Space: The Final Business Frontier | GIANT LEAP Ep. 1


T-minus 10, nine, eight, seven, six, five, four, three, two, one– The space race isn’t
just global superpowers duking it out for bragging rights and technological supremacy anymore. Private companies, lots of them, are rushing to commercialize
not just the final frontier, but the act of getting there. I am a sports guy, this is
like March Madness to me. It’s one and done, I got
one shot to get to the end or else I’m either gonna
fail, run out of money, or be gobbled up by someone else. And whoever figures out how to make launch safe, affordable, and convenient is going to
take the next giant leap. We choose to go to the moon in this decade and do the other things, not because they are easy,
but because they are hard. 60 years into the space race, the way we leave Earth
has changed remarkably. Zero, all engine running. Liftoff, we have a liftoff,
32 minutes past the hour. Space seemed like a vast, black desert, but now we’re ready to
make the desert bloom. I’m talking about opening
space up to business, to private enterprise. Opening space up to commerce and experimentation and development. Why? To improve the quality of life on Earth. 25 years after Ronald Reagan signed the Commercial Space Launch act, the desert has begun blooming. I think if you’re a young person in 1969 and you saw people walking on the moon, and 50 years later, we
still haven’t gone back, I think that’s a little disappointing. I think they took that,
their hopes and dreams of their youth, and are applying
it to today’s marketplace. And I think they’re having
a fantastic success. In the world of rocket launch, there are two very
distinct races going on. The first are the large rocket companies like SpaceX, Virgin
Galactic, and Blue Origin. Jeff Bezos has reportedly
invested billions already in Blue Origin and
will invest billions more. Liftoff. SpaceX has also raised billions of dollars and acquired very large
contracts from NASA as well, in order to fund both
development and operations of its vehicles. Liftoff of the SpaceX Falcon-9 rocket. But they aren’t the only
players in the game. There’s a heated race picking up between small and medium launch companies. There’s a subset of the community not named SpaceX, not named Blue Origin, trying to figure out, okay,
how we get there fast? Companies like Rocket Lab, Relativity, Firefly, and Virgin Orbit. Right now, there are more than
100 small launch companies competing not just to get to space, but to see who can get
there most reliably, cheapest, and then repeat it
over and over and over again. And ideally, end up with
their business in the black. Because in time, new industries rely on these launch companies
getting payloads into orbit. And any missteps can spell disaster. Not just for a rocket,
but an entire company. There is a $200+ billion
commercial space industry right now today. There are a couple of huge markets that have been very profitable. The most profitable is
the satellite industry. In 2018, the global space
economy was estimated to be around $360 billion. $277 billion of that is
the satellite industry, which has actually grown over $100 billion over the past decade. And for those satellites to get to space, they need to be launched on a rocket. Global launches in 2018 increased by 46% over the number of launches a decade ago. In many respects, it’s never been easier to put a satellite into space, in terms of the cost and
the availability of rockets to ride into orbit. And a new era of smaller,
cheaper satellite technology is creating this boom. Once a year, out in a desert north Utah, the Small Satellite or SmallSat
Conference, comes to Logan. It has all the trademark features
of an industry trade show, bright lanyards, tons of swag, but the deals happening
here are carving out what the future of the space
economy will look like. I’ve been coming to this
conference for 20 years and seen it grow from
300 people to over 3,000. So, it is exciting to see that transition as we move into the next phase. Traditional satellites are often powerful behemoths, the
size of school buses, costing hundreds of millions, if not billions of dollars to build. Today, the proliferation of smallsats, CubeSats, even nanosats, can cost as little as $10,000, and can be built with similar hardware that goes into your cell phone. They range from the size of a Rubik’s Cube up to about the size of
a dorm room refrigerator. And so that’s a big difference. And so, some of these launch ventures want to launch a few
dorm-size refrigerators, and others want to launch
dozens of CubeSats. And so, they’re trying to
divide the market that way. Those satellites are providing
imaging of the Earth, they’re potentially providing
telecommunications services, and they’re attracting
quite a lot of investment in 10s, hundreds of millions of dollars, even billions of dollars. The Earth’s insatiable
need for communications and internet is really what’s driving this huge number of satellites
that are going into orbit in the next five to seven years. There’s gonna be thousands,
if not 10s of thousands of new satellites in orbit in
the next five to seven years. The question is, are they
able to actually provide business services that will be successful? The idea is that entirely new business models as well as revenue streams will be propped up by the
data these smallsats collect. The imaging and data
collected from these smallsats will be used by everyone, from hedge funds to telecom
giants to the US government. Just think of how much
the photos you can get with your Android or iPhone have improved from the first generation
to the current generation. Similar things happening in smallsats. Market research says
smallsat manufacturing will nearly double by 2020, with nearly 8,000 new
smallsats in space by 2026. The issue is always, small satellites have a lot of capability,
but there’s not a good, affordable way to get them into orbit. And that’s where the
small launch companies see a promising business. The fact that a small launch vehicle is much cheaper in total
than a large launch vehicle on the order of five or $10 million, as opposed to $50 to $100 million, and there are more customers. Say you have a smallsat that you want to launch into orbit. Think of the big companies
like SpaceX as a bus, and the small and medium launch companies like Rocket Lab as a taxi. With large launches, you’re
at the back of the bus, after the needs of what’s
called the primary, which is the main payload on the rocket, like a big government satellite. Your smallsat is just
piggybacking off that primary since they bought the
majority of the rocket. With small launchers like Rocket Lab, you and your smallsat can dictate more of your terms on
