space tourism mba dissertation

Warwick Business School – Executive Modular MBA Dissertation – 0262185 1

Executive MBA Dissertation

“Establishing a Low Cost Sub-Orbital Space Business in the UK”

Submitted by: Mark Morley, 0262185

Submitted on: 10th February 2006

A Dissertation submitted in part-fulfilment of the requirements for the Degree of Master of Business Administration of the

University of Warwick

“All the work contained within is my own unaided effort and conforms with the University’s guidelines on plagiarism”


Acknowledgements This dissertation is dedicated to Melanie Carleton-Mills who has provided me with a constant

source of inspiration and support throughout the writing of this dissertation.


Abstract The purpose of this project is to look at the viability of establishing a low cost sub-orbital

space business in the UK.

In recent years, most space rocket launches have been conducted by government funded

space agencies around the world. These agencies command multi billion dollar budgets to

develop space related equipment and launch services. The high cost of accessing these

launch services restricts the amount of research that can be conducted by the scientific and

university communities. Sub-orbital launch services such as Sounding Rockets provide an

ideal low cost, flexible launch platform however a dedicated launch service for UK universities

does not currently exist.

In recent years, a few high net worth individuals have paid significant amounts of money to fly

aboard Russian space craft. These individuals, or Space Tourists, have ignited the general

public’s interest in the future potential of the space tourism industry. Once again, high costs

and limited launch services will restrict growth of this industry unless a number of non-

government funded commercial space companies are established and are able to compete in

this new and exciting industry sector.

This project will undertake research to establish whether a low cost UK space business can

be established to address these two market requirements, namely a service for launching

scientific based payloads into sub-orbital space and a launch service to meet the needs of the

emerging space tourism market.

The aim will be to see if this low cost venture can be established without the need for

government funding.


Table of Contents

1 Introduction ...................................................................................................................................... 8

1.1 Background of the study ........................................................................................................ 8 1.2 Project objectives ................................................................................................................. 10 1.3 Methodology ........................................................................................................................ 10 1.4 Organisation of the report .................................................................................................... 11

2 Industry & Company Review ......................................................................................................... 12 2.1 Introduction .......................................................................................................................... 12 2.2 Review of Today’s Global Space Industry ........................................................................... 12 2.3 Overview to the Sub-Orbital Sounding Rocket Industry ....................................................... 13

2.3.1 Review of the Primary Sounding Rocket Launch Providers ....................................... 16 2.3.1.1 European Based Sounding Rocket Programmes ............................................. 16 2.3.1.2 U.S Based Sounding Rocket Programmes ....................................................... 17

2.3.2 Review of Sounding Rocket Launch Sites .................................................................. 18 2.4 Overview to the Emerging Sub-Orbital Space Tourism Industry .......................................... 20

2.4.1 The Ansari XPRIZE Competition ................................................................................ 21 2.4.2 Current Developments in Low Cost Space Craft Design ............................................ 23 2.4.3 Emergence of Commercial Spaceports ...................................................................... 24

2.5 Review of the UK’s Space Strategy ..................................................................................... 26 2.5.1 Enhancing UK’s standing in astronomy, planetary & environmental science ............. 27 2.5.2 Increased productivity through promoting the UK’s use of space ............................... 27 2.5.3 Developing innovative space technologies that improve quality of life ....................... 27 2.5.4 Size and Health of the UK Space Industry ................................................................. 28 2.5.5 UK Involvement with the ESA Programme ................................................................. 29 2.5.6 UK Micro-Gravity Activities ......................................................................................... 29

2.6 An Overview of Starchaser Industries .................................................................................. 30 2.7 Summary ............................................................................................................................. 33

3 Review of Literature....................................................................................................................... 34 3.1 Introduction .......................................................................................................................... 34 3.2 Review of the Sounding Rocket Market Sector .................................................................... 34

3.2.1 Microgravity & Sounding Rocket Industry Analysis .................................................... 34 3.2.2 UK Microgravity Research Policy ............................................................................... 36 3.2.3 Review of Starchaser’s Sounding Rocket Programme ............................................... 39

3.3 Review of the Space Tourism Market Sector ....................................................................... 42 3.3.1 Sub-Orbital Space Tourism Industry Analysis ............................................................ 44 3.3.2 Competitive Analysis of the Space Tourism Market ................................................... 45

3.3.2.1 SWOT Analysis of Virgin Galactic & Starchaser ............................................... 47 3.3.3 Estimating Market Demand for Space Tourism Services ........................................... 48 3.3.4 Financial Investment Issues Associated With Space Tourism .................................... 50

3.4 Review of Starchaser’s Current Business Strategy .............................................................. 53 3.4.1 Company Strategy ...................................................................................................... 53 3.4.2 Marketing Strategy ..................................................................................................... 59

3.5 Summary ............................................................................................................................. 64 4 Discussion ..................................................................................................................................... 65

4.1 Introduction .......................................................................................................................... 65 4.2 General Review of the Sounding Rocket Industry ............................................................... 65

4.2.1 Can Starchaser Compete in the Sounding Rocket Market? ....................................... 66 4.3 Analysis of the Results from the Sounding Rocket Survey .................................................. 67

4.3.1 Review of Survey Methodology .................................................................................. 67 4.3.2 Discussion of the Results Obtained ............................................................................ 67

4.4 General Review of the Space Tourism Market.................................................................... 71 4.4.1 Can Starchaser Compete in the Space Tourism Market ? ......................................... 72 4.4.2 Increased Media Interest in the Space Tourism Industry ........................................... 72

4.5 Analysis of the Results from the Space Tourism Survey ..................................................... 73 4.5.1 Review of Survey Methodology .................................................................................. 73 4.5.2 Discussion of the Results Obtained ............................................................................ 73

4.6 Summary ............................................................................................................................. 79 5 Proposed Strategy ......................................................................................................................... 80

5.1 Introduction .......................................................................................................................... 80 5.2 Proposed Sounding Rocket Market Strategies .................................................................... 80 5.3 Proposed Sub-Orbital Space Tourism Market Strategies .................................................... 81 5.4 Proposed Company Strategies ............................................................................................ 82


5.5 Summary ............................................................................................................................. 83 6 Conclusions ................................................................................................................................... 84

6.1 Introduction .......................................................................................................................... 84 6.2 Major Recommendations ..................................................................................................... 84 6.3 Limitations of the study ........................................................................................................ 85 6.4 Future research directions ................................................................................................... 85

7 References .................................................................................................................................... 86 8 Appendices .................................................................................................................................... 88


List of Figures

Fig. 1 Comparison of Micro Gravity Launch Methods ................................................................................................. 13 Fig. 2 Typical Configuration for a Sounding Rocket ................................................................................................... 14 Fig. 3 Typical Parabolic Flight Path for a Sounding Rocket ........................................................................................ 14 Fig. 4 Current ESA Supported Sounding Rocket Programmes .................................................................................. 17 Fig. 5 U.S Federal, Non-Federal and Proposed New Spaceports .............................................................................. 19 Fig. 6 SpaceShipOne Space Craft & White Knight Launcher ..................................................................................... 22 Fig. 7 Post XPRIZE Contenders Currently in Business, (See Appendix 8-H) ............................................................ 23 Fig. 8 New Entrants to the Privately Funded Space Industry ..................................................................................... 24 Fig. 9 Global Space Tourism Market Opportunity ....................................................................................................... 25 Fig. 10 Economic Value to New Mexico State ............................................................................................................ 25 Fig. 11 New Mexico Spaceport Business Opportunities ............................................................................................. 26 Fig. 12 Key Users of Satellite Technology / Services ................................................................................................. 27 Fig. 13 The Upstream and Downstream Sectors of the UK Space Industry ............................................................... 28 Fig. 14 2003 Turnover by Application, Excluding the Consumer Market .................................................................... 28 Fig. 15 UK Financial Contributions to ESA Programmes ........................................................................................... 29 Fig. 16 Reusable Skybolt Sounding Rocket ............................................................................................................... 31 Fig. 17 ‘Storm’, 7 tonne Bi-Liquid Rocket Engine ....................................................................................................... 32 Fig. 18 Starchaser Range of Rockets ......................................................................................................................... 32 Fig. 19 PEST Analysis of the UK Sounding Rocket Industry ...................................................................................... 35 Fig. 20 Porter’s Five Forces Analysis ......................................................................................................................... 35 Fig. 21 Porter’s Diamond Summary of Potential UK Based Microgravity Industry ..................................................... 38 Fig. 22 SWOT Analysis of Starchaser Industries Sounding Rocket Business ............................................................ 40 Fig. 23 Strategic Focus of Starchaser’s Sounding Rocket Programme ...................................................................... 41 Fig. 24 Competitive Advantage through Product Differentiation ................................................................................. 42 Fig. 25 Space Tourism Market Opportunities by 2030 .............................................................................................. 43 Fig. 26 Sub-Orbital Space Tourism Industry PEST Analysis ...................................................................................... 44 Fig. 27 Sub-Orbital Competitive Positioning Matrix .................................................................................................... 46 Fig. 28 Comparative SWOT Analysis Between Virgin Galactic & Starchaser Industries ............................................ 47 Fig. 29 Estimating the Elasticity of the Space Tourism Industry ................................................................................. 48 Fig. 30 Estimated Ticket Demand Based on World Wealth Report ............................................................................ 50 Fig. 31 Key Information Sought by the Investment Community .................................................................................. 52 Fig. 32 M.O.S.T Method of Analysing Business Growth ............................................................................................. 53 Fig. 33 Representation of Starchaser’s Current Business Strategy ........................................................................... 54 Fig. 34 Starchaser’s Project Lifecycle’s ...................................................................................................................... 55 Fig. 35 Seven Domains of Market Attractiveness ....................................................................................................... 56 Fig. 36 Position of Starchaser with Respect to its own Growth .................................................................................. 57 Fig. 37 Metamorphosis of a Company ........................................................................................................................ 58 Fig. 38 Review of Starchaser’s Marketing Activities ................................................................................................... 60 Fig. 39 Starchaser Brand Characteristics ................................................................................................................... 60 Fig. 40 The Characteristics of a Successful Brand ..................................................................................................... 61 Fig. 41 Starchaser’s Old & New Logos ....................................................................................................................... 62 Fig. 42 Virgin Galactic’s New Image ........................................................................................................................... 62 Fig. 43 NOVA Launch Vehicle .................................................................................................................................... 63 Fig. 44 UK Specific Launch Locations ........................................................................................................................ 68 Fig. 45 Average Launch Budget Per Year ................................................................................................................... 69 Fig. 46 Considerations When Choosing a Launch Partner ......................................................................................... 69 Fig. 47 Factors Preventing Market Entry for New Launch Providers .......................................................................... 70 Fig. 48 Age Range and Gender of Space Tourism Survey ........................................................................................ 74 Fig. 49 Awareness of Space Tourism ......................................................................................................................... 74 Fig. 50 Awareness of the Starchaser Brand Name .................................................................................................... 75 Fig. 51 Those Interested in Taking a Sub-Orbital Flight ............................................................................................. 75 Fig. 52 Reasons for Taking a Sub-Orbital Flight ......................................................................................................... 76 Fig. 53 Reasons for Not Taking a Sub-Orbital Flight .................................................................................................. 77 Fig. 54 Ideal Amount to Pay for a Ticket ...................................................................................................................... 77 Fig. 55 Factors Affecting Choice of Operator ............................................................................................................. 78 Fig. 56 Worldwide Launch Activity, 1980 – 2004 ........................................................................................................ 88 Fig. 57 Commercial Intermediate & Heavy Lift Launches, By Country ....................................................................... 89 Fig. 58 National Origin of Components of Commercial Intermediate & Heavy Lift Launch Vehicles .......................... 90 Fig. 59 ASCENT Market Share Projection of Commercial Launches by Country ..................................................... 91 Fig. 60 Review of Orbital’s Family of Rockets ............................................................................................................ 93 Fig. 61 SpaceX Family of Falcon Rockets .................................................................................................................. 94 Fig. 62 How the Demand for Satellite Launch is Calculated ....................................................................................... 96 Fig. 63 Historical and Forecast Commercial Launch Activity for 2005-2014 .............................................................. 97 Fig. 64 Today’s Commercial Satellite Industry Sectors & Associated 2004 Worldwide Revenues ............................ 97 Fig. 65 Payload Usage (Orbital Launches Only) – April to December 2005 ............................................................... 98 Fig. 66 Payload Mass Class (Orbital Launches Only) – April to December 2005 ...................................................... 99 Fig. 67 Location of Today’s Primary Spaceports ...................................................................................................... 100 Fig. 68 NASA’s Family of Sounding Rockets ............................................................................................................ 103 Fig. 69 Flight Profiles of NASA’s Sounding Rockets ................................................................................................ 104 Fig. 70 List of Global Sounding Rocket Launch Sites ............................................................................................... 105


Fig. 71 List of Original XPRIZE Entrants .................................................................................................................. 106 Fig. 72 Artists Impression of Virgin Galactic’s Proposed Spaceport in New Mexico ................................................ 109 Fig. 73 SpaceShipOne’s Flight Profile ...................................................................................................................... 110 Fig. 74 View from SpaceShipOne During Apogee – October 2004 .......................................................................... 110 Fig. 75 Starchaser’s Thunderstar Launch Facility & Rocket ..................................................................................... 111 Fig. 76 Flight Profile of Starchaser’s Thunderstar Rocket ........................................................................................ 112 Fig. 77 List of Attributes for Space Tourism Related Consumer Experiment ........................................................... 113 List of Appendices

Appendix 8 - A Review of Today’s Global Orbital Space Industry ............................................................................. 88 Appendix 8 - B Review of Today’s Satellite Industry ................................................................................................. 96 Appendix 8 - C Review of Global Launch Locations ................................................................................................ 100 Appendix 8 - D Review of NASA’s Family of Sounding Rockets ............................................................................. 103 Appendix 8 - E Flight Profiles of NASA’s Sounding Rockets ................................................................................... 104 Appendix 8 - F Current Sounding Rocket Launch Locations ................................................................................... 105 Appendix 8 - G Original List of XPRIZE Contenders ............................................................................................... 106 Appendix 8 - H Update on Current Space Tourism Launch Vehicle Projects .......................................................... 107 Appendix 8 - I New Entrants to the Sub-Orbital Space Craft Market ...................................................................... 108 Appendix 8 - J Virgin Galactic’s Space Port ............................................................................................................ 109 Appendix 8 - K Virgin Galactic’s Sub-Orbital SpaceShipOne Rocket Plane ............................................................ 110 Appendix 8 - L Starchaser’s Sub-Orbital Thunderstar Rocket ................................................................................. 111 Appendix 8 - M Example of Sub-Orbital Space Tourism Attributes ......................................................................... 113 Appendix 8 - N Seven Domains of Attractive Opportunities .................................................................................... 114 Appendix 8 - O Sounding Rocket Survey Contacts ................................................................................................. 116 Appendix 8 - P Sounding Rocket Survey and Associated Results .......................................................................... 118 Appendix 8 - Q Space Tourism Survey and Associated Results ............................................................................. 125


1 Introduction

The aim of this chapter is to provide an introduction to the subject area being researched,

how the research will be conducted and the methods, tools and supporting materials that will

be used to deliver this dissertation.

1.1 Background of the study

Space exploration has traditionally been associated with well funded, government backed

space agencies. Billion dollar research programmes such as the International Space Station

(ISS) serve as a platform for understanding the origins of space and for conducting research

into the space technologies of the future. Today’s space industry is dominated by a number

of high profile space agencies, namely the U.S National Aeronautics & Space Administration

(NASA), European Space Agency (ESA) and the Russian Space Agency (RSA). In the next

few years the emerging Chinese Space Agency will also become a major player in the launch

market sector.

The ISS provides a rich environment for conducting many scientific experiments in zero

gravity. However many of the world’s universities will never have a chance of having their

experiments conducted on the ISS due to high costs and lack of suitable launch vehicles to

reach the ISS. For this reason many universities use a much cheaper and easier to access

space launch service known as a sounding rocket. Private enterprise has been able to enter

this launch market as sounding rockets are not required to go into orbit (they will normally rise

to just above the earth’s atmosphere) and therefore the technical challenges of designing a

suitable rocket are much easier and cheaper. In the late 1960s the British government started

to fund a sounding rocket service called Skylark and this programme ran successfully for

many years until its final launch in 2005.

The UK has a worldwide reputation for being an innovative country, laying claim to many

world firsts over the years including the design of innovative projects such as the Concorde

supersonic aircraft, Hovercraft and the Jet Engine. It was the Concorde project that led the

British government to reconsider its position of funding expensive high risk projects. This was

due to the fact that Concorde faced significant time and cost over runs during its design

phase. Exploration of space may be considered as one of the most risky projects for a

government to fund and hence this would explain the British government’s reluctance to

assign significant budgets to manned exploration of space.

The British government currently provides very little funding to ESA and for this reason British

universities are at a significant disadvantage when trying to get their experiments aboard an


ESA rocket or launched up to the ISS. Many of the UK’s leading universities, undertaking

space related research, such as Leicester and the Open University tend to take part in high

profile space programmes which are funded by the Particle Physics & Astronomy Research

Council (PPARC). There still remains a significant amount of research that could be

undertaken if British universities had access to their own dedicated, low cost sounding rocket

service. Therefore one of the main aims of this project will be to look at the current market

demand from British universities and whether a new low cost and dedicated sounding rocket

service could be established.

One company looking to explore the potential of the sounding rocket market is Starchaser

Industries, based in Manchester UK, they are one of the world’s leading privately funded

space rocket companies. Starchaser would like to exploit the gap in the market left by the

Skylark programme and see if a new sounding rocket could be established to target

universities wishing to have access to a low cost space launch system for conducting micro-

gravity based experiments. This project will therefore help Starchaser to identify its potential

new customers, review current British university research projects that could benefit from

such a service and whether or not Starchaser has a long term future in this market without

government funding.

The other area that will be reviewed in this project is Space Tourism. Over the last fifty years

the public’s imagination has been gripped by the possibility of one day being able to take a

trip into space. In recent years a few high net worth individuals have been able to buy their

way into space by way of the Russian space programme. The Russians see this as a

potentially lucrative sideline business which brings millions of dollars into their cash strapped

space programme.

In order to kick start the space tourism industry a global competition known as the Ansari

XPRIZE was launched with the sole aim of encouraging private enterprise to develop a low

cost reusable launch vehicle (RLV) which could be used to fly individuals to the edge of

space. Extensive research has already been undertaken into the area of space tourism, but

the general public’s perception of space tourism is still not widely understood. Competitions

such as the XPRIZE help to capture the public’s imagination to the potential of one day being

able to take a space flight. This project will therefore conduct a survey to see what the British

public’s thoughts are to the potential of space tourism and whether it could offer a company

such as Starchaser a lucrative business opportunity in the near future. Many space tourism

surveys have been conducted in the past, prior to the winning of the XPRIZE, however this

will be one of the first to be conducted on the British public since the XPRIZE was won.


The author has worked with Starchaser since 1999, in this time the company has shown true

spirit and determination to achieve their dreams of one day establishing a commercial space

business. They have been able to run their business on a minimal budget, primarily through

sponsorship activities, but at the same time they have been able to achieve many goals

including the launch of the largest unmanned rocket from British soil. It is hoped that this

dissertation will provide a number of strategic recommendations and additional information for

Starchaser to be able to secure future funding to help them grow their business.

The author has a close relationship with the management team at Starchaser and hence

there is a personal interest to make this business a success. This project, albeit a small

contribution, to the overall success of the venture will allow Starchaser to understand their

target markets and any potential barriers that may exist to them achieving their future

business objectives.

1.2 Project objectives

There are two fundamental objectives for this project. Firstly a review of the current sounding

rocket market will be conducted to see whether there is enough market demand from British

universities to establish a dedicated sounding rocket service for them. The second objective

of this project is to understand the general public’s thoughts on space tourism and whether

they would be interested in using such a service if it were made available in the near future.

The aim will be to try and understand their requirements and concerns about taking a flight

aboard a reusable space launch vehicle. Starchaser would then be able to tailor their future

space tourism business to meet these requirements.

