in

Jeff Bezos, Billionaire space race, Amazon.com Goes to Space on July 20

I know we’re all watching with fascination and baited breath as richard branson took this flight up to space or at least 50 miles above the earth yesterday. But what is the business case for this? How is virgin galactic actually going to make money off of what we saw yesterday yeah? So this really was the test phase they’re still in r d phase, and the plan was always for richard branson to go up and test what the experience would be like for the paying customer down the line. I ran through the economics of their business model with ceo, michael colglaser. Effectively it can carry six paying passengers at around 250 000 dollars a pop. He actually told me that prices initially will go up until they can scale the number of flights that they’re able to do. Six, paying customers at that level gives you one and a half million dollars per flight and the operating cost is around four hundred to five hundred thousand dollars, so it’s, actually a pretty high margin business. The thing is, they still have so far to go. They have to build a factory to build these spaceships. They have to put a lot of money into the rnd a lot of money into the marketing and for the time being, they’ve stopped selling additional tickets so that that need for for capital is pretty clear with that stock, offering that they came into with the market. This morning, so where is that capital directly going to go 500 million dollars or up to it worth of shares? Where could we see it most quickly put to work yeah, so in in the near term, they only have two of the vss unity starships.

The thing that actually launches you up into space, they also remember, need to build more of the dual fuselage airplane, which takes vss unity up to altitude. I was actually speaking to new mexico’s governor yesterday, who was at the event, and she said that they’re in very early talks about the next stage of their relationship. Remember new mexico spent 200 million dollars building spaceport america for virgin galactic. They got a great deal out of it, but they need somewhere to manufacture these spacecraft at scale and it just doesn’t exist. Yet the new mexico governor is hopeful about job creation, hopeful about the investment the state can make, but the fact that they’re only in early talks give you some sense of how long a road it’s going to be to scaling up this business. Let’S contrast virgin galactic with blue origin, which of course is another space, enthusiastic billionaire’s venture jeff bezos, and he will be going up eight days from now on july 20th. How is that flight going to look different from richard branson’s yeah it’s, exciting? I get another trip to stand in the desert sun. You know they have like very different. I know they have very different delivery mechanisms right this kind of classic space age debate. Do you use a capsule that goes up on a rocket like blue origin? Is doing, or do you use a wing based system like virgin galactic? They also have very different business models.

Virgin galactic has a very specific mission. A very specific business model go up for. Just a few minutes of weightlessness come back down. Simple blue origin wants to do civilian space flight. It wants to take up jeff, bezos and other paying customers, but it’s. Also, in that other launch business, it wants to compete with spacex and ula, and boeing and lockheed in carrying up payloads for satellite providers. It wants to do its own internet based uh space based internet to compete with spacex. It doesn’t have as focused a business model as virgin galactic, but it’s trying to compete in those big ticket contracts. Remember it was vying with spacex for the nasa contract for the lunar lander for 2024, but it didn’t win that contract and it’s appealed the decision so that’s kind of the difference between the two ed i’m. So glad you mentioned spacex, because literally all i’ve been thinking about all day is the picture. I saw of elon musk standing barefoot in a kitchen with richard branson at 3am yesterday, before this flight. Clearly, a billionaire bromance going on there and elon musk, we know, has purchased a ticket he’s going to go up eventually on a virgin galactic space flight. When could that happen? So the latest that we’re hearing from the company is early 2022 is when officially they’ll start commercial trips. The problem is that this business is so supply constrained. If you think about it, they sold 600 tickets right at 250 000 a pop.

They only have a couple of spacecraft. They would have to do a hundred launches in their first year to satisfy just that original list. At the same time, throughout 2020 they were taking 1 000 deposits to hold your place in line so that’s. The whole point about ramping up it’s going to be a long time until they launch with frequency, and i think even those existing ticket holders are going to be waiting a long time to get on board.

What do you think?

Written by freotech

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Jeff Bezos, Billionaire space race, Amazon.com 'Space Race' Renews 1960s Debate Over Spending Inequality And Space Travel

Anthony Fauci, Rand Paul, United States Senate BLOCKS GOP Senator's Hurricane Aid Act