everybody in the world. But we live in the world in which we live, not some utopia.
  - qualudeheart 4y ago
    The “killer feature” is kick starting an aerospace revolution, no matter if that’s civilian or not. The “killer feature” is kick starting an aerospace revolution, no matter if that’s civilian or not. If you’re in an aerospace career, you know that the commercial aviation industry has been in a steep decline. The “air” part is struggling, but imagine the applications coming from the “space” part. Just manufacturing in space is a massive opportunity.
bwestergard 4y ago
I would hope that public servants wait for bankruptcy so they are able to purchase the company at a favorable price before folding it into NASA.
- m463 4y ago
  I suspect they wouldn't get the secret sauce (which is that spacex is not nasa).

twoodfin 4y ago

This article doesn’t attempt to explain why the growing reach and capacity of terrestrial wireless networks won’t swallow up the lion’s share of this “trillion dollar market”. I’m sure folks with hunting cabins in the Maine wilderness are thrilled that Elon is burning investor dollars to bring them broadband Internet at $100/month, but doesn’t that market tap out pretty quickly?

pedalpete 4y ago

Maybe I have to wait for Part 2, but I don't see how this is related to Bankruptcy, of course, to the exclusion that Elon says that would happen. The conclusion seems to be that after raising $10B, SpaceX can't justify it's $127B Private Market Valuation. The chart shows Starlink projected revenue to be $15B in '22 and over $20B in '23 and operating income of over $5B in '22 and $10B in '23. If these numbers are anywhere close to correct, is bankruptcy really a possibility? Even if they were 2 years behind schedule and only had operating income of $4B and growing at 80%+ per year, couldn't they raise another $5B if they needed?

bombcar 4y ago
I suspect that Musk could round up $4b from his couch even after being forced to buy Twitter.
sebastialonso 4y ago
I hope you're correct. There's no actual decent alternatives to Starlink for rural settings where I live.

walrus01 4y ago

If I had a dollar for every speculative article written about ISPs or starlink by someone who's never worked in ISP core network engineering or two way satellite...

WheelsAtLarge 4y ago

Blah,blah,blah, Space X has been the only company that's been able to advance space technology as a private company in the last 20 yrs. All other companies have just rehashed what was previously developed. NASA and the US government will be foolish to let it disappear via bankruptcy. If the company gets in real trouble, we will suddenly see that NASA will award it a long-term contract for its services that will get it out of trouble. Right now Space X is the best space option that the government has available. As long as it can deliver, Space X will continue to exist. There's no way Space X will disappear due to bankruptcy any time soon.

senttoschool 4y ago
Sounds like you're saying tax payers should bail out whatever bad decisions SpaceX employees make. No thanks.
- j-pb 4y ago
  There's plenty of bailouts that were unnecessary, e.g. banks, hedge-funds. Space exploration is one of those problems that are inherently difficult enough that you can do everything right, and still go bankrupt.
- WheelsAtLarge 4y ago
  The Space industry is very volatile at this point. The business models are few and very expensive. I am not saying that Space X should have a blank check for anything they want to do but they should be given a small safety net and the benefit of the doubt. They have proven that they are able to advance the technology so they should be helped should they fall into trouble. Additionally, the alternative is to let the government do it. Either way the money will be spent. I think it's best to let an entrepreneurial company like Space X decide how best deploy the money at this time.
  - senttoschool 4y ago
    >let an entrepreneurial company like Space X decide how best deploy the money at this time. And if you bail them out, what motivation do they have to behave like an entrepreneurial company?