when and how you’ll fly. And you’ll pay for the whole ride. So booking a taxi for a smallsat gives you more flexibility about when and exactly where you
want to go into orbit. But it’s more expensive. Sometimes a ride share on a big rocket and the chance to save
on your launch expense is more suitable depending
on the satellite, its mission, and the budget. Far more important is
the orbital inclination or the angle of the satellite’s orbit relative to the equator. It’s much easier to move a satellite into a higher or lower orbit
than to change its inclination. And that’s why all launch customers have to decide how
their mission priorities and budget can align when
choosing how to get to space. It’s getting to the point
that hitching a ride on the really big rockets, it works for some people, it doesn’t work for all business cases. And so you’ve got smallsat
ventures that say, we want our own rides. Those customers will determine which of these small
rocket companies succeeds and which of the companies will fail. This is not the internet, where you build up a huge userbase and then you figure out
how to monetize them later. Launch doesn’t work that way. You’ve gotta built up
a backlog of customers. Out of the more than 120 small and medium-size launch
companies out there, just one is successfully launching rockets for customers right now. And that is Rocket lab. People can actually walk on
up to us and we’ll fly them. That’s a great competitive
advantage to have over, you know, folks that are
still developing a vehicle. Peter Beck’s Rocket Lab has raised over $280 million from outsider investors, with a valuation of more
than one billion dollars, and is currently flying
a rocket every 30 days. It looked what the hardest thing to do was to go from zero to first
successful orbital flight. But really, going from first
successful orbital flight through to producing one every month has been an equal amount
of stress and energy and complexity and toughness. We obviously, we’ve
completed our test flights, and moved into full commercial operations with the first flight
of its business time. And then straight on the heels of that, we flew our NASA mission,
and now we’re, you know, we’re building and launching one vehicle every sort of 30 days, every month. And while other rocket companies are looking to build their customer base, Rocket Lab can’t meet the
rising demand for launches. Our biggest issue is we
can’t broaden out profits. That is our challenge. We’ve built four and a
half acres of new factories and, you know, we’re pushing
in every direction we can to build more capacity. We fear that there aren’t, you know, we are the only dedicated
solution available on the marketplace right now. You know, at an affordable price. And so, what we see, a
tremendous amount of demand. So the demand is there,
that’s not the issue. The issue is figuring out
how to provide reliability, scale, and cadence, while keeping
prices as low as possible. And each company has its own approach. Every company has a unique
way to building their rocket. You know, whether they’re using liquid, solids, fuels, or a
combination of the two. Whether they’re 3D printing their stages, everyone has their unique
approach to getting to a rocket. However, the bottom line
is good business in space is exactly like good business on Earth. A focus on customers,
incremental successes, and a vision that’s supported
by a real business model is what works in space,
just as it works on Earth. One of the companies who believes they have a successful
business model is Firefly, a medium-size launch company
based out of Austin, Texas. So I’m gonna run through this
part of the procedure, ‘kay? Please set baming, press logic to the next
pressure increment, and and we’ll go in 10 PSI increments, starting from ambient, with a window of one. And so, in the next six months, Firefly’s gonna launch this rocket. We’ve been working on it for years now, and we’re gonna have that cathartic moment where we launch the rocket, everything’s gonna go great. But the outlook for Firefly wasn’t always so rosy. This is a very difficult business. There are a lot easier ways
to make money in the world than building a rocket company. And you have a lot of setbacks, you have technical setbacks, you have financial setbacks. But the most challenging one for me has been the financial setbacks. Firefly, like many other rocket companies, is familiar with financial setbacks. Vector, one of the more
well-known launch startups, ran into financial woes
in the summer of 2019, and saw their CEO depart amid uncertainty about the company’s future. Back in 2017, Firefly, then
known as Firefly Space Systems, was saddled with financial instability and filed for bankruptcy. That’s when Silicon Valley investment fund Noosphere Ventures swooped
in, bought their assets, and rebranded the company
to Firefly Aerospace. I’ve learned a lot about
the types of investors that you want to have involved in this. That learning has made us, I think, very strong to push through this time. As an investor and a
sort of, like, you know, one of the financial sort of
people behind the company, I try to encourage the company to think beyond simply building a product, but building a business. Thank God we went bankrupt, frankly. We have a better product now. I have a better partner, who lets me do what I’m good at doing and he funds the project, and I’m not off, you know, humping the dot com guys’ legs, please give me another $100,000. Now, after two years of R&D, they’re about to launch
their first rocket. Our plan is to have
five launches next year. All five of them will be from Vandenberg Air
Force Base in California. But the next thing is to
start adding technology as an established
company, and reusability, and continuing to drive the costs down. And we wanna do things in a different way. Companies like Firefly are hard-pressed to
differentiate themselves to stand out to investors
and attract customers. We’re differentiated by our payload class. Even among small launchers,
we are a big small launcher, so, our first rocket, Alpha, is capable of carrying
a thousand kilograms, whereas our competitors are more in the 500 kilograms and less area. That big a payload means they can service bigger clients such as NASA and other federal agencies
like the US Air Force. We are on track to be able to provide NASA lunar lander capabilities, landing on the moon in the 2021 timeframe when these would typically
be launched in early 2021. Firefly has restructured and rebuilt its organization
from the ground up, but the question remains if they can remain competitive
when it comes to price. We currently have a backlog
