Is There Really Money in Space?

United Launch Alliance CEO Tory Bruno chats with Dean Paul Jarley on the state of space exploration. 50 years after the Apollo 11 moon landing, rocket launch technology has drastically improved and the prospect of commercial space travel is almost top of mind. Can space tourism really become the multi-billion dollar market that some expect it to be? And are Cape Canaveral and the Space Coast ready for the demand? Is space ready to be the final commercial frontier?


Featured Guests

Episode Highlights

  • 3:18 – How Tory Bruno became CEO of United Launch Alliance
  • 5:48 – How United Launch Alliance came to be
  • 8:42 – What’s it like being involved in the space industry during such a competitive time?
  • 12:36 – How much cheaper can rocket launches get?
  • 13:34 – What kinds of companies could be most successful in utilizing space travel?
  • 16:33 – When will humans live and work in space? Engage in space tourism? Get to Mars?
  • 21:27 – What’s the most important thing to know about the commercialization of space?
  • 23:20 – Questions from the audience:
    • Do you anticipate building things in space to avoid loss during launch?
    • How do you see real property rights being involved in space?
    • What’s it like working with Blue Origin on the Vulcan engine?
    • Have there been any attempts to develop insurance for spacecrafts?
    • Does ULA have any plans to develop a heavy lift rocket?
    • Where did you see the space industry headed when you started your career?
    • Can you elaborate on the difference between components vs. propulsion?
    • Why does ULA exist?
  • 34:35 – Dean Paul Jarley‘s final thoughts


Episode Transcription


Paul Jarley:                         There are certain moments in time that stay with you. I remember where I was 50 years ago today. I was 10 years old. I was on the beach at a lake near my hometown, clutching a radio, and listening to mission control. It was 4:18 in the afternoon when Neil Armstrong said-

Neil Armstrong:                Tranquility Base, here. The eagle has landed.

Paul Jarley:                         The beach erupted in applause.

Paul Jarley:                         This show is all about separating hype from fundamental change. I’m Paul Jarley, Dean of the College of Business here at UCF. I’ve got lots of questions. To get answers, I’m talking to people with interesting insights into the future of business. Have you ever wondered, “Is this really a thing?” Onto our show.

Paul Jarley:                         The race to the moon was a race to glory that brought a much needed boost to democratic capitalism in its Cold War with totalitarian communism. But this was not the first time a group of explorers had set out for glory and to assert the political power of a government patron. Christopher Columbus comes to mind. There what started out as a search for glory, quickly turned to commercial interests complete with conquistadors searching for gold and pirates looking to steal it. Colonization and wars followed. Will history repeat itself? Is space ready to be the final commercial frontier? If so, can space pirates and colonization be far behind? Listen into my conversation with Tory Bruno. He’s CEO of United Launch Alliance. In other words, a rocket man. He spoke to a group of business and engineering students earlier this year in The Exchange.

Paul Jarley:                         So how cool is that? So, for my engineering students, this is The Exchange. And the idea behind The Exchange is that we have a speaker in here every day talking to business students about careers, about their career path. About how they might become part of an industry, if that’s what they’re interested in doing. And today we have kind of a double purpose. So, for those of you who don’t know me, I’m Paul Jarley, I’m Dean of the College of Business here. And my job is largely to think about what the college should look like five years from now and 10 years from now and how we’re going to get there. All right? So I get to do this kind of a lot. I get to sit down with really interesting people who have interesting things to say and provocative ideas. And it’s frequently the case that I’m sitting there during our conversation thinking, “Yeah, is that really a thing? Is that something that my students really need to know about? Or is this person just blowing smoke at me?” All right?

Paul Jarley:                         And so that’s sort of the idea behind our podcast. I go out, I talk to people about various kinds of things and whether or not I think they’re really a thing or not. And so Tory, who’s with us today, who is the guy who runs that organization has graciously agreed to have that kind of a conversation with me along the way. So welcome to the College of Business, Tory.

Tory Bruno:                        Thank you. Happy to be here.

