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.

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)

Now, even though I’m pretty libertarian, I can at least empathize with the goal of not letting poor widows get screwed by unscrupulous privately-traded companies…but we put the people in the 90th and 95th and 98th percentile in this same category?  Sure, privately traded companies, and especially startups can be pretty risky–even in strong and growing industries.  But really these days, investing only in publicly traded companies is no guarantee that you won’t get screwed.  There are all sorts of ways investors are allowed to do financially suicidal things with publicly traded companies, but aren’t allowed to take any risks with privately traded ones, even if they’ve managed to build net worths of several hundred thousand dollars not counting equity in their primary residences.

I just wonder what the investment environment would be like if the accredited investment rules had a cutoff bar of $500k vs. $1M.  Not that it’ll ever happen, just surprised to realize how high of a bar current accredited investment rules really are for investment.

That is all.

Background

As I mentioned on my Space Show appearance earlier this week, my first appearance there in January ’07 elicited a lot of discussion both on the blog, and offline. I mentioned that a guy approached me with the question along the lines of “is there a way to wrap a business case around propellant depots”. That would be Colin.

We batted around a lot of ideas over the months, and came to the conclusion that while it was probably a bit too challenging to wrap a business case around depots directly. Not unless you had the backing of a wealthy philantrocapitalist like Musk, Bezos, or Bigelow (if any of the readers happens to be such a philantrocapitalist desperately in search of ways to invest a couple hundred $M to try and one-up Elon, my email address is jongoff@gmail.com, just in case you were wondering). The problem is that making depots really pay off probably requires at least two, and possibly three miracles. And when you have to raise outside money from non-philantrocapitalistic sources, you’re only allowed at most one miracle per business plan.

So, we backed up and looked to see if we could find any businesses that enabled depots that might be profitable in themselves. The idea of prox-ops tugs seemed to fit the bill. The idea is that one of the miracles needed for a depot is the development of a good prox-op tug that could take the complexity out of bringing “dumb” propellant tankers from their delivery orbit to the depot, hooking up the transfer lines, and then sending the tankers home empty when they’re done. If you could find a way to develop such a tug (or something close enough that it was clear that you only needed to trick-out your already existing tug with some slightly different add-ons), in a way that paid for itself, that would both make you some respectable amounts of money while simultaneously making the fielding of commercial depots that much closer to reality.

The challenge is that while there are probably a half dozen companies in the US that have the technical competence to design a tug-like spacecraft, and most of them want to do so pretty badly, none of them have really tried to go after this new market entrepreneurially. Now admittedly, and to be fair, it’s got to be really hard for a large, publicly traded company to take entrepreneurial risks like that in even the best of cases. But part of the problem has been the challenge of finding some initial toehold market that you can really get into the space tug business with.

There are a couple of aspects to this problem:

1. You need a customer who has a need that’s bad enough they’d be willing to actually buy servicing from you.
2. You need a technical approach that is non-scary enough that said customer will actually be willing to let you try
3. You need a customer with money, and an approach that’s cheap enough that the value of your service to them is sufficiently less than your internal cost to develop and deliver that service that you can actually make money.

That’s a bit harder than it sounds, and at least part of the reason why nobody has actually delivered on orbital servicing using space tugs is that this is a tough nut to crack.

There are people out there who could probably benefit a lot form servicing (NRO and USAF LEO satellites, GEO comsats, etc), but their spacecraft are so expensive that they really don’t want to be the first guinea pig–second or third maybe, but they’d rather see you demonstrate your capabilities on someone else. In both cases we looked at options like just attaching the spacecraft and providing some extra maneuvering capability–not even trying to actually transfer fuel or power or anything. But the reality kept coming back to the fact that the amount of engineering work it would take to go directly after such a mission immediately would likely cost so much that you couldn’t raise the money. If you could demonstrate your capabilities on something easier first, it might be realistic to start servicing these bigger players, but that means you still need to find a toe-hold market. They’re great second markets, but not good toe-holds.

Iridium For The Win?

In the end, we started looking at the Iridium constellation, due to the collision they had with the Russian Cosmos satellite in February of 2009.

