Why The US Can Beat China: The Facts About SpaceX Costs

http://www.spacex.com/usa.php

by hef19898 • 14 years ago

497 258 14 years ago

hef198986• 14 years ago

Following the discussion on the SpaceX infrastructure, I did some didding on their homepage and stumbled over this article.

Seriously, being in this industry, that's more than just impressive. And you should really ask yourself what you do wrong...

evoxed3• 14 years ago

> The Falcon 9 launch vehicle was developed from a blank sheet to first launch in four and half years for just over $300 million. The Falcon 9 is an EELV class vehicle that generates roughly one million pounds of thrust (four times the maximum thrust of a Boeing 747) and carries more payload to orbit than a Delta IV Medium.

> The Dragon spacecraft was developed from a blank sheet to the first demonstration flight in just over four years for about $300 million. Last year, SpaceX became the first private company, in partnership with NASA, to successfully orbit and recover a spacecraft. The spacecraft and the Falcon 9 rocket that carried it were designed, manufactured and launched by American workers for an American company. The Falcon 9/Dragon system, with the addition of a launch escape system, seats and upgraded life support, can carry seven astronauts to orbit, more than double the capacity of the Russian Soyuz, but at less than a third of the price per seat.

Well now, look at these gems! If you still need a reason to get into this company, just read the first sentence of either quote.

skore3• 14 years ago

Well, that may be true, but when you hire a ton of NASA scientists, I would assume they can fill out those blank sheets rather quickly...

objclxt• 14 years ago

Sure, but the same is equally true the tech industry: bright developers make smart products.

InclinedPlane5• 14 years ago

And yet, how is it that NASA, or even Boeing or Lockheed-Martin, can't manage to fill out those blank sheets rather quickly, let alone cheaply?

rst• 14 years ago

Some of those statements are ... forward-looking. In particular, Dragon isn't man-rated yet, and that will require a lot of further engineering. Most notably, SpaceX has committed to a launch abort system for getting a crewed Dragon away from a failing booster; they've got a concept for this, and design work is underway, but it's not tested as of now, and I think some of the work is probably contingent on getting NASA funding to finish up.

So, Dragon can't carry astronauts yet.

Roboprog• 14 years ago

Cool. The Falcon 9 is most of the thrust of a Saturn 1: http://en.wikipedia.org/wiki/Saturn_I#S-I_stage

MatthewPhillips• 14 years ago

> font-size: 11px;

Why?

ForrestN• 14 years ago

Seriously! This must be the worst website I've encountered in a long time. Despite the inspiring content in the article, I leave with a mixed experience. Just goes to show how much design matters.

jkeel• 14 years ago

You're comment made me smile. Only because I clicked the link, saw the page and thought, "who designed this?". My next thought was, "well, most of the space related sites look like this, so maybe it fits well with what that community expects".

joering2• 14 years ago

Google Chrome: Ctr +, Ctr +, Ctr +

Honestly, the same thing I had to do with Hacker News. Font is damn too small, for me at least.

yesbabyyes• 14 years ago

I view webpages at 120% by default. I used to love small fonts, now I don't know what I was thinking and instead prefer the browser default of 16px.

sp332• 14 years ago

In Chrome: Settings, Under the Hood, Customize Fonts. Set the "Minimum font size" to something comfortable.

Firefox: Options, Content, click the Advanced tab under "Colors and Fonts". Choose a minimum font size that's comfortable.

ordinary• 14 years ago

I didn't even realize I was squinting at the tiny letters until I read this comment. Thanks for pointing it out, future me's eyes are grateful.

Retric• 14 years ago

If your browser is not setup to show 11px as readable I suggest you change something locally.

StavrosK2• 14 years ago

Like get glasses?

cpeterso• 14 years ago

Medium-grey text on light-gray background doesn't help either.

PaulHoule• 14 years ago

It's astonishing to see this much transparency into launch costs.

Governments have long held this information close to their chests. NASA, in particular, has never published accounting on what the Space Shuttle really costs, since this information would help a competitor (Russians, Chinese, etc.) build a similar vehicle with better economics.

evoxed3• 14 years ago

On that note, this might be the perfect opportunity for some never-before-herad-of Russian billionaire to make their mark as well by providing similar services to the rest of Europe that may be underserved if SpaceX really takes off in the US. (Apparently when I don't sleep I think in puns, so apologies for that.)

guard-of-terra• 14 years ago

If this SpaceX thing takes off, of course other space agencies, including RKA, will be forced to make transparent and comparable offerings in order to stay relevant (or get out from the launch "business").

