XCOR’s Greason: Commercial Space Industry Must Grow Up, Learn to Cooperate

Jeff Greason
CEO, XCOR

General Remarks

  • Worst thing is to give a true believer everything they want and then have them fail…
  • Thrilled and terrified by the magnitude of the opportunity facing the U.S. commercial space sector…
  • He’s not sure the industry is ready to do all the things that the United States government is asking it to do…but they’re going to have to do it anyway…
  • “It is time to grow up” as an industry – companies not tear each other down but work together, sell things to each other and cooperate on solving common problems….
  • This industry includes smaller startups like XCOR and aerospace giants like Boeing, Lockheed Martin…. “We’re all on the same team”
  • “If we blow it this time, I’m not sure we’re going to get another chance” because I don’t know if there will be a U.S. space industry to provide services to…

Past Rocketry Work

Showed some video of work done several years ago for Rocket Racing League…take off and flight and the change out of the propulsion system….vehicle turned around in 8.5 minutes….did seven flights in one day…

Not currently working with the Rocket Racing League but open to it in the future…

They were using nitrous oxide – wasn’t good enough for them….no market….

Now has a bi-propellant….non-toxic oxidizer…

XCOR's Lynx suborbital vehicle

Challenges With Lynx

Showed an animation of a Lynx flight…

One of the challenges of the vehicle is the large windows up front….

“Our assessment of the market is that you’re selling the windows.”

He feels lucky that someone didn’t walk in the first day with a ton of money….company would have imploded…every aspect of design affects every other part of the design…They have had to rip up the design numerous times because of small changes in one area…

Everything’s going great expect for one little problem….but that little problem turns out to be insanely difficult to solve…

“It’s looking like we’re getting there, but we’ll see.”

Business Climate

Business wise, last two years not the most flush in the history of the company….

  • economic recession had a major impact on VC fund raising.
  • NASA had exited the R&D business to pay for the Constellation program. That is usually a good source of funding for XCOR – someone always needs a problem solved.

“The prospects now are absolutely brighter than they have been in ages.”

NASA Commercial Reusable Suborbital Research program is a “phenomenal” one that is viewed well in the investor community…helps with credibility and getting funding…

High pre-sale interest in flights…

One problem with the industry: people are investing their own money in it, but very few people who invest money for others are taking the risk….

The Competition

XCOR expected to be in a fiercely competitive market where its price ($95,000 per seat) would have to be below the costs of its competitors…

For one reason or another, XCOR’s well-funded competitors don’t seem to be gaining on them….

In a sane world, a company that has  a vehicle without an engine would purchase one from a company like XCOR, which specializes in engines…

XCOR’s competitors aren’t interested in that:

  • Major argument against this approach: XCOR would be supporting a competitor and the competitor would be building up XCOR.
  • Greason’s response: So what? We’re both making money.

On the Prospect of ITAR Reform

“Ay yi yi!”

ITAR is far too strict – it has damaged the U.S. industrial base, weakened its competitive edge, and helped build up capabilities elsewhere

“If you want to have just one cause for why the U.S. has no substantial market share in launches and why the aerospace industrial base is in the sad shape it is today, it would be ITAR.”

Reform efforts are underway, but ITAR is the subject to demagoguery….

If it was reformed under one party, when there is a tech leak the other party will accuse its opponents as endangering national security…

Tech leaks are inevitable, you can slow them but not stop them….

On NASA Engine Development

The Atlas V uses the Russian RD-180 rocket….

NASA has a proposal to develop an RD-180 class engine as part of its advanced propulsion program…

U.S. contractors have never exercised their right to put it into production domestically because they could never produce it as cheaply as the Russians…Its easier to buy them from the Russians…

Makes sense for NASA to develop an engine with that same level of power only using different technology to make it cheaper and less complicated…No logic in copying the RD-180 because of its complexity…