Business News Event Analysis MGT

A True Worldwide Web: SpaceX’s Mission

I. Description

In February 2018, SpaceX captivated the attention of major news networks across the globe after the first, spectacular, and successful launch of Falcon Heavy, the world’s largest rocket. Several weeks later, the company accomplished another breakthrough with the successful launch of its first two internet test-satellites in low-earth orbit alongside an intelligence satellite, which will be used by the Spanish ministry of defense (Waters, 2018).

The company’s test-satellites launch followed the authorization from the top United States communication regulator – the Federal Communication Commission – to build a broadband network using low-earth orbit satellites. SpaceX’s internet satellite service is one of twelve ventures endorsed by the commission in the past twelve months including projects from the European OneWeb, the Canadian Telesat, and Space Norway (Shepardson and Vengattil, 2018).

While broadband satellite communication was first introduced by Boeing fifteen years ago, SpaceX’s endeavor is significantly more ambitious. The California-based company plans to deploy 800 satellites in low-Earth orbit – between 684 and 823 miles high – to reduce the latency time and provide internet services to rural areas in the United States. However, the deployment of such a large number of satellites poses a series of challenges, which the firm needs to address to succeed, including the close proximity with existing communication satellites (Meyer, 2018).

The cost of such ambitious endeavor can be astronomical. The current price tag to launch a payload of several satellites into orbit is on average $62 million when using SpaceX’s Falcon 9 rocket, one of the most competitive price in the industry (SpaceX, 2018). However, costs become manageable to a company already in the business of launching items into space (Pasztor, 2018). Additionally, the California-based company’s biggest strength lies in its capability to reuse its rockets, hence significantly scaling-down on operating expenses.

SpaceX aims to develop a constellation of interconnected satellites to form “a so-called mesh network.” At first, the network would provide internet access to the most rural regions in the United States. In the long-term, the system is expected to satisfy the constantly increasing demand for high speed network and provide a true worldwide internet coverage. The company’s low-Earth orbit satellites project directly competes with substitute ventures led by Google with its high-altitude internet balloons or Facebook with its high-flying drones network. (Waters, 2018)

The California-based company expects its broadband satellite communication services to generate sufficient positive cash flow to ultimately finance Elon Musk’s ambition to establish a human colony on Mars in the next 50 to 100 years (Meyer, 2018).

II. Connection to Management Concepts

Fundamentally, the long-term vision of the privately owned space exploration company is the reflection of the strategy as a perspective embraced by its founder. Elon Musk is renowned for his visionary take on technology, the environment, and society. The series of company he founded have been aggressive pacesetters in their respective industries through the implementation of innovative technologies (e.g., Visa in the e-payments industry, and Tesla in the automotive industry), and SpaceX is no exception.

Since it was founded in 2002, the California-based company experienced a long succession of drawbacks and failures, which threatened the core existence of the company. However, the shared culture and ideology brought together the members of the organization to keep it afloat and live to fight another day. The more recent success of the business resides in the collective mind cultivated by the company’s ambition to settle a human colony on the red planet. Each individual within the company works united towards the next milestone in space exploration.

SpaceX’s core value of continuously pushing further the technological boundaries and exploring the depth of the universe do not rise from market demand but rather from its founder’s core belief in human’s nature to innovate and explore the unknown. The space exploration company’s core purpose is to connect each individual on the planet to the internet and provide them with the opportunity to travel beyond the skies.

The company’s envisioned future is to provide an internet access to all individuals around the globe, even in the most remote locations by 2030. Additionally, SpaceX aims to settle a small human colony on the red planet in the next 30 years by building the most powerful reusable rocket in the world to carry the spacecraft, which would propel the space crew towards Mars. The company states its BHAG as to “revolutionize space technology, with the ultimate goal of enabling people to live on other planets”.

In accordance to its title of aggressive pacesetter, SpaceX leads the radical change in the communication industry. The company is working towards re-inventing the method used to convey the information between two distinctive points in space. Rather than going through landlines, antennas, optic cables, and other methods, SpaceX aims to reconfigure the delivery system so as to provide equal speed internet to every regions of the globe, even the rural regions currently uncovered by regular service providers.

The significant amount of risk, high capital requirements, labor intensity, and level of expertise requirements all factor in to deter any organization or individual from entering either the communication or the space exploration industry, therefore minimizes the threat of new entrants. Nowadays, organizations in the communication also hold a noteworthy bargaining power over its customers in this constantly connected society as individuals in developed and developing countries can now barely go a day without a device with an internet connection.

III. Takeaways

The broadband internet satellite project undertaken by SpaceX clearly shows the business’s constant will to push further the boundaries of technology and space-related projects. The strategy initially implemented by its founder over fifteen years ago still subsists today within and beyond the walls of its research and development center, and rocket plants. From a personal standpoint, witnessing the ideology driving Elon Musk and his employees to constantly push away the limits is priceless. It continually reminds me how one’s perspective on the world can impact others.

Employees are the greatest resource of a company and they should continually be inspired to create and innovate. While human capital is the biggest asset of an organization and should never be neglected, a firm’s visions is what can motivate employees to go beyond their initial assignment. SpaceX’s vision aspires its employees to extend the boundaries of human travel. The company must and do understand that its power to remain the leader in innovation in space travel or disruptive technology in communication lies in its ability to engrain its vision in people.

The communication and space exploration industries are both undergoing radical changes while companies develop increasingly more innovative products. The threat of new entrants is limited but the threat of substitutes and level of rivalry remain consequent. Therefore, managers must acknowledge the new trends to stay ahead of the curve and deliver disruptive yet competitive products to the market. As a manager, I would lead the development teams towards continuous innovation throughout careful planning so as to limit the risk of falling behind the concurrence.

IV. References

Meyer, David. “Here's What You Need to Know About SpaceX's Satellite Broadband Plans.” Fortune, 22 Feb. 2018,

<fortune.com/2018/02/22/spacex-starlink-satellite-broadband/.>

Pasztor, Andy. “SpaceX Lifts Two of Its Own Prototype Satellites Into Orbit.” Wall Street Journal, 22 Feb. 2018.

<www.wsj.com/articles/spacex-lifts-two-of-its-own-prototype-satellites-into-orbit-1519319051.>

Shepardson, David, and Munsif Vengattil. “SpaceX Gets U.S. Regulator to Back Satellite Internet Plan.” New York Times, 14 Feb. 2018.

<https://www.nytimes.com/reuters/2018/02/14/technology/14reuters-spacex-broadband-fcc.html>

“Capabilities & Services.” SpaceX, 2018.

<www.spacex.com/about/capabilities.>

Waters, Richard. “SpaceX Joins Race to Make Web Truly Worldwide.” Financial Times, 16 Feb. 2018.

<www.ft.com/content/740e93c2-12bc-11e8-8cb6-b9ccc4c4dbbb.>

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