Competition is actually a good thing sometimes.

tjic3• 14 years ago

> On that note, this might be the perfect opportunity for some never-before-herad-of Russian billionaire to make their mark as well by providing similar services to the rest of Europe that may be underserved if SpaceX really takes off in the US.

You haven't learned your lesson from the last 20 years.

There are no more "European markets for space launch" and "American markets for space launch" than there are "European markets for database products".

People compete globally.

The only reason that someone in China or France wouldn't prefer the use the best quality / lowest cost supplier is if their local government gets involved and distorts the marketplace via either taxation or regulation.

damoncali2• 14 years ago

Is that really why? I worked at NASA for a while, and everything we did was in theory public info (to my knowledge, at least) - but nobody had any incentive to make anything actually available. (It's a shame - lots of cool stuff is jus sitting on hard drives).

excuse-me17• 14 years ago

But the reasons Nasa had to do it that way - weren't

Space-X has a single goal - lift 1000Kg up 500km cheaply.

The space shuttle had a million competing goals - from the airforce who wanted a certain glide slope, senators that wanted bits built in their home state, Presidents that wanted a launch on the day of a press conference, scientists that wanted a platform for different experiments, Astronauts that wanted justification for crewed vessels. And of course Nasa that needed to find budgets to keep 'N' Apollo era people employed.

maaku• 14 years ago

I still work at NASA and the GP is referencing a myth. There are plenty of reports out there detailing how much Shuttle cost by many different accounting metrics.

Joakal2• 14 years ago

Doesn't ITAR stop you from making it public information?

kijin• 14 years ago

Yes, their pricing seem to be even more transparent than typical airline fares. Stunning.

Imagine being able to order a satellite launch from a rocket company's web site. Select payload type. Select orbit. Select date and time. Checkout with Mark Zuckerberg's credit card.

davidtyleryork• 14 years ago

It's only a matter of time before Facebook colonizes the moon :P

randall• 14 years ago

Most YC hackers:

"I'm fixing x because x is broken. They're slow, costly, inefficient, and aren't taking advantage of modern technology."

Elon Musk is doing a YC startup (in spirit) on the most grand scale possible.

piotrSikora2• 14 years ago

How is that YC-specific?

lutorm3• 14 years ago

You are affirming the consequent. It was never stated that this was a property of only YC.

sounds2• 14 years ago

And, if his luck holds (and I really hope it does!), mankind can escape our single-planet limitation and actually colonize the solar system !

ashleyw• 14 years ago

We've just got to hope there aren't any major catastrophes involving life early on. Personal space travel could easily go the way of Concorde and commercial supersonic travel if companies like SpaceX and Virgin Galactic don't get it spot on first time.

ewolfe• 14 years ago

I had no clue they were profitable. With "over $3 billion in revenues" and "total company expenditures ... were less than $800 million" that is quite the ROI.

hyperbovine• 14 years ago

Classic example of economic profit. They figured out how to do something at a fraction of the cost, and get to print money until the market catches up and prices fall.

piotrSikora2• 14 years ago

Keep in mind that those $3bn are mostly "future" revenues that will be generated over the next 5 years (http://www.spacex.com/launch_manifest.php).

simonh• 14 years ago

Also that was $800 Million through 2010, we are now 2 years on and counting.

angersock3• 14 years ago

Wonderful quote from the article:

"(This concept may be foreign to some traditional government space contractors that seem to believe that cost overruns should be the responsibility of the taxpayer.)"

skore3• 14 years ago

Really? That sounds rather obvious and a bit too cheeky to me. To twist it the other way around: If cost run over in a government project, who else could you hold responsible?

Sure, it's not a great thing that this happens, but it seems like a douche point to make when the government simply has no other choice.

Edit: Sorry, misread 'government contractors' as 'government agencies'. I was under the impression that he is talking about NASA.

excuse-me17• 14 years ago

Even with commercial contracts a lot of government (and especially military) was done on cost+. However much we spent on a development the customer (taxpayer) would pay "+" an agreed margin.

maxerickson• 14 years ago

The quote is in direct reference to a contract that NASA (the government...) has with SpaceX.

So apparently it is possible for the government to agree to contracts that do not leave the taxpayer holding the bag for overruns.

fr0sty• 14 years ago

>who else could you hold responsible?