Paul Jarley:                         So I like to talk about people’s careers. I think students get confused a lot. People think their careers are going to be really linear. And how I always tell them that that isn’t going to be the case. Walk up to any five-year-old kid and ask them what do you want to be when you grow up? And if they say dean of a business school, you should run from them. Right? I mean, nobody says that. That’s not how you get to be me. So I want to know, how do you get to be in charge of a rocket company, rocket man? How does that path work for you?

Tory Bruno:                        Well, I’ll start out by saying I really had no interest in management when I started. I just want to be a rocket scientist and that’s what I did for about the first 10 years of my career. And I always did want to be a rocket scientist. So if you had asked me when I was at a kid, I’m just old enough to remember seeing the first moon landing. And I was very inspired by that. So I always wanted to build rockets and I built rockets my whole life. I built my first rockets out of some 80-year-old, moldy dynamite I found in the back of my grandmother’s barn. 10 fingers, for everybody in the room who can see. And so I went to work for Lockheed and I was just a rocket designer. I worked in structures, I worked in control systems. I was a ballistician. Then about 10 years in I thought, well maybe I will sort of reluctantly go into management. Because I could probably have a greater impact there and maybe help other people in their careers, as well.

Tory Bruno:                        And then it was a very traditional career progression after that. You know, I did program management and systems engineering back and forth of increasing complexity. But I’ll say the one unique thing about it was that I always wanted to work on the most difficult problems. So I felt very inspired by the missions that we served. And so, if something was really in trouble and struggling, maybe other people were kind of fleeing that project because it was going pretty rough.

Paul Jarley:                         So, just to clarify for students, right? This was your missile bay period. Right?

Tory Bruno:                        Yes, that’s right.

Paul Jarley:                         You were involved in missile projects?

Tory Bruno:                        Yeah. Yes I was.

Paul Jarley:                         And I think it’s really helpful, right? In any kind of project like that to develop a mindset where… Things are going to go wrong. Right? And a lot of people do run from that. But the people who understand kind of that, “Well, that’s just part of the journey.” And solving those problems is really important.

Tory Bruno:                        Well, that’s right. And especially if you’re doing something that is technically challenging, or even just programmatically challenging, because there’s an urgency or a need. Your country needs it, your team needs it, whatever it is. Then it’s going to be hard and there will be setbacks. That’s okay.

Paul Jarley:                         So ULA is a joint venture between Boeing and Lockheed? Could you tell me a little bit about how that came about and why?

Tory Bruno:                        Sure. So, first, let me start kind of at the back end of that with what does that mean? It does not mean that this is a combination. ULA is a stand-alone company. 12 years ago, people who worked at Boeing had to quit their jobs and be rehired by ULA. Same was true for Lockheed. And then Boeing handed over the factory and handed over the drawings to the Delta rockets. Lockheed did the same for Atlas, and a new company was stood up. There is a board of directors between us and those owners, but there are no commingled employees, facilities, anything like that. The intellectual property created afterwards belongs to ULA, it’s just owned by our two… You can think of it as two shareholders. How did it happen?

Paul Jarley:                         Yeah, what drove that decision?

Tory Bruno:                        Yeah. So once upon a time there was an idea that there would be a gigantic telecommunications industry based in space. And so lots of companies facilitized for that. Lockheed developed the Atlas V, Boeing developed Delta IV, they still had Delta II. Spacecraft companies stood up whole divisions. And then people discovered that you can build out fiber optics on earth instead a lot more cheaply and the bottom kind of fell out. And there wasn’t enough business for all of these companies. And Lockheed and Boeing consolidated what they had into this joint venture in order to make one viable launch business. It was also done at a time that the government desperately needed that. So what is not well known is that our country’s sort of space infrastructure has fallen into a pattern of sort of all the satellites go up at once in a short span of years, which means they all age out at about the same time. And then they all have to be replenished and so on.

