Business Model Development for Space-based Businesses

Mike H. Ryan, Ph.D.
W. Fielding Rubel School of Business, Bellarmine University, 2001 Newburg Road, Louisville, KY 40205
[email protected]

Abstract

The questions facing commercial space business are similar to those that all businesses must answer. First, how do we make money in our endeavor? Second, how can opportunities best be developed successfully? Third, assuming some level of success how can the business grow and flourish in a manner that ensures a reasonable return. Fourth, can the business create a sustainable competitive advantage to enable future growth and profitability? The respective answers to these basic questions determine whether or not a business is going to be viable. For space-based business these questions are even more critical because of the generally high cost of entry, the problematic and costly nature of access to space and the almost overwhelming level of government oversight and regulation. The important question that a business model answers is "where does the business make money?" Space ventures must ultimately become profitable for private companies to be involved. Government funding and investments by interested "angel" investors are important for getting things started but ultimately will be insufficient in the absence of sustained positive cash flow and long term profitability.

The space-based businesses that will survive and prosper are those that create and implement a sustainable business model. The investment community will want to see the same basic business characteristics in space-based activities. Space ventures tap into the inherent human desire to do interesting and exciting things but desire alone is unlikely to create sustainable businesses. Wishful thinking is an inadequate substitute for a good business model. This presentation will examine key considerations for space-based business model development including: revenue generation, developing customer bases and creating ancillary opportunities. It will provide some examples of niches where successful space-based business have been created. I addition, it will explore some of the possible areas where successful businesses might be created in the near future and potential pitfalls they might encounter.

Presented at ISDC 2011 - Huntsville. Paper and presentation charts are not available.