It is rather incredible how dominant Falcon 9 is in the current launch market.
this post was submitted on 10 Dec 2023
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SpaceX became dominant in the launch market the same wat Amazon became dominant in the delivery market.
By using massive investor capital to undercut the competition by operating under cost.
It's not really amazing at all, it's perfectly predictably. The other parties need to turn a profit, SpaceX/Starlink doesn't, so they're cheaper.
Step one of enshittification.
This strategy can also be called "investing".
If their internal Falcon 9 launch cost is $20 something million, they do pretty well on a lot of commercial launches. They're also starting to get cash flow positive on Starlink.
The problem with "investing" is that the investors eventually want as much return as they can get.
It would be foolish to assume venture capitalists will not try to exploit a market monopoly.
Oh, I meant the company investing upfront in capabilities, not individual investors. My understanding is that SpaceX mainly sells non-voting shares, so they should be less susceptible to normal investor BS.
As far as using/abusing their position goes, I think there's some evidence of regulatory capture. Requirements are appearing for automated flight termination systems, low satellite reflectivity, and satellite deorbit. Those are all good, but SpaceX exacerbated the issues, and now these rules add cost and complexity for their competitors.
It's actually still quite amazing that this model works with literal fucking space travel.
Probably shouldn't be commenting on a 3-month-old post on a memes forum, but this seems highly inaccurate to me. Do you have a source for it?
It's pretty simple.
1 - SpaceX baaaarely made a profit in q1 2023, if they did better in q2, we don't know (yet).
2 - SpaceX main customer is Starlink, making up 62 of the 96 launches.
3 - launching a falcon 9 costs 67m (if you're a third party, but I'm assuming for the sake of this post this is a healthy pricepoint).
4 - Starlink has a 2.6m subscribers, which (if they have expensive subscriptions), can pay for 23 launches per year assuming zero other costs.
So, at the absolute minimum, Starlink bought 39 launches, totalling 2.6 billion, using investor capital. So at the very least, that's 2.6 billion dollars SpaceX burned and would have had to get elsewhere.
Note that those are minimum numbers. The real numbers are probably an order of magnitude higher, since Starlink also has to pay for terrestrial bandwidth for 2.6m people. It's far more likely every single one of those 62 Starlink launches is venture capital. And despite selling 62 launches to that way, SpaceX barely made a profit.
In other words, without this free cash, they would need to massive up their prices, probably somewhere to the level of Rocketlab, which does need make money.