Book Review: The Rocket Company

Now that I’m done venting on Mark, I think I’m done kvetching about the ESAS plan for now. I’m still home sick with this stupid cold, but I’m most of the way back out of the woods, and will probably be going in to work this afternoon. While we’ve been recuperating, Tiff and I finished reading The Rocket Company, and since I promised Patrick I’d write a review, I’d like to take the time to do so now.

The Rocket Company is a fairly interesting semi-fictional book about one company’s attempts to open space up for commercial development. If you’re looking for a good work of fiction with excellent plot, character development, page turning action…this isn’t it. In fact, it is about as dry as The Goal, but at least it was intellectually fascinating. Don’t get me wrong, I enjoyed this book quite a bit, and it’s an excellent book if you’re a rocket nerd, but I wouldn’t suggest inflicting it on your significant other unless they are almost as nerdy as you are (or at least very patient). Also, if you’re anywhere near as hoity-toity about literature as my coworker Pierce…..

Anyhow, the book covers a variety of topics from general business, to management, to technical issues, marketting, public relations, regulatory work, etc. It’s a fairly good introduction to how most of those various topic relate to actually making a profitable space launch business. The technical chapters were for the most part quite interesting, even though I would quibble fairly strongly with a few of the design approaches. All in all, the book provides a very good way to develop a rocket manufacturing company…if you happen to have a couple of true-believer billionaire angel investors with Dirksens burning holes in their pockets, itching for the chance to open space to the masses.

Business and Financing Stuff:
Which brings me to my main qualm with the book–the assumption that developing and fielding even a small reusable vehicle has to take billions of dollars. Note, I didn’t call this a flaw–the authors may very well be right, and if they are right, most of the other conclusions in the book more or less naturally flow from that assumption. It just kinda made me wonder after the author introduced yet another “team of experts” in the book if all that was really neccessary for a first-generation commercial reusable vehicle.

At least part of this stems from the design philosophy they chose for their vehicle. Admittedly, there are many subtle problems facing low-operational-cost RLVs that they do a very good job of addressing. Basically, once you realize that SSTOs are really pushing it, the challenge of how do you handle getting both stages back to the launch site so you can prep them and fly them again is rather interesting. Their approach of doing a VTVL straight-up first stage is rather interesting, and IMO one of several potential solutions to the problem. However once that decision has been made, the requirement of near SSTO performance on the upper stage tends to really drive up the development/engineering costs of that stage. Shaving weight becomes a must. I wouldn’t really be surprised if such a vehicle really took that much to develop. Not that there are any obviously superior alternatives–there are alternatives, just no obviously perfect design (that’s how engineering usually goes).

I’ve always been a fan of doing the build-a-little, test-a-little, incremental approach where you try to target intermediate markets to build up capital and experience as you work your way towards your goal. I think such a method would be able to bring a spacecraft with similar performance and operating costs to what they’re suggesting at a much lower price, and without requring billions of up-front investment. But I may well be wrong.

All that said, one of the most interesting ideas presented in the book is a ramification of these assumed high development costs (but may actually be applicable even for lower development cost vehicles). Basically almost every commercial space startup I’ve heard of over the past several years has assumed that they would not just be building their vehicle, but that they’d be operating it, and that they would make money by selling rides. The book however makes the case that the only way to get large amounts of revenue quickly is by selling vehicles instead of rides. I personally think there’s a lot of merit to this idea. After all, it will take a long time for the general market to adapt to the idea of low-cost, high flight-rate vehicles, even after they are in existance. It should be stressed that most of the customers for these low-cost reusable launch vehicles aren’t even in the market yet, and may not even realize themselves that they’ll be in the market for them!

