I get the impression, from a lot of these biz dev’ers, that they think of biz dev as fun and sexy. One minute you’re grabbing lunch with Ron Conway and Ashton Kutcher and the next minute you’re closing a deal on the phone while you wait in the lobby at Microsoft to give Steve Ballmer the bad news: “No, we will not accept your acquisition offer of 3 trillion dollars.” From there, you head out for cocktails and swirl single-malt Scotch while discussing why Apple is so badass.

Worth a good read for anyone startuping or thinking of startuping.

The first thing I wanted to mention was that this was the first Space Access in three years that I actually came away from feeling recharged and excited. 2010 was a very difficult conference, with the strains that led to the second Masten reboot coming to a head, and some personal and petty disappointments on my part that at Masten we hadn’t even tried to give XCOR any real competition when it came to selling ULA on a partner for their RL-10 replacement engine project.

By 2011, I was running full-speed ahead with Altius, which was exciting, but the feeling I came away from Space Access with that year was frustration. Masten was making headway on its reboot, but hadn’t really caught its stride yet, Armadillo had had a depressing year, and XCOR was still struggling to raise the rest of the money it needed to really get into its Lynx work.  The industry had fought and lost the NASA 2010 Authorization battle, with its main win being that the much suckier House version hadn’t been passed. While that would’ve been disastrous, it was still pretty clear that the antibodies had won that round. I won’t belabor the point any further, but the last two Space Access conferences before this one hadn’t recharged me or excited me the way that previous conference had.

Fortunately, at least to me, the feeling I took away from this year was a lot more invigorating and optimistic, mostly due to progress at the three main sRLV companies that have been regulars at the conference: XCOR, Armadillo, and Masten. I’ll touch on each of them briefly:

XCOR
By far, XCOR impressed me as the company at the conference the closest to seeing its vehicle become a reality. With the funding round finally closed on Lynx, and the aerodynamics work winding down, they’re hot and heavy in the processes of parts detailing, manufacturing drawing development, quoting, working with suppliers to get parts made, and then integrating the pieces as they came in.  The design work they showed at the conference gave me a lot of confidence–I personally think that that HTHL vehicles like Lynx are actually more complex in many ways than VTVL vehicles–and XCOR’s presentation showed a design reaching the level of maturity, detail, and sophistication you would expect in a vehicle that is being built and readied for flight test.  While they’ve got a lot of integration to go, with all its opportunities for delays, rework, and development snags, if you’ve been at this point in a prototype vehicle development effort, it almost makes you giddy with excitement. I’m going to stick my neck out and say that I think there’s a high probability that XCOR is going to be there in force at next year’s conference, showing pictures and videos from Lynx’s first few flight tests. There’s still a long way from there to a commercially operating Lynx Mk2, but I think that so long as they can keep a decent war-chest of extra cash available to work through the inevitable slides, it’ll be exciting to see the race between them and VG over the coming year or two. To be honest, I wish I had some XCOR stock about now.

Armadillo
Armadillo also gave reason to be excited. Simply put, they already flew a vehicle to 95km that actually probably could’ve been coaxed over the von Karman line with a little more patience in the engine characterization and such. While they are stepping up to a larger vehicle, and going back to a cold-gas RCS system (which worries me–I think you’re really going to want hot-gas RCS for a full 100km flight), I think they’ve got a good shot at being the first of the Space Access regulars to make it over the von Karman line. Now admittedly, this is with a vehicle that’s basically a liquid sounding rocket, but it’s a good first step. It’ll be interesting to see where AA goes as they try to transition the info learned from Stig-B back into their VTVL vehicle development.

Masten
The things that gave me the most hope about Masten were actually from a side conversation from Dave outside the conference itself. A lot of the technical issues that I had been sweating while still working there look like they’ve found a good rigorous approach to solving. While they still have a lot of execution between them and success, and while they’re by far the most undercapitalized of the three, it looks like they’re taking the steps and getting the outside help they’ll need to make a reliable VTVL rocket system. The Xeus work and the other contracting stuff is also cool, but to me I was able to walk away with the warm fuzzy that Masten’s on a good track for getting Xaero and eventually Xogdor flying.

My hope with all of this is that next year, each of the teams will have enough solid accomplishments under their belt that we’ll have many of them back in larger numbers to collect some hard-earned bragging rights. We’re still growing up as an industry, but I feel pretty excited about the near-term prospects of at least this corner of the industry.