The contractor who underbid. If Roger's submits a bid for $1m to deliver 50k widgets he shouldn't be able to come back after the fact and demand $4m to complete the project because he underestimated his costs.

wtvanhest2• 14 years ago

If he can't do it for the price he says he can go to bankruptcy which would allow him to renegotiate contracts or eliminate unprofitable ones. This option is more appealing to nondiversified businesses. Lockheed really would be irresponsible to offer the same contract. Further lockheed isn't vertically integrated enough to control costs which Musk hints at but doesn't say outright.

I don't think the old government contractor system made long term sense, but it was a great start to space exploration and money "wasted" looks more like invested to me.

mikeash• 14 years ago

The standard way these things are done is that company A contracts company B to deliver product X for $Y. If company B then spends $Z > $Y delivering product X, company B simply loses money.

pilom• 14 years ago

All Musk is saying is that they bid the project as a Firm Fixed Price (FFP) contract. Most contractors aren't willing to do that with untried technologies b/c of the possibilities of cost overruns. For instance when the government buys Humvees for the army they pay a Firm fixed amount per vehicle because the contractor knows exactly how much one should cost and charges more than that to the government.

For a brand new stealth fighter though, there are a lot of unknowns and a lot of development to do before they can build the first plane. The contractor can say "We think we can do all the necessary research for this with 100 people over 3 years plus $2 billion in additional costs for materials and to contract out the construction of new factories etc. All that added up would be $5 billion (plus $100 million per additional month beyond 3 years) and we expect a 15% return in profit on this development." This is called a Cost plus Fixed Fee contract. If they were to bid it as a firm fixed price contract they would just say "we want $3 billion per plane for the rest of time" and the government would likely overpay comparatively. The government agrees to the cost plus fixed fee terms because the know it allows the contractors to price their offering lower if they don't have to take on the risk.

So option 1: Government takes on risk of overruns but pays a lower price if on time and on budget. Option 2: Contractor takes on the risk and makes out like a bandit if they are on time and on budget.

unreal37• 14 years ago

Actually what happens in governments is that they sign a contract to provide product X for $Y. (i.e. Provide a new sidewalk for $100,000)

Then through further discussion, after the contract is signed, everyone realizes they actually need product X2. And so the contractor revises their bid to $Z where $Z exceeds the original $Y by a wide amount (i.e. Provide a new sidewalk and re-landscape the grass on either side for $250,000)

There are no cost overruns in government contracts. Just changes in scope. You don't find out what they really need until you really get into talking with them.

jonknee• 14 years ago

> There are no cost overruns in government contracts. Just changes in scope. You don't find out what they really need until you really get into talking with them.

Umm, there are tons of cost overruns in government contracts (and in non-government contracts). Consider the James Webb Space Telescope for example. Or the F-35. Or about any software project. It's very hard to predict costs of new inventions.

Symmetry3• 14 years ago

Um, you're wrong. Most military or government aerospace development is done on cost plus contracts where if the bidding entity ends up spending more than they officially planned they'll make more profit. This isn't the way your city buys a sidewalk, but it is the way the government buy a space launch.

pgroves2• 14 years ago

While I appreciate the sentiment, it's not exactly a fair comparison. The first government rocket launches surely had cost overruns. But were the most recent shuttle launches vastly over-budget?

Launching a satellite these days is a relatively known quantity whereas many horrifically over-budget government projects are doing things no one has ever done before.

coenhyde• 14 years ago

If SpaceX can put the costs to launch a satellite into orbit on their website, then you'd think that enterprise software companies would be able to price their software ......

By the way SpaceX is my favourite company of all time. Elon Musk is living my 6 year old self's dream (actually my dream is still pretty similar, just haven't got their yet ;p )

goatforce5• 14 years ago

Can I get a 30 day free trial of one of their launch vehicles?

StavrosK2• 14 years ago

Yes, but you have to arrange for a call and watch a short spaceinar.

driverdan• 14 years ago

That was one of the first things I thought about too. Transparency helps everyone. If a space company can do it so can your SaaS company.

protomyth3• 14 years ago

Heck, at this point I'd accept a particular enterprise software company shipping a one click update program instead of 10 pages of instructions and 720,621 lines of PL/SQL that I need to run against the Oracle database.

// that is the exact line count from "wc -l" - I am not joking

zschallz2• 14 years ago

But then we couldn't charge you for training and consulting.

alanbyrne2• 14 years ago

> "The total company expenditures since being founded in 2002 through the 2010 fiscal year were less than $800 million which includes all the development costs for the Falcon 1, Falcon 9 and Dragon."