The basic idea is one I’ve been pondering for a long time. There seems to be a lot to it. One of the key challenges with space businesses is that there’s a huge amount of unknowns with the market, the capital cost to get into the business is high, and the time to revenue is often high. By selling your rockets to flight operators, you can create at least some buffer between yourself and the first and third problem. Say it takes three years to go from concept to a full orbital flight prototype, another two years from there to when you have your first production vehicle, and another two to three years after that until the market has ramped up enough that you can at least be cashflow positive on your launch vehicle operations. That’s 7-8 years from initial capital to cashflow positive. Now, imagine if instead you have two companies, a launch vehicle provider and a launch vehicle operator. The provider can now start having serious revenue, and probably be cashflow positive after only 5 years, while the operator can be cashflow positive within 2-3 years of initial investment. It may take the operator years to become fully profitable (and many of them will likely never make it to profitability), but the launch vehicle provider will likely be profitable much sooner. All in all something like this seems to make pretty good business sense, even for low-development cost projects.

One of the results that followed this idea in the book was the suggestion to try and sell these as “prestige” items to various national governments who don’t yet have manned spaceflight capabilities. Tickling the ITAR dragon (or at least having your business plan staked on getting the State Department to act sensibly) seems pretty darned scary to me, but if you can make it work, there are some real benefits. Those other countries (say Europe, Japan, Taiwan, South Korea, etc) would probably be a lot more willing to actually buy vehicles than to buy flights. US Legislators aren’t the only ones who prefer to fund programs that employ people in their own countries than to just buy services from whoever can provide them cheapest. Giving people the option of buying a vehicle that they can then operate themselves seems to strike a happier middle ground. These prestige vehicle buys are therefore not really taking away from the commercial launch service market, because they probably wouldn’t be in the market just for rides.

I’m not so much a fan of governments spending a bunch of money on national prestige bull, but if it’s cheap, and if they could actually use it for useful purposes, I think I’d be willing to take their money if they wanted to buy some vehicles.

Anyhow, the whole concept of selling vehicles instead of flights is one that anyone involved in commercial space launch world should give serious thought to. It might not make sense in all cases, but it has some real potential to bring in substantial amounts of revenue early on.

Technical Nerdlichkeit:
Ok, that’s enough for now about their business ideas, now back to the technical goodies! I really strongly suggest reading their chapter on balloon tanks and fracture mechanics. I’ve been working on the design for the propellant tanks for our demo vehicle for the past week or two, and although I had previously learned about fracture mechanics in college, that was a long time ago. While I definitely would never want to have to design a vehicle to as demanding of standards as what is portrayed in the rocket company, it does provide a useful reminder of that key point. Ironically, after my initial materials selection analysis, we almost ended up going with (and might still end up reverting to if the alternative I’m looking at doesn’t pan out) the exact same aluminum alloy suggested in the book.

The section on GN&C was fascinating. I’m definitely going to have to read up a bit on fluidic controls, but that’s probably something expensive enough to be out of reach for most alt.space vehicle designers.

I also liked the discussion about using turbojets on the first stage for extra landing cross-range (and possibly self-ferrying capabilities). Making sure you can land back at the launch site is a big deal. [As an aside, if John Hare is reading this, I’d suggest he keep working on proving out his high T/W ratio airbreathing idea he presented at Space Access ’04. If he gets something working, I’ll try and twist Dave’s arm into trying it out on one of our flight test vehicles.]

Oh, and the chapter about spacesuits was pretty darned cool, particularly the discussion of hard suits and Webb suits. Definitely worth reading, and definitely thought provoking.

Conclusions:
There were a lot of other fun chapters discussing potential future markets, lunar and martian transportation systems, and a whole bunch more. If you’re interested in space access, this is definitely a book worth buying. If you’re working for a space access company, this book should be on your bookshelf at work. If you’re a billionaire true-believer with Dirksens burning a hole in your pocket just chomping at the bit to become the next major “space angel”, you can contact Michael about investment opportunities at Masten Sp….just kidding (I wouldn’t know what to do with a Dirksen if I got one), seriously, if you’re an investor looking for some interesting insight into this market, I’d suggest buying the book. If on the other hand, you’re looking for an excellent work of literary genius, you’re probably reading the wrong blog anyway.