This research will then allow the author to make a proposal as to how Starchaser should enter

their target markets, what barriers may exist to them achieving their business objectives and

what the potential of the target markets are likely to be.

1.3 Methodology

The area of space flight and space tourism has provided the author with many references on

the current market trends, competitors, issues and future trends for the development of the

space industry. Most of the references were obtained from the government space agencies,

British universities, conference proceedings and websites. Various academic related

reference materials have been obtained directly from the world’s leading authorities in the

subject areas being discussed in this project.


A number of relevant surveys have been conducted in the past and these provided the

inspiration for the two surveys conducted as part of this project. To meet the needs of the two

objectives of this project, two different surveys will be undertaken. One qualitative and the

other will be quantitative in nature.

The first survey, qualitative in nature, will target British universities who are currently

undertaking space related research and who could benefit from having access to a micro

gravity, sub orbital sounding rocket launch service. The main aim will be to try and

understand current launch requirements, payloads carried and whether they would use a new

low cost launch service if one were made available.

The second survey, quantitative in nature, was targeted at a much wider audience. This

audience would comprise of members of the general public who would be asked questions on

their thoughts on space tourism and whether or not they would be interested in using such a

service in the future. Both of these surveys will be distributed by way of a suitable web based

survey tool.

1.4 Organisation of the report

This dissertation will be split into the following chapter headings :-

Chapter 1 : Provides an introduction to the dissertation, how it will be written, the

objectives to be met and the research to be undertaken

Chapter 2 : Provides an overview to both the sounding rocket and emerging space

tourism markets, competitive analysis of both of these market sectors, an introduction

to Starchaser and how they hope to grow their business over the next few years

Chapter 3 : The literature review will examine the current academic research that can

support this dissertation along with identifying relevant MBA frameworks and

management tools that can support the areas being researched for Starchaser

Chapter 4 : Discusses the results from the surveys conducted for this project and

synthesises the findings from Chapters 2 & 3 to allow a strategy to be defined for

Starchaser

Chapter 5 : Proposes a strategy for Starchaser and a rationale will be developed as

to why Starchaser should follow this strategy and the expected benefits to be

obtained from following this strategy

Chapter 6 : Provides a conclusion to the dissertation and the overall findings and

proposed strategy will once again be highlighted in a simplified manner. Limitations

of the research will be discussed along with proposed future areas for research


2 Industry & Company Review

2.1 Introduction

The following chapter provides a brief overview of the sounding rocket and emerging space

tourism industries, with a particular emphasis on emerging technologies, companies and

trends which may impact the future growth of Starchaser.

Starchaser currently have a five stage growth plan and in order to derive a strategy, as part of

this dissertation, to execute this plan it was important to review the current orbital launch

market and the industry that they primary serve, namely launching satellites.

This chapter will also include an analysis of the key competitors and challenges that

Starchaser will have to overcome in order to grow their business. It was also necessary to

review the UK’s current space policy in order to understand any barriers that may exist which

could affect the growth of Starchaser. A review of Starchaser will also be carried out,

providing further information about their current business model, technology and company

direction.

2.2 Review of Today’s Global Space Industry

The commercial space sector has seen significant changes in recent years, with the dotcom

period during the late 1990s causing a sharp rise and fall in the number of commercial

launches worldwide. As communications technology has improved, satellites have become

much smaller and there is now a requirement to evaluate designs for new lower cost launch

vehicles. These will be able to launch smaller satellites more economically than the larger

launch vehicles traditionally offered by the government backed space agencies. At the same

time, other low cost launch services are being developed to service other sectors such as the

emerging space tourism industry.

Today’s space industry is dominated by the government backed space agencies such as

NASA and ESA. Over the years NASA has tended to focus on developing their Space Shuttle

programmes to support the International Space Station (ISS) and this has meant that a

number of commercial organisations have emerged to service the ever expanding orbital

launch market. Today’s primary orbital launch providers are discussed in more detail in

Appendix 8-A.

Most of the commercial launch providers are serving the lucrative satellite launch industry and

deploying payloads into earth orbit represents the largest commercial opportunity in today’s

space industry. Today’s satellite industry is discussed in more detail in Appendix 8-B.


2.3 Overview to the Sub-Orbital Sounding Rocket Industry

Sounding rockets take their name from the nautical term ‘to sound’, which means to take

measurements. Sounding rockets have been in use since the 1950s and the technology used

in their design is relatively simple and based primarily on military missile technology. They

are used as an experimental platform to test instruments on satellites / spacecraft and to

provide scientific information about the sun, stars, galaxies and the earth’s atmosphere. This

type of testing is unique because it is simple, cost-effective and time efficient, also the

payloads used for experimentation can be developed in a short period of time, eg six months.

Sounding rockets are ideal for deploying Micro Gravity based experiments, ie those scientific

experiments that need to be conducted in a near zero effect gravitational environment. It is

possible to conduct micro gravity based experiments in high drop towers or by using a plane

following a parabolic flight curve, (as used for astronaut training). However sounding rockets

provide the ideal means of deploying these payloads as they are able to reach a far greater

height and more importantly the experiments can be conducted for longer periods of time.

The various micro gravity launch methods are compared below in Fig. 1 [1]. It is possible to

also conduct these experiments on either the Space Shuttle or ISS however the country

wishing to launch the payload would have to be a member of either the NASA or ESA space

programmes in order to gain access to these facilities.

Fig. 1 Comparison of Micro Gravity Launch Methods


Fig.2 [2] below shows a typical layout for a sounding rocket, the rocket is normally split into

two parts, the payload and the rocket motor. This is called a single stage rocket. For greater

height and hence longer experimentation times, multi stage rockets are used. The rockets

are modular in nature meaning that the rockets can be easily configured according to the

weight of payload being carried. In addition to the motor and payload, the rocket will contain

a simple guidance system, telemetry antenna (for transmitting results back to the ground) and

a radar tracking beacon so that the rocket can be tracked during flight.

Fig. 2 Typical Configuration for a Sounding Rocket

After the rocket is launched it follows a parabolic trajectory into space and as the rocket motor

uses its fuel, it separates from the payload and falls back to earth. Meanwhile, the payload

continues into space and when the payload reaches the top of the parabolic flight, ie at it’s

apogee, the experiments are conducted. In most cases, after the payload has re-entered the

atmosphere, it is brought gently down to earth by way of a parachute and is then retrieved. A

typical flight trajectory profile is shown below in Fig.3 [2].

Fig. 3 Typical Parabolic Flight Path for a Sounding Rocket


Scientific payloads are carried to altitudes of between 30 and 800 miles and although the

overall time spent in space is relatively short, (typically 5 to 20 minutes) the experiment is

perfectly positioned to conduct its mission successfully. As the scientific payload does not go

into orbit, sounding rocket missions do not need expensive booster rockets or extended

telemetry and tracking technology. Significant cost savings are realised as parts and rocket

motors are acquired in large quantities and they utilise tried and tested design configurations

for each launch.

In some cases, namely those missions conducting astronomy, planetary or micro gravity

experiments, the payloads are recoverable which means the costs of experiments and sub-

systems are spread over many missions. Scientists are able to accomplish their research at a

specific time and place because the sounding rockets can potentially be launched from

temporary sites all over the world. Due to the low cost and short lead time, sounding rocket

payload testing is invaluable for University students conducting graduate work in scientific

fields.

Sounding rockets offer one of the most robust, versatile and cost-effective launch systems

and in the case of NASA has provided nearly 40 years of critical scientific, technical and

educational contributions to the nation’s space programme. The reasons for their success

are as follows [3] :-

Quick, low cost and fast access to high altitudes where optical observations of

astronomical, solar and planetary sources can be made of radiation at wavelengths

absorbed by the earth’s lower atmosphere

Direct access to the earth’s mesosphere and lower thermosphere (40-120km)

Ability to fly relatively large payloads (>500kg) masses on inexpensive vehicles

Provision of several minutes of ideal, “vibration free” microgravity

Ability to gather in-situ data in specific geophysical targets such as the aurora, the

equatorial electro jet and thunderstorms

Access to remote geophysical sites and southern hemisphere astronomical objects

Long dwell times at apogee

Ability to fly simultaneous rockets along different trajectories, eg with different

apogees, flight profiles etc

Ability to fly numerous free-flying sub-payloads from a single launch vehicle

Ability to recover and re-launch instruments


2.3.1 Review of the Primary Sounding Rocket Launch Providers

Today’s sounding rocket launch activities are mainly conducted in the US or Northern Europe.

Both NASA and ESA have active sounding rocket programmes and there are a number of

companies that build sounding rockets on behalf of these space agencies and for

independent research organisations.

These particular regions have been able to develop and sustain a reliable launch record and

for this reason other countries around the world tend to use these services rather than go to

the time and effort of developing their own sounding rocket launch capabilities. Given that

the sounding rocket experiments are relatively expensive and sometimes irreplaceable, many

universities and research establishments prefer to launch their payloads with leading space

agencies such as NASA and ESA. The primary reason is to ensure that their payloads are

launched safely with good quality measurements being taken when the payload reaches

apogee. Commercial companies such as Orbital Sciences Inc. have been successful at

entering this market sector, primarily launching U.S Air Force related sounding rockets,

however their business model is changing to support small satellite related launches. The

following section identifies the key sounding rocket programmes.

2.3.1.1 European Based Sounding Rocket Programmes

Up until 2005, Europe had one of the oldest sounding rocket programmes, the British Skylark

sounding rocket service which was first launched in the 1950s. Skylark was initially flown

from the Woomera launch facility in Australia and was first operated on a commercial basis by

British Aerospace. This programme was then taken over by Matra Marconi Space and finally

Sounding Rocket Services (SRS) Ltd in 1999. Skylark [4] was flown for the last time in April

2005 from the Esrange range in Northern Sweden. Following the demise of the Skylark

programme, SRS now plan to become the European agent for the American built Oriole range

of rockets and a supplier of hardware to the German / Brazilian VSB-30 vehicle. ESA are

currently participating in four different sounding rocket programmes, namely the German

Texus and Mini-Texus programmes, the Swedish Maser programme and the joint German

and Swedish Maxus programmes [5]

The Texus and Mini Texus programmes were initiated in 1976 by the German Ministry for

Research as a preparatory programme to the 1983 Spacelab programme. The Texus

programme was commercialised and is today managed by EADS-ST, Bremen. The Texus

programme employed Skylark VII rocket motors as the basis of its programme. The most

recent Texus rocket, Texus-EML1, was flown on 1st December 2005 and provided 7 minutes

of micro-gravity experimentation time. This particular flight used the Brazilian VSB-30 rocket

engine, the successor to the Skylark rocket motor. The Mini Texus programme was

established to fill the gap in the market for projects requiring microgravity for the range of 3-4


minutes and employed two stage rockets from surplus military equipment. They are able to

launch 100kg scientific payloads to an altitude of 140km.

The Swedish Maser programme was started in 1986 and is managed by the Swedish Space

Corporation, (SSC), Solna. The Maser programme also used Skylark VII rocket motors. The

first Maser payload was launched in March 1987 with their latest Maser 10 rocket programme

being successfully flown in March 2005. These rockets are relatively large and are able to

carry multiple payloads if required.

The Maxus Programme is a long duration sounding rocket service developed as a joint

development between EADS-ST and the SSC. This programme is capable of launching a

780kg payload to an apogee of 715km which corresponds to about 13 minutes of micro-

gravity time. As the rocket flies above the Esrange’s limit of 300km, the range’s safety

regulations require the Maxus to have a guidance control system and a self destruct system.

The Maxus rocket is ESA’s most powerful sounding rocket. The last Maxus sounding rocket,

number 6, was launched in November 2004, this particular rocket cost $12million to launch

and successfully deployed eight micro gravity experiments. The next European sounding

rockets to be launched will be the Maxus 7 and Texus 43, in May 2006 as part of ESA’s

ELIPS micro gravity programme. The current ESA funded sounding rocket programmes are

summarised in Fig.4 below:-

Fig. 4 Current ESA Supported Sounding Rocket Programmes

2.3.1.2 U.S Based Sounding Rocket Programmes

The U.S sounding rocket industry is centred around the NASA Sounding Rocket Programme

(NSRP). The NSRP is a suborbital space flight programme that primarily supports NASA

sponsored space and earth science research activities, other government agencies and

international sounding rocket groups and scientists. Since NSRP was established in 1959,

nearly 2800 missions have flown with an overall science mission success rate of 86% and

launch vehicle reliability of 96%. The programme is a low cost, quick response effort that

currently provides between 20 and 30 flight opportunities per year. These rockets are

launched from a variety of fixed and mobile launch sites around the world.


NSRP customers are primarily from the university and government research groups however

some research activities involve the commercial sector. The programme has contributed

major scientific findings and research to the world of suborbital space science and has also

provided a valuable proving ground for space ship / station sub-components. There are

currently eleven operational support launch vehicles in the NSRP and all of these launch

vehicles utilise a solid propellant propulsion system. These rockets typically use surplus 20-

30 year old military rocket motors and all the rockets are unguided. The NSRP uses three

main groups of rockets [6] and these are described overleaf and referenced in more detail in

Appendices 8-D & E [58]

Black Brant, produced by Bristol Aerospace Limited has been in service since 1962 and

provides the main ‘workhorse’ of the NASA sounding rocket fleet. Different versions of the

Black Brant can carry payloads ranging between 70 & 850 kilograms to altitudes from 150 to

1500 kilometres and can provide up to 20 minutes of microgravity time during flight. The

smallest Black Brant rocket is the Black Brant 5 single stage rocket and is used as the basis

of larger multi stage rockets from the Black Brant family. The most powerful rocket the Black

Brant 12 is a four stage vehicle that can launch a 113 kg payload to 1400 kilometres or a 454

kilogram payload to an altitude of at least 400 kilometers.

Oriole, produced by DTI Associates, was developed in the late 1990s to provide launch

services for commercial and scientific payloads. Oriole is significant as it was the first

privately funded sounding rocket in the U.S and the first new sounding rocket for 25 years.

The Oriole, when combined with a Terrier rocket motor can reach an altitude of 385

kilometres providing between 6 to 9 minutes of microgravity time.

Terrier – Orion, produced by DTI Associates, is a two stage spin stabilized sounding rocket.

The Terrier-Orion can launch a payload weighing up to 290kg to an altitude of 190 kilometers.

2.3.2 Review of Sounding Rocket Launch Sites

Most of today’s global sounding rocket launch sites, have been developed from existing

missile test ranges and others have been established due to the restrictions with getting

access to some government owned launch sites. One of the first sounding rocket test

facilities was established in Woomera, Australia and since then numerous sub-orbital launch

facilities have been established to cater for the sounding rocket market sector. The main

sounding rocket launch sites around the world are listed in Appendix 8-F.

From a U.S perspective there are two main launch sites, White Sands Missile Range, New

Mexico & Wallops Island, Virginia. All launches at these facilities are overseen by NASA and

hence it can be difficult to obtain a launch slot outside of the allotted launch programme. The


locations of these sites and other proposed non-federal launch sites are shown below in

Fig.5. [6] White Sands Missile Range is the Department of Defense’s largest overland

national range and is located in southern New Mexico approximately 35 miles northeast of

Las Cruces. The climate is semi arid with usually unlimited visibility, warm to hot temperatures

and a low humidity. The range covers an area of 8100 square miles making it ideal for the

launch and recovery of high altitude sounding rockets. The facility is operated by the U.S

Army and is also used for missile flight testing, rocket engine development and for conducting

experimental space craft flights.

Fig. 5 U.S Federal, Non-Federal and Proposed New Spaceports

Wallops Island is the location from which the majority of U.S sounding rockets are launched.

The facility was established in 1945 and since then there have been over 14,000 small rocket

launches from this facility. The facility is maintained by NASA and caters for both orbital and

sub-orbital launches. On average there are about 20 sub-orbital sounding rocket launches

per year. Moving forwards, the facility intends to become a centre of excellence for sub-

orbital launches and the facility has been upgraded to include launch facilities for commercial

organisations.

From a European perspective there are two key sounding rocket launch facilities. They are

located in Northern Europe, the Esrange facility in Sweden and the Andoya range in Norway.

The Esrange facility is the operational centre for the Swedish Space Corporation (SSC) and

its location 200km north of the Arctic circle offers several unique advantages, namely


payloads from sounding rockets have a landing zone of 120 x 75 km in size. This makes it

ideal for easy payload recovery operations (this is the only place in Europe where payloads

can be recovered on land). The location is outstanding for the observation of the boreal

phenomena such as the northern lights and a good launch infrastructure is in place to support

space agencies from across the World. Nearly all of ESA’s sounding rockets are launched

from this facility due to its proximity to the Arctic Circle.

The Andoya range in Norway is unique as it stretches North West from Norway over the

Arctic and provides the most northern location in the World for a permanent rocket launch

facility. The facility was built in 1962 and is owned and operated by the Norwegian Space

Centre. Andoya range has conducted more than 650 rocket launches and has hosted nearly

70 universities and research institutes from around the World. Its location provides

favourable conditions for studying various atmosphere and ionosphere phenomena and as

the launches are conducted over the arctic the airspace is relatively clear and there are hardly

any major shipping lanes to worry about. The facility has a large impact area, permitting a

variety of launch directions and rocket configurations without the need for guidance systems.

2.4 Overview to the Emerging Sub-Orbital Space Tourism Industry

The world’s first commercial orbital space tourism flight took place on April 28th 2001 when a

wealthy Californian investor Dennis Tito boarded a Russian Soyuz rocket to the International

Space Station at a price of $20million [7]. This made him the first individual to personally pay

for a ticket into space. This had two knock on effects for the Russian space industry. Firstly

they could see that there would be huge financial reward to their own space industry if they

supported these space tourism flights. Secondly the Russian space craft was considered to

be a fairly reliable space craft, despite its age, and it helped to improve its public image,

something the Americans were struggling to achieve with its ill-fated Shuttle programme.

Since Tito’s flight in 2001 two other space tourists have taken off on Russian space craft, in

April 2002 Mark Shuttleworth [8] became the second commercial space tourist as a member

of another mission to the ISS. More recently in September 2005 Greg Olsen [9], a U.S

scientist & entrepreneur, became the third space tourist. Both Mark and Greg were thought to

have also paid the Russian Space Agency $20million for the privilege of travelling to the ISS.

The Soyuz space craft is currently the only vehicle which can provide supplies to the ISS and

with there being three seats onboard and only two cosmonauts required to fly the Soyuz craft,

for the moment at least, this spare seat provides the only means for private individuals to

achieve orbital flight. Clearly the $20million cost per ticket of flying into space will have to be

brought down considerably if the orbital space tourism industry is to attract many more private


space travellers. These three privately funded space flights have demonstrated to the public

that space tourism is not only possible but will become more popular in the not too distant

future. According to the Futron Corporation, who conducted a Space Tourism Market Study in

2002 [10], there is a potential sub-orbital market for 15,000 passengers and $700 million in

revenues per year by 2021. The orbital space tourism industry is estimated to have 60

passengers who will help to bring in $300 million per year by 2021. This makes the industry

potentially worth $1 billion by 2021.

In terms of potential market growth, sub-orbital flight, simply due to its cost benefits, would

appear to be the main sector that will drive the space tourism industry. The main problem with

kick starting the sub-orbital space tourism industry is the availability of suitable space craft.

Up until now, nearly all space craft and launch services have been provided by the

government backed agencies such as NASA and ESA. These facilities were developed for

manned exploration, launching payloads into space and constructing the ISS. In order for this

industry to establish itself, a new breed of cheaper, more affordable, space craft and launch

facilities need to be developed. As with any new industry, companies will not invest time and

money in developing these space craft without a suitable incentive.

For this reason and to help kick start the space tourism industry a global competition was

established, and a significant financial prize offered, to the first non-government organisation /

company who could develop a reusable sub-orbital space craft. This competition was known

as the Ansari XPRIZE.

2.4.1 The Ansari XPRIZE Competition

The Ansari XPRIZE [11] is widely regarded as the catalyst for the emerging sub-orbital space

tourism industry and is based on a competition run in the 1920s, won by Charles Lindberg in

his Spirit of St.Louis aircraft, for the first aircraft to successfully cross the Atlantic. Once it was

shown that it was possible to cross the Atlantic by plane, other companies emerged and

started to develop aircraft which would one day help the birth of Atlantic passenger travel. The

Spirit of St.Louis proved that the principal barrier to commercial air travel was not a

technological barrier but more of a psychological one.

