ESA has a commercial launch strategy, but will member states pay? | Hacker News Reader

ESA has a commercial launch strategy, but will member states pay?

arstechnica.com

33 pointsPaulHoule45 comments

Meta; US produces well funded startups presumably because the exits are good. Investors don't mind the risk, expecting an outsized return.

Exits are good, perhaps, because US stock valuations are just much better. Investors are happy buying at a higher P/E ratio, expecting it to go up in even further, and make a good return.

Now, for a long time, there has been talk of US equities being woefully overvalued. Of course a value is only what investors are happy to pay. But supposing this is true, and US is due a major correction, Trump's "shock therapy" on markets might actually achieve it. If that's true, US valuations would drop relative to the rest of the world (this hasn't really happened yet, most of developed markets moved roughly in unison - but it's early days perhaps).

If that happens, US might actually stop looking like a most attractive VC market. This would presumably lead to a general drop of VC investments - but also to a greater geographic spread in VC investments. In particular, more money going into things like European space companies, as opposed to US ones.

There's a lot of assumptions here. Maybe US equities have higher valuations because they are genuinely better, or a correction won't actually come. But it always puzzles me why the US seems better at churning out well-founded startups for no totally obvious reason, and maybe that's it.

Two factors stick out to me.

Investing in the stock market is far more common in the US compared to the EU for the average person (something like 60% versus 15% of people in the EU). I imagine that has a huge impact on the amount of money sloshing around to fund companies from the top down.

The EU is bigger than the US in population terms, but when it comes to raising funding for a new startup it’s hard to look far beyond the borders of your own small country for many reasons. If this could be fixed it would make a massive difference in my view.

I’ve been involved in the founding of a few companies in Ireland and raising funding is tough and for all the work the figures are tiny compared to the US. You’ll likely be talking to Irish and UK investors only.

>> Investing in the stock market is far more common in the US compared to the EU for the average person (something like 60% versus 15% of people in the EU).

Is this accurate? For example, 80% of the UK has a pension and those are invested (partially) in stocks. Unsure how this works across the rest of Europe but 15% seems really low.

>> The EU is bigger than the US in population terms, but when it comes to raising funding for a new startup it’s hard to look far beyond the borders of your own small country

Completely agree with this. As much as the EU is a single market, in a lot of ways it falls short. Even if you're in some of the larger capitals you still end up looking for funding within your country. What do you think the solution is? Is the problem language? The completely different tax systems in each country? The spread of things (e.g. less concentration in one or two cities the way tech is in the US)?

The ESA is not an EU agency which complicates that comparison: https://www.esa.int/About_Us/Corporate_news/Member_States_Co...

> I’ve been involved in the founding of a few companies in Ireland and raising funding is tough and for all the work the figures are tiny compared to the US. You’ll likely be talking to Irish and UK investors only.

I am not surprised, but you would probably find it easier to raise money from investors in the UK for a larger established business: lots of companies from lots of countries list in London, for example. I think other factors are probably more important than the lack of a single market for capital raising on people's direct investments.

> Investing in the stock market is far more common in the US compared to the EU for the average person (something like 60% versus 15% of people in the EU)

Are you looking at people investing directly? A lot of people in the UK have pensions that invest in the stock market. About 75% of people of working age, IIRC.

I think this concept, and this entire article to a large degree, at missing the entire state of the space industry. The competition in space is mostly a facade. This page [1] provides regularly updated overviews on most metrics of space 'marketshare' and SpaceX dominates to an exceptional degree by every single metric. For instance as of last quarter they were responsible for 83% of all mass launched to space, carried out 40 launches while the rest of the world combined did 36, and so on.

So for all intents and purposes SpaceX is not only the US space industry, but largely the world's space industry. And it was started on an ideological basis, not a financial one. Like the saying goes, 'How do you become a millionaire in aerospace? Start out as a billionaire in aerospace.' It's simply not an industry where you can throw money at it and succeed. Blue Origin, which only recently finally managed to send their first craft to orbit, was actually started before SpaceX and funded by Bezos bucks back when Musk was teetering on bankrupt.

It's also not an industry where you can just smart your way through it. Many clever individuals with money, John Carmack being one with perhaps the most name recognition, have tried their hand at aerospace, and failed. For that matter - China has all the wealth, human talent, and such of the largest economy with nearly the largest population. And even they, in terms of launch capabilities trail well behind SpaceX.

