[FPSPACE] Study backs COTS[Scanned by MAIL]

[Matula, Thomas L.]

David,

Funny thing, There is a discipline invented by American Capitalists named marketing which does just that, plan for success in new markets. I know most folks confuse marketing with promotion, which is just the tip of the iceberg that folks outside of marketing see. Combined with the recent advances in the science of economics, ones which have integrated complexity theory and systems evolution and capitalism is not as mysterious as you make it out to be. 

This is also one reason I don’t see much more then hype in Alt.Space firms, because although the supposedly are “free market firms’ most don’t seem to be able to shake the RFP/Government contracting mindset of the industry their engineers grew up in. Most have business plans which seem completely dependent on government contracts to survive. Hence, the frequent demands for NASA to fund their dreams with program like COTS. And when they do see a market outside of NASA they approach it as they would a government market. Imagine for example selling cars to people before your firm even built a prototype? And yet how many thousands of  rides into space have been sold by firms that don’t even have a prototype flying and have no real idea when it will be delivered?  Yes, the money is in escrow, but my guess is the interest the firms are paying on it are no where near what a good money market account would pay.

No, opening new markets and creating new industries is not some mystical, magical process as alt.space advocate treat it. It is a straight forward process of applied economic models and established product innovation strategies.  You liken the X-Prize to the Orteig Prize, yet the environment was quite different. The 1925 Kelly Act had already created the core of an airline industry after the government airmail service had proven the market and cost and provided it with a potentially stable revenue stream, critical for development of any new industry. All that was needed was capital, and that is what the publicity of the Orteig prize and Lindbergh’s flight provided. It didn’t require a technical breakthrough, indeed every element of Lindbergh’s plane was simple off-the-shelf technology. Folks also seem to forget it was only 4 weeks later the Richard Byrd flew the first passengers and airmail across the Atlantic Fokker Tri-motor available commercially. It took another 10 years to get commercial service because of the diplomatic issues involved, but that is another story. 

By contrast the technology for space tourism vehicles is still under development. And there are no airmail markets to pull demand and the suborbital firms are so focused on the tourism markets they ignore the markets that could serve that function. And the result will be as the frustration grows among those who paid for their ride in the hype following the X-Prize and seeing their flight dates continue to recede into the future the whole idea of suborbital tourism will be an implosion setting the suborbital industry back years.  But by then the alt.space folks like you will move on to a new crusade as they did after the microgravity manufacturing market collapsed, and the orbital RLV market collapsed, failing to learn the key lesson of marketing strategy, promise less then you are able to deliver so the consumers get more then expected.  

Tom





-----Original Message-----
From: fpspace-bounces at friends-partners.org on behalf of David Anderman
Sent: Mon 2/12/2007 9:35 PM
To: fpspace at friends-partners.org
Subject: Re: [FPSPACE] Study backs COTS[Scanned by MAIL]
 
Dr. Matula:

The funny thing about capitalism is that its very hard to plan how it 
all works. I have no clue whether suborbital space tourism is the 
best industry for people to sink their money into. I think the market 
will make the final determination, rather than us.

DWA


At 06:37 PM 2/12/2007, Matula, Thomas L. wrote:
>But you also dodged the point of if space tourism is a good focus 
>for space commerce, or if it has led it astray of better suborbital 
>markets. In short is it a siren that is leading the alt.space 
>industry on to the rocks? And if so then the X-prize didn't advance 
>space commerce as claimed by folks.

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