It was this competition that gave Peter Diamandis the idea of establishing the XPRIZE

Foundation. The aim of the XPRIZE Foundation was to create a future in which the general

public would personally participate in space travel and its benefits. The Ansari XPRIZE was

the first competition initiated by the XPRIZE Foundation and it offered a $10million prize to

establish the space tourism industry through competition amongst the most talented

entrepreneurs and rocket experts in the world.


The prize would be awarded to the first team that could :-

Privately finance, build and launch a spaceship, able to carry three people to 100

kilometers , (the official start of space)

Return safely to Earth

Repeat the launch with the same spaceship within 2 weeks

The aim of repeating the launch was to prove that the spaceship could be reused rather than

having to rebuild a new spaceship from scratch each time. Since its inception in May 1996,

(up until the XPRIZE was won in October 2004), 27 teams from seven countries competed in

the prize. The aim of the prize was to :

Create a new generation of aviation heroes in the mould of Lindberg

Provide inspiration and education opportunities for students

Focus public attention and investment capital on this new business opportunity

To challenge explorers and rocket scientists from around the world

From its inception in 1996, many different designs of space craft were entered into the

competition. These ranged from conventional plane style craft which took off on a runway,

traditional multi-stage rockets complete with a three person space capsule, through to

vehicles that were towed or carried aloft to a high altitude before being released to travel to

their final apogee. Further information about the original XPRIZE contenders can be found in

Appendix 8-G. The XPRIZE was won in October 2004 by Scaled Composites and their

SpaceShipOne vehicle [12]. This was carried aloft by a high altitude plane called White

Knight. Once the White Knight had reached a specific altitude the SpaceShipOne rocket

powered plane would be released, its engines would be ignited and it would then continue up

to an altitude of 112 kilometers. It would remain on the edge of space for 5 minutes before

starting its descent. SpaceShipOne then glided back to its original takeoff location.

SpaceShipOne is shown below in Fig.6 underneath its launch carrier, White Knight.

Fig. 6 SpaceShipOne Space Craft & White Knight Launcher


SpaceShipOne technology is currently owned by the co-founder of Microsoft, Paul Allen and

his company called Mojave Aerospace Ventures (MAV). He bankrolled the $20Million project

and even though the prize was only $10 million, the prestige of winning the XPRIZE combined

with the downstream commercial opportunities that would come along, made the investment

worth while.

2.4.2 Current Developments in Low Cost Space Craft Design

The original Ansari XPRIZE had 27 entrants competing for the $10 million prize. Today, only

7 of the original contenders remain in business and a number of new companies have

entered the low cost space launch industry. Many of the original entrants to the competition

were designing craft which could be used after the XPRIZE, however a few companies

including Starchaser were designing their craft with one goal in mind, to win the XPRIZE.

Starchaser felt that using a single stage rocket would be the simplest and most cost effective

way of winning the XPRIZE. Starchaser were the second favourite entrant to win the XPRIZE

as they were the only other entrant to have actually launched an XPRIZE development rocket

prior to SpaceShipOne winning the prize. The following table lists the original XPRIZE

contenders who are still developing space craft for the space tourism sector. Further

information about these companies can be found in Appendix 8-H [13].

Fig. 7 Post XPRIZE Contenders Currently in Business, (See Appendix 8-H)

The XPRIZE contenders, in most parts, were funded privately from numerous sponsoring

companies and organisations. They were able to develop significant space technology on a

minimal budget and in the case of Starchaser were able to develop a fully working rocket.

Their rocket ‘Nova’ was successfully launched in November 2001 and was subsequently used

to promote the XPRIZE initiative until the prize was claimed by Paul Allen’s company.

Compared to the government space agencies, the XPRIZE contenders were developing their

craft on relatively small budgets. Private enterprise will make or break the future space

tourism industry and during the latter stages of the XPRIZE competition a number of the

World’s most high profile billionaires decided that they wanted to get involved with the

privately funded commercial space industry. Fig.8 overleaf shows the new entrants to the

sub-orbital spacecraft market sector.


Fig. 8 New Entrants to the Privately Funded Space Industry

Further information about these companies can be found in Appendix 8-I. Virgin Galactic are

currently leading the way in terms of introducing economically viable technology but it won’t

be too long before other companies such as Starchaser develop their own technology to

compete in this market sector.

2.4.3 Emergence of Commercial Spaceports

As of today there are five non federal spaceports licensed in the U.S however due to the

expected growth in the private space sector, eight other locations in the U.S have applied for

a license to operate a space port. For private space companies such as Starchaser this is

important as it will provide them with a gateway into space without fear of imposing on any

government backed space programmes. One of the first new spaceports has been

established in New Mexico with the help of the local government. They realised that the

private space industry could bring significant financial and employment benefits to its region

and with an abundance of wide open space it decided to apply to the Federal Aviation

Authority (FAA) for an official license to operate a non-federal spaceport. The Southwest

Regional Spaceport is located at Las Cruces, New Mexico and as part of its marketing

campaign recently hosted the global XPRIZE Cup, a competition for privately funded space

companies to demonstrate their capabilities.

The primary reasons that Las Cruces was granted an FAA operational license were [14]:-

Its relatively high altitude, where the air is thinner, allowing rockets to be launched

much more easily

Approximately 350 days of sunshine annually, providing near perfect launch and

recovery operations

The availability of large, open, unpopulated land for establishing launch facilities with

unrestricted airspace

The availability of significant infrastructure along with access to a large population of

engineers and scientists that have previously been involved with a distinguished

history in space related research


The New Mexico Government commissioned Futron Corporation to estimate the potential

space tourism market size [14]. Using a number of quantitative and qualitative survey

methods they were able to estimate the potential total market size (in terms of number of

flights) shown in the first row of Fig.9. The New Mexico market share is shown in the second

row.

Fig. 9 Global Space Tourism Market Opportunity

It is expected that other spaceports will be developed overtime which explains the drop from

75% to 50% market share, however with New Mexico developing the first Spaceport they will

have a significant first mover advantage. Starchaser were the first space tourism company to

establish a base at the spaceport and now with Virgin Galactic wishing to establish a

significant presence in the region, New Mexico has the opportunity to position itself as the

primary destination for those interested in space tourism. Taking into account the space

tourism providers, visitors and spectators to the proposed rocket racing league developed by

XCOR, Futron expect the economic benefits to the region to be very significant, these are

highlighted below in Fig.10.

Fig. 10 Economic Value to New Mexico State

Over time, the Spaceport will expand considerably and will become home to a number of

space tourism operators, service companies and manufacturing operations. These activities

are summarised overleaf in Fig.11 [14].

The combination of Virgin Galactic, Starchaser and New Mexico State has for the first time

shown that space tourism for the masses is not only a reality but will be possible within 2

years. The technology has been demonstrated and proven, Virgin and Starchaser have the

vision that space tourism is economically achievable and the New Mexico State authorities

have the belief that they can lay the foundations for an entirely new industry which will bring

significant economic benefits to it’s region.


Fig. 11 New Mexico Spaceport Business Opportunities

2.5 Review of the UK’s Space Strategy

Today’s UK space strategy, prepared by the British National Space Committee (BNSC)

focuses on three core areas and is currently supported by the British Government with nearly

£200Million of funding. This is relatively small when compared to France which contributes

nearly £2Billion to its space efforts, making the UK a relatively small partner in the European

space industry. The UK’s space strategy maps out clear scientific and commercial objectives

rather than to develop space technology as an end to itself.

For this reason, the UK’s Vision is [15]:-

“To be the most developed user of space-based systems in Europe for science, enterprise

and the environment. UK citizens will provide and exploit the advanced space-based systems

and services which will stimulate innovation in the knowledge driven society”.

To achieve this vision the government has therefore decided to focus on the following :-

To expand knowledge in astronomy, planetary and environmental sciences

To create opportunities for commercial exploitation of satellite systems

To advance key public services


2.5.1 Enhancing UK’s standing in astronomy, planetary & environmental science

One of the largest beneficiaries of the Government’s £200Million investment per year is the

Particle Physics and Astronomy Research Council (PPARC). The council provides grants to

University based research programmes which are working towards a greater understanding of

the earth and the universe.

2.5.2 Increased productivity through promoting the UK’s use of space

Today’s space industry is helping to stimulate new opportunities in the economy, in

commerce, public policy, science and for consumers. This is achieved through direct

provision of satellite services. The Government’s main goal is to maximise the exploitation of

these opportunities throughout society. To achieve this it needs to influence the development

of new space systems within the international market and it needs to establish the

downstream services which could exploit them. The number of different projects identified by

the government to support the three key users of satellite technology are shown in Fig.12

Fig. 12 Key Users of Satellite Technology / Services

2.5.3 Developing innovative space technologies that improve quality of life

In order to remain an effective user of space systems across the economy, the UK must

retain a capability to understand end to end systems and produce crucial elements of the

technology. This strengthens the voice of the UK during International negotiations and

underpins the delivery of the other two objectives in the UK space strategy.


2.5.4 Size and Health of the UK Space Industry

The commercial sector of the British space industry primarily supports the satellite industry.

This particular industry is split into two sectors, those companies providing space technology

for the satellites, the ‘upstream’ industry and those companies that actually exploit the satellite

services, namely the ‘downstream’ industry. In 2004 the BNSC conducted a survey of all UK

companies involved with space related business, 222 organisations were represented in the

findings [16].

The space related turnover of these companies varies over a wide range with only five

companies having a space turnover of £100Million and some 68% of the companies having a

space related turnover of less than £1Million. The total space related turnover of the UK

space industry is estimated to be £4Billion. Compared to the upstream sector the

downstream turnover represents 87%of the total industry turnover. The breakdown of the

upstream and downstream sectors are shown below in Fig.13.

Fig. 13 The Upstream and Downstream Sectors of the UK Space Industry

The application of these activities is dominated by the telecommunications and broadcasting

industry, this application alone represents nearly 80% of all UK space industry turnover. This

investment has paid off as the UK is one of the World leaders in the adoption of digital

television services. Fig.14 below shows the turnover by space application. It is significant that

the space transportation sector represents only 1% of the total turnover.

Fig. 14 2003 Turnover by Application, Excluding the Consumer Market


2.5.5 UK Involvement with the ESA Programme

The UK is one of the founding members of the ESA programme which is divided into two

categories, optional and mandatory programmes. The UK chooses to take part in most of the

optional programmes, and membership of the mandatory programmes is subscription based

and rates are worked out as a percentage of each European country’s GNP. Fig.15 below

shows the various ESA programmes in 2001 and how the UK subscribes to programmes

which it feels best supports the UK space strategy, namely Navigation, Earth Observation and

Science [1]. Today, the UK contributions to ESA are roughly the same, this is despite the UK

being the second richest country, (behind Germany), in Europe.

Fig. 15 UK Financial Contributions to ESA Programmes

2.5.6 UK Micro-Gravity Activities

The main issue faced by the UK is that it does not have access to a dedicated micro gravity

environment. The UK decided not to be a member of the ISS when it was being discussed in

the 1980s. Similarly the UK has refused to become involved with micro gravity programmes

run by ESA. The UK has decided to not participate in the European Life and Physical

Sciences (ELIPS) research programme and as such will not be able to get access to the

research and data derived from this programme. In 2002 , 102 UK researchers from 33

universities, 5 research institutions and 13 industrial companies were identified as potential

users of the ELIPS programme [1]. These researchers also formed part of the survey

population for this dissertation and the results will be discussed in Chapter 4.

Some UK universities have used sounding rockets for conducting micro gravity experiments

but with the demise of the Skylark programme the UK currently does not have a dedicated

launch facility for these experiments. As mentioned earlier, Sounding Rocket Services Ltd

are looking to re-introduce a new sounding rocket service in the near future.


2.6 An Overview of Starchaser Industries

Starchaser Industries is a privately held, high technology company that specialises in the

development, operation and commercialisation of space related products and services.

Starchaser enables new space related business opportunities by providing safe, reliable

affordable and reusable access to space for both space tourism and micro-satellite launch

markets. Founded in 1992 by current CEO Steve Bennett, the company is staffed by a highly

skilled, innovative and motivated workforce based at its research & development, assembly

and integration facility in Hyde, Cheshire, UK. Steve Bennett also serves as the Director of

Space Technology at the University of Salford.

Starchaser began life as an experimental rocket test programme set up by Steve in 1992.

The objective had been to develop an inexpensive means of delivering small scientific

payloads to high altitudes. This research was funded through a variety of sponsorship deals

and by the mid-nineties the project had grown into a team effort. In 1996 the team

successfully launched a 21ft rocket, Starchaser 2, which at that time qualified as the largest

private civilian rocket ever to be built and flown in Europe. Starchaser has an enviable record

of successful launches and they have now become internationally recognised as leader’s in

their field and are rapidly becoming a household name.

Starchaser officially entered the Ansari XPRIZE in 1997, one of the original entrants to the

competition and was incorporated as a private limited company in December 1998. On 22nd

November 2001 Starchaser successfully launched Nova, the world’s first privately built

reusable rocket capable of carrying passengers into space. In 2001 Starchaser started the

development of their Churchill range of rocket engines, culminating with the development in

November 2003 of the Churchill Mk3, a large 15 tonne bi-liquid engine. The intention was to

use a pair of these engines to power Starchaser’s official entry to the XPRIZE competition,

the Thunderstar rocket.

Starchaser initiated a very successful educational outreach programme in 2003, an ideal

platform to educate the school children of today into the technology and space tourism

possibilities of tomorrow. This activity along with open days at their facility provided a steady

source of income for the company. Starchaser then transferred its presentation and exhibit

materials to the Spaceport Visitor Centre in Liverpool in July 2005, this was to become the

UK’s leading space related visitor attraction. In 2005 Starchaser opened an office in New

Mexico, the world’s first dedicated commercial spaceport. Starchaser intend to use this

facility as their launch facility for future sub-orbital and orbital space programmes.


Starchaser spent nearly six years working towards their goal of winning the XPRIZE

competition however they were beaten by Paul Allen’s SpaceShipOne programme. They had

acquired valuable knowledge and experience in developing low cost rocket systems and

rather than disappear, as most other XPRIZE contenders did after the competition, they

decided they wanted to develop Starchaser into a proper commercial space business. As

part of this process, Starchaser began work in 2004 to convert their business into a public

limited company and raise the necessary funding to develop new facilities, rocket

programmes and allow a facility to be opened in the States, potentially Starchaser’s single

largest market. Overtime, Starchaser began to devise a business plan, one which would

allow the business to grow organically and allow the company to one day be able to compete

in the orbital space tourism market.

Starchaser’s primary objectives are :

to provide safe, reliable and affordable access to space for all

to become market leader in non government space access

to be recognised as ‘the’ British space programme

Starchaser realised early on that the investment community was nervous about funding purely

space tourism focused companies and therefore devised a stepping stone business plan that

would allow them to gradually achieve their space tourism dreams.

Starchaser will initially develop a new programme for sub-orbital sounding rockets, Project

Skybolt, shown in Fig.16 below, was conceived to address this market sector. Skybolt is

effectively a reusable sounding rocket providing the capability to launch scientific payloads

into space at a very affordable rate. The reusable nature of Skybolt makes it unique in the

industry and will help drive down launch costs. Skybolt will be 12m tall and will deliver a

100kg payload to a target altitude of 100 miles. Skybolt could be seen as the natural

successor to the British Skylark programme referenced earlier in this chapter.

Fig. 16 Reusable Skybolt Sounding Rocket


One of the key strengths of Starchaser is its internal design capabilities. Through a

sponsorship agreement with a product development software company they use state of the

art computer aided design systems to design all components of their rockets. As well as the

launch vehicle, Starchaser also design their own engines. Their latest engine, Storm, is a

modified and slightly smaller version of their Churchill 3 engine and this will be used to power

the Skybolt sounding rocket. This engine is shown below in Fig.17.

Fig. 17 ‘Storm’, 7 tonne Bi-Liquid Rocket Engine

The Skybolt programme will allow revenues to be generated which will then contribute

towards their next programme, Project Thunderstar, to enter the new and lucrative sub-orbital

space tourism sector. Thunderstar is a single stage rocket powered by a pair of Churchill 3

engines. The capsule would be capable of carrying three people and after reaching apogee

would return to earth via a GPS guided parachute. The flight profile of Thunderstar is shown

in Appendix 8-L and Starchaser’s range of rockets are shown below in Fig.18.

Fig. 18 Starchaser Range of Rockets


Despite limited funding, Starchaser have reached many milestones over the last twelve years

and they have remained in business with the aid of creative ways of raising revenue streams.

If they had proper financial and business plans then their dream of being the UK’s space

business will become a reality. The remainder of this dissertation will identify how this can be

achieved.

2.7 Summary

The aim of this chapter has been to understand the shape and make up of the current

sounding rocket and emerging space tourism industries, who the main players are within each

sector, provide an understanding of new business opportunities within the these sectors and

finally to understand the UK government’s strategy for space related activities and research.

The sounding rocket and space tourism industries represent the two opposite ends of

Starchaser’s business strategy and the information researched within this chapter will allow

Starchaser to develop their business plan in order to execute their long term strategy.


3 Review of Literature

3.1 Introduction

The following chapter will provide a review of academic literature researched for this

dissertation. This review will be split into the two fundamental areas introduced in Chapter 2,

namely the sounding rocket and space tourism market sectors. This dissertation is primarily

focused on marketing, business strategy and entrepreneurship activities and therefore

relevant MBA frameworks and tools will be employed to analyse the industry and company

specific issues faced by Starchaser when they enter these market sectors. The sounding

rocket market sector will be reviewed first.

3.2 Review of the Sounding Rocket Market Sector

As discussed earlier in Chapter 2, the sounding rocket market was initially conceived to

service the demand from research and educational institutions for a microgravity based

research platform. Most of the academic research that has been conducted in recent years

has been to understand the potential ‘uses’ for microgravity and the ‘need’ for microgravity

based research platforms. The microgravity sector has been constrained for a number of

reasons, for example a lack of low cost launch providers and government policies on

providing access to these facilities. Even though Starchaser are hoping to establish a non

government funded business model, most of their market opportunity actually comes from the

scientific and research communities, which are primarily supported by government grants.

3.2.1 Microgravity & Sounding Rocket Industry Analysis

Today’s European sounding rocket industry is dominated by ESA sponsored launches from

Northern Europe. The main competitive advantage that Sweden has is that it has access to a

large area of uninhabited space where sounding rockets can be launched. As a result of

these facilities, the Swedish government has been very supportive of companies wishing to

enter the sounding rocket industry and as such provide favourable grants to help new space

related companies establish themselves in this region. By comparison, the UK government

has a completely different attitude to supporting the microgravity and associated sounding

rocket industry.

Some of these reasons were discussed in Chapter 2, but the following PEST analysis of the

microgravity and sounding rocket industry summarises the issues from a political, economic,

society and technology standpoint.


Fig. 19 PEST Analysis of the UK Sounding Rocket Industry

Over the years the sounding rocket industry has seen many new entrants into a market which

was once dominated by the larger space agencies such as NASA. Over time, smaller

companies began to emerge who subsequently took over from where the major agencies left

off. Today, NASA sub-contracts out the manufacture of the rockets for its sounding rocket

programme and numerous other companies have emerged, primarily in the U.S and Europe,

to compete in this specialised industry. The PEST analysis in Fig.19 provided a high level

overview to the industry as a whole and the companies competing within this industry are

analysed by way of Porter’s Five Forces [17], illustrated in Fig.20 below.

Fig. 20 Porter’s Five Forces Analysis

New Entrants – The space industry has always been perceived as a technically

challenging and high cost industry to enter. For this reason there are relatively few

companies involved in this industry. Government red tape, flight safety and

operational licenses from the respective aviation industry bodies all add to keeping


the entry barrier high. Space launch system projects are also perceived as offering

risky investment opportunities and so many projects require private investment to

prove capability before investment houses are willing to provide funds for growth

Supplier Power – One of the key components of any sounding rocket is the engine.

