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Starting a Canadian Rocket Company (Finished)

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Tyler Reyno
Tyler Reyno

Tyler Reyno proposes establishing a Canadian rocket company called Open Space Orbital Inc. The presentation outlines a 13-year development plan to enter the smallsat launch market starting in year 6, with the goal of achieving 50 launches per year by year 13 at a cost of $2 million per launch. Reyno argues that a domestic launch capability is important for Canada's technological and economic future. A public-private partnership model is recommended to help develop critical infrastructure and space technologies.

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Tyler Reyno Queens Space Conference February, 2016 Starting a Canadian Rocket Company 1
Outline ?Introduction ?Main point ?Support of a domestic launch capability ?Proposed route of development ?Overview of a proposed solution ?Wrapping things up 1 2
Introduction ?Tyler Reyno ? Open Space Orbital Inc. ? BEng (Mechanical) ? Ongoing MASc (Aeronautical) 3
Main Point 4
Main Point ?Domestic launch capability ?Discussed primarily in terms of a private company 5
Support Of A Domestic Launch Capability 6
?Resource-based economy (limited) vs. progressive technology-based economy (unlimited) 2 Reasons Why It Makes Sense 7
?Technological position among international competitors Technological Relevance 8
?If nation doesn't apply evolutionary pressure on itself, it remains in state of neutrality Technological Relevance 9
?Political position among international competitors Political Relevance 10
?Not mentioned among highest profile nations like US, Russia and China Political Relevance 11
?Space program without access to space Access 12
?Ability to employ large amounts of people with wide skill ranges + high level intellect Human Resources 13
?Should want this degree of genius working in-country Human Resources 14
?Last but not least, its necessary ?Tendency of something not growing is to wither Its Necessary 15
?Decline of space program if we only focus on maintenance without increasing value Its Necessary 16
Proposed Route Of Development 17
?Entry through the smallsat launch industry: ? Roughly 250% market growth over next 5 years ? Supported by off-the-shelf smallsat solutions ? Smallsat market value (approx. $7.4B) Entering the Launch Industry 18
?Dedicated smallsat launchers seeing increased demand Entering the Launch Industry 19
?Easiest access in term of economics: *Image credit: Skybox Imaging Market Accessibility 20
?Other notes: ? Light lift most attractive among other lift classes ? More in reach of Canadas budget ? Low risk in terms of capital/resource loss in case of failure *Image credit: Skybox Imaging Market Accessibility 21
?Regulatory and logistic realities support us Regulations and Logistics 22
?Greater political standing among many European countries Regulations and Logistics 23
?In terms of developing progressively more capable launch capabilities Stepping Stone 24
?There is market share available for multiple smallsat launch capabilities (private or public-private) Competitive Analysis 25
Overview of a Theoretical Solution 26
Operations 27
?13-year development timeline ?First launch slated for Year 6 Development Timeline 28
Outsourcing ?Outsourcing key components in the beginning leads to faster access to market 29
Proposed Outsourcing Strategy ?Main components: ? First stage engines ? COPVs (fuel + oxidizer) 30
Result ?In-house development programs: ? All other components: Year 1-5 (5 years) ? First stage engines: Year 4-8 (5 years) ? COPVs: Year 6-10 (5 years) 31
?Two primary locations: ? Engineering and development facility ? Corresponding spaceport Establishment 32
?Close proximity between manufacturing and launch facilities Establishment 33
?Northern Nova Scotia is a good choice ?Located between North America and European space markets Location 34
?SSO and PO accessibility (popular destinations among smallsats) ?Flight path above the Atlantic Ocean ?Reasonable inclination 35 Orbital Considerations
?Lean operation with talent located under one roof is critical ?Main focus on high manufacturing and launch frequencies Operating Philosophy 36
Engineering 37
?No reliance on radical, untried technologies ?Prioritize simplicity and reliability Design Philosophy 38
?90% of a vehicles cost comes in the last 10% of performance Design Philosophy 39
