spaceportal.arc.nasa

1. spaceportal.arc.nasa.gov Space Entrepreneurship: The Next Big Thing Greg Schmidt - NASA Lunar Science Institute Bruce Pittman - NASA Space Portal

2. Space Is Neat • The public is fascinated with space • The Mars rovers website received over 6 billion hits in a 6 week period • Movies such as Star Wars and Star Trek have brought in $ billions • The Smithsonian Air and Space Museum draws in 5 million visitors a year • But . . .

3. Space Is Difficult & Expensive • Getting there and living there is a challenge • Go up 200 miles and accelerate to 17,500 mph in 8 minutes • Hard vacuum • Lethal radiation • Microgravity • The hots are very hot (120C) and the colds are very cold (-100C) • The cost of going to space has remained stubbornly high over the last 3 decades • $10,000 to $20,000 per kg • The best systems out there are only 98% reliable • You fail in about 1 in 50 attempts sometimes catastrophically • But there are changes on the horizon

4. BIGSOLUTIONS from small space systems Exploration • Low Cost Commercial Lunar Space Ops • Rendezvous • Docking • Formation Flying Increase Demand Access from Space • Science and Discovery • New Customers • Space Access Certificates • Aggregate Payloads • Payload Return Demo Ground Activities Launch • NACA Style Research & Test Support • Laptop Flight Operations • Space Simulations • Automated Launch • Integrated Ground Ops NASA Ames Research Center

5. There Have Been Many Failures • Business collapse of ambitious low-Earth orbiting satellite constellations in 1990’s (Iridium, Global Star) seriously limited commercial investment • Kittler Aerospace • OTRAG • Beal Aerospace • Rotary Rocket • ARC Technology/Starstruck/AMROC - IP sold to SpaceDev in 1999 • Iridium - 66 satellites • Globalstar -48 + satellites • Teledesic - 840 satellites • NASA hasn’t done so well either and has spent a lot more money • NASP • X-33 • X-34 • X-37 • X-38, • X-43 • ALS • OSP

6. Some Successes • Orbital Sciences • SpaceHab • Direct TV • Dishnet • XM Radio/Sirius

7. Entrepreneurial Space Paradigm • Government, DOD • Biotechnology • Microgravity Materials • Space Laboratories • Entertainment • Tourism, Other • Venture Capital • Government • Private • Launch Services • Orbital Platforms • Small to Large Satellites • Capsule Return Systems

8. New Approaches Are Needed • Government has had the lead in space so far but this is changing • Large net worth individuals are getting into this game, Paul Allen, Jeff Bezos, Richard Branson, Bob Bigelow, Elon Musk, and others • NASA has the ability to enter into unique agreements call Space Act Agreement • COTS program assisting development of commercial launch industry, but more needs to be done that benefits a broader community • What are the proper roles for the government, industry and academia? • The NACA (National Advisory Committee on Aeronautics) model worked well in developing the US aeronautical industry in the 1920s-50s

9. Developing Commercial and Military Aviation Government Supported and Guided Opening the Space Frontier Government Directed and Led Developing Commercial Space Government Supports and Guides Learning from History Opening New Worlds Government Directs and Leads

10. Government Is Trying To Help • DARPA initiated the Falcon program as part of their Operationally Responsive Space • 100 lbs to orbit on 24 hours notice for < $5 million • SpaceX Falcon 1 • Air Launch • NASA Commercial Orbital Transportation Services (COTS) program was established to demonstrate the capability to deliver cargo and possibly passengers to the International Space Station ISS - $500 million over 5 years on Space Act Agreement • Two companies originally selected • Space X - Falcon 9 • Kistler Aerospace - K-1 • Kistler failed their investment milestone and agreement was cancelled • Orbital Sciences was awarded the remaining Kistler $$

11. SpaceX Falcon 9

12. Rocketplane Kistler K-1

13. Orbital Sciences Taurus II

14. COTS Paradigm is Strategically Important to the NASA Vision!

15. International Space Station - ISS

16. ISS National Laboratory • The NASA Authorization Act of 2005 designated that the US portion of the International Space Station be designated a “national laboratory” • “The Administrator shall seek to increase the utilization of the ISS by other Federal entities and the private sector through partnerships, cost-sharing agreements, and other arrangement that would supplement NASA funding of the ISS” • NASA prepared a plan for Congress describing how the national lab will be implemented and operated • The plan states the intention of NASA to offer usage of the ISS free of charge

17. Science On ISS

18. Bigelow Orbital Facility

19. Suborbital Tourism

20. Google Lunar X Prize Odyssey Moon Astrobotic

21. Using Space Resources

22. Entrepreneurial Space Partners Virtue Arts

23. The Business Case For Space • What can you do in space that is worth the price/risk/difficulty of getting and staying there? • Telecom is the only clear winner so far • Other potential opportunities: • Tourism and entertainment • Biotech • Materials processing • Space Solar Power • Resource utilization from Moon and asteroids • ISS National Lab will be available soon • How to perform proof of concept to attract outside money?

24. Space Investment Summit • Boeing, EADS Astrium and several of the other major aerospace companies have been sponsoring a series briefings for the venture capital and angel investor communities • 7 summits have been held since 2007 with the 8th planned for Chicago in May • The purpose of the meetings is to start a dialog between the entrepreneurial space community and risk capital community about the opportunities for using space to make money • This is more than just rockets • Users of the space environment are highlighted such as biotech and materials • Value added services • Entertainment, sports and advertising • Focus on smaller investments, less risk and quicker returns

25. Space Diving

26. Space Investment Challenges • The markets are often not established • Space tourism • New technology is often involved • The amount of money that needs to be raised is large • Out of the realm of angel investors • Super angels such as Paul Allen, Jeff Bezos and Richard Branson have stepped in • Payback is uncertain • IRR is historically low for aerospace • Payback may be 7 or more years in the future • There are a lot of risks and uncertainties • There has yet to be a Yahoo or Google type IPO event and this is what the institutional investors are waiting for • But there is a lot of sizzle!

27. Recommendations • Start small • Focus on near term niche markets • Get early cash flow • SBIR/STTR/IPP Seed Fund • Subcontract to larger companies • Manage your risk • Technical - keep high risk items off the critical path • Cost and schedule - just assume it will cost twice as much and take twice as long (or more) than your business plan says • You need a business plan and you need to write it yourself • Take money only from people you trust and want to have around for a long time • Keep your eye on the goal but be flexible in how you get there • Learn from the mistakes of others, do your homework • Keep your sense of humor and enjoy the adventure