Today, both NASA and ESA use rockets powered by ex-military rocket motors.

These motors are in short supply and the industry needs new rocket engines such as

the Brazilian VSB30 to secure the future of the sounding rocket market sector.

Buyer Power – In recent years the buying power has shifted from individual research

groups launching their own rockets to the larger space agencies sub-contracting out

the manufacture of their own sounding rockets to companies such as Orbital

Sciences. Most sounding rocket launches today are carrying scientific payloads

developed by universities which in turn are indirectly funded by various governments.

Government has the ability to control grants awarded to research groups and hence

limit the number of potential launches that can be conducted

Threat of Substitutes – In recent years a number of private companies such as

Orbital Sciences and SpaceX have developed lower cost rocket launch systems. In

addition, the emerging space tourism industry may see companies such as Virgin

Galactic using their space tourism vehicles to not only carry passengers but to also

carry scientific payloads for deployment during apogee.

Competitor Rivalry – As NASA and ESA have largely sub-contracted out most of

their sounding rocket programmes, most of the competition in the market is between

companies such as Orbital and the Swedish Space Corporation. As these

organisations receive significant space agency contracts, they are very well funded.

Sounding rocket manufacturers who have a good safety record and undertake work

on behalf of a space agency tend to win the lucrative high profile launch contracts.

3.2.2 UK Microgravity Research Policy

In order to understand the potential market demand for a UK sounding rocket service it is

important to understand the UK government policy concerning microgravity based research.

In 2002 the UK government wanted to obtain a better understanding of the potential of

microgravity based research and a microgravity review panel was established to examine the

potential opportunities for microgravity based research. The review panel was headed by

Professor Bill Wakeham, Vice Chancellor of Southampton University and Chairman of the

BNSC Life and Physical Sciences Network Group. The review panel subsequently asked the

BNSC and the Rutherford Appleton Laboratory to establish the ‘market demand’ for such a

service.


The Rutherford / BNSC report [1] noted that from a historical perspective, the life and physical

sciences research areas, (that exploit microgravity conditions), have never been a high

priority in comparison with other UK space related activities. One of the initial academic

research studies, the Pippard Report [18] , was conducted in 1989 by Professor Sir Brian

Pippard on behalf of SERC and it concluded that there was no strong case at that point for

the UK to join the ESA microgravity programme. Whilst many European countries signed up

with the construction of the ISS, the UK declined becoming involved with this project. This

negative attitude to any involvement with microgravity and the ISS continues to this very day,

with the government’s current space policy centred on “putting space to work”, ie needing to

identify clear scientific or commercial benefits from space activities before participating.

The microgravity review panel concluded [19] that there were a number of scientific

opportunities for microgravity based research and these were divided into six disciplines,

namely fundamental physics, fluid and combustion physics, materials science, biology,

physiology and astro/exobiology and planetary exploration. (The leading academics involved

with these areas of research were contacted as part of the research for this dissertation and

the results of the survey are discussed in Chapter 4).

In May 2000, ESA commissioned a strategic marketing study on the potential industrial

opportunities for microgravity based work. This was conducted by Batelle ITM, Cranfield

School of Management and Access-Matrix. The common overall conclusion from these

independently conducted studies was that the tangible commercial returns in the field of

microgravity were far from being mature. They forecasted that the need over the next 5-10

years is for state sponsored basic research to establish a background from which a

partnership between industry and government can proceed to demonstrate potential, and

then for a similar further period before genuine commercially sponsored R&D would be

attainable.

The falling number of students choosing to study science and technology subjects at

university is a matter of widespread and growing concern in UK industry. Subjects which

involve space research are effective at generating interest in young people. One advantage

of having a UK microgravity research programme would be the opportunity to generate more

interest in science and technology amongst the young generation in particular.

At the time of the microgravity review panel research, the UK had a number of options with

respect to establishing a microgravity research programme, namely [19] :-


Join ESA Programme (ELIPS), which would provide access for UK researchers to

European collaborations and facilities and provide significant commercial space

contracts to UK companies

Collaborate with NASA, this would only be possible if the UK were to become a

member of ELIPS

Collaborate with other U.S Agencies, this would allow UK institutions to make their

own arrangements but they would have to source their own funding rather than

depend on a central funding system

Use facilities of a commercial basis, Individual research groups would be free to

make use of ISS facilities either through ISS partners of one of the commercial

agents. Similarly most other microgravity facilities could be hired commercially from

the operators

Do nothing – Naturally the lowest cost option but there would be no involvement in

research or industrial collaborations, no access to results and more importantly a

poor political impression of the UK as a world-class player

Upon reviewing the available options, the review panel recommended to the UK government

that they should join the ELIPS programme at the minimum membership level. They believed

that while there was no single scientific area where such an investment would lead to a real

breakthrough there were a number of areas where access to this complimentary tool would

be of value. In May 2003 the UK government reviewed the panel’s report and based on the

findings decided not to sign up with the ELIPS programme due to limited budget availability

and lack of demonstrable commercial benefits to be gained [20]. The government also

highlighted the problems with the ISS and the issues associated with getting suitable launch

vehicles, such as the Space Shuttle, up to the ISS. The potential issues faced with

establishing a microgravity industry in the UK can be summarised by way of the Porter’s

Diamond [21] shown below in Fig.21

Fig. 21 Porter’s Diamond Summary of Potential UK Based Microgravity Industry


Factor Conditions – In terms of location, Starchaser are well positioned to take

advantage of a good network of suppliers, contractors and skilled workforce.

Starchaser have all the required resources to be able to construct their sounding

rockets however the one major drawback is a lack of launch facilities in the UK.

Demand Conditions – The UK demand for sounding rocket services is relatively low

due to limited commercial opportunities and scientific research projects have limited

budget availability to fund microgravity related launch programmes. This will not

change until the government changes its policy towards microgravity research.

Related and Supporting Industries – Even though the UK does not have its own

microgravity programme, it does have a strong presence in other space sectors such

as satellites, deep space exploration probes and participation in other major

European space projects.

Strategy, Structure , Rivalry – As of January 2006 there were no other UK based

manufacturers of sounding rockets. Starchaser have a good opportunity to become

the only major player in this market sector, however key to the growth of this part of

the business is going to be acquiring new microgravity launch customers

Therefore we can conclude from this that the weakest area is related to microgravity demand

conditions in the UK, apart from suitable launch facilities the factor conditions are relatively

high. The remaining two factors, related and supported industries & strategy, structure and

rivalry are the strongest factors relating to microgravity activities in the UK.

Based on these findings the main issue facing the government’s support of microgravity

based research is the lack of funds to support what is perceived as a high cost programme. If

the launch costs could be brought down, thus increasing demand for such launch services,

then there is the possibility that the government would eventually support such a programme

providing that there is no long term tie in. This was the main issue surrounding the ELIPS

programme, namely committing to a five year rolling programme where there was no visible

downstream benefit to the UK from a commercial point of view. If private enterprise

companies such as Starchaser can make this financially viable then this should help to

increase interest and demand for such launch services.

3.2.3 Review of Starchaser’s Sounding Rocket Programme

Since Starchaser was formed in 1992 they have produced and successfully flown numerous

rockets, with each design becoming progressively larger and more technically advanced.

This step by step evolution of their designs has allowed Starchaser to focus on getting each

technical issue resolved before moving onto the next step, eg incorporating telemetry

systems, parachute recovery systems and ensuring that each engine design has suitable


thrust to lift the rocket to the required altitude. This demonstrates the confidence that they

have to push the boundaries with rocket development and prove that private enterprise is

capable of establishing a business in this market sector.

Starchaser have progressively increased their work force to meet the challenges of

developing more complex rockets and they have defied the odds in terms of raising the

necessary financial security to get the business to where it is today. They have been able to

retain key members of staff and encourage more people to join their operation. Fig.22 below

summarises the current situation at Starchaser and highlights the key strengths, weaknesses,

opportunities and threats facing Starchaser at the moment.

Fig. 22 SWOT Analysis of Starchaser Industries Sounding Rocket Business

As a company, Starchaser has one key advantage over its competitors, namely it’s ability to

manufacture the rocket body and engine in-house, thus allowing Starchaser to retain control

of the entire design process and guarantee rocket motor supply for their Skybolt programme.

Most other sounding rocket manufacturers would traditionally outsource rocket motors rather

than build their own, but the number of off the shelf rocket motors is dwindling very quickly,

thus putting Starchaser in an increased competitive position.


Starchaser’s sounding rocket programme has been designed to provide significant

advantages over its competitors, namely:

Skybolt will be the industry’s first reusable sounding rocket. Many of today’s

sounding rockets are expendable meaning that new sounding rockets currently have

to be built for each launch. This is both very expensive and a drain on a limited

supply of rocket engines. The other issue associated with today’s sounding rockets is

that they are being designed to carry more than one scientific payload. So for

example the latest MASER rocket carried six different payloads. In order for the

MASER rocket to be economically viable it must carry its full payload capacity

otherwise it will be launched at a significant loss. Having to wait for six payloads to

be ready for launch puts a significant time delay on the launch of the MASER rocket

and hence makes it very inflexible from a launch timing point of view. The reusable

nature of Skybolt will hopefully alleviate this problem and allow payloads to be

launched on a more frequent basis.

Skybolt will also represent one of the lowest cost sounding rocket services.

Starchaser have had to manage for years on a minimal development budget but they

have proven that they are capable of developing high altitude rockets. The lack of

budget has actually worked in Starchaser’s favour as they have been able to design

and build rockets using cheaper materials and manufacturing processes, more

importantly without compromising on safety or performance grounds.

Starchaser’s current strategic position is therefore summarised by way of Fig.23 below [17]

Fig. 23 Strategic Focus of Starchaser’s Sounding Rocket Programme


In the context of the whole space industry, Starchaser’s Skybolt programme is targeting a

narrow market segment, namely the sounding rocket market sector. Starchaser’s current

strategy is to adopt a significant product differential over its competitors (ie the reusable

nature of Skybolt) which in turn will help to drive down overall launch costs. In terms of

improving a company’s competitive advantage there are three recognised approaches,

adopting either a specific product focus, product differentiation or product cost leadership.

The reusable nature of Skybolt and its uniqueness in the sounding rocket market means that

Starchaser should be following a differentiation strategy which has the characteristics shown

below in Fig.24 [22]. Other more general company related strategies and issues will be

discussed in section 3.4

Fig. 24 Competitive Advantage through Product Differentiation

3.3 Review of the Space Tourism Market Sector

As highlighted in the previous chapter, space tourism potentially represents a lucrative

$1Billion a year industry by 2020. Initially the main area of development will be the sub-orbital

market sector and then as technology is developed and the investment community start to

take an interest then orbital space tourism will develop very quickly. Prior to the winning of

the XPRIZE in late 2004 it has been the orbital space tourism sector which has received most

interest from the academic community. For example predicting what it would be like to orbit

the earth as a space tourist, what business opportunities could evolve, eg orbital space hotels

and space sports centres.


Fig.25 below tries to predict what the orbital space tourism market and associated

opportunities, could be like by 2030 [23]. Clearly, significant investment and technological

advances will have to be realised before this vision can become a reality and the recent

interest in sub-orbital space tourism ignited by the XPRIZE competition has led the academic

community to re-focus their research into the short term business opportunities rather than

the long term. Orbital space tourism will happen one day and U.S billionaire Robert Bigelow

has established a new $50 million competition [24], similar to the XPRIZE, for the first

company to design a reusable orbital spacecraft which can be used to service his proposed

network of orbital space hotels. It is forward thinking entrepreneurs such as Bigelow and

Branson that will help to kick start the future orbital space tourism industry.

Fig. 25 Space Tourism Market Opportunities by 2030

Today’s academic sub-orbital market research research focusses on :

Trying to establish the potential market demand for what is a completely new and

unknown industry and then trying to predict the likely ticket price per trip into space

Estimating potential economic benefits, eg the Futron study conducted on behalf of

the New Mexico State government

Establishing which of the current sub-orbital space tourism companies are likely to

succeed based on their proposed spacecraft designs, individual business models,

marketing capabilities and proposed methods of financial investment

Trying to work out how to market and position a space tourism company, within an

entirely new industry sector, to a general public that knows little about the industry

The likely human ‘endurance’ implications for passengers wishing to take such flights

The technological barriers which have to be overcome to develop a cost effective

space craft design


3.3.1 Sub-Orbital Space Tourism Industry Analysis

One of the World’s leading authorities on space tourism is Professor Geoffrey Crouch from La

Trobe University in Australia. Professor Crouch has written a number of space tourism

research papers which address some of the afore-mentioned key areas of the space tourism

market sector. Some of these will be discussed later in this section but first, the following

PEST analysis shown in Fig.26 below, (adapted from one prepared by Professor Crouch,[25])

attempts to highlight the current issues facing the sub-orbital space tourism industry.

Fig. 26 Sub-Orbital Space Tourism Industry PEST Analysis

The future direction of the space industry lies in part with what the major space agencies such

as NASA and ESA will do. They have already started to sub contract work out to companies

such as Orbital Sciences but they will need to do more to help small private firms enter what

is currently a very lucrative market. NASA suffers from two externally controlled forces,

uncertainty concerning its funding because the granting agency, the US congress, changes

elected membership every two years and in addition, members of congress have repeatedly

changed the content of NASA programmes to benefit the private space contractors within

their constituency [25]. This situation has called for privatisation of the space industry [26]

which will open up more commercial opportunities for entrepreneurs to establish new

commercial space companies. The recent success of projects such as the XPRIZE has

helped to highlight what small companies are able to achieve on relatively small budgets.


A viable commercial space tourism industry will require a clear legal framework to facilitate

and encourage developments in space tourism [24], rather than the existing legal regime

which originated during the cold war era. Legal issues that need addressing include the need

for co-ordination of potentially high frequency space launches (availability and desirability of

insurance for spacecraft / owners / operators / passengers and even the drafting of new

criminal laws to apply in a space context, (eg anti terrorism / hijacking etc). If the space

tourism industry is to flourish then these issues need to be addressed at an international level

rather than have different laws for each country. Although governments may play an

important regulatory role, and the use of government assets may be a part of a space tourism

industry for some time, the real driving force behind space tourism, apart from customer

demand will be the financial returns that arise from new competition and enterprise. (Grouch,

2004)

3.3.2 Competitive Analysis of the Space Tourism Market

The space tourism market today is very much in it’s infancy with some of the original entrants

to the XPRIZE competition trying to transition their projects into commercial sub-orbital space

tourism businesses. As Virgin Galactic [27], in partnership with Burt Rutan, won the XPRIZE

they are perceived for the moment to be the market leaders (in terms of proven technology)

but the true measure of success of the venture will depend upon how quickly they can bring

their SpaceShipTwo craft into service. At the moment this is scheduled for 2008. Since the

XPRIZE competition, Virgin Galactic have used the marketing muscle of the Virgin Group to

help promote and position the company as the world’s only ‘viable’ space tourism company.

Virgin Galactic certainly has the technology and marketing skills in place to help build their

business but there are other companies aiming to take on Virgin Galactic in the future.

The nearest competitor is Starchaser, primarily as they were perceived as the only serious

competitor, other than Virgin Galactic to win the XPRIZE. From an XPRIZE point of view the

‘competition factor’ was measured by how much ‘working & demonstrable’ technology was in

place. Starchaser had completed a number of launches in the past and another 12 months

work could have seen them winning the XPRIZE ahead of Virgin Galactic.

There are many other companies continuing to develop sub-orbital technologies, most of the

XPRIZE teams had conducted engine tests but had never flown a full size version of their

craft. Other companies such as XCOR have developed a rocket plane to be used in the

Rocket Racing League competition, a further development of this craft, called Xerus, will

allow XCOR to enter the sub-orbital tourism market. One other competitor to watch out for

over the next few years will be Blue Origin [28], funded by the Amazon CEO Jeff Bezos, they

currently do not have any demonstrable technology to speak of but they are determined to


recruit the best rocket engineers in the industry and money will be no object when

establishing their launch facilities in Texas. The marketing experience of Amazon will ensure

that Blue Origin will become a well known global brand, very quickly.

In order to determine a competitive positioning matrix based on today’s main sub-orbital

space tourism competitors the author had to derive two positioning variables based on

measurable variables emerging today. As the market is still developing, some technology has

not been fully flight tested / approved and levels of service offering cannot be measured as

yet. The author therefore decided to base the matrix on the level of demonstrable technology

they currently have in place now and the brand visibility with respect to the competition.

Naturally, potential space tourists will want to fly with a company they have heard of, where

the technology is proven and safety records are at the highest possible levels. The

competitive position matrix shown below in Fig.27 aims to show where today’s key players

are with respect to each other.

Fig. 27 Sub-Orbital Competitive Positioning Matrix

Most of today’s private sub-orbital space tourism companies are funded by world famous

billionaires and as with the companies they have built their respective fortunes on, they will be

extremely competitive at proving that their space company is the most successful on the

market. However it is a known fact that you can have all the money in the world and the

project could still fail, this is where industry experience and proven capability can provide a

significant competitive advantage.


3.3.2.1 SWOT Analysis of Virgin Galactic & Starchaser

The following section provides a comparison of Virgin Galactic and Starchaser :-

Fig. 28 Comparative SWOT Analysis Between Virgin Galactic & Starchaser Industries


Virgin Galactic and Starchaser represent two completely different companies, one is well

funded with a global reputation for marketing expertise and risk taking whereas the other is

very much smaller, with minimal budget but a significant industry and knowledge base to offer

the potential of one day being a large and success full space tourism company. Richard

Branson and Steven Bennett share a desire to be successful at everything they do and if

necessary take risks to achieve their respective goals. They are both entrepreneurial in

nature and are sometimes referred to today as tomorrow’s ‘Astropreneurs’ [29].

3.3.3 Estimating Market Demand for Space Tourism Services

One of the key factors to the success of the space tourism industry will be the ability to

accurately predict the market demand levels for sub-orbital flights. A number of surveys have

been conducted to gauge the general public’s thoughts on space tourism. (This dissertation

undertook a similar survey and the results to which are discussed in Chapter 4). The one

common question asked by all surveys was “how much would you be willing to pay for a

space flight”. Market demand or in this case ‘interest’ [30] in terms of number of people willing

to take a trip into space was thus mainly determined by the price of the flight. Numerous

space tourism surveys have been conducted over the years and each one has provided

interesting feedback on the likely demand for space tourism services in the future. The overall

market elasticity was calculated by Ivan Bekey [31], this summarises the various price /

demand estimations and is shown by way of the graph in Fig.29 below.

Fig. 29 Estimating the Elasticity of the Space Tourism Industry


Once all the demand curves had been placed on the graph it became clear that the overall

demand trend highlighted that space flight ticket prices would become within the grasps of the

average person once ticket prices were between $5k and $10k. The survey conducted for

this dissertation showed that a significant number of respondents would be willing to pay up to

3 months average salary to take a sub-orbital space flight, (this ties in with the estimation

provided above). It will only be possible for the prices to come down once the technology is

‘in service’ and there are enough operators to encourage competition.

It has been argued that most of these surveys will have been very simplistic, measuring

‘interest’ instead of true ‘demand’ for space tourism [25]. One also has to consider that the

wide variety of possible space tourism products and experiences that might develop, will

affect potential demand tremendously as a function of the attributes of the various alternatives

which might emerge, [25].

In addition to ticket price, Crouch [30] highlights a number of other market factors which may

influence demand, eg how will the design of the spacecraft affects ticket reservations, ie plane

style or conventional rocket style. Each method of travel affects other factors such as cost,

risk, flight duration, comfort, training requirements, viewing configurations, launch and return

locations. Every passenger will subliminally assess all these variables before choosing which

operator to fly with. Therefore, with so many variables being measured within a new market

sector and with no previous comparable market demand data to work from, how can the

demand be estimated ?

There are a number of behavioural theories and research methodologies which can

potentially address these challenges. Discrete Choice Modelling, DCM, [32] using Random

Utility Theory (RUT), [33], combined with Information Acceleration (IA) [34], provides a

rigorous and reliable means for making progress in answering problems of this nature.

