[dbh937]

"New-space" aerospace companies are operating on a different funding framework from the old aerospace juggernauts. Instead of cost-plus funding that came almost solely from the government and which allowed rockets like ULA's Delta IV and Atlas V to stay competitive in the $300-400 million range without having to find ways to cut costs. SpaceX, Blue Origin, and Orbital Sciences, as well as other new companies, have to innovate in order to make their businesses feasible.

Additionally, Blue Origin and SpaceX have different goals from traditional aerospace firms that requires them to drive costs down below what a government would require. Blue Origin want to offer rides to space to tourists; for that, their costs need to be low enough for a person to buy a ticket. SpaceX wants to land their rockets on Mars, and then take off again. Being able to land the first stage of the Falcon 9 allows them to perfect the landing and reuse of rockets on Earth, before taking that knowledge to Mars.

[hackuser]

Thanks. I've heard the story but I haven't seen evidence of it, it smells too much like a marketing story (we're young and exciting, those old people are boring and stuck in the past), and it seems very unlikely: I don't buy that the 'old' companies wouldn't want to reduce their costs by 75%, greatly increasing demand for their very expensive service, greatly increasing their bottom line - even in a cost-plus arrangement.

Usually changes like this result from a technical or economic development.

[ZoFreX]

It's not that we're young and exciting and the early attempts were old and boring. The comment you're replying to is pointing out the very different incentives between several private companies competing for and government-funded projects with totally different funding structures.

[TeMPOraL]

Different incentives = different goals. SpaceX had to cut costs down to even be remotely competitive, and they had the benefit of starting from scratch, with no prior commitments in design of machine shops, etc. and with access to several decades worth of spaceflight experience.

And they have a drive, too. Mars is not a marketing story, Elon seems to really believe in doing it, and a lot of people at SpaceX buy into this vision.

[robotresearcher]

So why didn't the old companies do it? They have the same access to technical and financial expertise as anyone, and deep pockets.

[lmm]

"Cost-plus" funding means they didn't have any incentive to reduce costs. The thing that got them money was keeping politicians onside, so it was more important to e.g. provide jobs in relevant states.

[robotresearcher]

I agree totally. I was responding to the parent who was challenging cost-plus as an explanation for Big-Co failing to bring down costs.

[swax]

Old companies don't want to reduce the cost - they like hundreds of millions of dollars per launch ;)

[lsseckman]

That's true, even with less pressure it would have been in their reach to work on those projects. Seems strange to be just happening now.