Saturday, January 30, 2010

Rice Business Plan Competition 2010

Is your business plan ready?  The top 42 teams compete for $800K of price money.  $125K investment Opportunity.  NASA will be there participating.  Intent to compete Deadline is next Friday, Feb 5, 2010.  Judged by 200 VCs, Angels, and entrepreneurs.  I love this stat from the event website: over 80% of last years teams have launched their companies and since 2001, competing teams have raised $150M.  Competition date is April 15-17, 2010.  If not this year, start prepping next year's plan!

Space Business Ideas from OOTC

Ken Murphy over at Out of the Cradle has some interesting space business ideas:

  1. Vacuum Spheres: yep, bringing back "nothing" and charging for it.  Still need to better understand the market for this one.
  2. MDL Boxes: reusing boxes flown previously to cut down on the re-certification process.  Although Ken admits his method won't work under the existing regs, I think NanoRacks and Kentucky Space may be able to help us there.  I have some ideas on this one, but I will wait to more fully lay out my case for standardized experiment containers.
  3. Asteroid Data - satellite at EML-1 that maps the solar system in high-def and sells the results on a subscription basis to scientists, government agencies, and entrepreneurs.
  4. GeoSat Forensics - This idea needs a manned station at EML-1.  Since it would use less Delta-V to travel from GEO to EML-1, gather the over 600 tons of GEO junk and analyze how the material has aged utilizing your station at EML-1.  Such knowledge would be valuable for understanding which materials to use on future long-duration missions. Long-Term Idea.
  5. Emily Free Flyers - Launching Free Flyer platforms from an EML-1 manned station around the moon and back.  very low energy trajectory - selling space for experiments and product production runs.  Long-Term Idea.
  6. Monocoque Modular Transport - Develop a common "caplet" that sits atop any of the world's launchers with the modular ability to customize external "bolt-on" components based o the requirements of the mission - from trips to station to trips to the moon.
What I liked best (other than his affectionate reference to EML-1 as "Emily") was his quote:
"The more that cislunar space is opened up to entrepreneurs, the more they’ll be able to put their capital at risk to try out their ideas and pave the way for others to follow."

7 Attributes of Silicon Valley

Why do VC’s and entrepreneurs love Silicon Valley? According to the United State Department of Labor, the Information Technology industry grew at an average of 8% between 1994 and 2004.  If you are good at picking winners (Google, Amazon, Zynga), this growth rate would be even higher.  All things being equal, starting a business in a high growth industry provides the greatest potential for significant returns (10 to 1 or better). Here is my theory: If your favorite industry can behave more like Silicon Valley, your favorite industry can promote its own growth.

If I’m right (which can be debated in the comments), what are some key Silicon Valley behaviors or attributes worth emulating? Here are a few ideas:

  1. Low barriers to entry: Businesses are inexpensive to start and can be scaled over time.
  2. Many exit strategy options: Active mergers and acquisitions and the occasional IPO provide entrepreneurs and VC’s multiple opportunities to cash out.
  3. A large number competing firms with a healthy variety of company sizes: this is key since the large wealthy businesses usually acquire the innovative small businesses – without firm-size variety, an industry has a hard time generating the deals that provide the cash to start the next generation of innovative companies.
  4. Universities leveraged as “idea incubators”
  5. Young people armed with the tools, skills, and knowledge necessary to have an immediate impact on the industry’s products and services.
  6. Short inexpensive product development cycles allow companies to aggressively pursue innovative solutions knowing the costs of failure are low
  7. Low Government Regulation
To emulate Silicon Valley’s growth, your industry doesn’t have to have demonstrate all of these attributes to be growing, but it would seem logical to be pursuing them all, IMHO. Next, I would like to lay out a few ideas of how we get the Space industry to start behaving more like Silicon Valley. The fun part is, I think there may be some money to made in helping the industry transform.

Tuesday, January 26, 2010

Business Cases for Space Ventures

What is the business potential of outer space? I am not an engineer, I am a Finance manager. I am a spreadsheet artist. I am creating this blog to discuss a few business cases behind the clever space and newspace ideas our engineering friends are coming up with. I want to explore the markets, initial customers, breakeven price points, and financing necessary for such space ventures to succeed (or fail).

I want to explore the differences between the space industry and other high growth sectors within the US economy. What business lessons can the space community learn from other sectors (e.g. how do we incentivize the space industry to behave more like Silicon Valley?).

And I want to meet like minded people who enjoy an evening in front of a spreadsheet (I hope you are out there somewhere!). I probably won't develop the ideas explored on this blog to the point of creating business plans for them (go for it if you want to), but I hope some of the ideas refined through discourse on this blog turn into successful businesses some day - so help yourself! Ideas are cheap. Implementers wanted!

I hope that is not too much to ask. Welcome, let's get started.