of about $1.3 billion, and a pipeline of over three
and a half billion dollars for our launch services alone. If we fly according to our
projected flight rates, we expect to be cashflow
positive by the end of 2020. We’re very conscious of cost, that’s one of the fundamental
tenets of Noospace, so Firefly will try to be
competitive with anyone. And we take all competition seriously. That competition comes not only from other small and
medium launch companies, but large ones as well. Like SpaceX, who announced
a smallsat solution priced as low as one million dollars for payloads up to 150 kilograms. Which equates to approximately
$15,000 per kilogram to put something in orbit. Coincidentally, that is exactly the same as the Firefly economics
for our Alpha vehicle. Firefly believes they can deliver something that Elon
Musk’s space giant cannot. Unlike SpaceX, where those satellites will be one of many,
quite possibly one of 60, our partners will have
the same unit economics, but will have a much more custom, dedicated offering, it
could be one of four or one of five satellites in our faring. Ride share’s not the best opportunity for a lot of small satellite customers. In some ways, it’s like hitchhiking. You don’t get to go exactly
where you want to go and you don’t get to go
on your own time schedule, and that’s important
to a lot of customers. In five years’ time, Firefly plans to not just
be launching a rocket, but a family of rockets. We are interested in building a multi-billion dollar business. And in order to do that, we know that we need
to be cost competitive with whatever the market throws at us, not just simply what the
competition’s doing today. And one of those competitors is in Long Beach, California. Virgin Orbit is an offshoot of Richard Branson’s Virgin
Galactic space company. And while they’re a
medium-size launch company, just like Firefly and Rocket Lab, their approach to getting
a rocket into orbit is a bit different. Virgin Orbit is a dedicated
small satellite launch vehicle that is seeking to revolutionize
the small satellite market. We’re utilizing our flying launchpad, it’s a Boeing 747 400
aircraft that we modified, and it has an attached rocket under the left wing of the plane. It’s a two-stage rocket,
liquid oxygen kerosene rocket. It has been flown before
and has many successes. Some of those other successes are by their sister
company, Virgin Galactic, who has used this
launchpad drop technology for space tourism instead
of small satellites, which they believe is a
difference maker in the industry. Everything we built around
the air launch system is meant to mitigate against,
you know, long-term delays. For example, an air launch system can fly in most weather conditions. Because we’re air launch,
our cadence is very quick, so it only takes four to six hours to really fuel the rocket, you know, attach it to the plane,
and take off on a mission. And having that flexibility, having that quick cadence turnaround time is critical to making sure that payloads can get to orbit when
they wanna get there. That flexibility is what most small launch companies
hope will set them apart. That responsive rapid launch to exactly where you want to go, that appeals to government users. Government missions, scientific missions, government military missions, government intelligence missions are all exploring the
potential for lower total cost small launch vehicles that can do exactly what they need, when they need it. And without even having a successful full-duration test launch, Virgin Orbit already has
a backlog of customers. Of course, we see the market expanding. There’s a lot of potential out there. So we certainly could see ourselves providing even more launch support than, between 20 and 24 a year, and of course that is a
more mid to long-term goal. Ignition. Liftoff. The future for companies like Rocket Lab, Firefly, and Virgin Orbit looks promising. But what about the hundreds of smaller launch companies out there? Will everybody survive? Probably not. There’s not enough demand
for 100 and some odd rockets that are currently in development. We absolutely believe that the window to invest in launch has already closed. There are some investors who made some early good plays here. That are going to work out very well, but at this point, the industry is well past that kind of venture capital investment
stage, in our opinion. So, we see it shaking out to
maybe 10 companies surviving. The launch industry is unforgiving. It’s not very tolerant of failures. On behalf of Arianespace, I wish to express my deepest apologies to our customers for the
loss of their payload. And telling them how sorry I am. If you’re having a bad run of luck, you don’t get a whole lot of
patience out of the market before people start using other rockets. The technology of space
activities is fascinating, the technological challenges
are extraordinary, the competence that it
requires to conduct operations in space is intimidating. The launch industry has an energized, passionate collection of engineers, venture investors, and designers singularly focused on
moving private enterprise off the planet. It’s not just a new industry, but a new way of seeing the
world and working above it. Once you have that cheap access to space, now you have entirely new business models that close that didn’t before. You have an entirely new cases
for space as an environment. You have an entire ecosystem
of support services that are developing to
support those satellites that are being launched in
the next five to seven years. And so, that has kind of unlimited amount of economic development, economic
growth possibility there. You know, I like of
liken where are right now to the very first
beginnings of the internet, where were just starting to send emails. That’s really where we are in space, we’re just starting to send emails. And if you think, if you
go back, when, you know, you just started sending
emails and if I said to you all of the stuff that was gonna occur because of the internet, you
wouldn’t believe me, right? You would think that’s just crazy. But that’s where I think
we’re at right now, is we’ve sent our first email, and now space is opened up to innovators to really try new things. That’s why perfecting the world of launch is just the beginning. Rockets aren’t just providing
a platform for spaceflight, but a platform for innovation as we figure out the business
of how we get to space. The next problem is where do we stay? On the next episode of Giant Leap, the International Space Station
its nearing its retirement. And NASA wants to open the
door for commercial companies to develop the technology and the business to create our next space habitats.

