Gwynne Shotwell Is Steadying Force at SpaceX
wsj.com
wsj.com
> In August, reporters asked Ms. Shotwell how confident she was about the latest timetable. Such difficult predictions “can make a liar out of the best of us,” she said, adding: “I hope I am not proven to be a liar.”
This last paragraph... ick. Not worrying about the mischaracterization of delay, that's just Pasztor. But the association of Shotwell and "liar"... Shotwell is known for her honesty. Boeing leadership... very not so much. I do hope this isn't a new meme - that would be remarkably slimy.
Meta: There's the idea that knowing some topic, and seeing the press repeatedly get it wrong, causes one to doubt their reporting of everything else. Watching press coverage of SpaceX has introduced me to an unhappy variant. Knowing some political background for a topic, and finding it essential to even "read" press articles, leaves me wondering if I've been unknowingly failing to adequately "read" press coverage of everything else. :/
Typically, this is presented as the opposite, where most people seem to mysteriously forget how poorly the media treats their own area of expertise when they turn around to trust it in other areas[0].
What did change so, and that I think is directly related to Musk as well, is how SpaceX is perceived now as compared to a few years ago. It all started with Teslas Model 3 issues and the subsequent Twitter issues, after that Musk, and by extension his companies, are seen in a different light by many. Whether this is justified or not is anyones guess.
Regarding SpaceX, competitors are now exploiting an opportunity, I just hope that Musk doesn't take the bait. On the other hand, maybe a somewhat more realistic approach doesnt't hurt. When did some "research" into SpaceX lately I saw a change in tone in articles, especially covering the financial side, from article in 2013 / 2014 to now. I have the impression that SpaceX, and Musk as well as Tesla, are also followinng the hype curve.
Added background: I'm not so optimistic regarding bith Tesla and SpceX anymore as have been, especially Tesla.
Not commenting on Tesla, but why are you not optimistic wrt SpaceX?
To put simply, SpaceX has won the space launch industry more thoroughly than anyone could have predicted just a few years ago.
SpaceX is now routinely recovering every core they fly, and based on publicly revealed data they are cheap to refurbish. This means launch costs they pay are down to a small fraction of what everyone else pays. They have reduced the cost of getting to the end of their launch queue to $60M for basic service, and despite the low sticker price they are still probably making more profit per launch (not profit margin, more flat profit) on those than any of their competitors are. According to Königsmann's recent talk at IAC, they now have a 100 future launches on their launch manifest, priced at about $12B. That's more than the entire rest of the commercial launch industry put together, by a huge margin.
Because they now get their first stages back, it means that their stable of launchers grows larger and their launch cadence can improve with every new finished rocket, so they can rapidly turn those deals into actual profit.
In just a few years, SpaceX has turned from the scrappy upstart to the 800-pound gorilla who dwarf all their competition. On top of that they have the BFR which sounds fantastic and fantastical, and their satellite internet business which seems designed to make sure they don't run out of launches for their launchers, and both those projects are a lot more risky. But the point is, unlike Tesla with Model 3, those projects can fail and they will still be the most effective and profitable space launch company in human history. They can afford to have a long and explosion-filled development cycle for the BFR. In a lot of ways, they have already won, and that's just the victory lap.
Of course, until they get BFR worked out, they are not going to go to Mars.
The main reasons I am not that optimistic anymore regarding SpaceX are financial, mostly based on some doubts I developed regardintheir real launch prices ( I know that there is no "standard" launch) and the fact that encumbents are waking up.
So, as far as financials are concerned 100 launches representing $12B mean an average of $120M per launch, a far cry from the $62M they are advertising. These price are not that far of from, say, Ariane. Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches (ULA is a nice case in point regarding the revenue and profits government work is providing. this also explains a lot about ULA, but that is a different topic). SO the first issue I have is the hype regarding SpaceX costs which is purely based on advertised numbers. The discrepancy was also there up to 2015 (wsj published internal docs and real number up to 2015 in Junuary 2017). So, to me it seems that SpaceX is doing what everybody else is doing in that sector: taking government contracts to cross finance commercial business. Be it development contracts (SpaceX and Boeing for manned space flights), purely military programms (F-35, Eurofighter,...) or direct state subsidies (Airbus, Boeing tends to get the government money through military programms). I'm not judging here, it is simply a common industry practrice. I totaly agree that SpaceX has a much lower development cost structure as purely private company without any political and bureaucratic beef, I just doubt that this advantage is as great as I believed it to be.