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Jonathan Goff

Jonathan Goff

President/CEO at Altius Space Machines
Jonathan Goff is a space technologist, inventor, and serial space entrepreneur who created the Selenian Boondocks blog. Jon was a co-founder of Masten Space Systems, and is the founder and CEO of Altius Space Machines, a space robotics startup in Broomfield, CO. His family includes his wife, Tiffany, and five boys: Jarom (deceased), Jonathan, James, Peter, and Andrew. Jon has a BS in Manufacturing Engineering (1999) and an MS in Mechanical Engineering (2007) from Brigham Young University, and served an LDS proselytizing mission in Olongapo, Philippines from 2000-2002.
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8 Responses to Book Review: The Rocket Company

  1. Kelly Starks says:

    Agree. Very cool book. DRY. Some of the ideas only make sence if you take some of their asumptions. [Real problem with their atitude toward systems engineering and trade studies. Classic sign of a doomed program.] And their designs a bit clumbsey for that kind of money. [Hey for a couple billion the big boys were willing to sign up to deliver shuttle class SSTOs.]

    But for a end to end theoretical case study of a private space program its damn good. Lots of solid tech research. Good busness hints (like sell the craft, don’t be a launcher company).

    Oh Jon, if you get a couple billion — lots of folks will be willing to help you spend it. Some you work for now.

    😉

  2. jsuros says:

    Well, you sold me. I just ordered my copy from amazon.

    Your comments on selling spacecraft to national governments made me think of the rumored deal the russians are making with the ESA to sell them Kliper orbiters they can launch from Kourou.

    I wonder if some variant or knockoff of the Kliper will end up being the DC10 of the space age?

    Needless to say, the CEV will never be sold to anybody.

  3. Anonymous says:

    Jon,

    My day job looks like leaving me time and facilties with a bit of cash RSN. I hope to bring some really weird stuff to SAS 06.

    Redneck

  4. Kelly Starks says:


    jsuros said…

    ==

    Your comments on selling spacecraft to national governments made me think of the rumored deal the russians are making with the ESA to sell them Kliper orbiters they can launch from Kourou.

    I wonder if some variant or knockoff of the Kliper will end up being the DC10 of the space age?

    I doubt it. Its more the last gasp of the old ’60’s style capsule on booster, gov programs. Its still pretty pittiful compared to the several of the alt.space concepts.

  5. jsuros says:

    >>Kliper as the DC10 of the space age

    >Its still pretty pitiful compared to several of the alt.space concepts.

    True enough, but I’ve been reading those concept studies for 30 years. A space yugo on the market beats any paper spacecraft ever devised.

  6. Kelly Starks says:

    Hey were not talking NASA, some of those alt.space concepts have funding — even have hardware.

  7. Karl Gallagher says:

    I got too annoyed to finish it. The trade study idiocy was one problem. If this guy’s never seen a problem with more than one possible solution, he has a huge ego or a tiny imagination.

    The other big problem was “selling vehicles.” Okay, J. R. Entrepeneur can’t make money operating a vehicle. So why is the customer going to be to make money operating it? And if it’s buying a ship it can’t make a profit on, how do you convince the ITAR folks that this is a business deal instead of ICBM smuggling?

  8. Jon Goff says:

    Karl,
    I think his point about selling vehicles was that it would be difficult for the initial company (with all the overhead inherent in developing a high flight-rate reusable) to make sufficient revenue quick enough off of selling flights. He wasn’t neccessarily implying that there wasn’t any market for it, just that it’s a lot easier to get high revenues early on by selling vehicles. If you look at the graph in his book (I forget what page), he shows the revenues from selling flights vs selling vehicles. Near-term, selling vehicles comes out on top, but long term selling flights is more profitable.

    It’s not entirely a silly idea, even though I don’t fully agree with him either.
    ~Jon

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