So basically the whole concept of the current state of things being a huge success for "commercial space" is, in large part, a facade. Had SpaceX not emerged then "commercial space" in the US would have been a complete failure, and people would be bemoaning such a waste of money to try to privatize things that history had shown were only able to be effectively executed by governments.

[1] - https://brycetech.com/briefing

There's a large number of very well-capitalized startups in China trying to build reusable rockets, in competition to SpaceX. It's a significant national security priority for them. I'm pretty sure one of them will succeed soon. I don't understand your argument why they must all fail—I'm not clear if you've articulated such an argument, really, beyond "many people have failed, so it's probably impossible".

But SpaceX itself is existence proof that it's possible to do the things SpaceX does. And: the market in China is still wide-open for the taking, since SpaceX itself can't sell there.

Chinese newspace seems to be at an inflection point at this moment. I think there's five different private-sector teams that will attempt their first orbital booster recovery, either in this year or in 2026. That's: Deep Blue (Nebula-2); Landspace (Zhuque-3); Space Pioneer (Tianlong-3); iSpace (Hyperbola-3); Galactic (Pallas-1). Four of those five startups have already launched to orbit—Landscape even beat SpaceX (and Blue Origin) to the first orbital methane/oxygen rocket. (Not that you'd have heard about that on a Western-focused place like HN[0]. China's space startups are a blindspot for us, and, I think we're going to end up blindsided by them very soon, in the same way we were blindsided by Huawei, by DeepSeek, by BYD. We just ignore all the fast-moving developments there right up to the point they're impossible to ignore...)

[0] https://hn.algolia.com/?q=zhuque-2 (0 comments)

Basically. Last year spaceX had fleet of 18 F9s doing more than 50% of global launches, 80% including starlink.

SpaceX stans wank over 50% and 80%, but ignore that 18 is rookie numbers.

7/145 US space launches in 2024 was Non SpaceX.

That means US in aggregate build 25 rockets.

Versus PRC 68 (wanted 100 which was kind of reach).

Next 5-10 year projection need to account for # launch vehicles once PRC figures out reusable. Bearing in mind that PRC already producing ~2.5x launch vehicles, just not reusable.

To add, PRC didn't take reusable seriously until UKR war, and now they likely have multiple viable candidates due end of year. "Seriously" as in they proposed years prior to squat megaconstellation orbital rights but development wasn't urgent. Frankly no reason PRC won't have 50-100 reusables fleet _IF_ demand justifies it. And then like with all PRC catchup, they'll put more than SpaceX lifetime aggregate payload in a few years, and then it won't even be close.

The fundemental reality is, despite having ~10 year headstart, SpaceX is still an American company operating at American scale. US space launch lead is not particularly durable / sustainable.

If future of space is anything like EV, there's potential for several PRC rivals with fleets larger than SpaceX if there's demand for it. TBH only short/medium term demand is militarization of space (including isr megaconstellations). I expected PRC to only modestly eclipse SpaceX by factor of 2 in medium term. But with US murmuring about Brilliant Swarm, probably more and quicker, because technically it going to be faster for PRC to build 1000s of rival space interceptors than proliferate 1000s of nukes for parity (enrichment limitations > launch tempo).

Note that each of the 138 SpaceX launches required producing a second stage, something your numbers aren't really accounting for.

And that it seems like SpaceX is close (within a year or so) to full reusability, while rivals are still trying to work out how to reuse the first stage.

2nd stage 1/6 weight with simple merlin engine. Early F9 used 9 merlin = ~15 more rockets. ~60% of PRC though we don't know full industrial capacity of either, i.e. SpaceX could be boeing tier and do 600+ frames per year, or PRC can brrt their reusable like shipbuilding at 200x whatever US is per year. I think Starship is big caveate, it could work or it could not. It's much more complicated / not conservative project vs F9 and has borderline Vanguard / Atlas tier failure rate granted one could argue that's move fast break things by design. But push comes to shove, comes to hammering industry to fill strategic need, I wouldn't be confident SpaceX can maintain lead for long enough to matter. Especially if space weaponization on the horizon.

This is true for sure. But even if you look outside SpaceX, it's all American firms (sort of). Blue Origin, Rocket Lab (NZ origin but by now American). So maybe they aren't making money or getting much "market traction" but at least are in the race.

Europe has some such startups, Isar is one that comes to mind, but only going by media buzz, seemingly much less. I have zero insight into this industry so I can't tell if it's just my biased reading of biased reporting, or reality.

- "The top factors ESA will consider in this first phase of the challenge are each proposer's business plan, technical credibility, and financial credibility."