The other threat I see is now that incumbents woke up competition for comparative launchers is getting tougher. While Ariane-5, as one example, was intended for a shuttle-like program Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload. Last estimates put in almost in a ballpark region of Falcon-9s based in advertised prices not taken the above emntioned averages into account. As a result it is reasonable to assume that SpaceX cost advantage will not stay for ever. The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so. And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital.
All of this doesn't mean that SpaceX did not achieve incredible things, they showed how fast and cheap development can be without political BS. They developed a reusable rocket (finacial aspects non-withstanding). They breathed life again into the American space programs. So when I say less optimistic that implies a very high (hyped?) starting point.
EDIT: Ariane-6 is scheduled to replace the Ariane-5, with an unclear development up ahead it it seems obvious that demand is shifting to a provider with an already developed launcher. As you see I did not look to deep into ULA yet, so everything is coming down to Arianespace - SpaceX comparison.
$62M gets you a spot at the end of their launch manifest, for the standard service as laid out in https://www.spacex.com/sites/spacex/files/falcon_9_users_gui...
The customers who want some additional service over what is detailed in the manual have to pay more.
The customers with launch dates soon will have entered the queue before the prices were lowered, and have to pay the prices they agreed on. If they choose to, they are free to give up their position, and re-enter at the back of the queue for the cheaper price. Several operators have indeed done this, at least one more than once.
> Sure, it's an average, which is exactly my point. Underbidding other commercial providers is easoer when you get highly priced government work to susidize these commercial launches
The government prices are higher because at the time the contracts were written, they agreed to a price that was half of what was available on any other commercial provider, including Arianespace. At the time, oldspace basically laughed at them and said that it cannot be done at that price. Since then, SpaceX has driven down the prices across the board. Would you call this a subsidy?
Also, the government price also pays not just for the launch, but also for the development and manufacture of the Dragon capsule, which is something Arianespace does not have the equivalent of, and which probably costs more than the launcher.
But the most important part of all this subsidy talk is that the statement "government launches subsidize private ones" is just plain false, because the private ones also make profit, and a lot of it. The government launches still make more profit, and you could argue that the government deals subsidized the development. But to say they subsidize the launches would imply that SpaceX doesn't make profit on their cheapest launches, which they do.
Overall, the cost argument is FUD. While nothing you said was technically false, it was instead carefully crafted half-truths designed to obscure the reality, which is that if you do pay SpaceX $62M, they will fire your payload into orbit, make a profit doing so, and no-one else is at this time able to compete with them on this.
> Ariane-6 will be much closer to a Falcon-9 and will allow lower costs per kg-payload.
Ariane-6 design was selected in late 2014, to be competitive against the pricing of F9 in 2015. The design then selected is no longer competitive against modern SpaceX pricing, which has caused most of the prospective commercial clients to book flights with SpaceX instead. (Hence the 100-launch order book.) The development of the rocket still continues with ESA funds, because of it's strategic significance, despite the fact that the rocket will never be able to be commercially successful.
To be able to compete against SpaceX, they are developing Ariane NEXT, which is a project set to reduce the cost of Ariane-6 by a factor of 2. This would make it competitive against SpaceX pricing as of today. There are two problems with this. The first is that the current SpaceX pricing is not their floor -- their prices are set to make them healthy profits, and if there is actual competition they can drop them more. The second is that the timeline for Ariane NEXT has the rocket completed in the 2025-2030 timeframe. So SpaceX could ride their current launch system for a decade before competition. SpaceX launched it's very first rocket a decade ago. Do you believe that they will not have either improved F9 to make it more cost-competitive given a decade of milking it, or phased it out for BFR?