Tory Bruno:                        And, at that time, we were right at the back end of the life of everything that was on orbit then. And all the replacements were late and there was a crisis coming. There would of been gaps in capability. There would have been soldiers in the field calling for help and nobody on the other end of the phone. Gaps in GPS, which you take for granted today, it’s on your smartphones. But there would have been places where you couldn’t have it, where it wouldn’t have worked. And so there was kind of a crisis. And the government said, “Hey, we need ULA to sort of step in and never be late. And don’t lose one in 10 rockets anymore, which was the normal back in those days. We in fact have never lost a launch. 130, never failed to take our mission to space. And so the two things came together to create the company.

Paul Jarley:                         So was there a boom-bust cycle? Did I hear you right then?

Tory Bruno:                        Yes, you did.

Paul Jarley:                         In terms of employment and a number of other things that kind of went with it?

Tory Bruno:                        Absolutely.

Paul Jarley:                         So let’s talk about the current economics for the industry. Because we’ve seen some new entrants, right? By some pretty big names, with big egos I would imagine. So talk a little bit about that competitive landscape.

Tory Bruno:                        Yeah. So for the first time in several years there actually is a mature enough launch industry, kind of grew up around us, in order to have more than one source to go to space and to have competition. That’s a good thing. It’s healthy for the industry. You can’t make investments in new technologies and new capabilities if it doesn’t change your business outcome afterwards. And competition is one of the things that causes that to be true. So that’s good. It’s why it’s healthy for the industry and it’s good for the country to have a broader lift industrial base. Maybe what you’re really getting at is how about is it viable for as many companies to enter this market space?

Paul Jarley:                         Yeah, I’m a little curious about that.

Tory Bruno:                        Yeah. So the answer is no, it isn’t. There’s enough work here for two or three major launch companies. And right now it’s a gold rush, in a way. There’s dozens of companies that are trying to get into lift. And, in the end, all of them will not be there on the other side. That’s a fact.

Paul Jarley:                         Is that where the money is in the industry? Is it in the launch?

Tory Bruno:                        No.

Paul Jarley:                         I figured not.

Tory Bruno:                        It’s not.

Paul Jarley:                         That’s probably the most commodity part of the whole operation.

Tory Bruno:                        Yes it is, yeah. So the main… When you look at at a marketplace and you try and see where the centers of value are. In this particular case, you would probably say in the services that are provided. The closer you get to your end customer, typically the more attractive the economics.

Paul Jarley:                         So I would have guessed, and we had a little chance to talk this morning. I would have guessed that the advances to greater commercialization of space would have been dependent upon reducing launch costs. And you know, we’ve got one guy out there who’s doing miraculous things, reusing vehicles. And I assumed that it was being driven by that. But you sort of bursted my bubble this morning. Talk a little bit about that.

Tory Bruno:                        Well, yeah. So what we’re really talking about, since this is a business school environment, is a principle called elasticity in a marketplace. Where, if you can lower the cost of something, then the total volume in that market would grow. Smartphones is a great example. That’s not really true for the launch industry because, as it stands today… And we’ll talk about trajectories, but as it stands today, lift is never really more than about 10% of the value of any given mission. So the price of the satellite, the cost of operations and so on really swamp out lift. Lift is bought separately at the end of the process, so it’s more visible in a way. But the fact that it’s such a small portion means that there has not traditionally been elasticity present. Now, if you get a new mission in space that could create a different economic equation that could change. Otherwise you’ve got to drop the price of lift by at least an order of magnitude to create that elasticity.

Paul Jarley:                         One of the reasons I was asking is we have a business plan competition in the college called The Joust. And a few years ago we had a rocket scientist in The Joust. And he had proposed a very cheap, reusable rocket for micro-satellites. And he projected that to be, if I remember right, a $20 billion industry by year three. And he didn’t win The Joust and, to this day, he doesn’t understand why. Because he couldn’t possibly have met that demand in that period of time.

Tory Bruno:                        That’s right.

Paul Jarley:                         But it, again, brought up the question of well how cheap do you think launch costs can go? Are we near the bottom of that? Do you think there’s advances there coming?

Tory Bruno:                        So we’re near the bottom of the cost structure. That doesn’t mean we’re near the bottom of the price of lift. There are businesses for which fixed costs are a dominant factor. The launch business is one of those.

Paul Jarley:                         I would think so.