?91% of rocket failures attributed to three areas: ? Propulsion ? Separation ? Avionics Failure Modes 40
?Pressure-fed propulsion systems ?Ablatively-cooled nozzles ?Vehicle engineering design with small safety factors Possible Simplification Methods 41
?Two-stage format ?50 kg payload capacity ?14 m length, 0.9 m diameter ?13,500 kg vehicle mass ?90-second first stage burn time Proposed Rocket Characteristics 42
?New level of transportability ?Requirement for economically feasible commercial smallsat launcher Proposed Rocket Characteristics 43
?First stage engine: ? 35,000 lbf first stage thrust ? LOX/ethanol ? Pintle injector ? Sea level specific impulse of 220 s Proposed Propulsion Characteristics 44
Financials 45
?Always a matter of economics ?Limiting factor facing customer base is launch cost Economics 46
?Human resources ?Supporting infrastructure and technology ?Regulatory and legal considerations Capital Requirements 47
?5-year development timeline and budget: ? Year 1: $2,000,000 ? Year 2: $18,000,000 ? Year 3: $11,000,000 ? Year 4: $16,000,000 ? Year 5: $10,000,000 ?Total: $57,000,000 Proposed Financial Plan 48
?Federal budget illustration: ? 2016: 0.41% of CSA budget ? 2017: 4.70% ? 2018: 3.41% ? 2019: 4.96% (extrapolated) ? 2020: 3.01% (extrapolated) Public Enterprise 49
?Value received over investment is high ?Development of: ? Critical new infrastructure ? Space-supporting resources and technology Public Enterprise 50
?Operational and pricing target: ? $2,000,000 launch cost ? $40,000 per kg at 50 kg total payload capacity ? 50 launches per year (approx. weekly launches) Business Goal 51
?Progressively increase launch rate: ? Year 1-5: No launches ? Year 6-8: 3 launches per year ? Year 9-10: 6 launches per year ? Year 11: 18 launches per year ? Year 12: 30 launches per year ? Year 13+: 50 launches per year Launch Rate Strategy 52
?Progressively decrease cost: ? Year 1-5: No launches ? Year 6-8: $6M per launch (3 launches ) ? Year 9-10: $5M per launch (6 ? Year 11: $4M per launch (18 ? Year 12: $3M per launch ? Year 13+: $2M per launch (50 lyear) Pricing Strategy 53
?Progressively refined profit margins: ? Year 1-5: No launches ? Year 6-8: 11.8% (3 launches per year) ? Year 9-10: 30.8% (6 launches per year) ? Year 11: 72.5% (18 launches per year) ? Year 12: 48.3% (30 launches per year) ? Year 13+: 59.8% (50 launches per year) Profit Margins 54
? Progressively increase launch rate while decreasing cost ? Year 1-5: No launches ? Year 6-8: $6M per launch (3 launches per year) ? Year 9-10: $5M (6 launches per year) ? Year 11: $4M (18 launches per year) ? Year 12: $3M (30 launches per year) ? Year 13+: $2M (50 launches per year) ?119 performed launches Stage Employment Spending ($M) Operational Spending ($M) R&D Spending ($M) Total Spending ($M) Gross Revenue ($M) Net Revenue ($M)* Net Revenue ($M) [After Taxes]* Year 6-13 101.4 15.5 170.365 287.265 583 280.95 210.71 Launch Period Spending 55
2028+ (Year 13+) Financial Summary Employment spending (per year) $13M Operational spending (per year) $0.05M R&D spending (per year) $27.125M Total spending (per year) $40.175M Gross revenue (per year) $100M Net revenue (per year)* $56.834M Net revenue (per year) [After Taxes]* $42.625M Price per launch $2M Expenditure per launch $0.804M Average profit per launch $1.196M Average profit per launch assuming 5% failure $1.136M Average profit per launch (5% failure) after taxes [25%]) $0.852M Yearly profit (after taxes) $42.625M Proposed Financial Plan Summary 56
2028+ (Year 13+) Financial Summary Employment spending (per year) $13M Operational spending (per year) $0.05M R&D spending (per year) $27.125M Total spending (per year) $40.175M Gross revenue (per year) $100M Net revenue (per year)* $56.834M Net revenue (per year) [After Taxes]* $42.625M Price per launch $2M Expenditure per launch $0.804M Average profit per launch $1.196M Average profit per launch assuming 5% failure $1.136M Average profit per launch (5% failure) after taxes [25%]) $0.852M Yearly profit (after taxes) $42.625M Proposed Financial Plan Summary 57
?*Net revenues consider 95% mission success rate ?Year 13+ profit margin is 59.8% ?Cash positive at Year 6 ?Maximum market share of 16% Details 58
Wrapping Things Up 59
Review ?Illustration: ? Need for a domestic launch capability ? Potential operational, engineering and financial philosophies 60
