Space Villages Case Study PDF
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Erasmus University Rotterdam
RSM
Adrienn Toth
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Summary
This case study, from Rotterdam School of Management, focuses on Space Villages, a new company aiming to commercially develop space infrastructure. It delves into the challenges and opportunities for commercial space ventures, considering the current landscape of the space industry and the potential for innovations and profitability.
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Rotterdam School of Management Innovation Management (BT2106/BK2106) This case was written by Adrienn Toth (RSM Case Development Centre), with the support of Karla Meschat, Jasmien Khattab, and S...
Rotterdam School of Management Innovation Management (BT2106/BK2106) This case was written by Adrienn Toth (RSM Case Development Centre), with the support of Karla Meschat, Jasmien Khattab, and Sandra Langeveld (Erasmus University Rotterdam). The writing of this case was made possible by the generous cooperation of Space Villages. The case is intended for class discussion rather than to illustrate effective or ineffective handling of management situations. Sole responsibility of the case resides with the authors. Classification: Internal Introduction Tomas Hamann, the proposal manager of Space Villages, had another late-night working session. He was preparing a new proposal to acquire funding for the implementation of novel software that would operate the robotic arms of an assembly module of the company’s commercial space station. It was one of the many projects the Space Villages team was working on for the last months. During the mandatory daily ‘rise and shine’ stand-up sessions at 07:00 AM—which Tomas had newly implemented—the team would discuss their progress. While it was expected of team members to share their expertise, Tomas made sure they kept their ambitious vision in mind: to launch a commercial space station within the next few years, the first of its kind, that would not only take space research to the next level, but also commercial activities of the industry as a whole. Up until now, commercialization of space exploration activities had not been the norm, as the research institutions that were currently active in space research and operated space stations were mostly founded by various national governments. Even though they had made significant breakthroughs and further developed the space industry, these institutions were not managed with the mindset of a profit-oriented company. This was about to change, because Space Villages’ ambition was to be the first to launch and operate a flexible, modular, and cost- effective space station. From a technological perspective, most of their planned activities had already been proven to be possible, so now Tomas and his team were facing the next challenge: designing the business case, identifying the market needs and services to address them, and creating a detailed business plan to make it all profitable. Who could be the customers of such a commercial space station? What are their needs and expectations? How can Space Villages meet those needs while being profitable? Tomas knew well: a flexible mind of all his team members, while keeping their eyes on the price—that is, to launch the first commercial space station—was the key to success. Figure 1: An envisioned habitational module in space with artificial gravity Source: Space Villages Classification: Internal The commercial space industry Human interest in space and how to understand, access and interact with it has been around for a while and has only become more prevalent with the realization that leaving the Earth and finding other habitable environments will be essential to the human race’s long-term survival. As is the case with all scientific areas reaching a point of breakthrough technical innovation, the space industry is at a stage where the focus is slowly starting to shift from exploring what is possible, to implementing these activities in a more cost- and time-effective way. To capitalize on these opportunities, new private companies are currently emerging that operate in a competitive market and relying on generated profit, instead of the government-owned space agencies that were previously driving innovation. Similarly, to SpaceX—a prime example of a for-profit company making waves in the rocket engineering industry—new players are emerging who would like to provide all kinds of services related to space in the fields of space research, space transport and space tourism. This puts aspiring players of the space industry in a tough situation: instead of trying to find their place in an already established business environment with potential customers, suppliers, and competitors, they have to find their way in this industry together as competitors. The difficulty lies in predicting future demand for different products and services, as well as predicting the directions for technological development that will arise as a result of the democratization of these activities. The one thing that these incumbents in the space industry have in common is that the business requirements are driving technological development, and not the other way around. Different from the research driven focus of the existing space organizations, these new industry professionals are working on innovations they see the most business opportunity in—not necessarily those that require the most advanced technology. The range of activities of these new companies is quite broad, such as building bigger and higher quality telescopes that allow for the advancement of space research, and developing rockets to creating a good infrastructure for human space travel that could later lead to space tourism. These activities are also connected to each other, meaning that these new market players will most likely create a well-established system where they form partnerships, complement each other, and compete—just like in other industries. When it comes to building a commercialized space station that can be used for various purposes by other companies, there are already some that are being developed. As of 2023, four different projects are being carried out in the US whose aim is to build such a station, and one additional project in Europe—spearheaded by Space Villages. It is expected that at least three of these companies can be successful in the near future considering the expected demand. These companies must of course comply with a list of safety standards. For example, they must demonstrate that they can avoid accidents and prevent the space station from reentering the atmosphere. And—in case they are planning to send people up to space as well—they should prove to be safe for humans. Classification: Internal Introduction to Space Villages “We are committed to building the space infrastructure of the future to enable the development of Low Earth Orbit as a stepping stone for colonizing space” Space Villages was founded 5 years ago in the Netherlands and now operates as a group that has members in different European countries as well as in the United States (Space Robotic Workers in Spain, Orbital Outpost Italy in Italy and Orbital Outpost X in the US). The different units work together across their regional boundaries with a unified goal in mind: Their vision entails enabling space business applications to meet the main goals of both moving manufacturing services to space and addressing the human interest in space colonization. Although the different units are located in different countries, they have a common aim of bringing the business of space