Gathering the data required to enable the DCM of consumer choice in space tourism would

therefore entail the design and execution of consumer choice experiments [30]. An example

of the attributes making up a consumer choice experiment related to space tourism is shown

in Appendix 8-M, [30]

In addition to the consumer choice experiment above which relies on probability to help

determine the ‘estimated’ market demand a much more simpler way would be to try and use

data that exists at the moment to form the basis of an estimation. In order to secure funding

from the investment community, they prefer to see hard facts relating to market demand

rather than the estimates derived from an extrapolated graph. Two leading experts from the

financial community, [35], proposed that a more accurate picture could be established by

using suitable figures from the World Wealth Report [36]. An overall market potential of over


40,000 people was calculated and conservatively estimating that 0.56% of high income

people would actually buy a ticket. The maximum ticket price was assumed to be $100k. The

demand figure was suitably high and gives a high enough safety margin. There is even room

for competitors hence the data shown below in Fig.30 presents a strong business case.

Fig. 30 Estimated Ticket Demand Based on World Wealth Report

3.3.4 Financial Investment Issues Associated With Space Tourism

Securing financial investment for space related technology development is one of the biggest

hurdles with developing a space tourism business. The XPRIZE was won by a company

funded by one of the richest men in the World, namely Paul Allen co-founder of Microsoft. If

he had not provided the $20 million investment into his Mojave Aerospace Ventures to

develop SpaceShipOne then there is a chance that organisations would still be competing for

the XPRIZE today.

A number of billionaires have now entered the space tourism industry, Jeff Bezos (Amazon

CEO), Richard Branson (Virgin Group) and of course Paul Allen (Microsoft) to name but a

few. These men are regarded as risk takers and are willing to put up money for a venture

which has a potential for a good return.

Venture capital companies are also renowned for investing in risky businesses however the

space tourism industry is an unknown quantity and many venture capital firms shy away from

providing funding with the following reasons being highlighted by Dr Livingston and venture

capital company Colony Fund LLC [37]


Unwillingness or inability to identify the team, space companies require a team of

people with a diverse set of skills and experiences with the minimum team comprising

of technical experts, managers, financial specialists, marketing people and other

industry professionals. Any entrepreneur who will not discuss the identity of his team

or the skills they bring to the table will be considered as being suspect

Nebulous funding sources, In addition to a team, a space enterprise requires

startup capital. Companies having ‘exotic’ sources of income or those refusing to

specify their sources of capital will also be treated suspiciously. Startup funds

provided by the people involved with the company will be seen as being very positive

and a willingness to take financial risks themselves in order to get established.

Any mention of the word Billion or Dollars with a straight face, Any startup

looking for eight or nine figure capitalisation in the current embryonic state of the

commercial space industry are extremely questionable. The reality is that the total

private capitalisation in the New Space companies to date is probably nearer to the

$200-$300million range. As this is a new industry with little to show so far in the way

of overall track record, it can be safely claimed that a string of successful, but modest,

space startups will be needed to lay the groundwork enabling venture capitalists to

feel more comfortable with larger risks (ie “Aim small, miss small”)

No understanding of the target market, Knowledge of a target market is essential,

who are the customers ?, how much are they willing to pay ?, how do you plan to

attract these customers ?. In short, a strong marketing plan with extensive research

conducted on the target industry, competitors and customers is essential

Large quantities of ‘unobtanium’ infused into the business plan, business plans

containing proposals for technologies or exotic materials that don’t even exist yet is

often a sign of trouble. Most rocket technology available today has been tried and

tested over many years. The trick from an investment point of view is trying to make

the design and manufacturing process much more economical to bring down costs

and hence increase overall profitability

Playing the conspiracy card, be wary of entrepreneurs who claim that their

business plans have been impeded in the past by ‘Big Business’ or Government

issues, this means that poor planning, unachievable goals and lack of research may

actually be to blame for poor company performance


In addition to a very strong business and marketing plan, a venture capital company will

require the following characteristics when looking to invest in a project :-

Exceptional management teams

Clear value propositions

High growth markets

Strong competitive position

Focused and differentiated technologies

Substantial gross margins

The apparent ‘signal to noise’ ratio [37] of today’s space enterprises is significantly high, with

some of the ex-XPRIZE contenders being the main examples of companies promoting non-

viable business plans involving unrealistic concepts that deters VC’s from placing funds into

the industry. The problem is that these companies are actually putting up a barrier for

companies such as Starchaser who have actually got their hands dirty with the technology

and who now need guidance as how to take their business to the next stage of evolution.

Some typical questions asked about the robustness of a space tourism startup are ;

Can the company raise what it needs under the projected market conditions ?

Can the company carry the cost of capital even if there is a slip in schedule ?

How high are the safety margins in the cash flow plan ?

If a space entrepreneur has to present a financial proposal to the investment community then

the following aspects should be researched in detail [35],

Parameter Drivers

Cost of Capital Debt / Equity Ratio

R & D Cost Technology Maturity Level

Time to Market Project Management / Regulatory Env.

Revenue Expectations Overall Demand Competition

Fig. 31 Key Information Sought by the Investment Community


3.4 Review of Starchaser’s Current Business Strategy

Starchaser have matured immensely over the last ten years, starting out as a group of people

developing small rockets on a part time basis to now having ambitious plans to establish a

presence in the sounding rocket & emerging sub-orbital space tourism industries. This shows

that they have the entrepreneurial spirit and determination to grow their business. Unlike most

of the XPRIZE entrants, Starchaser have been able to keep their business afloat by securing

additional outside investment from private individuals and by developing a range of other

revenue generating initiatives. These activities have allowed Starchaser to continue to

develop their technology and to get the business to a position where it can begin to structure

itself so as to make itself attractive to the investment community.

3.4.1 Company Strategy

It is recognised that there are four stages to the effective development of an organisation,

Mission & Objectives describe what an organisation is looking to do and Strategy & Tactics

are the methods of how they will be achieved. This has simply become know as the M.O.S.T

method [38] of applying a systematic approach to business development which will increase

its long term stability and effectiveness. This model allows organisations to focus its

resources and provides a foundation on which to evaluate its performance. In terms of

identifying if Starchaser are undertaking the correct initiatives to help grow their business the

M.O.S.T analysis was used to examine their current business strategy.

Fig. 32 M.O.S.T Method of Analysing Business Growth

Using this method of analysing Starchaser’s current business strategy, their primary Mission

is to:

Provide a safe , reliable and affordable access to space for all

To become the market leader in non government space access

To be recognised as ‘the’ British Space Programme


Their current Objectives for achieving this mission is to employ a five stage growth strategy

as shown in Fig.33 below:

Fig. 33 Representation of Starchaser’s Current Business Strategy

Stage One represents their first significant business opportunity since the XPRIZE was won

in October 2004. Starchaser have spotted a gap in the market left by the Skylark sounding

rocket programme and are now using their experience to develop the world’s first reusable

sounding rocket. This rocket is being developed with proven technology and will form the

basis of one of Starchaser’s main revenue streams over the next few years.

Stage Two will involve developing their XPRIZE contending rocket, Thunderstar, into a viable

sub-orbital space tourism launch vehicle. Once again Starchaser are using proven

technology developed from a number of test flights, drop tests and engine firings conducted

during the XPRIZE competition.

Stage Three will see the development of a two stage rocket called Thunderbird to allow for

the deployment of payloads such as small satellites into orbit. The current industry trend for

much smaller GEO stationary satellites means that launch vehicles can be smaller, thus

reducing launch costs.

Stages Four & Five will see an adaptation of their Thunderbird rocket to allow for the

carrying of space tourists. Once again the technology used is mature, the problem facing

Starchaser will be trying to develop the vehicle to withstand heat on re-entry to the earth’s

atmosphere and ensuring that safety on board the rocket is of the highest levels. These

factors contribute to making Interplanetary travel the most difficult goal for Starchaser to

achieve.


Starchaser’s initial Strategy is to focus on their sounding rocket programme and once this

has been brought to market they will then focus on the continued development of their

XPRIZE vehicle to compete against Virgin Galactic in the sub-orbital space tourism industry.

If Starchaser can successfully reach these two stages in their overall strategy then they will

be in a position to move onto stage 3. Starchaser cannot afford to be distracted by, for

example, lucrative business opportunities in the orbital market, they MUST get their base or

foundation layer of services and technology in place first in order to reach stage 3. To this end

a number of Tactical projects have been identified which must be completed before reaching

Stage 2 of the growth pyramid, namely (in preferential order) :

Complete development of the new Churchill 3 derived bi-liquid STORM engine

Complete the development of the reusable Skybolt sounding rocket

Continue development of the Thunderstar launch escape system and 3 man capsule

Continue development of the Starchaser 5 / Thunderstar Rocket

Development of Guidance / Navigation systems

Development of a hybrid rocket engine

In terms of identifying when each stage of the business growth pyramid is likely to be

reached, we can use an S-Curve to illustrate the expected ‘project’ (as opposed to product)

lifecycle according to when the service offering and technology mature. Starchaser’s various

project lifecycles are shown below in Fig.34.

Fig. 34 Starchaser’s Project Lifecycle’s


Fig.35 attempts to show how each service will mature and we can see for example that the

sounding rocket service will be brought into service relatively quickly as the technology being

used is fairly mature and Starchaser already have significant experience in this area. It is

hoped that the sounding rocket service will become Starchaser’s initial source of income to

allow the continued development of the next stage of their programme. Their sub-orbital

service will require a longer period for R&D due to the additional requirement of carrying

passengers, but once again some of this work has already been conducted as part of the

XPRIZE competition. Overtime it is hoped that the lessons learnt developing sub-orbital space

technology will be applied to the orbital programmes that Starchaser would like to develop in

the future. Interplanetary travel is seen as a very long term goal and will require significant

financial investment.

Before Starchaser can devise a comprehensive business plan to take to the investment

community, they will need to undertake a number of assessments as to whether the company

is ‘ready’ to enter these new markets. According to Dr John Mullins [39], they will need three

crucial elements, a market, an industry and a core team of people to be able to successfully

execute the strategy. To assess whether Starchaser can reach each stage of their proposed

growth pyramid, Mullins recommends analysing each stage using the seven domains of

attractive opportunities. The seven domains are shown overleaf in Fig.35 and each is

explained in more detail in Appendix 8-N.

Fig. 35 Seven Domains of Market Attractiveness


On first glance this model appears to highlight the normal issues when assessing a business

opportunity but there are three additional observations which are often missed, according to

Mullins, by entrepreneurs and some investors :-

Markets and industries are not the same thing

Macro and micro level considerations are necessary, also markets and industries

must be reviewed at both levels

The keys to assessing entrepreneurs and their teams aren’t simply found on their

resumes or in assessment of their entrepreneurial character.

The PEST analysis of the proposed new market sectors was highlighted earlier along with a

SWOT analysis of Starchaser and their ability to enter these sectors. The critical factor now

is whether Starchaser has the correct internal resources to be able to drive the proposed

business strategy. The questions highlighted in Appendix 8-N [39] will help Starchaser to

effectively ‘road test’ their business ideas and identify what their internal needs will be in order

to develop an appropriate business plan to execute their proposed strategy.

In terms of assessing where Starchaser are now with respect to the growth of their company

we can use Greiner’s model of the five stages of growth [40] of a company to identify the

position of Starchaser according to its size and age. This is illustrated below in Fig.36.

Fig. 36 Position of Starchaser with Respect to its own Growth


At the moment Starchaser would be considered to be positioned near the beginning of phase

3 of the growth through delegation phase. Phases 1 & 2 saw Starchaser develop its early

rocket programmes before moving onto developing a rocket to compete in the XPRIZE

competition. The company is now growing strategically by choosing two projects, Skybolt &

Thunderstar and developing a business plan to bring these projects to market in order to bring

further investment into the company.

To explain this further and understand how a company grows from a people perspective, it is

important to understand the individuals that actually work for the company. According to

Sykes [41], you need the correct mix of people to be able to initially grow the organisation.

Sykes proposes that there are three types of people to be found in a company, namely

Envisioners, Enablers and Enactors and at company startup phase they should all be aligned

around a unifying vision or shared mission. The envisioner has the ability amongst an

individual or group to conceptualise.

Entrepreneurs are categorised as envisioners as they are responsible for generating the initial

business idea but then it is up to the enabler to take the envisioner’s idea and put it into

production. Finally the enabler gets the enactors to actually undertake the work in hand.

Fig. 37 Metamorphosis of a Company


Fig.37 on the previous page shows how the organisational structure changes over time,

initially you have the three Es at the start up of ‘Egg’ phase, as time moves on, rapid growth is

seen, the external environment changes and more resources are required. At point A on the

graph a period of ‘second thinking’ [41] is required to re-evaluate the organisation of the

company and if required bring in more people to delegate responsibility to. This process

repeats itself and the organisation grows organically into a ‘butterfly’ until a point is reached

where the product or service is brought to market. The important thing to note is that the

whole organisational structure is designed around the vision for the company and its

products.

From Starchaser’s point of view they are transitioning into the enlargement phase, shown by

the yellow star and expanding their business around the two strategies defined earlier. This is

backed up with the recent news that Starchaser has opened up a U.S office in New Mexico

and the CEO has delegated responsibilities to two new employees over there. Up until

recently the CEO was undertaking both the envisioning and enabling role, ie minimal

delegation. Moving forwards, the CEO needs to appoint an Operations Manager or

equivalent to undertake the day to day management tasks of running the business whilst he

focuses his time on developing the new business plan and securing new funding from

investors.

3.4.2 Marketing Strategy

In order to try and assess Starchaser’s marketing activities, the framework [42] shown in

Fig.38 overleaf was applied to examine their marketing mix, strategy and macro environment

that they currently operate in. Starchaser’s perceived marketing strengths / awareness are

shown by way of the yellow highlighted text.

From a marketing environment point of view Starchaser have a very good understanding of

the target markets they wish to enter. Starchaser have been around for many years and

during this time they have established a very good understanding of the macro environmental

issues which could affect their business. They have a strong link with the XPRIZE

Foundation, the organisation that will help to develop the new space tourism industry and they

have a new relationship with the Governor of New Mexico State, the location of the

Spaceport. The PEST and SWOT analysis conducted earlier in this dissertation will help to

re-enforce Starchaser’s understanding of the environment that they will be operating in.


Fig. 38 Review of Starchaser’s Marketing Activities

From a strategy point of view, as highlighted earlier, they are currently focused on a

differential advantage strategy both in terms of a reusable sounding rocket and a traditional

rocket for space tourism. The next stage is for Starchaser to derive the marketing strategy for

each new sector and to start thinking about how they wish to position their products in the

market space. The next major issue faced by Starchaser is to work out how to position their

brand as the provider of low cost sub-orbital sounding rocket and space tourism services.

Ideally, when people think of space tourism they will immediately think of the name

Starchaser. According to Dibb& Simkin [43], a brand can have five groups of key attributes.

The attributes shown in Fig.39 represent the current perception, by the author, of the

Starchaser brand name.

Fig. 39 Starchaser Brand Characteristics


Starchaser are in a position where they have a very strong company name, unique and at the

same time relevant to the industry that they serve, but they now need to develop the brand

still further in order to try and compete with one of the strongest brands in the World, Virgin.

Dibb&Simkin [43] suggest that a successful brand should have six key characteristics and

these are shown in Fig.40 below.

Fig. 40 The Characteristics of a Successful Brand

Starchaser’s brand currently meets three of these criteria. The company name and identity

are unique in the market, they have a long term growth plan to develop their business and

enter new markets and they have a differential strategy for competing with other companies.

To develop the brand further they need to focus on developing the other three characteristics

shown in red.

One of the issues that needs addressing is related to the area of integrated marketing

communications. In order to further develop their brand strength they need to ensure that

there is a consistent ‘brand image’ across the whole company. Moving forwards Starchaser

need to develop a Branding Guide which will allow the management of all logos, colour

schemes and fonts to be used in all electronic and printed materials. In addition, Starchaser

need to start registering all logo designs and trademarks to prevent brand identity theft. The

brand, in terms of company name, is one of their biggest assets, which needs protecting.

Ever since Starchaser was formed they had a very strong logo and text font which was

immediately identifiable with the Starchaser brand. Starchaser recently employed the

services of a marketing communications company who decided to give the company a fresh

look by re-designing their logo.


Their original logo is shown on the left in Fig.41 and the updated logo is shown on the right.

The new design is very simple and clean and the white square and blue arc represents the

trajectory of a rocket. The issue that Starchaser have is that in some of their marketing

activities and materials they are still using a mixture of both old and new logos which from a

branding perspective can be quite confusing. Instead they need one consistent image across

everything they do, similar in a way to one of the leading Formula One Teams such as

McLaren or Ferrari.

Fig. 41 Starchaser’s Old & New Logos

By comparison, Virgin Galactic have also undergone a major re-branding exercise, shown

below in Fig.42, employing a world leading brand identity consultant to redesign their logo.

Unfortunately they have gone from a very simple clean logo which can be easily re-produced

to one which is very fussy, difficult to re-produce (due to the detail) and is difficult to read the

word galactic. The new design is suppose to represent the iris of Richard Branson’s eye.

Fig. 42 Virgin Galactic’s New Image

With respect to Marketing Mix, Starchaser, due to where they are in terms of growth of the

business, are really only focussing on the Promotion and Product related activities of the mix.

One of Starchaser’s biggest marketing strengths is how they have managed to promote

themselves. Even though the survey for this dissertation highlighted a low awareness of the

Starchaser brand name, they have undertaken some unique projects aimed at trying to

increase awareness of not only their company name but also the space tourism industry in


general. Starchaser have launched a number of rockets over the years and these have

formed the basis of an exhibition at the new Spaceport visitor attraction in Liverpool. As well

as displaying rockets Starchaser provide support for educational activities in the Spaceport’s

own lecture theatre.

Starchaser’s largest rocket, Nova shown below in Fig.43 is used as part of their educational

outreach programme for UK based schools. The rocket provides huge brand presence when

travelling around the country to various schools and events. Hiring out the rocket, along with

activities at the Liverpool Spaceport has allowed Starchaser to develop a revenue stream into

the business to help part fund operational expenses.

Fig. 43 NOVA Launch Vehicle

Starchaser have a very loyal members club and numerous sponsoring companies who have

either made cash donations or supplied products free of charge into the business. They need

to exploit these networking opportunities further in order to try and get access to the

investment community.

Overall, Starchaser’s promotional marketing efforts over the last few years have been

excellent given their limited budget. Moving forwards, they need to introduce other areas of

the marketing mix to help strengthen their company brand and to put them in a better position

to try and compete with Virgin Galactic.


3.5 Summary

The aim of this chapter was to try and identify a number of research materials, in the context

of Starchaser’s business strategy, and apply a number of MBA models and frameworks to

analyse Starchaser’s current position. This was achieved successfully despite the unusual

nature of the industries that Stachaser are looking to get in to and the restricted amount of

academic research materials that are available.

The lessons learnt from this chapter will now form the basis of discussion in Chapter 4 and

provide input to the proposed strategy recommendations in Chapter 5.


4 Discussion

4.1 Introduction

The following chapter synthesises the previous two chapters to allow a strategy to be

developed for Starchaser. Included within this discussion will be an analysis of the results

from the two surveys conducted for this dissertation. The results from the survey and the

synthesis of the previous two chapters will result in a strategy being developed for Starchaser,

this will be discussed in more detail in Chapter 5.

4.2 General Review of the Sounding Rocket Industry

This industry is very mature, both in terms of how long it has been established and the type of

technology being used. Compared to other areas of the space industry, namely the orbital

launch sector, the sounding rocket sector has a very strong launch and safety record. The

industry has relatively few companies competing within this sector and most launches occur

in the U.S or Northern Europe. Nearly all launches are serving the scientific & research

communities with some NASA and ESA programmes being used to test flight equipment for

their respective orbital launch programmes, eg the Shuttle and Arianne rocket.