Review ?The time is right for this sort of advancement ?The technologies exist ?The talent exists 61
Review ?Study of economic feasibility suggests there may be impressive ROI ?Forward thinking and commercialization will support us 62
?Its going to have to be public-private My Thoughts 63
?Public-private better in terms of: ? International government cooperation ? True growth of Canadas space program My Thoughts 64
Thank You ?QSC sponsors and delegates ?Attendees ?Company members, partners and supporters 65
Tyler Reyno, Founder and CEO +1 (902) 499-7671 info@openspaceorbital.com 66

More Related Content

Starting a Canadian Rocket Company (Finished)

  • 1. Tyler Reyno Queens Space Conference February, 2016 Starting a Canadian Rocket Company 1
  • 2. Outline ?Introduction ?Main point ?Support of a domestic launch capability ?Proposed route of development ?Overview of a proposed solution ?Wrapping things up 1 2
  • 3. Introduction ?Tyler Reyno ? Open Space Orbital Inc. ? BEng (Mechanical) ? Ongoing MASc (Aeronautical) 3
  • 5. Main Point ?Domestic launch capability ?Discussed primarily in terms of a private company 5
  • 6. Support Of A Domestic Launch Capability 6
  • 7. ?Resource-based economy (limited) vs. progressive technology-based economy (unlimited) 2 Reasons Why It Makes Sense 7
  • 8. ?Technological position among international competitors Technological Relevance 8
  • 9. ?If nation doesn't apply evolutionary pressure on itself, it remains in state of neutrality Technological Relevance 9
  • 10. ?Political position among international competitors Political Relevance 10
  • 11. ?Not mentioned among highest profile nations like US, Russia and China Political Relevance 11
  • 12. ?Space program without access to space Access 12
  • 13. ?Ability to employ large amounts of people with wide skill ranges + high level intellect Human Resources 13
  • 14. ?Should want this degree of genius working in-country Human Resources 14
  • 15. ?Last but not least, its necessary ?Tendency of something not growing is to wither Its Necessary 15
  • 16. ?Decline of space program if we only focus on maintenance without increasing value Its Necessary 16
  • 18. ?Entry through the smallsat launch industry: ? Roughly 250% market growth over next 5 years ? Supported by off-the-shelf smallsat solutions ? Smallsat market value (approx. $7.4B) Entering the Launch Industry 18
  • 19. ?Dedicated smallsat launchers seeing increased demand Entering the Launch Industry 19
  • 20. ?Easiest access in term of economics: *Image credit: Skybox Imaging Market Accessibility 20
  • 21. ?Other notes: ? Light lift most attractive among other lift classes ? More in reach of Canadas budget ? Low risk in terms of capital/resource loss in case of failure *Image credit: Skybox Imaging Market Accessibility 21
  • 22. ?Regulatory and logistic realities support us Regulations and Logistics 22
  • 23. ?Greater political standing among many European countries Regulations and Logistics 23
  • 24. ?In terms of developing progressively more capable launch capabilities Stepping Stone 24
  • 25. ?There is market share available for multiple smallsat launch capabilities (private or public-private) Competitive Analysis 25
  • 28. ?13-year development timeline ?First launch slated for Year 6 Development Timeline 28
  • 29. Outsourcing ?Outsourcing key components in the beginning leads to faster access to market 29
  • 30. Proposed Outsourcing Strategy ?Main components: ? First stage engines ? COPVs (fuel + oxidizer) 30
  • 31. Result ?In-house development programs: ? All other components: Year 1-5 (5 years) ? First stage engines: Year 4-8 (5 years) ? COPVs: Year 6-10 (5 years) 31
  • 32. ?Two primary locations: ? Engineering and development facility ? Corresponding spaceport Establishment 32
  • 33. ?Close proximity between manufacturing and launch facilities Establishment 33
  • 34. ?Northern Nova Scotia is a good choice ?Located between North America and European space markets Location 34
  • 35. ?SSO and PO accessibility (popular destinations among smallsats) ?Flight path above the Atlantic Ocean ?Reasonable inclination 35 Orbital Considerations
  • 36. ?Lean operation with talent located under one roof is critical ?Main focus on high manufacturing and launch frequencies Operating Philosophy 36
  • 38. ?No reliance on radical, untried technologies ?Prioritize simplicity and reliability Design Philosophy 38