Wow. Facebook could have started an entire space program for less money than they spent on Instagram.

rytis• 14 years ago

Sad, isn't it? Just shows where the priorities are these days...

nickik5• 14 years ago

The priorities where always the same, its all about ROI. It always has been.

lolcraft• 14 years ago

And they would've had bigger profits and a solid business model, as well!

huggyface• 14 years ago

That really is a goosebump-inducing reframing of many recent valuations.

dude_abides• 14 years ago

That reminds me of this classic tweet:

Your mobile phone has more computing power than all of NASA in 1969. NASA launched a man to the moon. We launch a bird into pigs.

Instagram or omgpop or space travel, its all about priorities.

harrylove• 14 years ago

The status update, for reference: https://twitter.com/#!/svenningsen/status/144111724923076608

nirvana• 14 years ago

Or from another perspective, the entire cost of SpaceX's history to develop all these technologies is less than a SINGLE launch of the Shuttle by NASA.

natep3• 14 years ago

Where did you find that information about per-launch costs of the shuttle? Another post here claims this data hasn't been released.

Edit: so it seems $1.2-$1.5 billion is the accepted figure from outside analysis, but I don't see how this is possible. With a total budget of $7.2 billion in 1985, I don't see how they paid for $10.8 billion in launches.

mitchty2• 14 years ago

Does SpaceX's cost include the original research costs that NASA incurred by actually researching the underlying principles the Dragon rockets use?

I think people are underestimating the costs NASA incurred by being first. Take the X15 for example, its first test flights were without its planned engine because nobody up until that point had ever built a throttleable rocket engine.

Now its well known how to build them and what not to do. I'm not saying NASA is efficient, but direct numerical comparisons like these unnecessarily distort the various differences in history between the two.

The shuttles many deficiencies are rather well documented as well. And it, now had, features that the Dragon rockets don't serve such as the obvious recovery of space payloads for example.

larrys3• 14 years ago

"Facebook could have started an entire space program for less money than they spent on Instagram"

Space-x spent cash. Facebook bought Instagram primarily with stock.

brianobush• 14 years ago

I think he was referring to value, not liquidity.

angersock3• 14 years ago

Here, let's do better.

Apple has something like $100bn in cash reserves. Like, cash on hand (http://www.guardian.co.uk/news/datablog/2012/mar/19/100-bill...).

Think about that.

corford• 14 years ago

That's beautiful. I'm going to bookmark your comment for use when the next inevitable "are we in a tech bubble or not?" thread appears.

kamaal3• 14 years ago

This is indeed a very sad reflection of our priorities at this time.

We don't act unless we absolutely have to. I mean problems like disease cure, poverty and hunger eradication, space colonization can be solved with that kind of money on hand.

This is also what I think of Aliens too! We talk of super intelligent aliens who would have colonized space.That would have never happened, because just like us, they might have wasted their money, energy and resources on photo sharing apps and putting birds in pigs instead of doing some real stuff that actually matters.

barrkel• 14 years ago

No. Facebook could have taken the risk of trying to develop a space program, with a potential cost less than the price for Instagram.

Before it began, there was no guarantee that SpaceX would be successful, or that it would only cost $800 million in expenditures. And on the flip side, I expect the current value of SpaceX is higher than $1 billion.

Extreme example of how risk distorts price: if I buy a lottery ticket for $1 and win $1 million, does that mean that some guy who bought a soda for the same money could have done the same instead of buying the soda? Was the money spent on the soda wasted?

Elon took a risk, and appears to have won quite a position.

excuse-me17• 14 years ago

There's nothing new in this - it has been done before.

Want to build a Mach3 aircraft in the days when most people thought jets were pretty clever?

Want to do it in <2years using materials that had never been used in a plane before - and do it on budget.

And repeat the success with half a a dozen other projects.

And it's described in a book that everyone in technology (or management) should read http://www.amazon.com/Skunk-Works-Personal-Memoir-Lockheed/d...

excuse-me17• 14 years ago

re: the downvote.

This wasn't an attack on space-X it was a celebration of them having continued the tradition of the frankly astonishing work that skunk works started.

ps. it is a very good book

spenrose2• 14 years ago

The real cost of space flight is energy, specifically:

1) The huge amount of energy required to lift mass out of Earth's gravity well. 2) The vexing practical expense of obtaining that energy in useful form (e.g. rocket fuel) for launch.