100 thoughts on “Space: The Final Business Frontier | GIANT LEAP Ep. 1

  1. 8:17 – why don’t you put a taxi in orbit then, which can ferry your payload to the designated orbit, randevous with payload and propellant delivered by the big rockets?

  2. Hats off to you Bloomberg, this was an amazing documentary so please keep uploading space related content. Thank you, really…

  3. why mess with Rockets when you could program a drone to the job. Of carrying a payload and getting to space. That would be less than a thousand dollars to achieve the same goal.

  4. Let's go asteroid mining. Make some money and save Earth in the process by moving polluting industries offworld.

  5. Weird to think that rocket lab is more advanced that blue origin in at least one very important way, despite investment differences.

  6. All of this so called economic growth does not trickle down to everyday people it just benefit the corrupt company to make more money people 💩👎.

  7. A great overview of the space industry, but completely US centric. There are some strong players in Europe and China who did not get enough attention in this report except the focus on the failure of Ariane, which, given everything, has a highly respectable success rate.

  8. Does this content provider know that the gig is up like a month ago they spilled the beans on the shape of the earth is actually flat…

  9. Since when did HUMAN TRANSPORT BECOME THE HOLY GRAIL OF COMMERCE ??
    IT IS THE KITTING, THE CARRIAGE, LOGISTICS, WAREHOUSING, AND RESALE OF GOODS.
    TALK TO AMAZON, AND WALMART.