The grand European strategy is... to task government bureaucrats to review startups' business plans?? This is going to so predictably lead to more of the same—the creation of companies optimized for writing proposals, and for pleasing bureaucrats.

- "ESA also isn't setting requirements on launcher performance, reusability, or..."

That they're still ambivalent whether they should pursue reusability or not shows how hopelessly unprepared they are.

> This is going to so predictably lead to more of the same—the creation of companies optimized for writing proposals, and for pleasing bureaucrats.

The european way. I wonder if the bureaucrats even know this is the inevitable result or if it is the actual plan.

Probably just the result of them not knowing any other way of working and forcing it onto everyone they interact with.

I would love to disagree, but after being involved with Gaia X… they cannot even pin down what Gaia X is, even when prompted to. It’s something about a standard for creating standards for a European cloud, but by now we’re several years and even more meta layers in, millions have been spent, and… nothing has come out of it.

It feels like the EU could be so much, if only other people were steering it.

lol you don't know the half of it. Working with ESA for anything but the most trivial project is beyond frustrating; it's basically 99% about producing swathes of documentation, which in itself is more akin to philosophy and semantic dissertations over obscure standards than actual technical work.

ESA is so risk averse that it's even weird for a space company

agreed, but what would you argue are the reasons for this mindset? i imagine the main cause is structural, ie. having to deal with all the member states?

A bureaucrat is not allowed to spend money on anything risky and must never allow for money to be used on something other than the intended use.

So the entire process must be micromanaged to death with documentation, which results in the money mostly being spent on the documentation.

not just the members states but also all the other behemoths stakeholders like Airbus, Thales, OHB and so on, which need to make sure that new missions are as easy to adapt to their preexisting flight heritage as possible

A good counterexample is the Arctic Weather Satellite project. It was defined as a new space process at ESA, so documentation required was reduced at the minimum, and risk acceptance was increased. Absolutely successful, on time, on budget, contractors happy, end users happy. But it is a small project and still difficult to replicate at large and to spread the mindset to other sections at ESA. Source: me. I work at that project as ground segment engineer.

> to review startups' business plans

How exactly do you imagine a government contract working if it's not reviewed before being granted?

> That they're still ambivalent whether they should pursue reusability or not

So they shouldn't verify if a proposal is credible because that's too much bureaucracy but they should dictate to the companies how they want to approach the problem rather than letting each company make their own plans and see who comes up with the best proposal?

The government should be a regulator and set ground rules. It should provide a market and clear requirements. Then leave private business alone to meet those requirements. If they need funding, leave the business to the VC industry.

They’re offering to fund 160 million euros to bootstrap private enterprises providing launch services to the ESA. Of course they want to review the business plan to make sure it’s viable before dropping a bundle of government money on some random company.

To compare, meanwhile Astra just $80 million to relaunch (so to speak).

Which is completely the wrong way of doing it. They are the market. So define it and leave it to private industry to fund and develop the capabilities to meet their requirements.

If they say, we are willing to spend X amount of money on Y number of launches. You can rent our launch sites for tests. Here is a list of requirements. They would see incredible results.

But no europe must micromanage and do things in their own bureaucratic way that has always failed.

That doesn’t really work if you try to create competitors to already established companies in a limited market

The EU is mostly stringent on the environment, and single-use rockets are pretty bad for the environment: all the metal and sophisticated parts must be produced, only to be thrown into the ocean.

I would expect reusability to be a requirement based on that factor alone. You ca produce carbon-neutral fuel, but there is a lot of environmental load involved in production of the very rockets.

reusability is mainly done for cost instead of environment, but you need to launch a lot to re-cup the costs, and esa is not a commercial org like spacex.

I do think the ESA rockets use a more eco friendly fuel then others, that is probably more important then some metal on the seabed.

Solid rocket fuel is one of the less eco-friendly things that exists. A fully-stacked Ariane 6 is, by mass, 11% chlorine.

- "they should dictate to the companies how they want to approach the problem"

No; I mean they should define the problem they need solved. If they're too unfocused to define that problem as "mass-produced reusable rockets", that's a strong signal they've already lost.

There's a dozen newspace startups pursuing reusability, and it's Europe's loss that none of them are in Europe.

No, the problem should be "find a way to launch x tons for <€Y, and be able to do that z times a year".

If mass produced reusable rockets are the best solution then companies will propose that.

Do you actually think that there are any viable alternatives to reusable rockets as a solution to this problem?

There could be? People are smart, maybe someone would come up with a viable approach. Point is, if reusable rockets are the only viable approach, then everyone will use that approach to meet the requirement.