Rocketry's future will always be limited by those daunting constraints.

api• 14 years ago

Fuel is at present an insignificant cost of launching a rocket.

Of course, you could also say that the rocket itself has far more embodied energy than it carries in fuel.

excuse-me17• 14 years ago

>Fuel is at present an insignificant cost of launching a rocket

Fuel is almost ALL the cost of launching a rocket. If you can arrange for me to pick up fuel every vertical mile on the way up - I can get to orbit very cheaply!

nickik5• 14 years ago

Yes but its hard to get optimal specialy when you want to have everything reusable. Even then there is much money to be safed with a good process.

The cost of the fuel is not that big a deal.

lutorm3• 14 years ago

I'm pretty sure somewhere on the SpaceX web site they say that the fuel cost is actually a small fraction of the total cost. That's why reusable vehicles (which they want to do) even make sense.

It would be more informative to say the real price is mass, since it's the fact that you have to accelerate the mass of fuel you will use at time t up to that point that gives rise to the tragically inefficient log term in the rocket equation.

ColinWright2• 14 years ago

This ...

    The huge amount of energy required to
    lift mass out of Earth's gravity well.

... is a common misconception. The energy required to get to orbital altitude is only a tenth of the kinetic energy of orbital veloity. Yes, I'm just confirming your observation that the energy requirement is huge, but you're understating the problem, and propagating a misconception.

spenrose2• 14 years ago

My point is that the insofar of the promise of space is "let's send lots and lots of stuff, especially people/food/air/water", then the fundamental economics center on energy use. Are you saying that some of the orbital velocity can be recaptured or otherwise used to offset the cost of fuel?

wave• 14 years ago

Actual goal of Elon Musk is to send someone to Mars, but since seems far reaching goal for most people and since they might call him crazy, he is sticking with near space for now. Do not be surprise when he starts talking about Mars.

nickpinkston• 14 years ago

He already does - check out his recent Daily Show interview: http://www.thedailyshow.com/full-episodes/tue-april-10-2012-...

ballooney• 14 years ago

He talks about Mars quite publicly already and various of SPaceX's corporate videos contain CGI dragon capsules landing on mars.

Also he's not 'sticking with near space for now' to avoid being called crazy as you imply, he's sticking to near-space now because you have to get that capability working and reliable so you can build on it for going further afield. It's not a smoke screen, it's all quite consistent with a road-map to mars.

wolf550e2• 14 years ago

No, he uses launching to LEO to make money to pay for a mission to Mars.

kamaal3• 14 years ago

since they might call him crazy

Trust me, success in these kind of projects is impossible unless you are crazy.

In fact you have to be crazy to work on anything which others think is impossible.

andys6274• 14 years ago

Man I wish this could be replicated in train construction - Florida is exploring this. One downside however, is you get what the private developer wants - so they're ending up with a train station at Orlando airport instead of downtown Orlando where it should be. Government is uniquely incentivised to do that right because they gain from increasing property values near where the train will go. Unfortunately local developers won't be so nice as to pony up more for that kind of thing even though they will reap disproportionate rewards. Another example - here in Reno, we're trying to build Bus Rapid Transit through a main corridor that is undergoing a pretty great revitalization. People in NV are especially not cool with traditional way for raising taxes for this kind of project (a la 1 cent sales tax just for BRT/streetcar).

It begs to ask, if the developers nearby are going to gain so much, why aren't they building it themselves? Too many groups that won't take risk... I mean probably 1,000 people who own buildings there will benefit disproportionately... you are never going to get them together to pony up for a streetcar. But the proof is there... look at Portland for a US example... also Seattle and SF and San Diego. Its just easier to get the government to do it. They should put a local surcharge on property values. Its only fair. However, they will f- this project up I'm sure... just like NASA spent a kabillion extra dollars just to build certain parts in certain senator's home states... and my other local train is going to have a snack bar so the Sonoma County housewives that will never ride the train can get a snack; instead of more seats and bike space.

btilly• 14 years ago

If you want to understand why it is hard to get many people who will benefit to pony up, read The Logic of Collective Action.

Basically the problem is that it is a public good. If the good is provided, everyone benefits, not just the ones who paid. So unless your payment is going to make the difference between it happening or not happening, you don't want to pay. And even if someone gets you to pay, you'll be incentivized to pay as little as you can get away with.

andys6274• 14 years ago

I'm not trying to understand it. I'm saying its not going to happen. Government is the only one that can do it, and they might even be able to do it equitably (in theory). The government should tax them because they are benefiting disproportionately more than the rest of the population.

