Thoughts on Commercial Space, Part IIA
The history of commercial space is fascinating and dramatic. It is full of spectacular technical and business failures and some success. I’ve had the privilege of living through much of it and what follows is largely from my memory, though I have made liberal use of the internet to get the facts and dates correct.
I like to think of commercial space, so far, as being divided into phases called 1.0, 2.0, 3.0 and 4.0. Not a terribly creative nomenclature, but I’ve used it in talks in the past and will stick with it here. I’ll briefly sketch each phase and subsequent posts will do a deeper dive on each. I will also distinguish between the demand side of commercial space and the supply side, this from the perspective of a launch service provider. This reflects my personal perspective as a career launch guy, but it is also instructive to see how each sector influences the other. Any space business counts launch as one of the largest costs as well as one of the highest risks. Access to space remains a significant barrier to entry for any prospective commercial space business.
Commercial Space 1.0 This is the beginning of commercial space from the launch of the first Intelsat spacecraft in 1965 to the present day. It is dominated by communications satellites in geosynchronous orbit and has benefitted by large synergies and cooperation with the government satellite and launch sectors. Growth in this marketplace stimulated the first round of entrants into the commercial launch sector in the mid to late 1980’s, including Ariane, Proton, Atlas, Delta and even Titan—a classic case of strong demand stimulating supply.
Commercial Space 2.0 This was the age of the big LEO constellation. The timeframe was the mid to late nineties. It was commensurate with the rise of the internet and several visionaries dreamed of an “internet in the sky.” Names like Teledesic, Iridium, Globalstar, Celestri and Skybridge and talk of hundreds or even thousands of spacecraft stimulated a lot of activity and investment on both the supply and demand sides of the market. The USAF EELV program was born during this time and was shaped by dreams of this burgeoning commercial market. Other commercial launch business came into the marketplace such as Sea Launch. Fundamentally flawed business models and the bursting of the dot-com bubble doomed Commercial Space 2.0. Some of the wreckage of Commercial Space 2.0 survived and was transformed including Atlas V and Delta IV currently operated by the Lockheed-Boeing joint venture, United Launch Alliance (ULA).
Commercial Space 3.0 This was the time of COTS, NASA’s commercial orbital transportation services. The driving force was the retirement of the Space Shuttle and the opening of new market to the US private sector. NASA’s promise of new demand to service the international space station stimulated private sector investment in new launch systems, Falcon and Antares, as well as cargo and crew carrying vehicles, Cygnus, Dragon, Dreamchaser and Starliner. We are currently part way through Commercial Space 3.0, with several of the new vehicles yet to fly. Commercial Space 3.0 is a long way from pure commercial but it reflects a large shift in the commercial direction from a government owned and operated space shuttle to private sector owned and operated systems, funded with a mix of government and private investment, servicing a government market. Hopes that these Public-Private Partnerships would stimulate other commercial demand-side enterprises remain unfulfilled.
Commercial Space 4.0 This is the most recent set of developments and is characterized by the phenomenon of the billionaire space entrepreneur, the emergence of the smallsat/cubesat, and round two of the big LEO constellation.
As with any simplistic organizational scheme, there are aspects of commercial space that don’t fit cleanly into any of these categories. And there are companies and programs that span all the phases. For example, SpaceX was born in 3.0 but clearly extends into 4.0 and has reached in to disrupt the (launch) supply side of the communications market (Commercial Space 1.0).
My next post will provide a more detailed look at Commercial Space 1.0 and extract some lessons learned.