Charting a course in a brand new market is difficult. Understanding the prevailing dynamics might help. While the Latest Space economy is actually a spot of rapid change, there are features that — if understood — might help investors and firms maximize prospects for fulfillment. A very important insight is that the Latest Space economy has evolved in a series of successive waves that differ in vital respects, including the best way private capital is deployed, the locus of market activity, and key success aspects. Viewed on this light, the market has rapidly progressed through two waves and is now stepping into a 3rd. Succeeding on this recent phase of the market requires understanding the way it has developed and where it’s now heading.
The First Wave of the Latest Space economy was perhaps most significantly about proving that personal capital and entrepreneurial business efforts could achieve this market that had formerly been the exclusive domain of governments, and within the course, dramatically reducing the price of launch. Several private launch firms were founded in the primary decade of the century, but the actual impact was driven by SpaceX. In 2008 Falcon 1 became the primary private liquid-fueled rocket to achieve orbit. Many aspects contributed to SpaceX’s success, with the core being the relentless elimination of cost, first through engineering and production, after which through reuse. A brand new era opened in 2010 with Falcon 9 slashing the price per kilogram to LEO by one-half in comparison with Long March and two-thirds or more to Atlas and Delta.
This success unleashed the Second Wave, primarily characterised by the enthusiastic expansion of personal capital and entrepreneurial effort across the space economy. By 2013 two dramatic inflection points were reached: The number of business launches exceeded those for presidency customers, and launches to LEO exceeded those to GEO. Again, SpaceX played a number one role with the Starlink constellation. But this time, the diffusion of innovation prolonged to many more participants across a variety of applications. Latest partnerships formed between traditional space players and recent entrants with progressive capabilities and low-cost structures. Government agencies began to take a look at business providers and move towards recent architectures in LEO, underscored by the creation of the U.S. Space Force and the NASA Industrial LEO Destinations program, reinforcing private investment theses.
Today we’re seeing the appearance of a Third Wave of the Latest Space economy, characterised by each challenges and opportunities. The drop off in private investment in space since 2021 is partially attributable to global headwinds and corresponding effects in all markets. However the Latest Space economy can also be seeing a qualitative shift as enthusiasm is tempered by realities, including unclear levels of presidency funding beyond initial demonstrations, abundant competition, and inevitable technical challenges. However the news is just not all bad. In truth, the present market presents a lot of opportunities to those that know what to search for and where to seek out it. Listed here are 4 approaches that might help investors and businesses achieve the current phase of the Latest Space economy:
- Outsource, selectively. In the primary wave, SpaceX vertically integrated to manage costs because much of the prevailing launch supply chain was burdened with excessive overheads and low utilization. Now there are opportunities to drive further savings with efficient and focused 2nd wave suppliers who can deliver horizontal economies of scale.
- Acquire proven assets, where inexpensive. Not all firms launched within the 2nd wave have a viable path to success. Nonetheless, many have advanced invaluable capabilities through several stages of maturation and risk reduction. Smart buyers will find opportunities to eliminate gaps and enhance differentiators by bringing key assets in-house at reasonable prices.
- Partner with terrestrial market leaders. Because the space economy matures, the insights of adjoining terrestrial goods and services businesses will change into increasingly relevant. Mature market mindsets, processes, and tools related to customer focus, honing value proposition, controlling CAPEX and OPEX, and managing risk can be as vital as understanding the physics and engineering of the space environment.
- Look globally. While much of the eye within the Latest Space economy has been focused on the U.S. given the magnitude of U.S. government budgets and the colourful private capital ecosystem, there are lots of global players with exciting capabilities — each in space and terrestrial markets — that may contribute to successful space ventures. There are complexities with incorporating non-US elements into offerings to the US government, but there’s real value-creation opportunity that could make it definitely worth the effort.
The third Wave of the Latest Space economy is a natural step available in the market’s maturation. Some players are proving themselves and enabling continued efficiency gains. Others that will not be viable will naturally provide opportunities for healthier players to take their early efforts forward under recent management. Proven business models and powerful players from all over the world will connect and integrate space into the remainder of the economy. Exciting times are ahead!