Colin hit on many of the reasons why Iridium looks like an interesting first customer for space tug servicing. But let me add a few more:

• Iridium provides a large number of identical servicing targets.  Which means that you can design the servicing hardware once, and provide dozens of missions, reusing hardware, software, and experience.
• Not only does losing satellites start cutting into Iridium’s ability to retain and grow their customer base, but satellite losses that turn into more debris could actually make it harder to successfully replace the current constellation.  They really need to keep those orbits clean enough that they can continue to use them.
• While they really don’t want to lose many satellites, the fact that they do have some spares means that they can actually afford to take more risks on something like orbital servicing [Note: an article in Space News yesterday indicated that they felt they could still survive as a business if at least 36 of their satellites were still available when Iridium Next starts launching].  The bar is a lot lower than it would be with $1B NRO satellites, or GEO comsats that are bringing in hundreds of $M/yr/satellite.
• The government has a huge interest both in Iridium continuing to exist, and in Iridium not having more of their satellites become collision targets.  At Iridium’s altitude and inclination, debris from any collision is going to increase the danger to just about all LEO orbits of interest.  Remember, unlike GEO where all the satellites are going in the same direction at nearly the same speed, LEO orbits all tend to cross each other.  It wouldn’t take too many repeats of the Cosmos collision to start really making a big mess.  So the government might have a legitimate reason to help try and encourage ventures like this.
• With Iridium’s satellites getting old, the odds of one or more of them running out of propellant or having its batteries die before it can be disposed of is probably not insignificant.
• The LEO environment is a lot easier to design an initial tug for, and a lot easier to affordably reach.  Not to mention you can probably get away with a smaller spacecraft.  All of these lower the amount of investment you need to raise up front.
• Iridium actually has enough revenue that they might be able to afford a sufficiently low-cost servicing option.
• Their only other option is really to count “hope” as an operating plan. The analysis I linked to above indicates that they think they can survive as-is, but having an orbital servicing option that allows them to continue at full capacity might still be very interesting to them.

What the NRO Doesn't Want to See a Repeat Of

How Best to Be Of Service?

So, we started looking at various options of servicing the Iridium satellites.  Our initial idea was to provide a small tug for each of the satellites.  If a debris conjunction appeared likely, or if the satellite’s attitude control system failed, or if the satellite ran out of propellant, the helper tug would take over, and either help the Iridium craft dodge the debris, or provide station keeping or end-of-life disposal services. While such an approach would eliminate the complexity of actually doing anything to the Iridium satellite other than just grabbing it, it would entail trying to make 66 small spacecraft cheap enough that you could launch them, hook them up, and perform their missions all for a price-point Iridium could afford…which quite frankly seemed unlikely.

We also looked at the idea of having only a handful of tugs (1-3) that would sit around in standby, and if an event came up, it would rapidly maneuver to the Iridium satellite in danger, rescue it, and then go back to standby mode.  While this cut down on the number of tugs you needed drastically, now the propulsion requirements goes way up.   Especially if you can’t put one in each orbital plane.  Switching from plane to plane requires a plane change if you have to do it in a hurry, and that can be crazy expensive from a delta-V standpoint (a 6o degree plane change done the quick way could cost you almost as much delta-V as it took to get into orbit).  You could also do ground based “rescue tugs” that could only launch on need…but once again none of these approaches was really realistic either from a launch frequency, propellant usage, or total cost standpoint.

What we finally settled-on was the idea of just refueling the satellites themselves.  If you did that, you could use one or maybe at most two or three tugs to do the whole job.  Plane changing between two planes with the same inclination can be done relatively cheaply if you have a lot of time.  You just go into either an elliptical orbit, or a circular orbit of different radius, and then your nodal regression rate will be either faster or slower than the Iridium satellite planes.  If you can be patient, you’ll eventually catch up with the next orbital plane.  Moving from satellite to satellite within a plane also requires some tricky maneuvers, but if you have time, they don’t have to use a lot of propellant.  One option we batted around was launching a little “mini-depot” (really mostly a dumb tank with some transfer systems and docking ports) into an elliptical orbit that would drift from plane to plane.  That way you wouldn’t have to accelerate and decelerate the whole propellant load each time you went into one of your drifting orbits.

The end result was that by doing it this way, you could cut down drastically on the number of launches, not have to be anywhere near as rushed, and cut down on the number of satellites.