There appears to be very little in the way of pure commercial opportunities in the sounding

rocket industry, ie launching payloads for companies outside of the research community. The

only real commercial opportunity is in the design and manufacture of sounding rockets to the

various launch organisations. Today’s sounding rockets are largely expendable, meaning

that a new rocket has to be built for each launch. In order to try and reduce costs,

programmes such as the MASER are able to deploy multiple payloads in one flight. In

addition the supply of rocket motors is dwindling quickly and ESA have had to look else where

for the supply of their rocket motors. It would appear that the number of flights being launched

could be constrained by the cost and number of rocket motors available on the market.

As sounding rockets are primarily supporting the research community, who in turn are funded

by government grants, it is important to understand each country’s space policy before trying

to make an estimate of the future demand for these services. The UK appears to be in a

minority within Europe where by they will happily fund the space related scientific community

with £200Million per year, but without membership of programmes such as ESA’s ELIPS or

providing alternative launch funds there is very limited opportunity to spend this budget on

microgravity based research. The government seems keen not to waste money on space

related research and as such prefers to fund space projects that can provide significant

commercial returns.


As highlighted by the Microgravity Report 2002, there were significant opportunities to exploit

microgravity but without government support the interest in this area of research appears,

from the survey at least, to have totally disappeared. This will be discussed in section 4.3.

4.2.1 Can Starchaser Compete in the Sounding Rocket Market?

Starchaser have a long and successful history of developing small rockets, more importantly

they have been able to achieve this on a relatively small budget and without lucrative

government contracts to develop the launcher technology. As discussed earlier, Starchaser’s

Skybolt rocket has two key advantages over the competition, namely it is reusable and low

cost. Starchaser also benefits significantly from the fact they have designed and developed

their own engine and rocket meaning they are totally self sufficient, ie not affected by the

industry wide shortage of rocket motors.

Based on this information alone it would appear that Starchaser could compete in this market

effectively but based on the survey findings from the UK at least, they would have to explore

other market opportunities. This could involve offering a sounding rocket service to U.S

based research organisations from its proposed New Mexico launch facility or partnering with

ESA to offer a reusable sounding rocket service. ESA’s current MASER programme has two

main draw backs in so much as it is very expensive to operate and due to its current

configuration is very inflexible from a launch frequency point of view. It would appear that the

shortage of suppliers of sounding rocket services and components, such as rocket motors,

opens up a strong commercial opportunity for Starchaser to sell or license their technology to

other launch organisations such as the Swedish Space Corporation. In addition, Starchaser

could secure financial investment to develop the rocket motor development part of their

company to such an extent that they become an official supplier of rocket motors to other

sounding rocket manufacturers across the World.

Starchaser have the opportunity to offer a complete sounding rocket development and launch

service but the key issue they need to address at the moment is how to get financial

investment into the company to help bring their ideas to market. Even if Starchaser cannot

provide a dedicated launch service to UK universities, due to the restrictive nature of the

government’s policy of microgravity research, they still have the opportunity to promote

themselves as the leading UK space company and sell their services to other more forward

thinking countries. The Skylark programme brought immense pride and exposure to the

capabilities of the British space industry and hopefully Starchaser will be able to resurrect this

pride once again via their Skybolt programme.


4.3 Analysis of the Results from the Sounding Rocket Survey

This section aims to review the results obtained from the sounding rocket survey conducted

on UK based space & micro gravity research institutions. The aim of the survey was to

establish if there was enough UK market demand for Starchaser’s Skybolt sounding rocket

service. The methodology used to conduct the survey will be briefly explained first.

4.3.1 Review of Survey Methodology

In order to try and find a relevant and large survey population, a number of universities had to

be identified who were likely to undertake space microgravity related research. These were

identified by firstly looking through the University Course Admissions Service (UCAS) website

to see which universities were offering space related undergraduate degrees and post

graduate research. Secondly a number of British universities receive significant funding from

the Particle Physics & Astronomy Research Council (PPARC) to conduct space related

research and these educational establishments were identified from their 2004 annual report.

Finally, the 2002 Micro Gravity Report produced by the British National Space Centre (BNSC)

identified all UK universities involved with life science or physical science research which may

benefit from having access to a sub orbital launch facility.

Due to the number of Doctors and Professors that were identified for the qualitative survey it

was felt that an interview based survey would be logistically impossible and difficult in the

timeframe allocated for this project. A postal survey would be expensive and again would not

guarantee a quick response and therefore it was decided that a web based tool would be the

most efficient method of conducting the survey. Suitable web based survey tools were

reviewed and one tool from a company called Zoomerang.com was used to host, prepare and

analyse the responses from the individual surveys. The qualitative survey was kept relatively

short to guarantee completions and additional comment boxes were provided against each

question for further feedback if each respondent felt the need to elaborate on their answers.

Each person in the qualitative contact database would be sent a personal email together with

a web link to the survey website.

4.3.2 Discussion of the Results Obtained

This particular survey was distributed, by way of personalised emails, to 84 potential

respondents (listed in Appendix 8-N). During the survey period, 14 academics agreed to

complete the survey which represents a relatively low response rate. Those who did complete

the survey were all very well respected academics within their field of research. Additional

feedback was provided which improved the qualitative nature of this survey however there

may be a number of reasons as to why there were so many non-completed surveys. This will

be discussed at the end of this section. The complete survey responses are shown in

Appendix 8-P. The highlights from this survey will now be discussed.


Most respondents to the survey used either NASA or ESA as their launch partner however

there was some interest in using Russian and Chinese launch providers. Most however

preferred to use ESA, this may be due to the fact they are working on larger European

projects. The split in preferred launch location is shown in Fig.44 below

Russia21%

Asia7%

North America

29%

Europe43%

Russia

Asia

North America

Europe

Fig. 44 UK Specific Launch Locations

Nearly 85% of those who responded said that they would like to see a British company

establish a low cost sub-orbital launch service. Some said that technological spin off

opportunities and increased graduate recruitment would be a couple of additional benefits to

be realised. 57% felt that a British company would not be able to enter this market space

without assistance from the British government, one saying that it would not be impossible

and that “brains not brawn” would help achieve the goal. 85% of respondents said they

believed that a dedicated low cost sub orbital launch system would be of benefit to university

related space research. 64% of respondents said they believed that the government should

help to subsidise sub-orbital launches.

ESA and NASA apparently impose many bureaucratic barriers and the use of an alternative

low cost launch provider would get around the problem of not being able to access the ESA

ELIPS programme. As a result of not being involved with ELIPS, many researchers feel

isolated from other micro gravity research currently being conducted across Europe.

Funding is typically provided to develop payloads and hardly any funding is set aside to cover

the associated launch costs of the payload. Fig.45 overleaf highlights the current situation

with respect to launch budgets. Starchaser may be able to provide a low cost launch service

but restricted budgets from the research councils may reduce revenue and business

opportunities for Starchaser, especially if they base their business model on supporting the

UK market only.


0 1 2 3 4 5 6 7 8

More than £1million

£500k - £1million

£250k - £500k

£100k - £250k

Less than £100k

Costs are subsidised

No budget available

Fig. 45 Average Launch Budget Per Year

As there appears, for the moment at least, to be little interest in microgravity based launch

programmes, the researchers have become more closely involved with orbital research

projects such as designing the new generation of micro satellites. Micro satellites are a

growing industry sector, which the government strongly supports, and 46% of respondents

said they were working on such projects. These projects not only have more prestige but

they also command significantly more funding than micro gravity based projects. 31% of

respondents said that they had not launched any payloads in the last five years and those

that had, said that it could take up to 4 years to complete some research projects prior to

launch. This figure alone is worrying as it would be very difficult to sustain a launch business

with very few payloads to actually launch each year. For those researchers that do use a

launch partner (and more importantly choose which partner to launch with), there are a

number of factors that are taken into consideration before choosing which launch partner to

use. As shown by Fig.46 the key issues are related to launch safety and reliability. For this

reason researchers tend to go with launch providers who have a long and successful track

record of launching payloads.

0% 20% 40% 60% 80% 100%

Location of Facilities

Flexible Launch Capability

Customer Service

Safety Record

Reliable Service

Low Cost

Not Relevant

Slight Importance

Important

Very Important

Critical

Fig. 46 Considerations When Choosing a Launch Partner


Those who responded gave a number of factors which may prevent a low cost launch

provider from entering this market sector, with a lack of technical expertise and competition

from the traditional launch providers being highlighted as the main ‘barriers to market entry’

for a new company such as Starchaser. As the government does not currently provide

funding for launch services they also said that securing private financing would also be a

major hurdle to overcome. These factors are all backed up by research conducted earlier in

this dissertation and are highlighted in Fig 47 below.

0 1 2 3 4 5 6 7 8 9

Lack of a market

Lack of funding from the private sector

Lack of entrepreneurial spirit to succeed

Lack of technical expertise

High costs involved

Restrictive government policies

Competition from traditional launch providers

Fig. 47 Factors Preventing Market Entry for New Launch Providers

50% of those who responded had heard of Starchaser, but only 21% were aware that a new

spaceport was being constructed in New Mexico. Most said they would use such a facility in

the future if a low cost launch infrastructure could be provided. (This figure may have changed

now given the recent exposure of Branson’s proposed spaceport in New Mexico).

This survey was successful in so much as it was taken by 14 leading academics who are

experts in their respective areas of research and they went to the extra effort of providing

useful additional comments and feedback. This additional feedback was inline with

information already acquired earlier in this dissertation.

As for those that did not complete the survey, this may simply be due to limited time, lack of

interest in the subject area or spam filters being set up on their email system, thus not

allowing the survey to be emailed through to their email accounts. In addition some may feel

that due to limited government support for this area anyway, completing this survey will make

no difference to the situation and hence they would be wasting their time.


4.4 General Review of the Space Tourism Market

The space tourism market is very much in its infancy at the moment. Despite the XPRIZE

being claimed in 2004, there remains a long way to go to bringing the space craft technology

to market and to inform the general public as to what a sub-orbital flight might be like. The

XPRIZE has certainly been the catalyst for developing a low cost sub-orbital space industry

but the orbital space industry remains the long term dream of many people. This dream has

become reality for a few high net worth individuals but there is a long way to go before this

type of service can be offered to the general public.

Many barriers exist to the successful development of the sub-orbital flight market, with safety

and regulatory concerns being widely understood to be the main issues. The technology has

been successfully proven and in some cases the technology being used has been around and

used successfully in other launch programmes. The other main issue is how to bring costs

down to such a point that business opportunities become commercially viable for small, non

government operators such as Starchaser.

The XPRIZE has partly helped to educate the public as to what space tourism is all about and

since the XPRIZE was claimed, the media have begun to take a significant interest in this new

and exciting area. One of the main interests for the media is how Richard Branson will bring

his Virgin Galactic company to market. Branson has already applied the Virgin ‘Marketing

Machine’ to his venture and in the process has already positioned the Virgin Galactic brand

as the number one space tourism company of the future. Branson has a reputation for being

involved with risky projects but the strength and reputation of the Virgin brand has meant he

has been able to invest significant money into the Virgin Galactic business. This may seem to

be unfair to a company such as Starchaser but the positive thing to come out of this is that

Branson is not only promoting his business but promoting the space tourism as a whole. This

alone has to be good for all prospective competitors who will enter this market in the near

future.

It is clear that money talks in this industry and this more than any other industry seems to be

getting significant interest from a number of high net worth ‘investment’ individuals. Once sub-

orbital spacecraft go into service in 2008 and proven that not only the technology is

commercially viable but there is also a significant market as well then the investment

community will start to take an interest and provide funding for new business start ups in this

sector. For the moment it would appear that ‘the industry’s start up costs’, will be financed by

a relatively few high net worth individuals such as Jef Bezos, Paul Allen and Richard Branson.

Once they have done the hard work of establishing the industry, so to speak, competition will

be introduced into the market bringing down ticket prices, reducing operational costs and

encouraging other smaller sub-orbital operators to enter the market.


4.4.1 Can Starchaser Compete in the Space Tourism Market ?

There is no doubt that Starchaser will one day hold a sizeable part of the sub-orbital space

tourism industry. They have the technology, the people and sheer determination to make the

business a success. The one thing missing at this moment in time is funding to grow their

business. Starchaser are suffering because the financial community perceive the industry to

be very risky from an investment opportunity.

Starchaser’s proposal for a sub-orbital craft uses rocket technology that has been around

since the early days of the Apollo missions. Whereas Branson will be offering a plane style

launch vehicle, Starchaser will be offering a traditional vertical launch vehicle. This will offer a

completely different launch and flight experience to Virgin Galactic’s craft and could be seen

as a differentiator rather than competitive advantage in the sub-orbital launch sector.

Starchaser have been able to use their rocket launches to date to test components that will

one day be used in their Thunderstar launch vehicle. This has allowed them to build up

credibility and experience in the industry. This credibility and experience could be the key

factors in bringing investment into the company. To improve these factors still further they

need to prove that they can develop a commercial business from their proposed Skybolt

sounding rocket programme.

In the meantime Starchaser need to continue developing their sounding rocket business and

educating tomorrow’s space tourists by way of their successful educational outreach

programme. They also need to fully develop their business and marketing plans in order to

fully realise the exciting opportunities that present themselves in the near future.

4.4.2 Increased Media Interest in the Space Tourism Industry

During the writing of this dissertation, November’05 to January’06, there have been three

major TV productions featuring the space industry and more importantly space tourism. All

three programmes were broadcast after the surveys were closed and in hindsight it would be

interesting to re-run the space tourism survey to see if any questions would have been

answered differently.

The first programme produced by the BBC, The Space Race, highlighted the history of space

flight and how the space race evolved between the U.S and Russia. The programme was

very informative and was told as more of a ‘story’ rather than in the more traditional

documentary format. The second programme, produced by the BBC, Rocket Man, highlighted

one man’s attempt to build a rocket to go into space. The interesting point about this

programme was that it mirrored the life of Steve Bennett, CEO of Starchaser. Even though


no mention was directly made of Starchaser, there were certain events in the series which

were identical to events that have happened in Steve’s own life to establish Starchaser

Industries. Finally, the BBC Horizon programme, produced a documentary on space tourism

and featured many of the U.S based XPRIZE contenders. Particular emphasis was placed on

Virgin Galactic and for the first time the general public could visualise Branson’s dream of

establishing a space tourism based company.

4.5 Analysis of the Results from the Space Tourism Survey

This section aims to review the results obtained from the space tourism survey conducted on

a number of members of the general public. The aim of the survey was to gauge opinion on

the perceptions of space tourism and whether those surveyed would be interested in taking a

sub-orbital flight if a company could offer a low cost sub-orbital launch service. The

methodology used to conduct the survey will be briefly explained first.

4.5.1 Review of Survey Methodology

In order to acquire a large survey population, a database of survey contacts could have been

purchased from a specialist survey company however this would have imposed a significant

cost to the author and therefore an alternative approach had to be derived. It was felt that

the target market for a space tourism company would be a young professional with

disposable income and so an initial email database of fifty contacts was compiled from friends

of the author. This contact database was made up of ex-work colleagues, personal and

family friends, fellow students from the Warwick MBA and a number of members of web

based technical forums used by the author. Once again, a suitable survey was compiled

using the Zoomerang.com tool set, but only a few comment boxes were added as it was felt

that the survey population would want to complete this survey as quickly as possible. This

particular survey was therefore looking for trends in statistical results rather than lengthy

additional comments and feedback.

The intention would be to email each individual and ask then to complete the online survey

and then ask them to forward the email to a number of their friends and work colleagues

Hence overtime the eventual number of contacts would grow significantly from the initial

contacts that were emailed. This ‘snowball’ or viral effect of acquiring new email contacts

would hopefully ensure that a large population could be reached and a meaningful set of

survey results could be obtained. Once a noticeable trend develops in both surveys then the

surveys would be closed and the results would be analysed.

4.5.2 Discussion of the Results Obtained

The space tourism survey was conducted between October and November 2005 and in total

215 survey forms were completed. The initial group of people targeted were the 31-40 year


old range as this age group was likely to have the disposable income in the future when sub-

orbital flights begin. The gender and age range of all respondents to this survey are shown

below in Fig.48.

3

26

31

10 8

0

14

27

105

1

79

0

10

20

30

40

50

60

70

80

90

15-20 yrs 21-30 yrs 31-40 yrs 41-50 yrs 51-60 yrs Over 60 yrs

Age Range

Nu

mb

er o

f R

esp

on

ses

Male

Female

Fig. 48 Age Range and Gender of Space Tourism Survey

As with the sounding rocket survey there was immense pride in British innovation and 90% of

respondents said that they would like to see a British company enter this new industry.

However there was concern that due to the high start up costs involved , 74% felt that it would

be difficult for a private company to establish their business without government support.

Interestingly, 90% of respondents said that they had heard of the concept of space tourism.

This could be partly to do with the marketing efforts of Virgin Galactic as their XPRIZE efforts

attracted a lot of media coverage during late 2004.

3

37 36

128

0 38 5 3 1

98

0

20

40

60

80

100

120


Age Range

Nu

mb

er o

f R

esp

on

ses

Yes

No

Fig. 49 Awareness of Space Tourism


The Starchaser brand was known by only 29% of those surveyed which shows, as discussed

in Chapter 3, that Starchaser need to significantly improve their brand awareness. Meanwhile

Virgin Galactic was known by 57% of the respondents. This is interesting as Virgin Galactic

have only been around for 1 year so this demonstrates the power of the Virgin marketing

machine in terms of increasing brand awareness in a relatively short period of time.

0

9

18

5 33

31

79

23

106

26

0

10

20

30

40

50

60

70

80

90


Age Range

Nu

mb

er o

f R

esp

on

ses

Yes

No

Fig. 50 Awareness of the Starchaser Brand Name

When asked whether they would be interested in taking a sub-orbital space flight, nearly 56%

of respondents said that they would be interested. This positive outlook was common across

all age ranges, as shown below in Fig.51. The trends are identical for each age range as

well.

3

22 23

64

04

16

4 42

0

14

29

14

53

61

0

10

20

30

40

50

60

70


Age Range

Nu

mb

er o

f R

esp

on

ses

Yes

No

Maybe

Fig. 51 Those Interested in Taking a Sub-Orbital Flight


The main reason given as to why they would like to take a sub-orbital flight is that they would

simply like to view the earth from space. This would imply that the spacecraft used for the

flight must have plenty of windows to allow all passengers to have a good view of earth from

space. In addition, 11% said that they would like to experience weightlessness. Again this will

affect the design of the interior of the spacecraft in terms of ensuring that passengers would

be able to experience this. The reasons for taking a sub-orbital flight are shown in Fig.52.

03 8

11

2

2

33

0

1

0

1

24

0

0

0

0

6

12

2

2 0

0

4

6

5

0 1

0

21

67

3010

6

0%

20%

40%

60%

80%

100%


Other Something to tell the friends Experience sensation of taking off

Experience weightlessness Achive a lifetime's ambition View earth from space

Fig. 52 Reasons for Taking a Sub-Orbital Flight

For those not interested in taking a sub-orbital flight, a number of reasons were given with

relatively few highlighting danger as the primary reason for not flying. Some said that it was a

combination of the factors shown in Fig.53 overleaf, others simply said that the reputation of

the carrier would be a key decider for them.


0

1 3

2

3

1

0

1

7 0

0

2

0

0

0

1

1

0

0

1

1

1

0 0

0

26

1

0 0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Other Not Interested Too old Too expensive Too dangerous

Fig. 53 Reasons for Not Taking a Sub-Orbital Flight

In terms of how much people would be willing to pay for such a flight, nearly 50% of

respondents said that they would be willing to pay up to 1 month’s salary to achieve this. This

means that ticket prices would have to be between $3k - $5k. Considering that the initial

Virgin Galactic flights are about $115k it shows how far the ticket prices would need to come

down to grow the market significantly. It was interesting to see that 2% of respondents would

consider paying more than 1 year’s salary.

50%20%

20%

5% 3% 2%

1 months 2 months 3 months

6 months 1 year more than 1 year

Fig. 54 Ideal Amount to Pay for a Ticket

Safety record would appear to be the main concern of respondents when looking for a

suitable sub-orbital operator to fly with. In order to acquire market share, potential new

companies in this sector will have to play particular importance to how they market the safety

of their spacecraft.