Tory Bruno:                        And so there is a rate curve, right? And economic order quantities have a tremendous effect on lift.

Paul Jarley:                         Think marginal costs here, right?

Tory Bruno:                        Think… Yes.

Paul Jarley:                         Think marginal costs, for my students in the-

Tory Bruno:                        I keep forgetting I’m in the business school.

Paul Jarley:                         Yeah, yeah, yeah.

Tory Bruno:                        Yes. So, because there’s a large fixed cost, there is a big effect on marginal costs. So if you can go from 10 launches a year to even just 20 launches a year, it has a profound effect on pricing.

Paul Jarley:                         Yeah, yeah. And today that’s still largely around satellites, I assume, both military and commercial.

Tory Bruno:                        Yes, that’s true.

Paul Jarley:                         So when you read, maybe, futurist sorts of things on the commercialization of space. And I noticed in your video you mentioned the moon as an example of this? Three things usually come to mind, right? One is space tourism. And I guess there’s a list of like 250,000 people worldwide who have put money aside to be in a launch. Think about that, right? There’s pharmaceuticals, because of zero gravity as I understand it. And then there’s mining, particularly of the moon, which comes up fairly regularly. So which of those three do you think has the most promise going forward?

Tory Bruno:                        As a sustained economic activity?

Paul Jarley:                         Yeah. Yeah, yeah, yeah. Not a side show, right. Which I think the tourism probably will be for awhile.

Tory Bruno:                        Yeah. So the space tourism still is so expensive. We’re really talking about billionaires. There’s only so many of those and they’re probably only going to go once. So what we’re really looking for is a more widespread activity, if we’re going to have a self sustaining economic sort of zone. And I look to natural resource development. I think one of the things that people are unaware of are the discoveries, over the last decade to decade-and-a-half, relative to the quantity of natural resources that reside just between here and the moon. Not even necessarily the moon itself, but the near Earth objects, or asteroids as they’re commonly called, that are in between Earth and the moon. There is about a thousand years worth of the entire planet’s production of industrial metals in 1,700 asteroids that reside between here and there. So we’re talking about a level of abundance that defies human imagination.

Paul Jarley:                         Wow, you’ve made space a much scarier place than I thought, to be honest. Are we concerned that all at any of those are going to kind of get jarred from their orbit and land on our lap.

Tory Bruno:                        We actually understand those objects pretty well.

Paul Jarley:                         I would hope so.

Tory Bruno:                        You do have an object encountering Earth almost every day.

Paul Jarley:                         Yeah.

Tory Bruno:                        Yeah.

Paul Jarley:                         So is the idea there to capture those and bring them back to Earth

Tory Bruno:                        No, it’s-

Paul Jarley:                         Is that? Or is it?

Tory Bruno:                        It’s to mine them there. And do as much-

Paul Jarley:                         Using robots and whatnot?

Tory Bruno:                        Using robots initially. And eventually people will be involved because of the scale of what we’re talking about.

Paul Jarley:                         Who are the big players there? Thinking about doing that?

Tory Bruno:                        These are all startup companies now. And they are waiting for a practical transportation infrastructure to be available to them. So companies like Planetary Resources, for example, Astrobotics. We’ve actually gathered them. At ULA we’ve gathered about a hundred of these small startup companies together into a community to help them mature their business plans and understand their needs and requirements.

Paul Jarley:                         Is it also a vehicle by which you buy talent?

Tory Bruno:                        No, I have not raided my future customers for their talent.

Paul Jarley:                         Okay. Okay. But are you helping to ensure that industry then, in a sense? I mean, I know Google does this, for example.

Tory Bruno:                        Yeah. No, we are absolutely doing our part to facilitate that.

Paul Jarley:                         How far away do you think that is?

Tory Bruno:                        Oh, that’s within two to three decades. You’ll see at least a thousand people living and working in space, in that economic zone.

Paul Jarley:                         Are we going to get to Mars in the next 10 years? What’s your take on that?

Tory Bruno:                        Yeah. Yeah.

Paul Jarley:                         Humans on Mars?