The other supposed F9 competitors are hardly better off.
The Russian Angara is expendable, yet to launch a real payload and already uncompetitive on cost and losing contracts. They have talked about a replacement, but that is still a pure paper rocket, as no funds have been allocated.
ULA is developing the Vulcan which expects to first launch in "mid-2020s", and which is expendable. For missions that go far enough, they can actually beat the current F9 lineup, mainly because of their awesome upper stage. However, at the bread and butter of commercial launches, LEO and GEO, they will have a very hard time competing on cost. If the Gateway program is not cancelled, they can probably get a profit on that. Regardless, they are also still a decade away, and will have to face what SpaceX makes then, not what they fly today.
Blue Origin might surprise us all and suddenly launch a very nice, reusable booster. That is, if they ever actually choose to enter the market and launch something. As of today, they are still MIA.
> The other oart, somehow related, is reliability. Both, ULA and Ariane, have a better launch record than SpaceX. That reused Falcon-9s are now advertized as "launch-proven" instead of reused (nice counter-point to a expendable launcher when you look at a unit level) kind of confirms this and is again pure marketing. Not sure how much marketing factors in when someone wants to launch a $100M plus payload so.
It probably doesn't factor in much at all. But what does is insurance. All commercial launches are insured, and the insurance premiums for SpaceX are not substantially higher than other operators. This tells me that either the insurers are idiots, or that they feel that F9 today is nearly as safe as the competitors. Either way, the customers don't care, as it's not them who lose money if a rocket blows up. Hence, the 100-launch order book. Which is more than the other commercial operators put together.
> And the final factor is that incumbents have really deep pockets, SpaceX needs venture capital.
SpaceX could now run without any additional capital investment. They have a working assembly line, working launch infrastructure, and are cranking out rockets which each make a profit on launch, then land and launch again, and again...
And this is why venture capital is so cheap for them. (see https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-v... ) And they will take in a lot of it to develop BFR. And they will have more of it available than any of those deep pocketed competitors.
In terms of insurance premiums, everthing I found was statements from the launch, read first, customer of re-used Falcon-9s. If you have a source for real numbers I would really apprecoate that. As you said, insurance factors in.
Regarding price, if the basic package gets a slot at the very end and everybody is being upsold they are offering the equivalent of Ryanair's $19.99 tickets. Nothing wrong with upselling, but in the end I think we can agree it's the average revenue / cost that matters, everything else is just marketing. Again nothing wrong with that. Also I never doubted that SpaceX is the cheapest provider at the moment (significantly lower development costs), I just doubt the actual difference (I consider it to be really small). And whether competitors are unable to catch up.
I did find a study from the DLRG (German Center for Aerospace, crude translation) that saw a real benefit around 100 launches per year. Dated, and I would assume with experience the numbers change.
Important to note, SpaceX is advertising reused launchers at a 30% discount. If they don't find enough customers (I would assume low value payloads would be a perfect market segment for those, also inlone with SpaceX mission to open space for everybody. Traditional high value missions would be a different thing) they are facing an inventory problem nobody else has in the industry.
EDIT 2: In addition to inventory risk, there is the cost for fuel to get the stages back and refurbushing them. And, without enough customers, potential recycling.
But I do see why VC money is flowing their way, all of the points you mentioned make agreat story. Space being a nation state zhing, all it needs is political commitment an VC is basically competing with the bank.
And FUD, I think I lay out my thoughts pretty clearly using numbers whenever possible. I try to avoid cranking out statements without fact as much as possible. And since I don't have anything to do with space travel I don't think my opinion on HN changes anything.
EDIT: I just checked on SpaceX website, future launches are at 35 / 36 if I counted correct, not sure where the 100 comes from.
One other point regarding insurance. Costs are one thing, as is getting your money back. Loosing a unique payload setting you back months or years a different one. Honestly I'd love to see the real LSA and RAMT numbers for both Ariane-5 and Falcon-9. A pitty these will never be public in the next 50 to 80 years if ever.