  • 39. ?90% of a vehicles cost comes in the last 10% of performance Design Philosophy 39
  • 40. ?91% of rocket failures attributed to three areas: ? Propulsion ? Separation ? Avionics Failure Modes 40
  • 41. ?Pressure-fed propulsion systems ?Ablatively-cooled nozzles ?Vehicle engineering design with small safety factors Possible Simplification Methods 41
  • 42. ?Two-stage format ?50 kg payload capacity ?14 m length, 0.9 m diameter ?13,500 kg vehicle mass ?90-second first stage burn time Proposed Rocket Characteristics 42
  • 43. ?New level of transportability ?Requirement for economically feasible commercial smallsat launcher Proposed Rocket Characteristics 43
  • 44. ?First stage engine: ? 35,000 lbf first stage thrust ? LOX/ethanol ? Pintle injector ? Sea level specific impulse of 220 s Proposed Propulsion Characteristics 44
  • 46. ?Always a matter of economics ?Limiting factor facing customer base is launch cost Economics 46
  • 47. ?Human resources ?Supporting infrastructure and technology ?Regulatory and legal considerations Capital Requirements 47
  • 48. ?5-year development timeline and budget: ? Year 1: $2,000,000 ? Year 2: $18,000,000 ? Year 3: $11,000,000 ? Year 4: $16,000,000 ? Year 5: $10,000,000 ?Total: $57,000,000 Proposed Financial Plan 48
  • 49. ?Federal budget illustration: ? 2016: 0.41% of CSA budget ? 2017: 4.70% ? 2018: 3.41% ? 2019: 4.96% (extrapolated) ? 2020: 3.01% (extrapolated) Public Enterprise 49
  • 50. ?Value received over investment is high ?Development of: ? Critical new infrastructure ? Space-supporting resources and technology Public Enterprise 50
  • 51. ?Operational and pricing target: ? $2,000,000 launch cost ? $40,000 per kg at 50 kg total payload capacity ? 50 launches per year (approx. weekly launches) Business Goal 51
  • 52. ?Progressively increase launch rate: ? Year 1-5: No launches ? Year 6-8: 3 launches per year ? Year 9-10: 6 launches per year ? Year 11: 18 launches per year ? Year 12: 30 launches per year ? Year 13+: 50 launches per year Launch Rate Strategy 52
  • 53. ?Progressively decrease cost: ? Year 1-5: No launches ? Year 6-8: $6M per launch (3 launches ) ? Year 9-10: $5M per launch (6 ? Year 11: $4M per launch (18 ? Year 12: $3M per launch ? Year 13+: $2M per launch (50 lyear) Pricing Strategy 53
  • 54. ?Progressively refined profit margins: ? Year 1-5: No launches ? Year 6-8: 11.8% (3 launches per year) ? Year 9-10: 30.8% (6 launches per year) ? Year 11: 72.5% (18 launches per year) ? Year 12: 48.3% (30 launches per year) ? Year 13+: 59.8% (50 launches per year) Profit Margins 54
  • 55. ? Progressively increase launch rate while decreasing cost ? Year 1-5: No launches ? Year 6-8: $6M per launch (3 launches per year) ? Year 9-10: $5M (6 launches per year) ? Year 11: $4M (18 launches per year) ? Year 12: $3M (30 launches per year) ? Year 13+: $2M (50 launches per year) ?119 performed launches Stage Employment Spending ($M) Operational Spending ($M) R&D Spending ($M) Total Spending ($M) Gross Revenue ($M) Net Revenue ($M)* Net Revenue ($M) [After Taxes]* Year 6-13 101.4 15.5 170.365 287.265 583 280.95 210.71 Launch Period Spending 55
  • 56. 2028+ (Year 13+) Financial Summary Employment spending (per year) $13M Operational spending (per year) $0.05M R&D spending (per year) $27.125M Total spending (per year) $40.175M Gross revenue (per year) $100M Net revenue (per year)* $56.834M Net revenue (per year) [After Taxes]* $42.625M Price per launch $2M Expenditure per launch $0.804M Average profit per launch $1.196M Average profit per launch assuming 5% failure $1.136M Average profit per launch (5% failure) after taxes [25%]) $0.852M Yearly profit (after taxes) $42.625M Proposed Financial Plan Summary 56
  • 57. 2028+ (Year 13+) Financial Summary Employment spending (per year) $13M Operational spending (per year) $0.05M R&D spending (per year) $27.125M Total spending (per year) $40.175M Gross revenue (per year) $100M Net revenue (per year)* $56.834M Net revenue (per year) [After Taxes]* $42.625M Price per launch $2M Expenditure per launch $0.804M Average profit per launch $1.196M Average profit per launch assuming 5% failure $1.136M Average profit per launch (5% failure) after taxes [25%]) $0.852M Yearly profit (after taxes) $42.625M Proposed Financial Plan Summary 57
  • 58. ?*Net revenues consider 95% mission success rate ?Year 13+ profit margin is 59.8% ?Cash positive at Year 6 ?Maximum market share of 16% Details 58