77%

10% 4%

4%

5%

Safety record Low cost faresCustomer service Location of launch facilitiesOther

Fig. 55 Factors Affecting Choice of Operator

When asked whether respondents would prefer to travel on a space plane or traditional

rocket, 40% said they were not bothered, 23% said they would prefer a rocket and 37%

preferred a space plane. At the moment Starchaser’s plans are to build a traditional rocket

and Virgin Galactic will be offering a Spaceplane. It would appear that offering choice in the

market will be important to winning new business. In addition, both types of spacecraft offer a

different flight experience so there is potential for customers to try out both forms of transport.

Their Thunderstar rocket is therefore a key differential advantage for them.

With regards to Starchaser’s plans to launch from the New Mexico Spaceport, 75% said that

they would be willing to travel to this location in order to take their sub-orbital flight. Assuming

that training takes 4 days, there will be the potential for space tourists to spend 5 days in New

Mexico. Therefore, in addition to the Spaceport, the New Mexico State government needs to

ensure that the appropriate tourism and leisure infrastructure are included as part of the plans

for the spaceport, eg hotels, restaurants and sports facilities. An alternative would be for

Starchaser to establish a Sub-Orbital Space Orientation Centre in the UK to allow people to

undergo basic spaceflight education, training and health checks before flying out to New

Mexico for their sub-orbital flight.

With regards to providing space tourism education in UK schools, 61% of respondents agreed

that this would be of benefit to school children. The additional feedback provided to this

question proved very interesting and this along with the entire survey responses can be found

in Appendix 8-Q.


4.6 Summary

Overall the responses to both surveys, especially the additional feedback, was very

interesting and backed up key areas of earlier discussions regarding the viability of both the

sub-orbital sounding rocket and tourism related space industry sectors.

It was quite apparent from a UK perspective, that there is very little interest in micro gravity

based research, primarily due to a short sighted space policy produced by the British

Government. If Starchaser are to make a success of this business then they will have to find

micro gravity launch customers from outside the UK.

The space tourism survey was one of the first to be conducted in the UK since the XPRIZE

was won in late 2004 and it appears, from this survey population at least, that the concept of

space tourism was well known and understood. An increased media interest in this area has

also helped to educate a wider population. The market demand, from a UK perspective,

would appear to be there, but prices would have to come down significantly first for the

market to grow. Starchaser’s use of conventional space technology should bring them a

differential advantage to allow them to compete effectively within the sub-orbital market

sector.


5 Proposed Strategy

5.1 Introduction

The following chapter discusses the proposed strategy that Starchaser should take to develop

their sounding rocket and space tourism areas of their business. The proposed strategies are

based on the findings from the previous chapters and a rationale will be proposed as to why

Starchaser should implement them.

5.2 Proposed Sounding Rocket Market Strategies

The global sounding rocket market sector is very mature and in the UK at least, (due to

restricted government policies), offers very little in the way of commercial opportunities for

Starchaser. This section will attempt to recommend key strategies that Starchaser should

follow in order to grow their sounding rocket business.

The main problem facing Starchaser’s sounding rocket programme will be how quickly they

can acquire revenue streams once the Skybolt launch service becomes operational. Skybolt

has a key differential advantage over other sounding rocket launch providers, namely it is

reusable. This factor alone should help to bring launch costs down considerably and allow

more launches to take place. With this in mind Starchaser should look to see if they can offer

an outsourced launch service to ESA’s ELIPS programme. In addition to having access to a

reusable sounding rocket, a partnership with Starchaser would provide ESA with an

alternative sounding rocket launch location to Esrange, namely the New Mexico Spaceport.

This will also provide ESA with a presence in what will become one of the major

commercialised launch facilities in the world. If Starchaser can secure a long term launch

contract with ESA / NASA, they will be able to develop a significant revenue stream and they

will then be in a position to make themselves more attractive to the investment community.

One of Starchaser’s key strengths is its internal capability to design and build its own rocket

motors. One of the main issues affecting the sounding rocket industry is the very limited

supply of rocket motors. Starchaser could look to either license the rocket motor technology

to another company or establish their own company Starchaser Rocket Motors Inc. SpaceDev

secured external funding of $2.5Million from the investment community to design a rocket

motor specifically for SpaceShipOne. This investment has now paid off as Rutan / Branson’s

Spaceship Company will now be building the SpaceShipTwo craft, initially for Virgin Galactic

but also for other space tourism launch operators. This will provide SpaceDev with a

significant revenue stream for both the manufacture and in service maintenance of these new

hybrid rocket motors. Starchaser could look to establish a similar operation for the sounding

rocket launch operators, ie provide competition to the Brazilian VSB-30 rocket motor.


Due to limited time and resources, this dissertation has only been able to focus on the UK

market for sub-orbital sounding rocket launches. Even though the survey conducted had a

low response rate, the general feeling from the academic community was that there was a

limited need for microgravity launch services in the UK. For this reason Starchaser should

consider running a similar survey across Universities in both Europe and the U.S to establish

market demand for these regions. If Starchaser could establish a partnership with ESA’s

ELIPS programme, then this would offer other universities around the world an alternative and

more flexible launch capability than those available today.

5.3 Proposed Sub-Orbital Space Tourism Market Strategies

The sub-orbital space tourism sector represents the second stage of Starchaser’s business

plan. The following strategies would help Starchaser establish their brand in this sector and

identify how they can establish a complete service offering for this industry.

Starchaser’s current business strategy is to develop their Thunderstar launch vehicle to serve

the sub-orbital space tourism market. Even though it may be too early, Starchaser will need

to consider what to do if the space tourists prefer to use the space plane vehicle rather than a

conventional vertical take off rocket. Also, the easiest way for a new competitor to enter the

sub-orbital space tourism market would be to lease existing technology. The competition for

passengers will help to reduce ticket prices but more significantly will have the knock on effect

of eating into Starchaser’s share of the market. Starchaser could therefore use their industry

experience to negotiate with the investment community to possibly provide the funding to

lease SpaceShipTwo vehicles as well. If Starchaser could utilise proven technology in

addition to their own, then they may find it easier to raise the money required from the

investment community. In addition, Starchaser could use their experience with the sounding

rocket industry to adapt the SpaceShipTwo craft to launch micro gravity payloads (similar in

concept to the Space Shuttle’s payload bay). This would mean the craft would have a dual

capability, carrying space tourists and at the same time deploying scientific payloads once the

craft reaches apogee. The launch of the payloads would therefore be party funded by the

space tourists

New Mexico’s Spaceport will become the global ‘hub’ of the World’s commercialised space

industry. Once the market has been established, both commercial and academic institutions

from around the world will require information about all aspects of the industry. Working in

partnership with the XPRIZE foundation, Starchaser should look to establish The Institute of

Space Tourism. The whole aim of this will be to improve the awareness of the Starchaser

brand in the commercial and academic communities. In years to come, we can be sure that

business schools across the world will use Virgin Galactic as the basis of MBA and

undergraduate case studies of how to establish a space tourism business. If Starchaser can


establish thought leadership and develop a ‘lighthouse’ brand for their company name then

whenever someone mentions space tourism, Starchaser will always be associated first with

this industry.

Starchaser have successfully partnered with the Liverpool Spaceport visitor attraction and a

natural development of this would be to provide facilities whereby potential space tourists

could undergo basic training before arriving at the New Mexico Spaceport. The Space

Tourism Orientation Centre would offer a comprehensive two day course which would include

health checks, exercise routines and formal class lectures on what to expect from their sub-

orbital flight. Finally, a virtual reality sub-orbital flight could be offered by way of a Thunderstar

flight simulator. This would help to prepare space tourists prior to their arrival in New Mexico.

Similar facilities could be opened in other strategic locations around the world, for example

Dubai which is currently the world’s fastest growing tourist destination. Dubai also has some

of the best hotel and leisure facilities in the world and attracts many high net worth individuals

who could afford sub-orbital flights.

In addition to developing the launch vehicles, Starchaser need to establish a plan for how

they will offer their space tourism service to the general public. For example could Space

Adventures Inc. take space tourist bookings on behalf of Starchaser?. Space Adventures

have already established credibility by negotiating for the world’s first space tourist, Denis

Tito, to visit the ISS. In addition, Virgin Galactic have one key advantage over Starchaser in

so much as they have many resources available to them from within the Virgin Group.

Branson will be keen to integrate his Virgin Holidays and Virgin Atlantic airline business into a

completely integrated space tourism holiday package. Branson would also be able to fly

space tourists directly to a terminal at the New Mexico Spaceport from any airport around the

world. Starchaser need to think now about establishing partnerships with suitable airlines that

could offer a similar capability to Virgin Atlantic, eg British Airways, KLM, Emirates etc.

5.4 Proposed Company Strategies

Starchaser need to focus on getting a better understanding of the potential size of the space

tourism market, understand the key customer values / expectations / concerns and how they

can develop their brand strength to compete with Virgin Galactic.

In addition to conducting another, more globally focused, sounding rocket survey, Starchaser

need to look at running a more comprehensive and more widely distributed space tourism

survey. Many surveys have been conducted in the past on a country by country basis, but

very few have been conducted since the XPRIZE was won in late 2004. Starchaser should

work with Professor Geoffrey Crouch at La Trobe University to develop such a survey.


Crouch is regarded as one of the world leaders in academic research into this area. Naturally

if Starchaser are sponsoring the survey they will then be credited with its publication and

hence referenced in numerous global publications once the survey results have been

compiled. Once again it is indirectly increasing brand awareness and provides Starchaser

with a much better understanding of the market they are looking to enter.

Starchaser’s educational outreach programme has been extremely successful, it has helped

bring revenues into the business, it has contributed towards children’s understanding of space

and it has provided significant brand awareness opportunities by way of it’s rocket and trailer

travelling the length and breadth of the UK. Moving forwards, Starchaser should look to

develop this idea further by developing a national competition for school children to either

design & build small rockets to compete in an altitude based competition or to develop

experiments which could be deployed via Starchaser’s Skybolt sounding rocket service. This

could be run in a similar way to the popular Formula One in Schools competition whereby

school children design racing cars using the latest computer aided design software and then

compete in regional and national competitions. The aim would be to get the school children to

develop basic rocket technology or micro gravity experiments which will help them to get a

better understanding of the space industry. More importantly this would encourage today’s

school children to become the space engineers and researchers of the future.

Finally, from an operational perspective Starchaser should look to appoint an Operations

Manager who would be responsible for the day to day running of the company. This person

would have a manufacturing background and have prior experience of working in the space

industry. This will allow the CEO to spend more time on developing plans for the business

and working with the investment community to secure more funding. You can have a great

product or service but without a coherent business strategy and associated funding the

company will struggle to remain in business.

5.5 Summary

The aim of this chapter has been to try and identify some key strategies that Starchaser

should follow, based on the research that has been conducted for this dissertation and the

issues faced by the sounding rocket and sub-orbital space tourism industries.

These strategies were identified by utilising Starchaser’s perceived strengths and experience

today and to find ways of increasing revenue and brand awareness opportunities in the future.


6 Conclusions

6.1 Introduction

The following chapter draws a conclusion to the research undertaken for this dissertation.

The strategic recommendations from the previous chapter are re-emphasised in a simplified

manner. In addition, key limitations of the study will be discussed along with possible future

research directions that could be followed to enhance this research activity.

Based on the research conducted, the primary aim of these recommendations is to provide

input towards Starchaser’s new business and marketing plans.

6.2 Major Recommendations

In summary, this dissertation proposes the following recommendations to Starchaser :-

Establish a partnership with a leading space agency launch partner, this will

serve to secure a stable revenue stream for their sounding rocket service

Evaluate rocket motor production as a spin off venture, this will capitalise on one

of Starchaser’s key design strengths and help to fill a key component supply shortage

for other sounding rocket manufacturers in the industry

Investigate micro gravity launch demand from other universities around world,

due to low demand in the UK for such a service, a similar survey / analysis should be

conducted in other key markets to evaluate potential demand

Evaluate possibility of leasing a SpaceShipTwo vehicle, this will serve to provide

Starchaser with a low cost alternative solution to Thunderstar, it will allow Starchaser

to increase market share using proven technology and allow it to explore the

possibility of incorporating a micro gravity payload deployment system

Establish The Institute of Space Tourism, This will help to position Starchaser as a

thought leader in this new industry and help to increase brand awareness in both the

commercial and academic sectors

Establish UK based Sub-Orbital Space Tourism Orientation Centre, This will

provide a facility to help pre-train potential space tourists before they arrive in New

Mexico. It will also enhance and expand the excellent facilities at the Liverpool

Spaceport visitor attraction

Establish partnerships with a suitable airline and space tour holiday operator,

this will allow Starchaser to establish the foundations of their service offering,

providing a totally integrated holiday package


Conduct global space tourism survey with La Trobe University, To leverage the

academic skills of one of the leading experts in space tourism in order to provide

more accurate ‘market’ research as to the future potential of space tourism.

Published results will once again help to position Starchaser as a thought leader

Further develop the school’s outreach programme, This will provide a natural

extension to their existing outreach programme, allowing older school children to take

an interest in space related technology which in turn will help to enhance the design

and technology area of the UK’s National Curriculum.

Appoint an Operations Manager to look after the day to day running of the

business, This will help to relieve the management ‘strain’ within Starchaser in order

to allow the company to be more focussed on developing and delivering on their

planned business strategies and goals.

6.3 Limitations of the study

Due to time constraints and the broad subject areas being covered, this dissertation was

restricted to surveying a limited population, both in terms of the sounding rocket and space

tourism surveys. In hindsight this project could have covered either sounding rockets or

space tourism as a single dissertation subject on their own. During this project it was found

that the UK space policy does not currently include micro gravity based research and hence

the low response rate to the sounding rocket survey was therefore to be expected. Had there

been a keen interest in this area then the author would have arranged a few face to face

interviews but in hindsight the method used for gathering the qualitative data was the most

appropriate.

6.4 Future research directions

The sounding rocket market is very mature and a further area of study would be to try and

review the global market potential for Skybolt, rather than just the UK, as conducted by this

dissertation. The sub-orbital space tourism market sector probably offers the most potential

for future analysis, especially with regards to trying to survey a much wider population. Over

the next two years there will be a need to conduct more general business related research to

help companies such as Starchaser bring their products and services to market. The area of

market demand and securing financial investment would appear to be the key areas where

further research will be required. As the industry is very new, with limited competitors in the

market, this could offer an excellent area of research for either a marketing or

entrepreneurship based Ph.D.


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8 Appendices

Appendix 8 - A Review of Today’s Global Orbital Space Industry Over the last thirty years there have been two main competitors dominating the space

industry, namely the United States and Russia. During the cold war of the 1970s and 1980s

most space launches were related to government funded defence programmes. This period

saw an extensive network of global spy and reconnaissance satellites being placed into orbit,

these satellites were relatively heavy and the U.S and Russia had to spend billions of dollars

on their respective heavy lift space launch facilities. The so called ‘space race’ saw the U.S

and Russia achieve a number of World firsts but even today the two countries are keen to

prove that their launch facilities offer the most efficient means of launching a heavy payload

into space.

Fig. 56 Worldwide Launch Activity, 1980 – 2004

With the ending of the cold war in the late 1980s, these two nations had to find alternative

uses for their launch facilities and so emerged the beginning of the commercialised space

industry. Fig.56 above [44] shows the number of launches Worldwide over the last 25 years,

it is clear that at the height of the cold war, Russia was the dominant launch provider of

primarily defence related payloads. During the 1980s the number of space launches began to

decrease until 1986 and the Challenger Shuttle disaster. Up until the Challenger disaster

Russia’s space industry was very much supporting its own interests, but the need for an

alternative launch provider to the Space Shuttle provoked the Russians into providing launch

services for other countries, albeit on a very controlled basis. Russia saw a slight increase in

the number of launches during this period.


1986 was also a significant year as many other countries began to realise that without access

to the Space Shuttle programme and with limited commercial access to the Russian Soyuz

programme they had few alternatives other than to try and develop their own launch

capabilities. One of the key new entrants to the launch market at this time was the European

Space Agency and their Arianne programme. The U.S and Russia began to upgrade their

respective Space Shuttle and Soyuz launch programmes to support the emerging commercial

launch market and at the same time began to work on the joint development of the

International Space Station.

The commercial space market has grown exponentially since the Challenger disaster and the

period of most significant growth was during the late 1990s. This growth was due to two

factors, firstly to support the building of the International Space Station and secondly the

emergence of the digital telecommunications industry. One of the key factors affecting the

growth of the telecommunications industry was the rise of the internet and the period around

2000 saw the number of commercial launches peak to coincide with the so called ‘DotCom’

boom period. The DotCom crash in late 2000 saw the number of worldwide launches drop off

considerably, not just by the U.S and Russia but by all countries involved with the launch

industry. Fig.57 [44] clearly shows that the launch industry is demand driven.

Fig. 57 Commercial Intermediate & Heavy Lift Launches, By Country


The development of the commercial space industry has been driven by the government

backed heavy launch providers. In addition to the recently re-introduced Space Shuttle there

are currently six other heavy lift launch providers around the World. Even though there are

only six key heavy launch providers, the associated support services to design and maintain

these rockets are provided by some of the World’s largest Aerospace companies such as

Boeing, EADS, Lockheed Martin and Saab. Space programmes are and always will be a

great platform to showcase engineering technology and this is why some of the World’s

leading engineering conglomerates bid for these high profile government space contracts.

Fig.58 [45] below highlights which aerospace companies are involved with providing systems

and services to each launch provider and it is noticeable that each country’s launch

programme prefers to use companies within their respective country to manufacture their

rockets. As the rockets are designed and assembled in a modular nature it is relatively easy

to assign contracts to a number of different companies working on the same rocket

development programme. Where possible, highly competitive companies will not work on the

same contract and this is demonstrated by Lockheed Martin and Boeing who are working on

the U.S Atlas 5 and International Zenit 3SL Sea Launch programmes respectively.

Fig. 58 National Origin of Components of Commercial Intermediate & Heavy Lift Launch Vehicles


Most of the heavy launch providers are funded by their country’s respective governments,

Atlas 5 backed by the U.S, Arianne 5 by Europe, H2A by Japan and Proton / Soyuz by

Russia. From a commercial launch perspective the most interesting of today’s launch

providers is Sea Launch, this is one of the world’s first, privately funded, heavy lift launch

facilities. Sea Launch was formed in 1995 in response to an increased market demand for a

more affordable and reliable commercial satellite launch service. Within the space of five

years Sea Launch partners had built an entire launch infrastructure and operating launch

system. Sea Launch offers superior value, both from an operational and economic launch

point of view and this will be discussed further in section 2.5. The one thing that Sea Launch

has proved is that it is possible to establish a non government funded space launch business

which in this case is winning market share from the more established heavy lift providers.

Starchaser would like to emulate what Sea Launch have achieved but at the other end of the

market, namely sub-orbital and micro-small payload orbital launch systems.

Sea Launch was established to service the growing commercial space launch business and it

is this sector more than any other which will grow exponentially over the next 15 years. The

Analysis of Space Concepts and Enabled by New Transportation (ASCENT) report conducted

by NASA and Futron Corporation [46], was prepared to try and provide an estimate of the

future potential of the Commercial Intermediate and Heavy lift market sectors. This is

illustrated in Fig.59 [44]. The chart illustrates that the U.S and Russia will still be a dominant

force in 15 years time, both having a similar trend and number of commercial launches per

year.

Fig. 59 ASCENT Market Share Projection of Commercial Launches by Country


Due to technological advances in the 1980s, there was a growing demand for launch services

to cater for the medium payload launch sector. The U.S government had spent billions of

dollars developing their heavy lift launch programme only to find that there was a need in the

market for a smaller launch system to cover the medium weight sector. For this reason NASA

decided to sponsor a project at Harvard Business School which looked at future commercial

space applications. Upon completion of the Harvard project, and after winning a prize for

space business research, three MBA students went on to secure seed capital funding from a

group of businessmen. A company called Orbital Sciences Corporation was established in

1982 to service the low to medium end of the orbital launch market.