While I was standing there looking at this pretty darned impressive hole in the ground, I started thinking about Larry Niven’s quip about how “Dinosaurs went extinct because they didn’t have a space program”. As I said on Twitter during the drive, I don’t think our space program would actually do us much good in stopping an extinction-level meteor strike, even if we had 5-10 years advanced notice (which we most likely wouldn’t have because we’re not doing the NEO search in the way that would actually give us much advanced warning).

I think a better way of thinking about this would be to say that “Dinosaurs went extinct because they weren’t spacefaring. Unfortunately, neither are we–yet.”

Speaking of spacefaring, I think that Paul Spudis’ article about the seafaring vs. aviation analogy for space was spot-on in illustrating this point. This is why I’m worried that the destination/mission focus of so much of the space debate is driving things in foolish directions. I actually side with Paul in thinking that cislunar space (including the surface of the Moon) is where it makes the most sense for us to develop ourselves into a spacefaring (and not just space-visiting) civilization. I just think a lot of the debate is on destinations versus whether we want to be forever stuck with one-off missions or whether we want to establish the kind of transportation infrastructure that enable something more like what Paul described (and ultimately what would be required if we want to be able to avoid repeating the fate of the Dinosaurs if it turns out some rock out there is addressed with our name on it).

It takes slightly crazy people to make big changes. These same people generally have tough lives. It’s a lifestyle choice.

–Iain McClatchie (who runs the  Ambivalent Engineer blog)

One of the things that really strikes you about all the conversations between NASA and Congress about NASA’s attempt to help you know, follow its charter and “seek and encourage, to the maximum extent possible, the fullest commercial use of space” by funding commercial development of crew transport vehicles is the emphasis on safety. Shuttle ended up killing two crews out of 135 flights, which is actually about what you’d expect to get from flying crews on EELV-class vehicles without a launch escape system of any sort, yet in almost every Congressional hearing, you hear a ton of hand-wringing about whether these vehicles will be safe enough for NASA’s astronauts. And you can tell that NASA has taken these inputs very seriously, with all the requirements (and referenced requirements, and requirements referenced in referenced requirements, and requirements referenced in requirements referenced in referenced requirements), paperwork, overhead, and with their attempt to force things into a FAR-based mold closer to how NASA does major programs. It’s pretty clear that NASA and Congress both see safety as the top priority for commercial crew. I know this may be heretical, but I’m wondering if this is a misplaced priority.

Maybe I’m wrong, but here’s my concern:

1. NASA really wants at least two independent, self-sustaining, affordable ways of getting people to and from the ISS. Having this capability means that if anything happens to one system, you don’t get the standdowns like what you had with the Shuttle program.
2. Having at least two affordable and healthy competitors also means more price competition, and more incentive to innovation.
3. There’s no chance that Orion on SLS is going to be anything within spitting distance of “affordable” for routine crew rotations.
4. As NASA has been openly admitting for almost as long as this blog has been around, they know that they can’t afford to go beyond LEO if they can’t offload all of the ISS crew and cargo needs to commercial providers using firm, fixed-price contracts.
5. But NASA only wants to buy about 8 seats per year (two rotations of four crew each) from commercial providers, in order to meet their ISS obligations.
6. You’re only likely to get two affordable and healthy commercial crew providers if they have enough demand to spread their fixed costs out over (and if they can keep those fixed-costs within reason).
7. I can only see a few ways of doing that (though there may be others):
1. Have the commercial crew vehicles be affordable enough that they can enable significant non-NASA crew, cargo, and recoverable freeflyer (like DragonLab) services.
2. Having the commercial crew vehicle be similar enough to a commercial cargo vehicle that each provider can actually get a decent number of flights per year out of a mix of crew and cargo.
8. Only the first of those two options avoids the challenge of a NASA/commercial crew monopsony scenario, where the ISS is the only thing keeping the commercial crew providers afloat.
9. While there is a small, but non-zero, chance that you could get sufficient demand from what Bigelow calls “sovereign clients” to get non-NASA crew/cargo demand even at the old $20M/seat Soyuz price, the best analysis I have seen with the existing data (pgs 43-53 of this presentation) suggests that the price point commercial crew needs to get in order to reach a tipping point is $5M/seat max, and possibly as low as $1-2.5M/seat.
10. While it may be barely possible for NASA to eke out a minor victory by getting two independent  and semi-healthy commercial ISS crew providers who also do ISS cargo deliveries on unmanned versions of their rockets/delivery vehicles, even this minor victory is only possible if the fixed cost of the crew capability isn’t too excessive.
11. With only two flights per year worth of crew demand, there might not even be enough demand for one commercial provider unless they can find synergies with ISS cargo deliveries, or more preferably non-NASA customers.