Yes, it is a public good. The public benefits. But if I own condos full of college students and they decide to build a train station for the train that goes to the college in front of it, I'm going to benefit more. And its not that many people - its property owners within a few blocks. We could figure something equitable out.

Symmetry3• 14 years ago

So, this is basically replicated in train construction in Europe and Japan, but the US has a... unique regulatory environment for trains.

http://www.ebbc.org/rail/fra.html

Also, when you develop near a train station you can't build parking lots next to it, which tends to make people with cars upset, and they usually have more political influence than people who just use trains:

http://www.darientimes.com/news/darien-features/local-news/5...

andys6274• 14 years ago

I'm not sure I understand your argument - trains in Europe and Japan are not private.

We're talking about Elon Musk and looking past the status quo of stuff. The status quo I'm trying to look past is "do everything based on cars, for cars, for the benefit of cars, because cars are the way old people have done it and they're obviously right. Cars. Cars. And more cars."

noomerikal• 14 years ago

On a side note, could you pony up for a designer? I felt like I was perusing a README file for StarCraft.

retube• 14 years ago

I am surprised that a leavy-lifting rocket capable of achieving orbit only develops 4 times the thrust of a 747.

mcguire3• 14 years ago

A Delta IV Medium's payload capacity is roughly 10,000lbs (to a geosynchronous transfer orbit). A 747's original design payload is more than 10x that. (Wikipedia claims a 747-8F's payload is about 150 tons.)

mburshteyn• 14 years ago

This is why SpaceX is my favorite company.

hashfold2• 14 years ago

mine too.

mukaiji2• 14 years ago

You are a random billionaire (i.e. not Mark Zuckerberg) with a billion dollars.

You could: A. Buy Instagram. B. Build SpaceX from scratch.

Most of them would probably buy instagram. :(

awj• 14 years ago

Well ... yeah. I have a bit of experience buying things, but know nothing about creating and running companies that design and build rockets. I'd probably buy Instagram too since the rocket thing would die in my ineptitude.

mukaiji2• 14 years ago

what about Jeff Bezos (ok, he's EE [yay, EE!]), or Richard Brandson (or it's really Rutan's brainchild)? OK, Virgin Galatic is child-play next to SpaceX, but it still demonstrate that billionaires can invest in AA.

InclinedPlane5• 14 years ago

To be fair, it's not so simple.

Elon Musk is an exceptional individual, he has a degree in Physics and he taught himself engineering and "rocket science". Not everyone is capable of replicating what he has done, regardless of the money involved. The average case of a billionaire dumping money into aerospace ends up with the billionaire having less billions and nothing much of consequence occurring in aerospace.

ck2• 14 years ago

I wonder how many decades until you can buy an earth-orbit ride giftcard at walmart.

wtvanhest2• 14 years ago

It will more likely be Amazon.

workhorse• 14 years ago

Elon for president?

cridal2• 14 years ago

Nope... Born in South Africa...

gaius10• 14 years ago

Remind me which continent Obama was born on?

hashfold2• 14 years ago

u r racist. a capable person will take country higher. be positive!

cridal2• 14 years ago

Is this guy the Richard Branson of XXI century? Barely in his 40s and: Paypal Tesla SpaceX You've got to be in owe...

chrismealy• 14 years ago

For the first time in more than three decades, America last year began taking back international market-share in commercial satellite launch. This remarkable turn-around was sparked by a small investment NASA made in SpaceX in 2006 as part of the Commercial Orbital Transportation Services (COTS) program. A unique public-private partnership, COTS has proven that under the right conditions, a properly incentivized contractor — even an all-American one — can develop extremely complex systems on rapid timelines and a fixed-price basis, significantly beating historical industry-standard costs.

drewblaisdell• 14 years ago

Is it fair to say that NASA would likely require many times the amount of funding for the same result as SpaceX?

I ask because as someone who was previously unfamiliar with the amount of funding SpaceX had to work with, $800 million sounds like an incredibly small amount of money to do (what looks like) more than NASA does with its ~$18 billion budget.

cowkingdeluxe• 14 years ago

Good point, and that $800 million was prorated over 4 years whereas NASA gets $18 billion annually.

mitchty2• 14 years ago

NASA also has fair amount more research going on unrelated to "build rockets" as well so direct numerical comparison isn't exactly valid.

jacoblyles2• 14 years ago

Keep in mind that is $800 million over 8 years. So the Space X budget is about 0.6% of NASA's.