Tory Bruno:                        Yeah. Visit. We’ll go and visit within a decade.

Paul Jarley:                         How many people are game for that ride?

Tory Bruno:                        All right.

Paul Jarley:                         Look at that.

Tory Bruno:                        Okay. That’s an exploration mission. That’s not a… So let’s be clear, there’s no terraforming happening. There’s insufficient C02 on the planet to do that. So there’ll be first exploration, then there’ll be a permanent presence. But you will not see a terraformed Mars.

Paul Jarley:                         So what keeps you up at night?

Tory Bruno:                        Oh, what keeps me up at night? So we have a challenging, ongoing mission. Every time we go to space, it is some person’s life work of research at NASA. It is some soldier’s life on the line. It is some commercial company’s entire business plan. And they depend on us to be on time and to not fail. And this is a very difficult job. You know, you’ve got to think about the nature of the technology we use. A rocket is not an airplane. You know an airplane is a big machine with a little bit of fuel in it. A rocket is all fuel, 90% propellant. All propellant, little bit of machine wrapped around it. It is a physics-defying act every time we go to space. No one has the reliability record that we have. It is not by accident and it is very fragile and takes constant diligence to maintain that.

Paul Jarley:                         So what do you see as your role in that process as CEO?

Tory Bruno:                        Well, as CEO, I am responsible for a couple of things. Specific to that, it’s making sure our culture of mission success stays in place. Because culture is the most powerful aspect of a business. And then, of course, I have my traditional CEO role, which is the strategic direction of the company and making sure we stay a viable business for the long run.

Paul Jarley:                         Okay. And here’s where the twist is going to happen, when I read Tory’s bio. So explain to me how the Knights Templar fit in to that view that you have.

Tory Bruno:                        We put the most obscure things in my bio.

Paul Jarley:                         Because usually when I’m seeing something about the Knights Templar it’s a conspiracy show on The History Channel.

Tory Bruno:                        So, yeah, nothing that interesting. So I’m a history buff. I’ve written, what the Dean is referring to is I’ve written a couple of books on the Knights Templar. And it’s a really about how they operated as a business.

Paul Jarley:                         That’s what caught my eye.

Tory Bruno:                        So maybe the thing that’s relevant to the launch industry, and the changing marketplace is the big picture of the Knights Templar. When you look at their, the grand sweep of their history, they came into a particular place in history. They did a very specific job. They were very, very successful at it for 187 years. And then the environment changed. They refused to adapt, and seven years later they were gone.

Paul Jarley:                         Well the King of France had something to do with that.

Tory Bruno:                        He did.

Paul Jarley:                         If I remember correctly.

Tory Bruno:                        Yeah, well, he absolutely did.

Paul Jarley:                         Why the Friday the 13th is-

Tory Bruno:                        Very good.

Paul Jarley:                         I know my stuff, yeah.

Tory Bruno:                        Yeah. Yeah. October-

Paul Jarley:                         Bit of a history buff myself.

Tory Bruno:                        Friday the 13th of October, 1307.

Paul Jarley:                         That’s why it’s considered unlucky.

Tory Bruno:                        Yeah.

Paul Jarley:                         Tell the story. Go ahead, Tory.

Tory Bruno:                        Oh, sure. So the Knights Templar were based in the Holy Land and the European colonies in the Middle East. And, eventually, that was taken back by the native inhabitants there. And so there was no European presence. They didn’t have a relevant mission. They had a lot of money. They had a lot of special privileges. They didn’t pay taxes, for example, anywhere. They didn’t pay tariffs. They didn’t contribute to the incomes of the social and economic structure of Europe. And the King of France owed them a lot of money. And he wasn’t going to be able to pay. And the next best thing to repaying your debts is to arrest everybody that you owe money to and taking the money they have. And so he organized a mass arrest at midnight on Friday the 13th. Orders sent out months in advanced, unsealed at midnight. Go arrest the Templars, they’re all heretics, and make sure you don’t forget to grab their money. And that was pretty much the end of them. Because they weren’t relevant, they were vulnerable to that particular.