> How exactly do you imagine a government contract working if it's not reviewed before being granted?

This. ESA's grant approval process is, to its credit, usually considerably more focused on technical excellence than handwavy projections and box ticking common in other government grant applications and tenders, and whilst PSS forms may be a PITA, you'd think a company destined to solve the hard physics and unit economics problems of building a viable commercial launch service could figure out how to fill them in when given a EUR160m incentive to do so.

The European Launcher Challenge is based off the NASA COTS programme that originally funded the Falcon 9 (just with less money, because Europe, which is a bigger problem than straw bureaucrats) Don't know why people seem to think SpaceX got that money through NASA's magical genius American foresight anticipating Starlink, as opposed them being impressed with how SpaceX complied with their requests for very detailed milestone based plans (which two companies that failed to make progress also managed...)

“we will continue doing the thing we have always done despite decades of evidence it won’t produce the thing we claim it will produce”

At some point, they need to adopt a different strategy. It feels like every European strategy is optimized for the comfort of bureaucrats rather than actual results.

A bureaucracy can not simplify itself. It is a complex system that can only go one way, ever more complex, until it deadlocks and eventually someone burns it to the ground and starts anew.

If it was an actual commercial strategy, private investors would pay. If the question is even put this way, this is bullshit and deserves to end nowhere.

You misunderstand the use of "commercial" here. This isn't about private corporations launching their payloads for commerce, it's about private (commercial) entities providing launch services to the ESA and other public space exploration orgs.

When you task bureaucrats to lead the economy, science, technology, research and development it is not going to end well. Soviet Union and other communist countries tried it and failed.

If you want something to be economically viable, you should create economic incentives, reduce regulation and reglementation and let private enterprises compete.

US had an entirely different vision of the economy and private sector and that's why it succeeded in many areas.

It’s all trade offs, though. The US has vast problems with identity theft, fraud, and perverse privacy violations, because there is no regulation in that area. The market will only care about profits, and not the humans on whose backs these profits are materialised.

There must be something in between these extremes on the spectrum.

You can take examples of working systems and adapt what works and discard what doesn't.

Europe has spent decades and trillions on programs that do not work and produce nothing but word documents. With no sign of anyone acknowledging the poor results of these programs.

Since I can't post on this thread anymore I will edit. I am talking about what this thread is about. Misguided and poorly designed industrial development programs that Europe has wasted trillions on with nothing to show for it. Not criticising every aspect of the EU.

Now that’s just hyperbole, and factually wrong, too. The EU has managed amazingly much over its existence. After WW II, it managed to keep peace, establish the worlds largest single market, enabled free trade, allowed citizens to move, live, and even work in any member state; it implemented regulation that makes food, drinks, and products some of the safest to consume and use on earth; it devised standards that are globally adhered to; it funds art, research, and urban development across all member states (as the Brits painfully realised); it distributes wealth in Europe, making the union stronger overall; and that’s just a small sample.

There’s lots of things in dire need for improvement for sure, but downright dismissing the EU as having achieved nothing is just spite and not helpful. That attitude got the Americans where they are now, and I sure don’t want to go there.

> The EU has managed amazingly much over its existence. After WW II, it managed to keep peace

You misspelled NATO.

No, I didn’t. The EU contributed a lot to a stable Europe after the war, and having tight diplomatic relations and economic bonds was paramount to avoid conflicts within Europe.

> having tight diplomatic relations and economic bonds was paramount to avoid conflicts within Europe.

The diplomatic and economic bonds between the belligerents of WW1 and WW2 were very close indeed before war broke out. The post WW2 peace in Western Europe was a function of the fact that NATO did its job “Keep the Russians out, the French in and the Germans down.”

If tight economic and other links prevented war there would still bebe a country called Yugoslavia. You need either actual broad based buy in or an imperial power willing to stop people who would like to go to war from doing so. NATO keeps Bosnia-Herzegovina from collapsing and as soon as they stop it’s done. No doubt there are other obvious examples in Europe, and it’s not as if anyone thinks NATO means much without the US.

>There must be something in between these extremes on the spectrum.

That's for sure. We should take what was proved it works and adjust it to our conditions.

Up to the 80s the science and engineering of the soviet union was top notch, they were mostly equal or even better when you look at the space program. I was thinking similarly to you about the superiority of capitalism to generate engineering progress, but for some stuff I‘m not so sure anymore. China, for example, is an interesting mix of long-term governmental planning and capitalist cambrian explosions. Not sure cause and effect absolutely determined by now.

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