Re: Branson and Bigelow to team up for a space hotel?

Orbital refueling was the 20 flights to get 2 to a lunar free return
trajectory. which you said was a lot of flights! lol. The only way to
get a lot of fuel up is to add another stage to the two-stage system-
and that can be done by adding two outboard LRBs propelled by three
RD180s each. The cost is far less than a new 747 - and if the systems
fully reusable and built robustly, the system should be cost effective.

The price of $25 million - is a lot, $2.5 million is less. There is a
thing called a demand curve, the rate at which you make sales versus
price. Generally speaking as you lower your price, you sell more
stuff.

So, on a graph of selling price on the Yaxis versus number sold, you
have a line that starts at some high level, and drops linearly until
you reach zero at some price.

Since your profit per unit is your selling price minus your cost, that
is a curve that goes up linearly with selling price. So, on the same
graph, you have a line starting at zero and sloping upward.

Your total profit is your unit profit times number of units sold,
multiply the two curves together - and you get an upside down parabola
with its peak where the two curves cross! lol.

This is the price you want to sell at. And unless and until you know
what the demand curve is, you don't really know what you should sell
at. If you sell too high, you hurt total profit by undercutting
volume. If you sell too low your hurt total profit by making less
money than you might otherwise. In both cases you leave money on the
table.

Since volumes are limited, it makes sense to advertise higher prices -
and then discount them as people express interest.

The point is, the Russians sold a trip to orbit and were paid $20
million each time. AND, they had lots of other barriers to entry which
increased the effective price to several times the amount paid. You
had to deal with Russian red tape. You had to deal with extensive and
burdensome training. You had to be dedicated. Even so, they sold at a
pretty brisk pace when they were available.

There's also a process called 'stair-stepping' the market. Basically,if
you're doing ground breaking stuff - you will have early-adopters who
will pay lots of money to do it first. Especially if the players get
into the history books! lol. You charge lots of money for the first
missions out of the box, build up your capital base,and use it to lower
your costs, and lower the price for the next round.. this is what
happened with consumer electronics. I recall when the very first
digital watches came out, and the first four function calculators -
they cost more than PDAs do today - if you can believe it. And there
were early adopters eagerly buying them up at these prices. The first
cell phones cost $3,000 - from radio shack, and the coverage was lousy
and the service expensive. I know, I bought one! lol.

So, it'll be the same here. The first commercial flight to the moon's
surface, the first people on the moon in the new millenium, the first
stay at the first base on the moon - the first woman on the moon, this
is all history making stuff, and there are people that will pay top
dollar to get into the history books - $80,000,000 is a bargain for
some.

In 2005 according to Forbes there were 691 US dollar denominated
millionaires in the world. In 2004 there were only 587 in 1990 there
were only 99 in 1982 there were only 13.

The number of billionaires is growing at 15% per year per consistently
- three times the global average. In five years there will be nearly
1,400 and most of these will be young to middle aged men - most likely
many will not be Americans. These folks could easily pay for two $80
million tickets,especially if the lady of their lives could be the
first woman on the moon for their country - which would be a gift of
unprecedented value.

Like I said we don't know what the demand curve is at this rarefied
level - but one thing is certain, we don't want to underestimate the
starting point of this market because entering at the right price point
maximizes profit, especially when you're stair stepping the price
points as the market expands.

of course an expanding market means an expanding capacity - and that
means significant investment in new technology. If we can create this
sort of developmental cycle - we would be repeating the Moore curve
effect in consumer electronics - and we may find that we'll have a
spaceship in every garage sooner than we think! lol.
..

.

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