For the paper one of the things we were going to do was analyze the different trajectories to figure out how much propellant it really took to move from satellite to satellite in a given plane (given various allowable travel times), as well as how much propellant it took to move between planes.  Once you know that, you can start getting a better handle on how many launches you would need, how long things would take, etc., which would start enabling you to get a realistic cost estimate for at least the marginal cost of the servicing.

Servicing Challenges

The one other big question mark was what it would take to service the satellites once you got to them.

The Iridium satellites weren’t made for servicing.  The propellant inlets are capped with the caps safety-wired on.  And the whole assembly is likely covered up with MMOD protection or MLI.  I tried to get a good look at the one Iridium satellite they had up in the Air and Space Museum while we were out in DC for the NGLLC awards ceremony last year, but the area where I”m pretty sure the fueling interface was at was somewhere you couldn’t readily see.  I was sorely tempted to see if I could sneak up onto one of the displays nearby to get a peek, but chickened out. Anyhow, the net result is you’re going to need to do some stuff that would take about 15 seconds for a dude on the ground to do, but is going to be annoyingly complex to do on orbit.  I won’t go into details, just to avoid pissing off the ITAR gnomes, but suffice it to say this is not a trivial task.

There’s also the challenge that propellant isn’t the only thing that these satellites need.  Batteries and solar panels wear out.  While the latest and greatest solar panels are a lot better than what Iridium was launched with, you still need to find a way to couple that power into the satellite itself without hurting it.  Do you collect the power and then just beam it onto the other solar panels (might work if it’s just the solar panel efficiency that’s dropping)?  Or is there some sort of power umbilical used for the satellite on the launcher that could be reconnected to to provide both power, and a backup battery?  How do you attach it all?  Once again, I have some ideas, but I think I’ll leave things at that.

Real Life Getting in The Way

So, we had some starting ideas, and a basic approach.  We were still unsure if we actually wanted to jump on this idea as a real business, but we were interested in at least seeing where the analysis went. We pulled together a team to write the AIAA paper to investigate the idea.  I can’t remember for sure, but I think Colin was planning on using this paper as part of his MBA that he’s been working on.  And then life got messy and complicated, and in the end we had to back out of the paper.  But we wanted to put these thoughts up here to spur people’s thinking. If someone is going to provide this service for Iridium, the clock is ticking.  Even a fast-paced spacecraft development project is going to take probably 2-3 years, and there’s really not too much longer that you can delay and still be of use to Iridium.  Basically, we wanted to get the idea out into public to see if someone could find a way to run with it.

Buzz Aldrin was one of the breakfast speakers during the conference. Though I was sleep-deprived enough that I couldn’t concentrate during most of his talk, he made an interesting (if not heretical) point about “astronauts”. The “naut” part of astronaut, taikonaut, or cosmonaut, refers to “nautical”–coming from the concept of an astronaut as someone who knew how to navigate in space. Basically a pilot, an astrogator, someone who knows orbital dynamics, and knows how to fly spacecraft. His point was that not everyone who flies on a vehicle in space is an astronaut. I think he was saying this to try and distinguish space tourists from actual NASA astronauts, but I think his point is more interesting than that. For most space flights, you really don’t need more than one or two astronauts. Most of the people who fly into space don’t need to know how to navigate by the stars, or how to plot a trajectory, or how to null out the rotations on a vehicle. You might want a backup pilot, but not everyone who flies into space needs to or should be a fly-boy. Now, there’s a bit of an emotional appeal to the idea of being able to call oneself an astronaut because one flew over 100km, enough so that it’s probably still worth leaving that tradition in place for now–my point was just that those paying space travellers don’t need to be trained or treated in the same way as a career spacecraft pilot.