EDIT 2: Typos, plus an other point on re-usability. It really sucks to type on a German keyboard, especially mobile. Z is right next to T, so the Germans are quick to become zhe Germans.
There are no losses on commercial ones.
> the Motely Fool did a couple of articles on that topic.
Motley fool did their articles before reusability. And that's what changed the game. At the time, they estimated that a first stage costs SpaceX $30M-$35M to build (let's assume $32M), leaving room for only $12M of gross profit margin per launch.
During one of her latest presentations, Gwynne Shotwell revealed that the very first first stage that flew again, cost half it's manufacture cost to refurbish. ($32M+$16M)/2 = $8M extra profit per launch. And that was the very first stage, the one that was stripped down to bolts, had every part inspected, and then put together. And that one only flew twice. Since then, SpaceX has modified the first stage to be cheaper and faster to refurbish, a few changes at a time for each launch. Now they are touting Block 5 of capable of flying 10 times between complete teardowns. I can't really give you hard numbers here because they have not been released, but how much would you expect it to cost them to refly a F9B5?
> As is Arianespace margin,
Arianespace has their rocket developement paid outside their budget by ESA, they basically only pay for the manufacture. This is rather different from SpaceX, for which R&D comes from their own budget.
> In terms of insurance premiums, everthing I found was statements from the launch, read first, customer of re-used Falcon-9s. If you have a source for real numbers I would really apprecoate that. As you said, insurance factors in.
Sadly I don't. They are not publicly available. I estimate that the prices are not substantially higher from the fact that everyone flies SpaceX anyway.
> everybody is being upsold
Up until today, they largely haven't been. Most rockets appear to launch in the standard configuration. The reason the prices are higher is simply order timing -- the prices used to be higher, and launch timing is important to many customers.
> I did find a study from the DLRG (German Center for Aerospace, crude translation) that saw a real benefit around 100 launches per year. Dated, and I would assume with experience the numbers change.
The design they are reflying also changes that. The DLRG report considered reflying their conventional designs, not designs designed from ground up for reuse.
For example, one of the major ways F9 differs from more traditional rockets is that it uses the same engine for the upper stage as it does for the lower stage. This is very inefficient, because the upper stage engine basically should be as efficient and light as possible (and it's ok to compromise on power) while the lower stage engines should be as powerful as possible (and it's ok to compromise on Isp and weight). If you put a simple cryogenic upper stage on top of the F9 booster, it would gain near +30% mass to orbit, and more the further away you're going. This was heavily criticized when F9 started flying.
The method in their madness is that doing it this way, they only have a single engine manufacturing line, reducing fixed costs and making reuse more economically viable. SpaceX has done a lot of these kinds of design decisions.
> Important to note, SpaceX is advertising reused launchers at a 30% discount.
They are not, anymore. The 30% was rolled into the overall reduced price, at this moment reflown boosters and new ones cost the same. The only benefit you get from flying reused is earlier launch date. (If you insist on an new booster, you have to wait until one is available, and others can launch in front of you with reused ones.) This is all part of the marketing push by SpaceX that reused boosters are actually better and safer than new ones. What with the "flight tested" moniker and all that.
> If they don't find enough customers (I would assume low value payloads would be a perfect market segment for those, also inlone with SpaceX mission to open space for everybody. Traditional high value missions would be a different thing) they are facing an inventory problem nobody else has in the industry.
Looking at their past launchers, customers don't seem to be thinking like this. Of the 11 reflown launches with commercial payloads, 6 seem to have been heavy (and super expensive) GEO satellites.
> I just checked on SpaceX website, future launches are at 35 / 36 if I counted correct, not sure where the 100 comes from.
SpaceX website is, err, not frequently updated. The only interesting document there is the payload users guide. To know what SpaceX is doing these days, you sort of have to either read fan sites (like /r/spacex ) or listen to all the presentations made by execs. That number is from Hans Königsmanns talk in IAC2018:
https://www.youtube.com/watch?v=0IU41zpzWUE&t=46s
And oops, it was just a >100, not exact 100.
