Jeff Foust has a story today on the current real space race (as opposed to the fantasy one between the US and China)–the new race for customers in the suborbital market. It’s basically a compilation of last week’s XCOR press conference announcement and this past weekend’s Space Access conference, both of which I attended. This to me is the key point:

“Quietly, this has turned into a horse race,” said conference organizer Henry Vanderbilt during a wrap-up panel at the conclusion of the Space Access conference. “There are a lot of people who could be the first to fly a passenger to suborbit at this point. Two years ago I’m sure the money would have been on Virgin Galactic. It isn’t necessarily so at this point.”

“What struck me about the events of this week was that we have finally, with all due respect, broken the mystique of Burt [Rutan],” Rand Simberg, an aerospace engineer and blogger, said. “He has had setbacks”–referring to the engine test accident last July that killed three Scaled Composites employees–“and, this week, now he has a competitor.” The growing awareness of companies other than Virgin “is going to be very good for the industry.”

“This perception of a horse race is probably a really, really good thing for investment,” said Joe Pistritto, an angel investor. “Ninety-nine percent of the people who could invest in this industry don’t know about this industry” but may start to learn about it as the find out about these competing companies.

If it is a horse race, who will win the ultimate prize: not just the first vehicle to enter the market, but the one that wins the market in the long run? The diversity of technical approaches, from the takeoff and landing techniques to the number of passengers, makes any predictions difficult. “If there’s four different operators flying people into space, their offerings are going to be a little different,” said Pistritto. “So you see an actual segmentation of the market around the experience you want, how much money you have, and where you are.”

What I meant about the “mystique of Burt” was the notion that the winning of the X-Prize was some kind of fluke, enabled only because the most brilliant aeronautical engineer in the world applied his genius to it. Many have used this as an excuse to denigrate the efforts of others building suborbital vehicles, which hasn’t made it any easier to raise money for such ventures.

Many seem to believe that it really takes the genius of a Rutan to build a suborbital vehicle. As evidence of this proposition, they point out that no other suborbital vehicles have been flown since 2004.

But in so doing, they display a fundamental ignorance of the nature of the technology and the requirements. There is no “one way” to skin that cat, and never was. Burt’s design was clever, and perhaps intrinsically safer, but it was not necessary, and there are other, better ways to do the job that are safe enough. It’s not at all clear that the SS1 approach is the best one for a commercial application, and if one includes in that the hybrid propulsion, it’s already caused delays (though those are partly due to Scaled taking on a project outside their area of expertise–they’re an aircraft manufacturer, not a propulsion house) in their development program, and it’s certain to result in higher operational costs and increased turnaround time.

The real point is that if only Burt could win the X-Prize, it wasn’t because he was the only guy smart enough to design a vehicle to do it. It was because he was the only guy with the reputation of being smart enough to be able to raise the money to do it. When it comes to space ventures, the hardest part is always raising the money. The technical challenges generally pale in comparison.

So, with schedule delays in SS2, now comes XCOR. XCOR has a reputation of its own, hard won over the past eight years, of underpromising and overdelivering. So when they have a (rare, almost unheard of) press conference announcing that they have the design and the cash to build a suborbital vehicle, with an endorsement from the Air Force Research Laboratory, the world listens, and suddenly it’s a real race.

Evidence that the mystique has been broken is this CNBC story by Jane Wells from last week, after XCOR’s announcement, with the hed “Branson And Northrop May Be Backing “Wrong” Rocket Man!”

Burt is no longer God, other companies are getting serious attention from both business journalists and investors, and it’s been a very good week for the new space industry and space age.

Joe Pistritto: We have a couple teams (Virgin and XCOR) that are planning to fly in a couple years, about the same time as the Shuttle is retired. At that point, the NewSpace industry will be the only way that Americans can get into space, and in that first year more people may fly into space on the new vehicles than have flown in space to date. At that point everyone in the country will have a better idea what this new industry does.

Henry Vanderbilt: Also, they’ll see that there is a horse race. A year or two ago it was assumed that Virgin would be first to market. That’s no longer the case.