JeffBlauser• 14 years ago

Not that there couldn't be inefficiencies at nasa, but they have many other programs going on which account for its budget.

hessenwolf2• 14 years ago

Partly true, but partly there is a fundamental inefficiency at play in the way they do things.

On the space shuttle, every outer tile is unique and must be manufactured accordingly. Boeing cover their rockets in shitty orange foam.

When the shuttle returns, it is driven into this spider-like contraption that actually cost almost as much to build as a shuttle. Boeing put the rocket on its side, and use step-ladders, and, I kid you not, a plank.

dbarlett• 14 years ago

Yes. According to a NASA study [1], Falcon 9 development would cost $1.3B as Cost Plus Fee ("traditional NASA") or $443M Firm Fixed Price ("more commercial approach"). Compare to SpaceX actual of "about $300M".

[1] http://www.nasa.gov/pdf/586023main_8-3-11_NAFCOM.pdf

Edit: NASA originally came up with the $4B/$1.7B estimates that InclinedPlane mentioned. They visited SpaceX, saw how they actually operated, and revised the estimated downward.

bane• 14 years ago

They visited SpaceX, saw how they actually operated, and revised the estimated downward.

I'm not sure that's really fair for NASA to do. The question they were supposed to be answering was "how much would this cost NASA to do?". They can't just see a more efficient operation and then cheat their numbers down because without Space-X, NASA would never have had a reference to work off of. NASA doing it the NASA way would have been the larger figure, not NASA doing it the Space-X way.

InclinedPlane5• 14 years ago

NASA did a study on this actually. Using traditional NASA procurement methods it would have cost at least $4 billion to develop the Falcon 9.

Also keep in mind that the $800 million amount is for developing the Falcon I, Falcon 9 ($390 million total) and the Dragon spacecraft (about $400 million). Even had NASA used more commercial oriented procurement methods they estimate it still would have cost at least $1.7 billion to develop.

edge17• 14 years ago

cool, wondering if you have a reference?

loverobots• 14 years ago

NASA is more than just lifting some stuff in space. They have staff they can't just fire, researchers, building and equipment that must be maintained, future projects and much more.

Hint: Fighter jets cost a lot more because parts have to made in many Congressional districts.

drzaiusapelord• 14 years ago

Meh. Manned space is only part of NASA's mission and the whole agency has been the Federal Agency of Low Earth Orbit for so long, its pretty crazy we're suddenly giving them a hard time. NASA is doing it right: giving up the LEO Shuttle monstrosity to commercial spaceflight and doing the things that are, yes, expensive and difficult. Protip: google 'nasa launch calendar 2011' and compare it to the number of launches SpaceX has had. Seriously, I'll just sit here and wait for you to do this. Now lets talk complexity of missions.

Cut NASA down to size and you're just getting more missiles and warships. You're not getting a tax break or the sudden birth of 100 SpaceX's. SpaceX should be applauded for its innovation and drive, not considered the low hanging fruit of space and everyone suddenly saying "This stuff is so easy why isn't NASA using their methods?!?" Because its not easy.

sliverstorm• 14 years ago

Remember that NASA's job is/was supposed to be to do stuff that hasn't been done before. SpaceX is doing something that has been done before more economically. It doesn't surprise me if two such organizations had different corporate "efficiency" levels.

tlogan3• 14 years ago

I hope that young entrepreneur will follow more steps of Elon Musk and instead of pursuing fast money start pursuing big dreams. Actually I think that is already happening...

gsmaverick• 14 years ago

Except you can't start a space company without a lot of your own money much like Musk did. You need the big capital first to launch a company that requires hundreds of millions in capital.

tlogan3• 14 years ago

So my point is that instead raising money to build path.com, color.com, or some other stupid web 2.0, young entrepreneurs should follow Musk steps.

gvb• 14 years ago

Elon Musk started with fast money (PayPal) and is now using that to pursue big dreams. http://en.wikipedia.org/wiki/Elon_Musk

tlogan3• 14 years ago

I'm sorry I was not 100% clear. With term "entrepreneur" I mean to include only people who already made it and prove to society they are entrepreneurs - i.e., they already sold the first company and have $$ and name. So my point is that instead raising money to build path.com, color.com, or some other stupid web 2.0, young entrepreneurs should follow Musk steps.