> And FUD, I think I lay out my thoughts pretty clearly using numbers whenever possible. I try to avoid cranking out statements without fact as much as possible. And since I don't have anything to do with space travel I don't think my opinion on HN changes anything.
I don't think you are trying to mislead people online. I think you have been mislead. The "government subsidy" argument is a complaint made by Arianespace and others and is simply not true. It requires using numbers from years back, or ones pulled from thin air, and comparing them to prices published today. The reality of the situation is that either SpaceX has been massively misrepresenting their numbers, or they make a healthy profit on commercial launches today, unlike literally anyone else in the industry.
Regardless, I think my thesis can be massively simplified here:
To put it simply, the anti-reusability argument is talking about what-ifs and maybes. "Maybe customers don't like the added risk of losing their payload" "Maybe customers don't like flying expensive payloads on reused boosters". Maybe maybe maybe. The reality is that a 100+ launch manifest for a launch services operator is completely unprecedented. Nothing like it has happened in history, ever. The customers have voted with their wallets, and are going with SpaceX. Billion $+ payloads are flying on reused boosters, and getting insured flying on them.
Against this juggernaut, which sucks out the volume needed by other launch service operators to pay for their fixed costs, they have rockets that are uncompetitive today, and plans for new rockets that all seem to be a decade away.
SpaceX gets to fly their current platform for a decade, milking the industry for all the money they need to build their next ones.
How is this not a reason to be optimistic for SpaceX?
It's the organization that succeeds, not the CEO or COO or any individual.
It's like a few years ago when steve jobs died, some people were claiming Apple was doomed. The "great man or woman" theory has been debunked enough that we know it is nonsense.
But as you noted, a successful company needs a stellar COO. So why is this news?
That's just absolute BS.
That was in reference to a particular CEO ro COO. It doesn't matter if Steve Jobs or Tim Cook is running Apple as long as they are competent and the organization is solid. As I said, I was referring to the "great man or woman" theory. Of course a successful organization requires "stellar" employees at every level.
> "But as you noted, a successful company needs a stellar COO." in the same paragraph, the obvious contradiction really weakens your argument.
That remark was in reference to the "news" cycle. If every successful company has a stellar COO ( just like they have stellar janitors, mid level managers, etc ), why is it news? Could it be just because she is a woman? That was what I was implying.
The only reason this is a story is because the media had to push out another woman story.
As he noted, every successful company has a stellar COO. Wonder why they aren't getting articles in large newspapers?
But, at least at a smaller/newer company, the CEO/COO has created the organization. It's not some thing that exists independently of the CEO/COO.
Didn't Apple suffer for many years, before Jobs was brought back?
What? No it hasn't.
Gwynne Shotwell is much, much more than a steadying force at SpaceX. She is brilliant and an amazing leader and has been pivotal in the success of SpaceX... as in: if you replaced her with someone else, I doubt SpaceX would be where they are today.
It is sad that her amazing accomplishments are often glossed over and/or overshadowed. I hope she is properly recognized in time. I think she is adversely affected by bias in the press (gender, etc.)
I don't work at SpaceX (used to work for JPL)... so this is just an outsider's opinion. I'm also male, FWIW.
(Comics are not nearly as original or modern as they'd like to pretend to be!)
Tony Stark is an arsehole, so is Elon.
Potts (at least as far as I can tell from the movies; I haven't read the comics; please let me know if they take a different approach) is personal assistant to the cranky genius; her job is to go with him and help him do his next great project.
Shotwell is operations; her job is to take over the company the cranky genius built, keep it running smoothly and profitably, and let him go off and do his next great project.
Different jobs, both important. (It's a pity Musk doesn't seem to have a Pepper Potts, who might have talked him into giving up his Twitter account.)
I think this is precisely what Pepper Potts ends up doing in the movies. Tony Stark stops running the company. Not to condone the comparison or anything, just clarifying what happens in the movies.
I am not calling you out specifically... just think that her importance to SpaceX has been diminished and undersold and I think it due to: (1) the oversized spotlight that Elon commands and (2) Gwynne is a woman, and fairly attractive at that... and so multiple biases play against her.