Joe: There are going to be different types of experiences at different price points, and as the horse race becomes more clear, it will expose the business to a lot of potential investors who haven’t been paying attention up to now. This is good not just for investment, but for creating a supply chain of suppliers that are needed. Still thinks that this is an individual investor market. Venture funds can’t justify this investment in the current business environment. Can do it with their own money, but not someone else’s. For someone with their own money, there’s no industry that is more exciting than this one.

Henry: Not important who comes in first. Emphasis needs to be that there is competition and that we’re in for exciting times.

Muncy: Difference between spaceflight participants (passengers) and Russ Blink strapping on an oxygen tank and flying out of the atmosphere on an Armadillo vehicle. Markets are wonderful magical things. We have no idea what the possibilities are (who knew that someone would program Doom eventually when Bill Gates said 640K would be plenty). Smart guys in the military might figure out what to do with these things once they’re flying. NASA may want to replace the T-38s now that they’re not flying the Shuttle any more (I think he means Gulfstream), or they might want to practice lunar simulations.

Challenge is to figure out how to get customers interested beyond the tourist flights. It will be different flying in the back of SpaceShipTwo than flying in the cockpit of the Lynx. We’ll see what the market wants. Lord willing the market will want both, and other flavors. The good things about markets is that if you offer something out there of value, it will be rewarded. Thinking about package tours of all the vehicles: Grand Slam of rockets.

[Update]

At that point, I got pulled up to join the panel by Muncy, so I couldn’t blog it.

Anyway, another conference is history. More thoughts later.

Chuck Lauer starts by informing us that Kistler and Rocketplane have been split off into separate companies. Still want to resurrect Kistler–only two-stage reusable out there.

Bottom line was that markets didn’t buy the value proposition that NASA could be a reliable anchor customer.

Drawing contrast between their max gees and Virgin’s. Rocketplane is four, Virgin is six. Thinks it will be a significant difference. In terms of market research, early studies had to spend a lot of time educating the customer. Now there’s a lot more awareness of various products (runway takeoff and landing single vehicle, versus air drop versus vertical) and it would be useful to update the market research.

Need public/private partnership unless you’re a billionaire like Jeff Bezos. They are continuing to partner with Oklahoma, and the action is primarily between the companies and the states, not the federal government. Even Florida is waking up the fact that the entrepreneurial space community is the future.

Marketing strategy is to work with partners all over the world. Going after one third of the tourist market. Expect 80/20 tourism/other (microgravity science and microsatellite), but the latter may be a bigger market than they think. Looking at charter flight model with things like reality teevee shows, sponsorship of contests (currently have one going with Nestle–paying full price for two seats and giving them away). Can see the Kitkat promotion at nestle.fr. Another contest in India for a multi-media company with a four-episode show to pick the winner. Winner’s sound bite: “I want to see what it’s like to pee in space.”

They can provide a blank canvas for corporate customers without having to compete with a brand (as they do with Virgin).

Lost a year plus of schedule in 2005/2006 as a result of the focus on COTS. Original plan was to build a couple four-place Learjet version, and then build a bigger version for more throughput. Since then have taken a step back and decided to go directly to the larger vehicle, built from scratch. New vehicle is pure cylinder fuselage, cabin the size of a large SUV 2+2+2 seating, with more revenue per flight but no increase in ops costs. Upgraded to an after-burning turbo jet with higher thrust, shorter takeoff roll, higher air-breathing altitude.

Frank Nuovo designed the interior of the aircraft (former head cellphone designer for Nokia). Everyone sees out the front (even in the rear seats), has their own window, and a personal video display. Will show tail camera view during ascent. Video screen will also be selectable for different angles. May use Google Earth overlay on monitor to know what you’re looking at.

[Update at 11:30 AM MST]

I got pulled away from the rest of the Lauer talk, but Clark Lindsey has some good notes, as well as more from the Frontier Astronautics talk.