DanI-S• 14 years ago

> This is a clear case of American innovation trumping lower overseas labor rates.

As much as I admire Elon Musk, this is a short-sighted, exceptionalist dogma. It may apply in some cases - for the time being - but do people really think that non-Americans are incapable of innovation?

SpaceX have had a headstart, since NASA and their gigantic budget have decided to take advantage of free enterprise. It's only a matter of time before Asian and European governments begin to do the same.

gaius10• 14 years ago

You've not met many European governments, have you? In England Elon'd still be waiting planning permission from his local council to build a launch site...

excuse-me17• 14 years ago

It's also the right time politically

Sea Launch was an even more innovative entrepreneurial commercial launcher. However the USA first stopped it docking in US ports to receive a payload because it was a foreign missile system and then stopped payloads being loaded in a foreign port because that would be exporting sensitive technology.

I'm guessing that Lockheed Martin and Boeing have less political clout in Texas today than they did in California 10 years ago

hef198986• 14 years ago

Not counting for the political discussion after some ethical experts told publicly it's dangerous and wont work. He would have been trapped in PR nightmare and have burned at least his intial 100M$ just on lobbing to find a launch site.

Sometimes I love th US! (No irony in it)

jacoblyles2• 14 years ago

In France, a Presidential candidate who advocates a 100% income tax on incomes over $300,000 is polling at 16% of the vote. Europe doesn't like Elon Musks. It's inequal :(

ph0rque• 14 years ago

Seeing how Elon Musk did not start out as American, I believe all his pro-USA rhetoric in this speech is designed to sway or convince some government people, just not sure to what end.

krschultz2• 14 years ago

Well first off Elon Musk was born a non-American. He moved to the US at age 19. So I highly doubt he believes people in other countries aren't innovative.

But he's not saying other places can't innovate. He's saying that running SpaceX in other places is not as likely to be succesful. Some percent of that might be political posturing (they are reliant on politicans supporting NASA buying from them, and on politicans not passing regulation to ban private space travel). But I bet the bulk of it is a true sentiment on his part.

In order to found a rocket company you need the freedom to launch rockets. Now, that's not something anyone can just do on a whim in the US, even advanced hobbyists need permits, but it's possible to get the permits. In some places it would be impossible for a private enterprise to get those.

You also need a pool of exceptionally good engineers to recruit from (both straight out of good colleges, and experienced). While some countries like China have some recent success, and others like Russia have a longer history, the US still has the most rocket engineers free to pickup and start at a new company. That's not something that is likely to change soon.

nickik5• 14 years ago

I think the point is that the US opened up the market where other countires didn't and he wanted to point out that low laber costs and alot of money is not everything you need to make a good spaceship.

pgroves2• 14 years ago

This is how a CEO gets engineers to want to work for his company.

MPSimmons• 14 years ago

By working on impossibly cool goals for the betterment of humanity?

Yes.

rorrr• 14 years ago

I hope Elon Musk gets all the "man of the year" awards.

The man is brilliant, and there's so much resistance to what he's doing, it's insane.

beernutz• 14 years ago

Wow, and that post from Elon is over a year OLD! Wonder where things lie currently?

brainless• 14 years ago

This is disruption in true sense. Hope others follow the footsteps.

rrrazdan• 14 years ago

http://www.astronautix.com/lvs/gslv.htm India's comparable GSLV has a programme cost of 800 million dollars and a launch cost of around 90 million dollars. Given the relatively less development costs in India. I'd have to say very impressive SpaceX.

rdl• 14 years ago

This is a good reason to the sarbanes oxley. If SpaceX had IPO'd already, more end cheaper capital might have helped, and buying spacex stock would the best thing I can do personally for space for a while.

olalonde• 14 years ago

> China has the fastest growing economy in the world. But the American free enterprise system, which allows anyone with a better mouse-trap to compete, is what will ensure that the United States remains the world’s greatest superpower of innovation.

China is also moving pretty fast towards a free enterprise system while the United States is moving in the opposite direction at approximately the same speed. Well at least, having lived both in America and China, that's my impression.

jeffool• 14 years ago

Is it dumb of me to ask "so why isn't NASA working on terraforming bodies yet?"

It seems inevitable, and like we may as well start spitballing now. Send a few rooms that attach to the surface and dig in, practice in there remotely.

Why The US Can Beat China: The Facts About SpaceX Costs

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