GOLD RUSH

Is there a space gold rush happening? Should we take to heart the old adage that if you want to make it rich during a gold rush, sell shovels? In this post, I'm going to convince you otherwise.

The California Gold Rush was a period of rapid settlement in the mid pacific coast region leading to a ballooning of the area's population from 15,000 in 1846 to 380,000 in 1860. If only half of that number actually thought to mine for gold, that puts the potential market of at 190,000 people. With so many clamoring customers, sellers found that they could charge exorbitant prices for basic needs, for instance a shovel would have cost you $30, the equivalent of $1000 today. Think of all the money you could make off of shovels alone, let alone all the other tools, clothes, food, medicine, and lodging needs the miners had. The merchants of the gold rush found the market ripe for exploitation due to impressively high demand.

Is the space industry experiencing a gold rush today? Is the market for space-related services ripe for exploitation? I don't think so because the number or customers, and thus demand for such services, is currently limited by several factors. Launch vehicles can only be manufactured and launched at a certain rate, so the only way to put more satellites in space is to launch several smaller satellites at a time instead of one larger one. Some companies have started proving this technique and are deploying large constellations of approximately 10x10x30 cm satellites, and we can innovate further in that area. I think the real limit is that there is not an infinite amount of radio spectrum available for communications, if there is any left at all. Since most money in space is made on the spectrum, whether the data transmitted is DirectTV or real-time images from space, the market is effectively limited by how much spectrum there is.

In order for a space gold rush we need to find a way to make money in space that does not rely on spectrum allocation. We need to find another market besides communications, data collection, and relay. Is that market asteroid mining? Is it space tourism? Certainly not yet. And it would be foolish to say that there is a "gold rush" in these areas which have not yet completed a single commercial mission.

I'm not saying it's not going to happen, I'm just saying that we don't know where the gold is yet. We're in the early stages of the space market where the people to make money will be the ones that discover the gold, not the ones selling shovels.

Pay no attention to how this blog post was spurred by a tweet from a cat.

© Peter Brandt 2019 | all images in public domain unless otherwise stated