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Jun 6, 2024
10:36:26am
RedHeadedStranger Playmaker
Imagine you run a freight delivery service from New York to LA. You use a

delivery van (think UPS or Amazon delivery size), as well as your competitors. Anyway, the trip across the Rocky Mountains is so hard on the vehicles that the van is basically scrap when you make it to LA. So, in order to make money on the delivery, you have to price in the cost of purchasing a new van for every delivery. The only people that can afford your and your competitor's services is the military and huge corporations that can make lots of money if they get their cargo from NY to LA.

One day, a dude called Melon Dusk looks at that and says, "I can make a lot of money if I can make a delivery van that can make it to LA and back again to New York, then I can charge the same amount for freight delivery as the other guys. If all I have to do is swap out the engine*, and reuse the chassis of the van, for a cost of 20% of throwing away the van I can make a killing."

You and all of the other Van freight companies laugh at Melon Dusk, thinking that the changes needed to make the ruggedize the vans will make them lose all of the profits.

Instead, Dusk's employees are incredible, and make such good vans and are able to reduce the time to book the vans, and drop the price and still make bucket loads of money. The military is extatic because the old freight companies would sometimes take years to build the vans to get their cargo to LA, and charge far more. Dusk also figures out how to make his own cargo, and find lots of customers for his cargo. That means he is making additional money off of his vans.

Well, Dusk has an additional idea. He realizes that if he builds 18 wheelers, he can make them so rugged, that he doesn't need to replace the engine after trip. The cost drops to maybe 1% of the prior original cost because all he is paying for each trip is the diesel fuel.  So, because diesel fuel is cheaper than building from scratch, or rebuilding the engine, Dusk's 18 wheelers become the ultimate answer - it is faster, it is cheaper, it is better.  It is now virtually impossible to beat Dusk at his own game, becaue he has the technology advantage over everyone else.  The only thing that can challenge Dusk is if a huge organization with very deep pockets can challenge him becaue he already gobbled up all of the early profits that subsidized his research into the 18 wheeler.

 

So, let me put this in terms of money.  A good metric is called "price per Kilogram to Low Earth Orbit, (let's just use $/kg to LEO)

 

The Space Shuttle in current dollars for $/kg to leo was probably $72,000.

The French will charge $7000 $/kg to leo, the russians about $4000 $/kg to leo, and the chinese about $4000 also.

The SpaceX Falcon 9 $/kg to leo is $1,560-3000.  Not that that is the price charged, not the cost to SpaceX.  That is how they make their profit. 

The aspirational target for $/kg to leo for Starship is less than $100.

 

 

*In this example the van "engine" is the Falcon 9 second stage which does need to be rebuilt after every mission.  So the vans are the Falcon 9, Proton, Long March, Arianne rockets.  Obviously, the 18 wheeler is the Starship.  New York is Earth, and LA is Space.  The side business that "Busk" makes is Starlink, which actually may make the money.  Most satellites are communications, so if you can get IP connectivity, Starlink will cannibalize that market soon.  I don't see how the French can stay in business.  The russians will just launch theirs and Iran's satellites.  china is throwin money trying its hardest to catch up because of defense issues.

RedHeadedStranger
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RedHeadedStranger
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Jun 6, 8:37am
Jun 6, 8:44am

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