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If Elon found you and made you the next GM, would you use spacex to launch air travel around the world?

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  1. CLARIFY:
    1. By GM, do you mean General Manager of SpaceX? Assume yes. 
    2. Given that I am the General Manager, should the focus of this question be centered around whether air travel around the world would be profitable for SpaceX? Yes but should include other criteria of your choice. 
    3. By air travel, do you have a specific type in mind (plane, space craft, etc.)? You choose.
    4. Should we be using existing SpaceX technology or creating new technoloy? You choose. (I'll focus on more on initial launch stages / MVP.)
    5. Is there a time frame? For example, are we focused on MVP v. a long term strategy? You choose. 
  2. SPACEX BACKGROUND: SpaceX is an aerospace manufacturer and space transportation services company founded by Elon Musk. The goal is to reduce space transportation costs to help colonize Mars. SpaceX also has developed launch vehicles and rocket engines. For the context of this question, I'd like to focus on the commercial space program that would send people to Mars 
  3. STRATEGIC CHOICE: The purpose of this strategy is to determine if SpaceX should launch a commercial space program that would send people to Mars around the world. Given that we know that Elon wants to send people to Mars, the strategic choices relate to how expansive the commercial space program should be. (We are not considering not launching the commercial space program at all given it is an objective for SpaceX.)
    1. Launch commercial space program in select regions of the world
    2. Launch commercial space program world wide
  4. EVALUATION CRITERIA: We can evaluate these options from both a company perspective and an external customer perspective.
    1. Company:
      1. Profit / Revenue: Impact to P&L / bottom line. 
      2. Technical Costs: Includes cost of hardware / software etc. to build and maintain program.
      3. Marketing / Sales / Servicing, etc. Costs: Non technical costs to build / maintain program. Includes marketing, sales, servicing, etc. 
      4. Resources: # of resources to build / maintain program. Includes engineers, pilots, etc.
      5. Time: Time to launch and maintain program.
      6. Competitors: Competitors in market
      7. Quality: Overall quality of commercial space program to Mars
    2. External Customer: 
      1. Customer Engagement: # of customers engaged with SpaceX
      2. Customer Satisfaction: Average satisfaction scores of customers using SpaceX / commercial Mars program
      3. Brand Awareness: Awareness of SpaceX brand / how customers view the SpaceX brand
      4. Market Expansion: # of markets commercial space program is in 
  5. EVALUATE STRATEGIC CHOICES:
    1. Company:
      1. Profit / Revenue:
        1. Limited Launch: Medium - less profit if the launch is limited. 
        2. World Wide Launch: High - with a broader customer base, more likely to be able to bring in higher profits.
      2. Technical Costs: 
        1. Limited Launch: High - Not as many costs as world wide launch but likely requires massive costs. 
        2. World Wide Launch: Very high - Likely will have market based costs as well as additional costs in general to expand program.
      3. Marketing / Sales / Servicing, etc. Costs: 
        1. Limited Launch: Medium - Not as many costs as world wide launch.
        2. World Wide Launch: High - Likely will have market based costs as well as additional costs in general to expand program.
      4. Resources: 
        1. Limited Launch: High - Large number of resources needed but less than world wide launch.
        2. World Wide Launch: Very high - Broader program requires more resources to build / maintain.
      5. Time: 
        1. Limited Launch: High - A lot of time required to launch initial program and maintain it, but less than world wide launch.
        2. World Wide Launch: Very high - A lot of time required to launch program and maintain in multiple markets. 
      6. Competitors: 
        1. Limited Launch: Low - Not many competitors in Space race launch that are making as much headway as Space X. If Space X stays in a certain region, possibility for competitors in other markets but given that Space X is very a head of its time, may be difficult to compete. 
        2. World Wide Launch: Low - Not many competitors in Space race launch that are making as much headway as Space X. 
      7. Quality: 
        1. Limited Launch: High - With a limited launch, can focus on building higher quality program.
        2. World Wide Launch: Medium - Quality concerns given that resources are spread more thin.
    2. External Customer: 
      1. Customer Engagement: 
        1. Limited Launch: Low - # of people who want to go to space is fairly limited. Also cost of program may not be economically feasible for many people. 
        2. World Wide Launch: Medium - # of people who want to go to space is fairly limited but with a broader market reach, can increase that number. 
      2. Customer Satisfaction: 
        1. Limited Launch: High - Given that the quality of the program is likely higher, satisfaction will likely be higher.
        2. World Wide Launch: Medium - May not be as strong with resources spread thin.
      3. Brand Awareness: 
        1. Limited Launch: Medium - Not as many customers aware of brand given market reach is not as wide; however, Space X already has fairly strong brand awareness at least in US.
        2. World Wide Launch: High - With more markets, Space X has a wider brand awareness.
      4. Market Expansion: 
        1. Limited Launch: Low - Not as many markets have program.
        2. World Wide Launch: High - Worldwide markets have program. Reach is wider.
  6. RECOMMENDATION: Given the big costs of the world wide launch that may not offset profits / revenue (analysis would be needed), I recommend focusing on a limited launch for now. Longer term - many years down the line once initial launch has occurred, Space X can revisit a world wide launch strategy. 
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@productmanager1644 during normal feedback I provide areas you did well, and areas of improvement.  This answer is meticulous, you are going to the 2nd round.   So, I’m going to change up my feedback and give you things to think about.

 

Things to think about: 

The Concord!

The Concord last flew in 2003 and it could go NYC to LON in 3 hours.  There hasn’t been a replacement.  Why?  The short answer is the economics didn’t work with a plane that only held 92-128 passengers.  I suspect SpaceX will have even worse economics – much higher costs,  fewer seats and given the price a much more limited market.  https://en.wikipedia.org/wiki/Ultra_high-net-worth_individual

 

Around the world:

If the draw is going to space and orbiting, then even if you only launch in one location the ultra-high net worth clientele will come to the launch site; this likely negates the analysis of WW vs limited launch.  I suspect that even with limited launch the total addressable market won’t change much.

 

If the goal is point to point travel (NYC to LON) this might make the economics worse as this becomes  a utilitarian transaction instead of ultra-high cost tourism.  It would mean that you need enough people to travel the route to make the route profitable and that means that people expect the route to run on a regular basis. 

 

My take:

Cost would have to come way down from current to make either very feasible.    On the other hand maybe you do one or two launches a year and take folks up for 10’s / 100’s of million while you do some mission that covers the bills (launch a satellite, or take supplies to the ISS).  

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