John Carmack is starting off with a video of Lunar Landing Challenge, showing the failed attempt to win last fall.

Likes the new single-tank design compared to the old quad. It’s easier to service, though a little harder to transport because it’s much taller.

Seeing views that we hadn’t seen at the time, from the three on-board cameras.

Now showing a burn of methane engine that they’ve been developing with NASA.

Now have four modules of the six that they plan to build their suborbital vehicle. Landing gear turns out to be one of the heavier items, as heavy as the tank. Sticking to dual tanks and single engine on each module. 800 psi pressure tank, with rubber landing pads. Thus tank is also landing gear.

Steps to commercial vehicle. Some debate whether differential throttling will work for control. Recent experience indicates that it is sluggish to respond, because throttling can’t be done fast enough on a peroxide engine, but a bi-prop engine may be more manageable.

Definitely disappointment after losing the cup. Thought they’d done everything they needed to prepare for. They’d done many test flights, including five 180 second flights (long enough to go to space). Had three vehicles, any one of which could do the ninety-second challenge. But they had five starts with three wrecked engines. Still not sure what the problem was, but think that (sorry, going to fast to capture it all), but think it had something to do with cooling jacket capacity and start-up processes that resulted in fuel entering the chamber prematurely. BIggest difference was that they turned the vehicles faster at the cup than during normal tests, and there could have been slight differences in chamber pressures or fuel ratios at a given point in time that had catastrophic results. May have had an assembly error (leaving out an O-ring that resulted in a fuel leak), but can’t be sure.

Disheartening, but compared to all the other hardware at the airshow with thousands of flights, they couldn’t have the statistical confidence as those military aircraft. Learned a lot of lessons. Don’t expect it to work the first time. Even with modern engineering practice, it won’t happen. Not arrogant enough to think they’ve solved all the problems, or even know what they are. Expect to lose several of the modules in flight testing. But once they find the problems, they’re confident they can solve them. On propulsion, engine now starts and stops like a light switch. Expecting high-speed aero problems.

On business scale issues, things are accelerating. Half a million in contract work, NASA and a commercial customer not to be disclosed. Starting to talk more like Jeff Greason now–transitioning from hobby to business. Won’t sell components, because integration is critical. Will sell functional systems (such as propulsion). Currently at around 5000 lbf thrust, will sell for a couple hundred thousand bucks. Will sell complete vehicle for half a million. Talking to Lunar Google X-Prize teams. Won’t warrant that it will land on the moon, but if they want to buy one for testing, he’ll sell it. Has very little confidence in Google Lunar X-Prize–doesn’t think anyone has what it takes. Talking to aerospace companies about sensor suite testing and lunar simulations. Still thinks highly of suborbital passenger market. Thinks there’s a market, and has all the pieces: propulsion, control, insurance, etc. Not worried about schedules, because SS2 continues to slip.

Had hoped that he was past the point where he didn’t have to invest any more, but did recently. However, more of a float issue, or loan, until some other things come in. “Perseverance and determination will get us there.”

Problem with LLC: once a year demonstration is the worst thing for a technical challenge. Adds pressure for tough decisions that can distract from main commercial goals. Afraid to do boosted hops at higher altitudes because they don’t want to risk if for the challenge. Have three vehicles, but last year’s experience shows that’s not enough for redundancy. Ready to do it now, but have to wait until end of year and keep hardware available for it.

[Update a few minutes later]

Clark Lindsey has more on Armadillo, and a report on the previous talk on laser launch by Jordin Kare.

Dan DeLong starts off by telling Paul Breed that they learned a long time ago at XCOR that green is bad, stop right now.

This talk is more than just Lynx, they’ll be talking about the other things they’re working on as well. Can’t talk about the Rocket Racer, because Rocket Racing League controls information on that. The piston pump is working well on it, though, and it’s the same pump that will be used on the Lynx, for both fuel and LOX.

There is no more Xerus. The concept has been changing, business model changing, aero changing, and they decided that they have a new stable configuration that they can give a name to. That is Lynx.