Orbital Sciences Corporation was one of the first non-government funded private space

launch companies and it was as a result of identifying a need for medium sized payload

launchers that they were then able to secure a lucrative contract from NASA. Once Orbital

had proven its business case by securing the NASA contract they were able to approach

venture capitalist organisations in New York to raise the necessary funding to build their new

launch vehicle. In 1988 Orbital were in a position to acquire another company, Space Data

Corporation, a manufacturer of sub-orbital sounding rockets. Within the space of ten years

Orbital had become one of the leading providers of sub-orbital and orbital payload launchers

in the World. The many different types of launch vehicles provided by Orbital are shown

overleaf in Fig.60.

During the 1990s Orbital went on to acquire further companies which would provide it with in

house capabilities to design and manufacture its own satellites and missile systems for the

U.S Navy. Today, with numerous high profile customers including for example NASA, Orbital

Sciences are valued at $677 million. Orbital also mirrors what Starchaser would like to

achieve in terms of establishing their business to serve the sounding rocket and micro

satellite launching markets.


Fig. 60 Review of Orbital’s Family of Rockets

Today, there are a number of new start-up companies looking to service the small size

payload launch market sector and one of the most promising companies is SpaceX. SpaceX

was established in 2002 with a view of providing a low cost commercial launch capability,

ideally for less than $10 million per launch. The lowest orbital launch cost at that time was


$30million. SpaceX are hoping to develop a family of launch vehicles, using a modular

design, to cover different payload launch requirements. Fig.61 below provides an overview to

SpaceX’s family of Falcon rockets and illustrates both the relative size of the rockets required

to support each payload weight category, eg small, medium and heavy and highlights the

associated cost to produce each rocket.

Fig. 61 SpaceX Family of Falcon Rockets

Unlike previous commercial launch companies such as Orbital, SpaceX has been privately

funded by an Internet billionaire and this method of funding a new space company rather than

via venture capital funding is becoming more common place. Their first rocket, called Falcon

1, uses a tried and tested two stage rocket design and this particular rocket has already won

a $100 million contract from the U.S Air Force. Overtime and using a modular design

philosophy they want to scale up the Falcon rocket with five and then nine engines to provide

a medium and heavy launch lift capacity. SpaceX’s business plan is relatively simple and

demonstrates how private companies are able to establish their space launch business with

private funding. However both SpaceX and Orbital established their companies on the back of

lucrative defence based space launch contracts.


In the same way that SpaceX have been able to undercut Orbital’s launch costs, Starchaser

hope to offer a cheaper service still by offering an alternative to the Falcon 1. This will be to

serve the micro / small size payload launch sectors.

Today’s space agencies and private launch providers utilise a number of launch facilities

around the world and these are discussed in more detail in Appendix 8-C.


Appendix 8 - B Review of Today’s Satellite Industry The non defence related commercial space launch market is very much consumer driven,

relatively new technologies such as digital television, the internet and global positioning

systems are fuelling the demand for high speed communications, this is depicted below in

Fig.62. [47]

Fig. 62 How the Demand for Satellite Launch is Calculated

It is this consumer demand which is ultimately increasing the demand for new satellites to be

placed into orbit. Advances in technology and materials has meant that satellites can be

designed to be much smaller in size than the satellites designed ten years ago, this was when

the initial heavy lift space rockets were designed. The introduction of smaller, lightweight

satellites ultimately means that in the future less powerful, much smaller launch systems can

be used for deploying satellites into space.

For a new launch provider to come to market it is important to understand the current

consumer trends, the technology coming in the future and then work out the likely demand for

launch services. Organisations such as Futron Corporation conduct market research into

most areas of the space industry and they will be featured later in this report. They recently

conducted analysis of the future demand for satellite services and their findings are illustrated

overleaf in Fig.63 [44]. This chart shows a significant number of Non-geostationary satellites

being launched in the late 1990s to coincide with the emergence of the Dot-Com boom. Next

year there is forecast to be another peak in NGSO satellite launches to coincide with new

trends in telecommunications technology.


Fig. 63 Historical and Forecast Commercial Launch Activity for 2005-2014

The current satellite industry, shown below in Fig.64 [48], is worth nearly $100B per year, with

the launch industry making up only $2.8B. It is the provision of launch services which

Starchaser would eventually like to provide subject to being able to design a suitable launch

craft to enter the lightweight launch sector, namely less than 100kg in weight.

Fig. 64 Today’s Commercial Satellite Industry Sectors & Associated 2004 Worldwide Revenues

Today’s satellites are being used for a number of different purposes, with telecommunications

remaining as the largest user of satellite services. As mentioned on the previous page it is

technological trends and associated consumer demand which will drive the future launch

requirements. If a company is able to tailor their launch service to suit an emerging


technology trend then that company will have a significant competitive advantage in terms of

targeting those companies with the offer of a launch service. The U.S Federal Aviation

Administration monitors all global payload launches and as can be seen by Fig.65 [49] a

noticeable trend is developing in the type of satellites being placed into orbit. It can be seen

that during 2005 there is a three fold increase in satellite launches, this is due to a significant

increase in demand for Navigation, Scientific and Meteorological services.

Fig. 65 Payload Usage (Orbital Launches Only) – April to December 2005

Global Positioning Systems are used as the basis of Satellite Navigation Systems and as of

2005 this is one of the high growth areas with consumers. In the past, older network of

military satellites were used for this purpose but now the companies behind the satellite

navigation systems are demanding faster and more reliable services which in turn means

there is a demand for new satellites. It is noticeable that one of the other major growth areas

is in the deployment of scientific payloads, a sector that Starchaser will initially be pursuing

with their new sounding rocket service. It is clear to see that if Starchaser can establish their

sounding rocket service then placing scientific payloads into orbit would be the next logical

step and based on the above projections the demand would be there for such a service.

In parallel with the type of payload being launched it is interesting to see in Fig.66 [49]

overleaf that there is a growing trend for the deployment of smaller payloads. As described

earlier, advances in lightweight materials, improved power source (battery/solar) design and

the overall miniaturisation of technology means that much smaller satellites will be produced

by the commercial sector. These so called Micro / Nano sized satellites will form the basis of

most orbital payload launches in the future and once again due to their reduced weight and

compact size means that much cheaper launch technology will be in demand. This means

that new entrants such as Starchaser would be able to enter the micro satellite launch market

at a fraction of the cost of the larger government backed programmes such as NASA.


Fig. 66 Payload Mass Class (Orbital Launches Only) – April to December 2005


Appendix 8 - C Review of Global Launch Locations Launch and re-entry sites, often referred to as ‘Spaceports’, are the locations across the world

used as gateways to and from space. Although individual capabilities vary on a site by site

basis, these facilities will typically contain launch pads and runways as well as infrastructure,

equipment and fuels needed to process launch vehicles and their respective payloads before

launch. The U.S was one of the first countries to develop spaceport facilities, the federal

governments of the 1940s began to build and operate space launch facilities, ranges and

bases to meet a variety of national security needs. Many of the original spaceports were

established on secret test facilities for launching military missiles. Whilst U.S military and civil

government agencies were the original and still are the primary users and operators of these

facilities, commercial payload customers have become frequent users of these government

backed spaceports.

Today’s spaceports, as shown below in Fig.67 [50], are scattered across the World and one

of the common characteristics of their locations is that they tend to be in largely uninhabited

areas, in some cases contained within many hundreds of square miles of open space.

Fig. 67 Location of Today’s Primary Spaceports


In the U.S, many states with areas of open space have seen a significant increase in the

number of applications to establish non-government funded spaceports to service the

commercial space launch sector. Each non government facility in the U.S requires an FAA /

AST license to operate a space launch facility and in order to manage the growth in

spaceports a national space transportation infrastructure plan is being developed. The aim of

the plan is to identify all infrastructure elements necessary to support both the emerging

private enterprise space transportation industry and the new national space exploration

initiative enacted by the President of the United States. In addition to launch facilities the plan

covers other considerations such as space traffic control, and federal R&D assistance to non

federal and private sector space systems efforts.

In Europe there are relatively few launch facilities, primarily due to the lack of wide open

spaces and a heavily congested airspace. A number of sounding rockets are launched from

the Andoya launch facility in Norway, however the bulk of European related launches,

conducted by ESA, actually take place from a dedicated European launch facility in French

Guiana, South America. The Kourou launch site lies just over 500km from the equator, its

nearness to the equator makes it ideally placed for launches into geostationary transfer orbit

as few changes have to be made to a satellite’s trajectory. The Arianne launchers also profit

from the ‘slingshot’ effect , ie the energy created by the speed of the earth’s rotation. This

effect alone can increase the speed of a launcher by 460m per second. These important

factors help to save money on fuel and prolong the active life of satellites. The location of the

Kourou spaceport is so perfect that many other countries including the U.S use this facility on

a regular basis.

Unlike most western countries, Russia does not have an extensive aerospace industry as

they have spent many years establishing a significant rocket and space industry instead.

Many of its launch facilities were constructed during the cold war for launching inter-

continental ballistic missiles (ICBMs). After the fall of the Soviet Union, the Russian Space

Agency was created to manage all of the space facilities across Russia. With the demise of

the cold war, many launch facilities went into dis-repair however some locations such as the

Plesetsk launch facility became one of the busiest space ports in the World during the 1970s

and 1980s. Today this facility is used for the launch of polar orbiting spacecraft and the

Baikonur site is used for manned launches to the International Space Station and for placing

payloads into equatorial orbits.

Another significant launch facility is Woomera, a large missile range in the middle of Australia.

Once again its remote location provides the ideal launch facilities for a number of countries

including Japan and the UK. The UK used the Woomera facility for missile testing and as an

early launch base for their Skylark sounding rocket service. In addition, the European


Launcher Development Organisation, the predecessor to ESA, began development of a

European launch facility at Woomera in the 1960s before moving to French Guiana in June

1970. Britain ended its operations in Woomera in 1976 and relocated its sounding rocket

programme to the Norwegian Andoya launch facility. The most significant fact about

Woomera is that it had the potential to help Britain become a significant player in the

International Space Race, but new government priorities of the time changed that. Today,

Woomera is still used for experimental tests of rockets but in the future there is the potential

for this to become one of the World’s leading spaceports.

In recent years there has been a limited number of locations that could be used by companies

to access to space, either due to political or for geographical reasons. Given that most of the

World’s surface is covered in water, one enterprising company decided to establish Sea

Launch, a portable floating facility that is currently based in the Pacific Ocean. The Sea

Launch facility was converted from an old Russian self propelled oil rig with private finance

from companies in Norway, U.S and Russia. It has the ability to provide heavy launch

capabilities to match any land based facility around the world and as it is located in the middle

of the Pacific Ocean it does not have any of the restrictions encountered by its land based

competitors. Sea Launch would appear to offer the perfect launch facility, especially for

launching payloads into orbit, however new and emerging markets such as space tourism will

require primarily land based launch facilities. Sea Launch has only been in operation for ten

years but it has become highly successful and could provide the template for how privately

funded organisations could establish similar launch facilities in the future to exploit the

emerging non government funded commercial launch market sector.


Appendix 8 - D Review of NASA’s Family of Sounding Rockets

Fig. 68 NASA’s Family of Sounding Rockets


Appendix 8 - E Flight Profiles of NASA’s Sounding Rockets

Fig. 69 Flight Profiles of NASA’s Sounding Rockets


Appendix 8 - F Current Sounding Rocket Launch Locations

Fig. 70 List of Global Sounding Rocket Launch Sites


Appendix 8 - G Original List of XPRIZE Contenders

Fig. 71 List of Original XPRIZE Entrants


Appendix 8 - H Update on Current Space Tourism Launch Vehicle Projects

Sprague Astronautics (US)

Company has re-branded itself three times since the XPRIZE competition, they have even borrowed branding and strapline messaging developed by Starchaser. Currently developing the vertical take off Altaris launch vehicle. First flight scheduled for 2007. They are said to have received significant venture capital funding and signed an agreement with NETunes for primary sponsorship rights. Even though they have the funding in place there is little credible evidence so far that they will actually meet their launch date.

Armadillo Aerospace (US)

Armadillo are said to be making steady progress and they have a long term goal of establishing a space craft. This may be due to the fact that they are supported by a team of volunteers but they do have funding from a computer games millionaire. Development of their vertical take off and landing rocket is progressing well with a number of test firings being carried out already. Armadillo are one of the few companies to actually making something rather than developing glossy computer animations of what their proposed design could be like.

Interorbital Systems (US)

This company predicts that they will be the first to provide regular orbital space tourism flights in late 2008. This is somewhat ambitious considering that they have no prior experience in this industry and constructing a sub-orbital craft would be more beneficial to them in the short term as they would be able to learn from their mistakes before going orbital . They are expecting orbital ticket prices to be $2million. They expect to launch their rocket from a floating ‘Sea Launch’ type of facility, which may give problems in terms of taking off from one location and landing in another. Very few engine tests have been conducted to date.

Mojave Aerospace Ventures / Scaled

Composites (US)

Scaled were responsible for building the XPRIZE winning SpaceShipOne Craft. They are well funded and have a strong history of developing leading edge flying craft. Burt Rutan and Richard Branson have now formed the Spaceship company to exploit the XPRIZE winning technology. This technology will form the basis of Branson’s fleet of sub-orbital craft.

Rocket Place Inc. (US)

There design is based on a heavily modified LearJet and will take off from a conventional runway. The idea is very simple and somewhat obvious, but they have significant issues with redesigning an existing craft to make it more structurally sound in order to carry the heavy engines and fuel tanks. They have stated they will start flight tests in 2006 with a full service to be offered in 2007.

PlanetSpace (Canada)

This team is based on the former Canadian Arrow XPRIZE team, throughout the development of Canadian Arrow rocket the team undertook a number of high profile marketing initiatives to promote their design to the World’s press. They are planning to use a conventional rocket design with a proposed launch date in mid 2007. In December 2005 PlanetSpace also announced plans for a sub-orbital spaceplane, probably as a result of the successful design produced by Rutan and his team.

Da Vinci (US)

This represents one of the most ambitious designs with a rocket being launched from underneath a large air balloon. They have received significant sponsorship from the Goldenpalace.com and have plans to launch a manned craft in late 2006. As with PlanetSpace they have started design evaluations for a plane style launch craft.


Appendix 8 - I New Entrants to the Sub-Orbital Space Craft Market

Blue Origin (US)

Blue Origin was established early last year by the Billionaire CEO of Amazon, Jeff Bezos. At the moment very little is known about this company except that it is extremely well funded but money alone will not guarantee success. Good funding means that Blue Origin will be able to recruit the best engineers in the business. They intend developing a traditional vertical take off rocket and to assist with the design and development process they have bought their own large ranch in Texas to undertake test flights. In November 2005 they announced the opening of a new HQ in the city of Kent near Washington. Unmanned test flights are scheduled for late 2006.

SpaceDev (US)

SpaceDev are a relatively small private company specialising in the manufacture of small satellites and hybrid rocket propulsion systems. Their propulsion system was used in the XPRIZE winning SpaceShipOne craft. They are taking an existing design produced by NASA and converting it to provide a capability to carry six passengers. This craft was originally designed to provide as a service space vehicle to the ISS, but the design could easily be adapted to serve the sub-orbital launch market.

Virgin Galactic (UK/US)

Virgin Galactic, part of the Virgin Group headed by Richard Branson, is the most significant space tourism company to have emerged in the last few years. Branson, one of the world’s leading entrepreneurs, spotted the potential of the space tourism market and decided to register the name Virgin Galactic in the mid-nineties, knowing that one day the technology would be available to exploit this new market sector. This technology now exists and Branson decided to sponsor Burt Rutan and Paul Allen’s SpaceShipOne during the closing stages of the XPRIZE competition. Branson has now form a joint venture with Rutan called the SpaceShip Company to exploit the technology and the new SpaceShipTwo craft being developed by Rutan will form the basis of Branson’s Virgin Galactic fleet. The marketing muscle of Virgin Group is second to none and they have already started to develop a significant marketing campaign to promote the company and more importantly start to educate the general public about what a sub orbital flight would actually be like. Virgin Galactic expects to launch their service in 2008 and fly 3000 new space tourists within five years at a cost of $115000 per person per sub-orbital flight, which includes three days training. In December 2005 Branson signed a deal with the New Mexico state government to lease facilities which will form the basis of the world’s first space port for the space tourism industry.

XCOR (US)

XCOR have designed a small rocket plane called the EZ-Rocket and this craft has already flown successfully and will form the basis of all craft to be used in the new Rocket Racing League developed by the XPRIZE Foundation. Once revenues start to come in they are planning to develop the EZ-Rocket into a larger craft which can serve the sub-orbital market. This craft will be known as Xerus

SpaceX (US)

Along with Orbital Sciences , this company is significant as they are largely privately funded with strong backing from an internet billionaire who founded the PayPal organisation. He has funded the development of the Falcon range of rockets for deploying orbital payloads, however their designs could be adapted to carry a passenger module above one of their higher powered falcon rockets. This company could be the first to offer orbital space tourism flights. This design would in essence be similar to Starchaser’s Thunderstar.


Appendix 8 - J Virgin Galactic’s Space Port

Fig. 72 Artists Impression of Virgin Galactic’s Proposed Spaceport in New Mexico


Appendix 8 - K Virgin Galactic’s Sub-Orbital SpaceShipOne Rocket Plane

Fig. 73 SpaceShipOne’s Flight Profile

Fig. 74 View from SpaceShipOne During Apogee – October 2004


Appendix 8 - L Starchaser’s Sub-Orbital Thunderstar Rocket

Fig. 75 Starchaser’s Thunderstar Launch Facility & Rocket


Fig. 76 Flight Profile of Starchaser’s Thunderstar Rocket


Appendix 8 - M Example of Sub-Orbital Space Tourism Attributes

Fig. 77 List of Attributes for Space Tourism Related Consumer Experiment


Appendix 8 - N Seven Domains of Attractive Opportunities The Micro Market Test

What customer pain will your offering resolve?, how strong an incentive do customers

have to give you their money?

Who, precisely are your customers?, do you have detailed, accurate information

about who they are?

What benefits does your offering provide that other solutions don’t?

What evidence do you have that customers will buy what you propose to offer?

What evidence do you have to show that your target market has the potential to

grow?

What other segments exist that could benefit from a related offering ?

The Macro Market Test

How large is the market you are seeking to serve, in how many different ways have

you measured it?

How fast has it grown over the last one/three/five years?

How quickly will it grow in the next six months or two/five/ten years?

What PEST factors will affect your market and how will this affect your business?

The Macro Industry Test

What industry will you compete in?, define it carefully

Is it easy or difficult for companies to enter it?

Do suppliers have the power to set terms and conditions?

Is it easy or difficult for substitute products to steal your market?

Is competitive rivalry intense?

Based on all five forces what is your overall assessment of this industry?

The Micro Industry Test

Do you possess proprietary elements?, eg patents, trade secrets etc

Can your business develop and employ superior organisational processes,

capabilities or resources that others would find difficult to replicate?

Is your business model economically viable?


The Mission, Aspirations & Risk Propensity Test

Whats your entrepreneurial mission:

o To serve a particular market?

o To change a particular industry?

o To market a particular product?

o Is the passion really there?

What level of aspirations do you have for your entrepreneurial dream:

o To work for yourself?

o To build something small or something big?

o To do, manage or lead?

o To change the world in some way?

What sort of risks are you and are you not willing to take?

o Will you risk losing control of your business?

o Will you put your own money at risk?, if so how much

The Can you Execute Test

What are the few critical success factors in your industry? And what support can you

provide to show that you have identified them correctly?

Can you demonstrate that your team taken together can execute on each of the

critical success factors?

Alternatively have you identified which CSFs your team is not well prepared to deliver

and hence will have to increase your team to be able to support?

The Connectedness Test

Who do you and your team know up the value chain in the companies that are likely

suppliers to your proposed business and to the competitors?

Who do you and your team know down the value chain among customers you will

target, both today and tomorrow?

Who do you and your team know across the value chain among your competitors and

substitutes?


Appendix 8 - O Sounding Rocket Survey Contacts


Appendix 8 - P Sounding Rocket Survey and Associated Results


Appendix 8 - Q Space Tourism Survey and Associated Results

space tourism mba dissertation

Business

professor

la trobe university

international

sounding rocket

european space

russian space

swedish space

larger space