Paul Jarley:                         And that’s what drives your thinking?

Tory Bruno:                        Yeah.

Paul Jarley:                         Very much.

Tory Bruno:                        Stay relevant.

Paul Jarley:                         So what do you think is the most important thing business students should know about commercialization of space? If you wanted to leave them with one thing? Then I’m gonna open it up for questions, I want to hear what you think.

Tory Bruno:                        Well, I’d say probably two things. First, you should be excited about it. We are on the very threshold of a new human epoch in history where there will be a giant economy in space. The second thing is be realistic. It’s not going to happen overnight and it still will follow all the normal rules of economics and business. Do not let it be a bubble. Do not let it be the Silicon Valley of 2001 of the Tulip bubble of 16-whatever it was.

Paul Jarley:                         You think there’s a real risk of that?

Tory Bruno:                        Oh, absolutely.

Paul Jarley:                         Yeah.

Tory Bruno:                        Yeah. Anytime there’s that much excitement and free capital available in the economy to be invested by unsophisticated investors unfamiliar with that particular activity, you have the potential for a bubble.

Paul Jarley:                         Because my sense is, right? These are really big bets that you’re playing over really long periods of time.

Tory Bruno:                        Yes. Yeah, and it’s not a small incremental business. Everything we do in space comes in very large increments of investment and cost. And it’s an extremely difficult, high-consequence business. So if you take, for example, just the satellite and I’ll zero in on the launch piece of that for a moment. A satellite will spend five, 10 years getting designed and built, it’s going to spend 10, depending on the application, even 20 years on orbit doing a mission. There is literally 15 minutes in that entire lifespan when it can die in a ball of fire on top of a rocket. And pretty much everything has to go right and nothing can go wrong. There aren’t a lot of other industries like that.

Paul Jarley:                         After my interview, we took some questions from students in the audience. Some of those questions are a little tough to hear. So I’m going to repeat each question before Tory’s answer.

Paul Jarley:                         Our first question: Do you anticipate building things in space to avoid loss during launch?

Tory Bruno:                        Yeah, yeah, I do. So I think of this eventual sort of cislunar, cislunar being the space between here and the moon. As a journey. So we kind of jumped right to the end state of people living and working there. And mining nickel and titanium, more platinum than has ever been mined in the history of humankind and all of that. It doesn’t start there. It starts, probably, with specialty manufacturing and research in low Earth orbit and microgravity, for things that are very valuable that can’t be made here. Ultra-pure materials would be another example.

Audience Member:        So it’s a process? I know I’m thinking way out.

Tory Bruno:                        It is a process, yeah.

Audience Member:        But I just wonder if you ULA had a vision for how they wanted to-

Tory Bruno:                        We do. We call it the CisLunar-1000. And you can read all about it and watch videos on our website,

Paul Jarley:                         So is your strategic plan projecting a hundred years into the future?

Tory Bruno:                        No, I’m only gone about 40 right now.

Paul Jarley:                         Okay. Because it’s just not worth it after that? The change and whatnot would just be too great to kind of even think about?

Tory Bruno:                        In this particular environment?

Paul Jarley:                         Yeah.

Tory Bruno:                        Yes, the uncertainty grows.

Paul Jarley:                         40 years is a long time.

Paul Jarley:                         Our next question came from a young real estate student who asked: How do you see real property rights being involved in space?

Tory Bruno:                        So what a great question. So no one imagined 40 years ago that there would be real economic activity in space. And so the outer space treaty and the lunar treaty regime really doesn’t address economic activity. Now the US passed its own law, a couple of years ago, that said, “Hey, you can actually go to space and mine something or develop something, own it, bring it home, and sell it.” This is a going to require an international treaty regime. So that was just a very small beginning. So I will say that the Space Council, which was recently stood up chaired by Vice President Pence, I serve on the Space Council’s User Advisory Group is jumping in.