  • 60. Review ?Illustration: ? Need for a domestic launch capability ? Potential operational, engineering and financial philosophies 60
  • 61. Review ?The time is right for this sort of advancement ?The technologies exist ?The talent exists 61
  • 62. Review ?Study of economic feasibility suggests there may be impressive ROI ?Forward thinking and commercialization will support us 62
  • 63. ?Its going to have to be public-private My Thoughts 63
  • 64. ?Public-private better in terms of: ? International government cooperation ? True growth of Canadas space program My Thoughts 64
  • 65. Thank You ?QSC sponsors and delegates ?Attendees ?Company members, partners and supporters 65
  • 66. Tyler Reyno, Founder and CEO +1 (902) 499-7671 info@openspaceorbital.com 66

Editor's Notes

  1. Domestic launch capability Reasons why it makes sense Entering the launch industry
  2. Two years of work
  3. References to government support
  4. Interplanetary travel, space resource mining, others around the corner Canada will have to demonstrate a certain level of access to space if it wishes to play a serious role
  5. Domestic launch capability reflects national confidence Nations that thrive are nations that take risks
  6. Passivity relying on other nations for large capital and resource investment capabilities
  7. Unlike any other industry, requires people of all trades and expertise
  8. Ground-breaking innovation does not stem from a passive environment Talent will almost always depart for better opportunity
  9. Value only comes through taking risks Cant stick solely to what we know (space robotics and satellites)
  10. Develop a smallsat launcher
  11. Development of backlog due to secondary payload status Currently no domestic competition (has been proven to be detrimental)
  12. High market value [available market capitalization value] over investment High technology value [value of what the technology enables us to do] over investment
  13. Less restrictive regulatory agencies [no ITAR/EAR-level bodies]
  14. International market reach
  15. Resources accumulated from smallsat launch program would serve as dirt under nails Transferrable tech and knowledge
  16. Rocket Lab, FireFly, Virgin Galactic and others
  17. Referencing development time towards full potential Comparatively small in comparison to medium and heavy lift launch programs
  18. Leads to more efficient engineering program Not executing R&D for all components of launch vehicle at same time
  19. There are Canadian companies predominantly working in these areas
  20. Market entrance at Year 6
  21. Ease of transportation of rocket hardware
  22. Excellent location for high frequency smallsat missions Economically feasible
  23. Proximity to equator
  24. Necessary for economic feasibility
  25. Result is ease of manufacture Low price and increased performance follow
  26. High performance is frequently the enemy of high reliability
  27. Design focus should be here
  28. (COPV propellant tanks) (Non-regeneratively cooled) (1.1-1.2) = Keep vehicle weight and material costs down
  29. 18- or 20-wheeler Key for high frequency launches
  30. Not optimized, but representative of possible solution taking design philosophies into consideration Approx. 245 s in-flight (average 230 s)
  31. Must provide low $/kg
  32. May imagine in terms of 2016-2020
  33. Maximum: approx. 5%
  34. Think this is pretty fair
  35. Economic attainability to new and ongoing satellite projects
  36. May still imagine in terms of 2016-2028
  37. May still imagine in terms of 2016-2028
  38. May still imagine in terms of 2016-2028
  39. Post-development period = sustainable business operation
  40. Highly dependent on achievability of 50 launches per year Only sustainable way to bring down cost so low is to launch frequently
  41. Highly dependent on achievability of 50 launches per year Only sustainable way to bring down cost so low is to launch frequently
  42. Extrapolating Assuming average of two satellites per launch
  43. This has been a review of why Canada needs a domestic launch capability, as well as an illustration of potential engineering and financial philosophies which may serve its development
  44. Required capital and resources Market opportunity
  45. Heavily government-supported, regardless of whether economics point to capital success
  46. National launch program would more so affect everybody