  10. Space junk is going to shred all our satelites creating more space junk until we destroy our society and trap ourselves on earth🤙🏼🤙🏼🤙🏼

  11. Hurrah
    Rah ra ja sa ma ha l ra ja sa ma ha l ra ja sa ma ha l ma lai ha l
    Aum hari shirthi vikrantnana hum phat phat ll

    Attack

  12. There is a problem with the space industry, which touches on spiritual issues and wonder. People like to see human beings boldly going where no one has gone before, simply "because it's there." But this is something extremely costly to do, and companies that pursue this dreams instead of profits will not last. Some companies are trying to find ways to keep humans in space, but the companies that will succeed will be the ones that find ways to remove the humans from space.

  13. I think you guys need to do more research. I found this shallow and uninformative, actually worse, it made hints & associations that were just plain incorrect.

  14. One of the better business documentaries I've seen. I've been a space nerd for 2 years now, and has been wondering how anyone could possibly compete with SpaceX. Now I understand the business aspect of it much better.

  15. Forgot to mention that this is not only happening in the United States but also in India Europe Russia China Australia New Zealand the are rocket companies in this country some have even more advanced technology than those mentioned on here

  16. '…opening up the Space for private entities…'.
    What makes them to think that they 'own' the void outer Space?

  17. Bloomberg must have money invested in Rocket Lab when starship comes online it will blow them out of the water or should I say space……the cost will be so cheap.

  18. Please continue this series! I want to show it to my daughters and nephews. They will be the generation that lives and work in space.

  19. Narator reklame zvuci kod sere i riga istovremeno. Nije bas najbolji odabir za naratora za lijek protiv zgaravice. Koja ironija.

  20. I think instead that clean, sustainable energy production is the last business frontier.
    Like what molten salt reactors can do.
    Here on Hearth, on the Moon and far away on Mars.

  21. you know when jeff bezos has spread some money when they are talking about rockets failing and they are showing Spacex rockets fail to land…those where there first few attempts at landing rockets and you know what Spacex is landing rocketsall the time now…and where is Jeff Bezos's rockets???oh they have yet to reach orbit shill media

  22. RocketLab is the only small company going to orbit and yet you talked about them for like 45 seconds? And most of your cinematic shots come from their launches?….

  23. Now we are trying to clean the oceans from plastic we dumped because we are a bunch of irresponsible idiots, in 50 years our nephews will try to clean the crap from space we will dump exactly for the same reason. We will never learn to respect this planet.

  24. But what about space junk? I hope all these companies have appropriate end-of-life plans for their tech so that they don't end up shutting us all out fo space for centuries.

  25. Ace reporting. It seems a bit paradoxical that these smaller companies tout their flexibility for launch, and a launch when you want approach, but also have a backlog of customers. I imagine it being like a hypothetical FedEx promise to deliver anywhere overnight, but not just yet because we have a backlog of packages to deliver.

  26. I love how business media desperately tries to keep Richard Branson and his fruitless ventures relevant….for reasons?

  27. When then speed up the film (which they did ) almost looks like the rockets are not steel tanks filled with helium. And that's exactly what they are.

  28. I’d like to take the Globe earth lie tour bus to these rocket conventions and have these twats discuss flat earth with these engineers.

  29. Is there anyone looking to profit from cleaning up all the space-junk up there to make room for all the newer sat's before "Kessler's syndrome" actually occurs?

  30. NASA is funding all the private companies to see who can figure out how to get to and it's not actually space it's low earth orbit. They Define it as space but it's really not…. meanwhile the United States is also paying Russia to transport their astronauts along with all the other countries going back and forth to the low earth orbit Space Station… Russia is fully capable of doing it all the countries trust them.. and they are making huge profits of off of transporting these so-called astronauts in Palos back and forth to the international lower Earth orbit station!!! Something is seriously wrong with this scenario… at the expense of the American taxpayer

  31. How can you expect us to believe this crap! Who is paying billions of dollars, ho that's right it's our tax dollars, we have to be the stupidest people that believe NASA, they never went to the moon, lies, and fake space!!!!!!

  32. WHAT ISS IS GOING TO RETIRE?? Opening those habitats module for commercial is going to be big.. really big~ Future is really a mystery huh

  33. Satellite this, rockets that… What about putting back people to work? A new Shuttle v2, that is worthy of the 21st century. We have the new materials, and amazing mech and tech!

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