Tory Bruno:                        But they are jumping in at the beginning, so they’re streamlining regulation on how you get to space and who controls which regimes in the government to try and foster businesses to get going. But there’s a long ways to go. If you’re going to have a business mining platinum or rhodium on an asteroid, you need to have the ability to have a claim, not have somebody else wait until you’ve invested in all the prospecting to then jump on you. You’ve got to be able to extract it, take it home, own it, and sell it, obviously. And you need regulation to make all of that safe and responsible. It is a little different than activities here on Earth, in that everything is in orbit at incredible velocities and irresponsibility has catastrophic results.

Paul Jarley:                         Another student brought up a partnership between Blue Origin and United Launch Alliance. The two companies are working together on ULA’s Vulcan Engine. She asked about what it’s like to team up with your competitor.

Tory Bruno:                        Sure. Yeah. So, for the rest of you, what she’s referring to is we have two engines on our new rocket. We’ve just selected Blue Origins BE-4 for the first stage. And we had also selected, about a month earlier, Aerojet Rocketdyne’s RL10 for the other stage. And you’re asking about, “Gosh, you have a competitor in your supply chain.” That is the nature of the aerospace industry. It’s a very small community. And we have a phrase that we use that is called “competimates.” So you are very often in each other’s supply chains. You compete while having them as a supplier. You compete while being their supplier. That’s not unusual, but it does drive certain unique things in your relationship. It’s important to feel like there’s some symbiosis or mutual dependency there.

Tory Bruno:                        So they will eventually compete with us with their New Glenn rocket. That’s really designed for a different… I’ll say centered on a different market segment than we are centered on. All you’ve got to do is look at a picture of it to figure that out. It’s Saturn V-sized. And it has a lot of engines. And, without our order rate, it is not very affordable because the engines would be very, very expensive. So they need us, we need them because they’re our engine supplier. And we’ll compete in slightly different places with overlap. And so all of that is pretty typical in our industry. I already have competitors elsewhere in my supply chain and vice-versa.

Paul Jarley:                         So that’s why you bought rather than made, if I understand it.

Tory Bruno:                        That’s why we buy rather than make. Now engines have a very large initial investment threshold. I won’t talk about the numbers involved in our deal, but the rule of thumb in rocketry is if you want a brand new liquid rocket engine, be prepared to spend one to two billion dollars to develop it. So that’s part of that equation as well.

Paul Jarley:                         Our next question: have there been any attempts to develop insurance for spacecraft?

Tory Bruno:                        There is actually, and has been for many decades, a big… Well, big industry. An industry around selling insurance. So everyone who is not the United States government that puts a satellite in space insures. You insure the spacecraft and the lift. And, on rare occasions, they may also insure some portion of the revenue stream. And that is actually a factor in the price of the launch service. Because, as we talked about a minute ago, that’s the big risk when you’re a satellite operator. And so, for example, if you’re a commercial company and you’re going to put up a big geostationary communication satellite and you choose to fly it on an Atlas? Your insurance will be about $12 million cheaper than if you flew it on somebody else’s rocket.

Paul Jarley:                         That’s just an experience rating that they’re using, right?

Tory Bruno:                        Yeah.

Paul Jarley:                         Because it’s been so safe, yeah.

Tory Bruno:                        Yes. And that’s also an interesting economic discussion, since we’re in the business school. At present, there’s a little bit of oversupply in the insurance market. Space is sexy right now and everybody wants to be in it. So the insurance rates are actually depressed a little bit below where they should be.

Paul Jarley:                         Interesting.

Tory Bruno:                        And narrowed a little bit more. If that industry ever rationalizes, these differences get bigger.

Paul Jarley:                         So did I hear you right? You wouldn’t launch without them having insurance?

Tory Bruno:                        They won’t launch.

Paul Jarley:                         They won’t launch.

Tory Bruno:                        Yeah.

Paul Jarley:                         The next question: does ULA have any plans to develop a heavy lift rocket?

