|XCOR Aerospace's Lynx And NewSpace Market Segmentation|
|Written by Jeff Krukin|
|Wednesday, 26 March 2008|
Congratulations to XCOR Aerospace CEO Jeff Greason and all XCOR employees on today's announcement of the Lynx Mk. 1 (yes, there will be more models) single-stage suborbital spacecraft. No doubt much of the well-deserved attention will focus on the engineering differences between this vehicle and those of Rocketplane and Virgin Galactic. While the distinctions are certainly important, the business implications resulting from these design differences point to the true value of NewSpace.
Take a look at the Lynx flight profile seen in XCOR's press release and you'll immediately note several key differences from Virgin Galactic's SpaceShipTwo flight profile; Lynx single stage vs.SpaceShipTwo /WhiteKnightTwo multi-vehicle leading to a lower apogee (highest altitude) of 61km vs 100km. The XCOR approach means a lower cost to develop and operate the vehicle, which translates into a ticket price of $100,000 vs. Virgin Galactic's $200,000.
As you would expect, each company is touting the benefits of their unique design. For example, the Lynx passenger will enjoy the view from the cockpit, side-by-side with the pilot, but not be able to float around as will SpaceShipTwo passengers.
So what's the true value of NewSpace as demonstrated by this announcement? Market segmentation in price and experience in exactly the same way that companies differentiate their products and services in other industries. In other words, XCOR Aerospace has done its market research and determined that the suborbital passenger flight market can be segregated into multiple categories. And in the best sense of free markets, customers will determine if XCOR is right or wrong. In this regard, space travel is no different from other forms of transportation provided by the private sector, because competition and engineering/price tradeoffs rule as they do in air, sea and land transportation. That's why you don't see only one type of car, truck, ship, airplane, helicopter and so forth. Instead, we have different vehicles for different requirements (read markets).
Thank you, XCOR, for bringing competition front and center to this brave new market. And thank you Jeff Greason for stating in your press release what everyone needs to understand about the human journey into space: “It means unlocking the material and energy resources and economic opportunities of our solar system for our children.”
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