I guess my big concern is that it doesn’t appear as though NASA or Congress are being realistic about how to properly prioritize safety. Ultimately you can always spend extra money on safety (one more test, one more certification, one more sign-off, one more review, etc)–the only way to have 0% chance of losing a crew on an ISS mission is to not do the mission. If you are actually going to fly, there’s a point where you have to accept some risk, and you have to say at some point that you’re only willing to spend a certain amount of money to potentially buy down tiny fractions of a decimal point safety-wise. If you have to make that decision anyway, then it makes sense to do it in the framework of the big picture of the mission risks and overarching goals.

This is something for instance that the Constellation program utterly failed to do–the core justification for Ares-I was that it’s launch ascent safety was supposedly going to be so darned good (a 1 in 2106.4823910293 chance of losing a crew on ascent, at a 50% confidence interval…), but in the light of a program that expected a 2% or greater chance of losing a crew on a given lunar mission, it’s pretty clear that spending money to go from a 1 in 1000 probability on existing LVs versus spending a decade and $10-20B on a new launcher to buy that risk down a bit was money very foolishly spent. The problem is I worry we’re going down the same path with commercial crew.

While I don’t personally have any really sage advice on how best to ensure safe operations while still keeping the overhead low enough to keep commercial crew provider costs low enough to give a realistic shot at enabling a new market to emerge, I am worried that the current balance is a well-intentioned disaster waiting to happen (see also Wayne Hale’s previous warning on this topic).  If NASA and Congress continue down the path they’re going with safety, there’s a very real chance that they’re going to make commercial crew commercially unviable. And that would be the ultimate Pyrrhic Victory–having one or two “commercial” crew providers that in the end that are flying, but are so expensive that only NASA can afford them.

Like most engineers, I don’t let the lack of much economic training get in the way of good economic philosophizing/debating, but I’ve learned a lot from their takes on economics and policy. I particularly like Arnold’s recent discussion of Patterns of Sustainable Specialization and Trade as part of the explanation for the current economic downturn. I don’t think it tells the full story–I think there’s still room for some of the “Austrian” business cycle thinking, and some of the insights that “Mish” Shedlock has given about credit’s often-misunderstood role in economics.

If you aren’t reading these blogs on a regular basis, I’d suggest doing so. These guys don’t agree on everything, and you probably won’t agree with them on everything, but you’ll probably agree that most of the conversation there is enlightening.

Figured I’d share.

To The Editor,

I’m a small business owner in Boulder County, building robotic systems for use in space and here on earth. While I’m a libertarian-leaning independent, I want to defend Newt Gingrich’s recent space policy statements, which I feel have been given undeserved flack.

While NASA’s budget is only a measly 0.5% of federal expenditures, that is still a large amount of money, and I agree with Mr. Gingrich that even within its existing budget, NASA is capable of delivering much more to our nation. Specifically, I agree with Newt that NASA can accomplish significantly more within its current budget in three ways:

First, NASA needs a bold vision that is clearly not achievable by doing “business as usual”. Newt’s proposal of fielding a moon base by 2020 fits that description. Such a goal is definitely not feasible within NASA’s budget without drastic changes to how NASA does business. One such change would be to utilize orbital “gas stations” such as those being developed by Boulder-based Ball Aerospace in conjunction with existing commercial launch vehicles, instead of relying on NASA-operated heavy lift launchers like SLS. This would also provide more near-term use for Lockheed Martin’s Orion Spacecraft, currently being developed here in Denver.
Second, NASA needs to be allowed to take more risks. As former Administrator Michael Griffin once asked “What, precisely, are the precautions that we would take to safeguard a human crew that we would deliberately omit when launching, say, a billion-dollar [unmanned] mission?” For instance, Denver-based United Launch Alliance flies rockets that by this standard should be safe enough today to launch US astronauts, at a risk no greater than a space shuttle mission.  Today, not five years from now.

Third, NASA needs to be allowed to continue to tap the potential of the commercial space industry through expanded prize authority and through continuing to act as a customer for NASA-needed services that the commercial companies such as Colorado-based Sierra Nevada are starting to offer with their proposed Dreamchaser vehicle. Prizes are a great motivator for private investment and risk-taking, and by acting as an initial customer for new commercial services, NASA can help entrepreneurs bring more investment money into the growing entrepreneurial space industry.

While I don’t agree with Mr. Gingrich on much, I do agree that his space policy is good for our nation, and good for the state of Colorado.

–Jonathan Goff

Short version: probably won’t be blogging at least through mid-February. Sorry guys.