Tory Bruno:                        No, we don’t because we don’t really see a market there that is attractive to us. So other people are designing rockets that are centered on lunar architectures or Mars architectures, for example. We’re really centered on Earth-orbit architectures. Not to say we couldn’t. So the Delta IV Heavy has a heavy variant that is a three cores, literally three rockets bolted together. It’s very impressive, if you ever had a chance to come out and see. We don’t plan to do that with Vulcan, but there’s no inherent reason why you couldn’t if there were a marketplace. But we just don’t see one. So it’ll be a single stick. It will have more capability than a Delta Heavy. So the cool thing about that is you get heavy performance, in fact about 30% more lift than a Delta IV Heavy, in a single stick configuration which collapses the price of heavy lift. And honestly, we just don’t see a need for more than that at this time.

Paul Jarley:                         One student wanted to know where Tory Bruno saw the space industry headed when he started his career.

Tory Bruno:                        Honestly, when I started I didn’t pay a lot of attention to space launch because I worked in missiles and in hypersonic re-entry systems. And so I sort of took lift for granted in a way.

Paul Jarley:                         The next question asks for an elaboration on components versus propulsion. Yeah, I don’t know what that means.

Tory Bruno:                        Yeah, sure. So when you look at a booster, and we’re talking about the first stage. The second stage is its own animal because it’s orbital. Okay? So we’ll talk about the booster. You have sort of this difference where you can bring the whole booster back propulsively, because that’s what it takes. In other words, you are going to first re-enter the atmosphere, hypersonically, experiencing really, really high temperatures. And then you’re going to light your engines off. And then you’re going to coast back down to the ground and you’re going to land. You’ve seen that on TV. Right? You get to recover the whole value. Some of the time there’s a 30 to 50% performance loss. In other words, on certain missions, you can only take half as much mass to orbit. So you can’t do it every time. But every time you do do it, you get the whole value back.

Tory Bruno:                        Then there’s component. So, when you look at a booster, it turns out that two thirds the cost of a booster is just one part. It’s just the rocket engine. You take the rocket engine out from under a booster, what’s left? A giant empty gas tank. And so that’s a different approach. And our approach is to do that. We’ll burn all of our propellant, no performance impact, burn to depletion. Then we’ll separate the engine section. Re-enter behind NASA’s Mars 2020 inflatable heat shields, so no high-temperature environments. Scoop it up with a helicopter and bring it home. So we only get two-thirds of the value of the booster back when we do that. But you get to do it every time. So, business student, given the marketplace it really just matters on how often are the spacecraft so large that you can’t do propulsive versus how often you can do our technique. So is it better to get all the value back some of the time or two-thirds of the value back all of the time? It depends on that mix of customers. And we’ll find out.

Paul Jarley:                         There’s an excel spreadsheet, though, that can solve that for you.

Tory Bruno:                        Definitely.

Paul Jarley:                         And our final question from the audience was: why does ULA exist?

Tory Bruno:                        Why do we exist? Oh, okay. Well, believe it or not, we are still the world’s premier launch company. We’ve launched everything that is important to our country that is on orbit now, or nearly everything. We touch your life every single day. Use GPS recently? That was us. You check the weather to see where that hurricane might be coming in? That was us. We’ve been to space 130 times. We have never failed to get our mission there, that is unprecedented. We’ve been to Mars 18 times and every celestial body of every significance in the solar system and beyond. We have the experience and the expertise to continue being the market leader and we will be.

Paul Jarley:                         It’s my podcast so I get to go last. This just might be our geekiest podcast to date. So I feel compelled to offer a science fiction reference in relation to the question of whether space commercialization is really a thing. Resistance is futile. It’s already happening in launch vehicles and satellite communication. The competition between ULA, Blue Origin and SpaceX has reinvented the Space Coast and brought a lot of funded research to UCF, a place that was founded to support NASA in the race to the moon. I suspect space tourism and space mining won’t be far behind. And, as our young real estate student noted, that will put the question of property rights in space front and center. Maybe the first space real estate program will be right here at UCF. That seems fitting, but that will probably be an assignment for a dean a few deans after my time here at UCF.

Paul Jarley:                         What do you think? Check us out online and share your thoughts at You can also find extended interviews with our guests and notes from the show. Special thanks to my producer, Josh Miranda, and the whole team at the Office of Outreach & Engagement here at the UCF College of Business. And thank you for listening. Until next time, charge on.

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