They’re having trouble with the computer display. Making jokes about Microsoft, and saying that their flight software won’t be windows. Dan talking about conversation he had night before with Russ Blink of Armadillo, with Russ saying that he’d rather fly a rocket controlled by a computer than one controlled by a human. Dan responded that while it made sense to do a vertical vehicle with computers, but it didn’t seem that good to do it with software based on a package called “Doom.”

Showing a flow chart of a meat hunt, with overanalysis. Their emphasis is analyze a little, and test a lot.

Showing various past projects–NRO thruster, DARPA LOX pump, methane engine.

Showing video of putting bomb inside of a methane engine to test combustion stability. Four bomb tests, all successful.

Talking about the valves that they’ve developed, because none were available that met their needs. Also doing own composites for the Lynx. They’ve come up with a glass-fibre and teflon resin, neither of which will react with oxygen.

Not talking about Lynx. Sunk cost so far $7m, with an estimate of $9M to complete. Showing a video of 50-lbf attitude control thruster, running nitrous/ethane, that will sit in the strakes. This video wasn’t shown at the press conference.

Mark II will have hard points on outside. Will carry upper stage dorsally, that can put 10-20 kg payload into LEO. Purpose of the contract is not to help build vehicle. It’s for analysis, demonstration and knowledge sharing of its responsive features. Air Force is looking for Operationally Responsive Space (ORS). Air Force has space they need the “OR.” XCOR has the “OR” but not the “S.” Everyone understand that you can’t be cheap at nine times per year, but because XCOR is commercial, they have to make it cheap, which happens by flying often. So Air Force gets the benefit.

Lynx requirements:

Supersonic
Two people
Fly under FAA-AST rules

Goal was to build smallest vehicle that met those requirements.

Showing video of firewall test stand, successive engine runs with increasing pauses, with minimum off time of two seconds. About a half second to start up.

Showing video from press conference now.

Fuel is carried in wing strakes, LOX in fuselage. About two gees at burnout, heading straight up at Mach 1. Mark II will be three gees. Landing speed about 95 knots, takeoff about twice that.

Tim Bendel, of Frontier Astronautics, is giving a presentation on how to address the gap between the ability of garage-based startups and larger companies to raise money. Not very many angels with money who are interested in space who aren’t already doing it.

Giving a history of the Zeppelin. After the count lost his first ship, he threw in the towel, because he’s lost all his money, but a lot of Germans sent him money, and he ended up with more than he had started with. Are there space enthusiasts who could do the same thing?

Talking about Warren Buffett’s stock, and its high value that he refuses to split. Independent holding companies evolved by purchasing a few shares of Berkshire stock, and then issuing new, lower-priced stock based on that asset.

His proposal is to gather small investors for the holding company, put their money into escrow, and fund start-up space companies off the interest. Different “flavors” or classes of stock would be issued, with different Class A escrow accounts, which could be associated with specific start ups.

Unfortunately, most of the info is on his charts, which I can’t read because I’m all the way in the back (where the laptop power is), and too dense for me to quickly transcribe even if I could.

He claims that it avoids sunshine laws, according to SEC lawyers that they’ve talked to. The basic idea is to provide a means for small investors to invest in small companies, albeit indirectly.

Issues: Have to pay for licenses, need to be broker/dealer, etc., a lot of paperwork. Probably about a hundred thousand bucks to get started. Goal is to do it for profit, in addition to helping space industry. Makes money on trades, but could also use other investment tools, such as puts and calls.

Has a business process patent on it, needs about a quarter million to start up.

Hard for me to evaluate it, given my funky state of consciousness, and inability to look at the numbers. I’ll talk to TIm about it later.

While I slept, XCOR lifted the news embargo at midnight PDT (presumably to allow coverage in today’s WSJ).

I’m still a little bleary (and of course still attending the press conference later this morning), but Clark Lindsey has a lot more. Just scroll down.

[Update a few minutes later]

Here’s more, from east coaster Jeff Foust, here and here.