Taber MacCallum of Paragon Space Development Corp gave probably the most interesting talk at the conference. Some of the earlier talks had copies of the slides posted on the NGEC-2 site, so I thought they were going to do the same for Taber’s talk. Alas, as of the last time I checked, this didn’t turn out to be the case. If anyone can snag me a copy of his presentation, that would be greatly appreciated. Taber and his wife were members of the original Biosphere 2 team, and he spent at least part of his time talking about lessons learned from that project. The biggest and most important part of his presentation was about the role of “leadership” in entrepreneurial ventures. He made the point that I’ve made in several instances that entrepreneurial ventures are high-stress, high-ambiguity environments. As I understood it, his point was that leadership in many cases boils down to emotional maturity. How we deal with our egos, with stress, with uncertainty, and with critical decisions. He made the interesting point that when a person gets identified too closely with a certain technical project or solution, it’s often easy to allow the success or failure of that project to become intimately tied to one’s self-worth. In such situations it becomes very hard to act objectively, and very easy to act in an emotionally immature fashion. I’ve seen this before (a lot) in myself, and I think that most readers could probably find examples in their own lives of such shortcomings. I know that when I’ve been championing an idea, and shoots holes in it, that sometimes I end up becoming very defensive, and will actively start blocking out evidence that contradicts my position. I usually calm down later, apologize, and get back to work. But it’s a valid point–and an extremely dangerous one for entrepreneurs (or other people in leadership positions). As one person put later on in the conference, the single most likely thing that could hinder the development of commercial space is the personalities of the key players involved. Ironically, I think he might be right. While the technical, financial, and market obstacles are real and severe, the emotional, ego, and personality challenges may actually be more important in the long run. Just a thought.

Another interesting idea came up in the discussion in our lunar access working group about space ferries. One of the members of our team was an engineer at a major commercial satellite manufacturer. On several occasions, when discussing various alternative commercial means for delivering satellites to orbit or to GEO, I’ve had friends like Dennis Wingo bring up the risk aversion of the satellite manufacturers/launchers as an insurmountable show-stopper. As the logic went, launch costs are such a small percentage of the overall costs (and minuscule compared to the future revenue streams) that doing things that would reduce launch costs wouldn’t really be very interesting to satellite builders/launchers, because the risk of doing something new would be too high. I had been repeating this conventional wisdom, when my teammate suggested a slightly different viewpoint. He agreed that satellite builders and launchers were very risk averse, by necessity. They really don’t want to buy the first flight of some new transportation concept. Higher risks correspond with higher liability premiums. However, he made the point that after the initial risk has been reduced through a demo (or preferably two or three), that launch costs actually end up being very important. He said that while launch costs weren’t the majority of the cost of building, launching, and activating a satellite, they were significant, and investors and customers really hammer on them to try and find the best deals they can. The fact that people are willing to launch on rockets with known worse reliability track records (Ariane V and Sea Launch for instance) in order to get a better launch cost should put to lie the idea that satellite builders and launchers are so risk averse that they’ll never get involved in a new technology until after its been in service for a long time. One shouldn’t assume that they’ll be able to just sign customers up right from the start, but at least from what he was suggesting, the barrier to entry into supplying services to that market might be a little lower than I had originally suspected. Another idea that came up in the conversation was that the sooner you could convince insurers that your service provides a net decrease in risk, the more likely they’d be leaned on by customers and investors to take advantage of that service (in order to lower their premiums). Once again, just some more food for thought.

Another interesting point, brought up by Ken Davidian regarded the aging of the NASA workforce. At the time of Apollo 11, the average age of a NASA employee was about 29 years old. Now it’s over 55. This has very important ramifications for the future of NASA and commercial space development, particularly with Griffin’s statements on several occasions that NASA was going to be relying on more experienced engineers for Constellation, instead of hiring on a bunch of younger engineers for the project.

Unfortunately, I’ve been asked not to blog about one of the most interesting new ideas that I heard at the conference. Maybe at some point once my friend has had more chance to spread his meme from inside the agency I can blog about it without risking getting the idea tossed out as being “Not Invented Here”.

Lastly, in addition to the working groups and the planned speakers, this conference ended up being a great chance for networking. I finally got to meet Grant Bonin in person (he’s been trying to rope me into writing a commercial Mars transportation white paper for a while now). I got to meet a few people from the NASASpaceFlight forums. On Wednesday night, Tiff and I (and some friends from Santa Clara) got to go swing dancing in San Francisco, and we were able to arrange a meeting with Jake McGuire (who I’ve known from the sci.space.* newsgroups for over 11 years now). And on Friday night we had dinner with both Henry Cate’s. For the conference, we were staying at the house of the one who hosts the Bay Area Moon Society meetings, and on Friday we had dinner with him and his wife and several of his kids and their families. His son Henry is the one who started the Carnival of Space last year.

I hope they have another conference like this next year. The work was fun, but I enjoyed getting to finally meet some of these people even more.