to the market—with a particular focus on the European market before going global. Their commitment is to contribute to the space economy of the future, with the goal of sparking new markets in technology, assembly, entertainment, and daily living through their creative business ideas. To do so, Space Villages aims to provide space-related technical services to commercial customers, space and government agencies by developing innovative and reliable technological solutions to fulfill their customers’ needs. Space Villages’ vision has taken shape in the mission of building a modular, expandable privately owned space station in Low Earth Orbit (LEO). This LEO Space Outpost is an initial infrastructure with the capability to cater to various needs of customers in the space industry, while remaining responsive to changing market dynamics due to its expandable design. Space Villages will contribute to the upcoming space economy by allowing space agencies and commercial enterprises to embrace more ambitious space plans and missions. The First Space Village Compared to the design of the US-based space stations, Space Villages envisions for their station to be expandable and reassembled flexibly and much more cost-efficiently. They achieve this by having both a modular and linear design, meaning they can attach and detach elements easily to/from the station (modular) and also expand the size of the station significantly if needed (linear). Each module in the station will be responsible for one specific activity and they can add the new modules based on demand. This can reduce the current risk of not seeing clearly who their future customers could be. Therefore, the cornerstone of Tomas’ strategy is flexibility, which offers his team guidance when thinking about new strategic directions. Given that they are highly future-oriented, they are already preparing for when the space industry will be booming, and new players will enter the market every day. Space Villages wants to cater to the variety of needs their future customers might have by using space platforms as building blocks that each can provide a different service. Although these space platforms are not significantly different from existing space platforms, adding such growth possibilities to their platforms allows for unprecedented flexibility to combining different kinds of services in one location. Space Villages has identified more than 20 potential services that they could provide. Being one of the driving forces behind Space Villages innovative ideas, examples that Tomas came up with include a fueling station for space vehicles, platforms that can hold up to 60-meter- wide telescopes (bigger than the currently biggest James Webb Space Telescope), and habitational modules where astronauts (and at some point, space tourists) can stay for a period Classification: Internal of time. Their future customers could be large institutional players like NASA or the European Space Agency, as well as newly formed commercial companies currently under development. The range of activities of these new companies is quite wide and as of now, not completely predictable. For example, Space Villages is preparing to offer the necessary infrastructure on their space station for future space fuel companies, space travel agencies and space mining companies alike. The companies offering these services could appear as startups who managed to secure funding for a novel idea, or as part of well-established giants who see an opportunity in expanding their portfolio with space services. Currently, space stations are built primarily with the goal of serving as research centers, where astronauts are an essential asset. Because such space stations should be safe for humans, they must adhere to additional regulations, which are challenging and costly to meet. Therefore, one of the most significant innovations that Space Villages envisions is an array of in-orbit robotic arms, enabling the assembly of the different modules in space. This would eliminate the needs for humans in the first stages of the creation of the space station, which is a radical change that significantly lowers the costs and the complexity of creating a minimal viable product (MVP). In addition, robotic arms are much more precise in the assembly of the space platform in comparison to humans. Figure 2: Design of the Robotic Platform Source: Space Villages Classification: Internal Building the first space village The 45-person Space Villages team is now working with an ambitious goal in mind: to start operating their space station by launching an MVP in 2028. This MVP would include the basic architecture of the station with robotic arms that are able to assemble the different modules. With the operationalization of the MVP, Space Villages could already start operations, and then easily attach additional modules on the go based on market need. Tomas was quite certain that the competition would not be able to create such an MVP, because the robot arm was patented and only able to be used by Space Villages. After the realization of the MVP, Space Villages plans to expand the space station in 3 key stages: first as a robotic platform, then as a crewed platform, and lastly as an induced gravity residential platform that can host up to 100 humans in Low Earth Orbit by 2035. Since it is currently a guessing game which of their planned services will actually be needed, the team is now focused on being as flexible as possible by preparing the designs of modules for all kinds of purposes. Then, once the market landscape becomes clearer, they can more easily switch and redirect their focus to the most profitable activity. At the same time, they are already working on implementing the elements of the space station that will surely be needed, like the robotic system that has to carry out assembly tasks. Modules which could be added in the robotic platform stage include in-orbit refueling and a shipyard for large systems assembly, while modules in the induced gravity residential platform would rather include living residences and leisure activities. Ultimately, Space Villages aims to create the very first space village, a continuously expanding abode for humans to live, work, and enjoy their free time. It was clear; to achieve such an ambitious goal, full dedication of every team member was an indispensable imperative. Luckily, Tomas’ team consists of space fanatics, all eager to see their space dreams come true. Next steps The future was still very uncertain, but Tomas and his team had to manage the situation as well as they could by remaining flexible and prepared for different scenarios. Matching the already existing and currently developed technologies with the expected business needs and adapting to changes quickly has definitely been a challenge but it is key to future success in this industry. Tomas was convinced that 100% commitment was the only way to solve the questions spinning through his mind: How can Space Villages best prepare for the future groundbreaking technological advancements and their impact? How can they create a service portfolio that is not only in demand in the short term, but can also develop together with the industry? Is there a way to somewhat reduce the risks originating from the current unpredictable state of the space industry? How could they use the gained insights into the European market to create global success? These were some of the challenges Tomas had to face. As he was deliberating these questions, he knew one thing for certain: Space Villages would have to keep innovating constantly to carve out their space in the market and remain successful over time. Classification: Internal